583 B.R. 573
1st Cir. BAP2018Background
- Stevenson filed Chapter 7 in Sept. 2016 while a state summary process (eviction) action by landlord TND was pending; the stay was denied as to payment conditions, TND later dismissed that state action after full payment and Stevenson received a Chapter 7 discharge in Jan. 2017.
- After discharge Stevenson again withheld rent and allegedly failed to recertify and permit inspection; TND issued a 30‑day notice and filed a new summary process action in April 2017.
- Stevenson filed Chapter 13 on April 21, 2017 (the case on appeal) and listed only student loans and the lease with TND; she filed multiple amended Chapter 13 plans but none were confirmable and reported limited other debts.
- TND moved to dismiss the Chapter 13 under 11 U.S.C. § 1307(c), arguing the filing was a bad‑faith, two‑party tactic to delay eviction; the bankruptcy court dismissed for ‘‘unreasonable delay prejudicial to creditors’’ (§1307(c)(1)).
- Stevenson raised several arguments on appeal (assumability of the lease, stay scope, anti‑SLAPP/abuse of process, racial bias, adversary proceeding), sought injunctive relief against the state action, and appealed the dismissal; the Panel denied relief and affirmed dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Chapter 13 should be dismissed under §1307(c) for cause (unreasonable delay prejudicial to creditors) | Stevenson: filed in good faith to "resume" assumable lease and to pay arrears over time; proposed plans would address obligations | TND: filing is a two‑party, bad‑faith tactic to delay eviction; no reorganization purpose; lease was terminated pre‑petition | Held: Affirmed dismissal for unreasonable delay prejudicial to creditors (§1307(c)(1)); case was essentially a two‑party dispute and not a reorganization of debtor's affairs |
| Whether the lease was unexpired and assumable | Stevenson: lease remained in effect and could be assumed under §365 | TND: lease had been terminated pre‑petition, so nothing to assume | Held: Court concluded lease was terminated and there was ‘‘nothing to do’’ to revive it; assumption not available |
| Whether the automatic stay prevented state court ministerial acts and required injunction of state eviction proceedings | Stevenson: bankruptcy stay and anti‑injunction relief should block state process | TND: promptly informed state court of filing; stay issues exceed this appeal | Held: Panel rejected relief; state process not enjoined by this appeal and related stay arguments were outside scope and meritless here |
| Whether adversary and anti‑SLAPP claims or alleged racial bias warranted reversal | Stevenson: anti‑SLAPP claim and bias required continuation of proceedings in bankruptcy | TND: such claims belong in state court or are unsupported; adversary dismissed after main case dismissal | Held: Adversary dismissed for lack of subject‑matter jurisdiction after main case dismissal; racial‑bias claim lacked record support |
Key Cases Cited
- Howard v. Lexington Invs., Inc., 284 F.3d 320 (1st Cir. 2002) (dismissal under §1307 reviewed for abuse of discretion; unreasonable delay can justify dismissal)
- Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007) (§1307(c) contains nonexclusive list of causes justifying dismissal or conversion)
- In re Benoit, 564 B.R. 799 (1st Cir. BAP 2017) (discussion of §1307 dismissal standards)
- In re Colón Martinez, 472 B.R. 137 (1st Cir. BAP 2012) (unreasonable delay—failure to file a reasonable plan—supports dismissal)
- In re Witkowski, 523 B.R. 300 (1st Cir. BAP 2014) (standard of review and dismissal for cause under §1307)