Paulson v. Wein (In re Paulson)
477 B.R. 740
| 8th Cir. BAP | 2012Background
- Paulson filed a voluntary Chapter 13 petition on August 22, 2011, to contest claims by People’s State Bank and Sunflour Railroad.
- People’s obtained a circuit court foreclosure judgment in SD on December 10, 2009, with money judgment and possession of collateral awarded to the bank.
- Sunflour filed a proof of claim for $24,623.36 plus post-judgment interest, secured by a judgment lien on real property, with a 2002 original judgment and 2008 supplemental judgment.
- Paulson formed an extrajudicial group nicknamed the Peoples Seventh Amendment Jury to challenge the state judgments and pursued declaratory relief and adversary proceedings that were dismissed as collateral attacks.
- During the case, Paulson filed five reorganization plans with vague treatment of secured claims and no feasible path to payment, prompting objections from the trustee, the bank, and Sunflour.
- The bankruptcy court dismissed the case for cause under § 1307 due to unreasonable delay and inability to confirm a plan, and also denied Paulson’s motion for new trial AM amend judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal for cause under § 1307 was proper. | Paulson argues the court abused by dismissing rather than converting. | Bankruptcy court concluded multiple failed plans and delay justified dismissal. | Affirmed dismissal for cause. |
| Whether the court correctly found unreasonable delay and lack of plan feasibility. | Paulson claims plans were viable and delays were not solely his fault. | Court found repeated failed plans, failure to treat secured claims, and infeasibility. | Findings supported dismissal for delay and lack of feasible plan. |
| Whether denial of the motion for new trial was proper. | Paulson asserts manifest errors or new evidence warrant relief. | Bankruptcy court properly addressed arguments; no manifest error or new evidence. | Denied; no abuse of discretion. |
Key Cases Cited
- In re Minkes, 237 B.R. 476 (8th Cir. BAP 1999) (unconfirmable plan and delay may support dismissal)
- In re Wagner, 259 B.R. 694 (8th Cir. BAP 2001) (feasibility and timing of plan payments; plan must be feasible)
- In re Moffet, 455 B.R. 718 (Bankr.N.D.Iowa 2011) (feasibility and timing; caution about plans funded by uncertain sources)
- In re Tolbert, 255 B.R. 214 (8th Cir. BAP 2000) (abuse of discretion standard; review of dismissal orders)
- Suggs v. Regency Fin’l Corp., 377 B.R. 198 (8th Cir. BAP 2007) (abuse of discretion standard; manifest error as basis for reversal)
- In re Danzig, 233 B.R. 85 (8th Cir. BAP 1999) (standard for reviewing denial of motions to amend or reconsider)
- Villarreal v. Laughlin (In re Villarreal), 304 B.R. 882 (8th Cir. BAP 2004) (abuse of discretion and deference to bankruptcy court findings)
- United States v. Williams, 504 U.S. 36 (1992) (limits of self-help authority; unrelated precedent to civil disputes)