526 B.R. 829
Bankr. D. Mont.2015Background
- Debtor David Weik (pro se) filed Chapter 13 on Nov. 13, 2014 primarily to stop scheduled auction sales of his stored personal property at Midway RV & Self Storage in Tucson. Midway asserted an $8,629.75 storage claim and repeatedly scheduled sales.
- Weik has a history of multiple recent bankruptcy filings: several prior Chapter 13 (and one Chapter 7) cases in Arizona, Montana, and Texas; none resulted in a discharge and most were dismissed. He admitted filing prior petitions to stop Midway sales.
- The petition, schedules, and SOFA in the instant case contained material omissions/misstatements: he failed to list multiple prior bankruptcy cases, did not list Midway as a creditor, omitted vehicles and an ownership interest in a corporation, and did not sign required schedule declarations.
- Debtor’s Chapter 13 Plan (filed Dec. 1, 2014) proposed 28 months of payments, listed only Verizon, did not provide for Montana Department of Revenue’s priority estimated tax claim, and was not served on Midway. Trustee objected to confirmation and moved to dismiss with prejudice and a two-year bar on refiling.
- At hearing the court found Weik filed several petitions on auction dates, failed to accept Midway’s offer to retrieve items (and thus did not obtain any written waiver), and generally failed to comply with filing and disclosure obligations.
- Court concluded Debtor failed to meet the confirmation requirements (including good faith and tax-return obligations), and that his conduct was atypical and egregious enough to warrant dismissal with prejudice and a two-year prohibition on refiling.
Issues
| Issue | Trustee's Argument | Weik's Argument | Held |
|---|---|---|---|
| Whether Plan may be confirmed (good faith & §1325) | Plan not filed in good faith: misrepresentations, serial filings, omitted assets/creditors, unpaid taxes | Pro se, rushed, lacked computer/time; did best to comply | Denied — Debtor failed burden; plan not proposed in good faith and omitted required tax compliance |
| Eligibility under §109(g)(1) (prior dismissal within 180 days) | Dismissal of prior case bars Debtor from being debtor under §109(g)(1) | Argued dismissals were for fee default and not willful failure to prosecute | Court did not need to decide §109(g)(1) issue because other grounds supported dismissal; did note prior dismissal within 180 days but declined to rely solely on fee default theory |
| Timeliness of Plan filing (FRBP 3015(b), Rule 9006) | Plan late (14-day rule) | Filing fell after Thanksgiving weekend; filed next business day — excusable | Plan lateness alone insufficient to dismiss; court exercised discretion and accepted timing as not sole basis for dismissal |
| Appropriateness of dismissal with prejudice and two-year bar | Serial, atypical bad-faith filings, concealment and prejudice to Midway justify drastic sanction | Pro se status and claimed misunderstandings; sought leniency | Granted — case dismissed with prejudice and two-year prohibition on refiling based on totality of circumstances and egregious conduct |
Key Cases Cited
- Barnes v. Barnes, 32 F.3d 405 (9th Cir.) (debtor bears burden to prove confirmation requirements)
- Leavitt v. Soto (In re Leavitt), 171 F.3d 1219 (9th Cir.) (totality-of-circumstances test for good faith in Chapter 13)
- Rosson v. Fitzgerald (In re Rosson), 545 F.3d 764 (9th Cir.) (standard for dismissal for cause and review of bad-faith findings)
- Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007) (debtor conduct must be atypical to justify dismissal or conversion)
- Tomlin v. Miller (In re Tomlin), 105 F.3d 933 (4th Cir.) (dismissal with prejudice is a severe sanction limited to extreme, egregious circumstances)
- Davis v. U.S. Bank (In re Davis), 778 F.3d 809 (9th Cir.) (broad definition of "claim" requiring disclosure of rights to payment)