682 F. App'x 842
11th Cir.2017Background
- Armando Rivas executed a promissory note and mortgage on a Boynton Beach, FL home; the note was later held by The Bank of New York Mellon (BNYM).
- BNYM filed a state-court foreclosure on June 4, 2012; on the eve of the foreclosure trial Rivas filed his fourth pro se Chapter 13 petition.
- The bankruptcy court dismissed the Chapter 13 case for lack of good faith, noting (1) Rivas’s stated purpose was to obtain a loan modification, (2) he had negative monthly disposable income and thus could not reorganize, and (3) multiple recent bankruptcy filings indicating serial filings; the court barred Rivas from filing any bankruptcy case for two years.
- The district court affirmed the dismissal and denial of in forma pauperis (IFP) status on appeal, citing conflicts between Rivas’s sworn income statements and concluding the appeal would be frivolous.
- Rivas sought IFP before the Eleventh Circuit, alleging judicial bias and racial discrimination; the Eleventh Circuit denied IFP as the appeal was frivolous and found no record support for bias or race-based dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rivas’s Chapter 13 petition was filed in good faith | Rivas argued he legitimately sought relief (loan modification) and appealed dismissal | BNYM and courts argued petition was a tactical delay device filed to obtain a loan modification and avoid foreclosure | Court held petition was filed in bad faith because primary purpose was loan modification and timing/serial filings showed intent to frustrate creditor rights |
| Whether dismissal was justified because Rivas cannot reorganize under Chapter 13 | Rivas maintained eligibility/ability to propose a reorganization plan | Bankruptcy court found Rivas had negative monthly disposable income and could not confirm a plan | Held that inability to reorganize (negative disposable income) supported dismissal as an alternative rationale |
| Whether the bankruptcy court abused discretion by enjoining future filings for two years under 11 U.S.C. § 105(a) | Rivas contended the two-year bar was improper and punitive | Court invoked § 105(a) and prior serial filings as grounds for entry of a bar to prevent abuse | Held the two-year bar was within discretion given serial filings and bad-faith history; no abuse of discretion found |
| Whether IFP status should be granted for the appeal and whether courts showed bias/racial discrimination | Rivas claimed courts were prejudiced/biased and suggested race influenced rulings | Respondents pointed to conflicting income affidavits and concluded appeal lacked nonfrivolous issues; no evidentiary support for bias claims | Held IFP denied because appeal is frivolous; no record evidence of prejudice or race-based decision-making |
Key Cases Cited
- Camp v. Oliver, 798 F.2d 434 (11th Cir. 1986) (IFP is a privilege committed to court discretion)
- Martinez v. Kristi Kleaners, Inc., 364 F.3d 1305 (11th Cir. 2004) (standards for sufficiency of poverty affidavit for IFP)
- Napier v. Preslicka, 314 F.3d 528 (11th Cir. 2002) (definition of frivolous action)
- Hughes v. Lott, 350 F.3d 1157 (11th Cir. 2003) (pro se pleadings construed liberally)
- In re Brown, 742 F.3d 1309 (11th Cir. 2014) (appellate review standard of bankruptcy findings)
- In re Int'l Pharm. & Disc. II, Inc., 443 F.3d 767 (11th Cir. 2005) (clear-error standard for factual findings)
- In re Waldron, 785 F.2d 936 (11th Cir. 1986) (good-faith requirement for Chapter 13 petitions)
- In re Phoenix Piccadilly, Ltd., 849 F.2d 1393 (11th Cir. 1988) (petition may be dismissed for lack of good faith to delay creditors)
- In re Kitchens, 702 F.2d 885 (11th Cir. 1983) (frequency of filings relevant to bad-faith analysis)
- In re Porto, 645 F.3d 1294 (11th Cir. 2011) (§ 105(a) sanctions and review for abuse of discretion)