In Re Burrell
MEMORANDUM OPINION
This converted chapter 7 case comes before the court on this court’s order for the debtor to show cause why he should not be denied a discharge pursuant to
Facts
Pro se debtor Charles Burrell received a chapter 7 discharge in a case commenced on June 13, 1986. Debtor filed his current bankruptcy case as a chapter 13 on October 21,1991, and moved to convert it to chapter 7 on June 3, 1992. The case was converted to chapter 7 on June 9, 1992.
Debtor’s Position
Apparently debtor wanted to have the present case converted to chapter 7 after
Discussion and Conclusions of Law
The issue before the court is whether debtor is entitled to a chapter 7 discharge in light of
(a) The court shall grant the debtor a discharge, unless— ... (8) the debtor has been granted a discharge under this section ... in a case commenced within six years before the date of the filing of the petition;
[1] The purpose of this section is to prevent overly frequent use of liquidation as a means of avoiding debt.
Madison Lumber & Block Company v. Rand D. Marshall (In re Marshall),
The statute is clear that the date on which the six year period begins to run is the commencement date of the previous chapter 7 case.
See Michael Antonio Canganelli v. Lake County Indiana Department of Public Welfare (In re Canganelli),
The second part of the issue is whether the date which concludes the six year period is the initial filing date of debt- or’s present case or the date the case was converted to chapter 7. Although both
dates are within the six year period barring a subsequent chapter 7 discharge (October 21, 1991 and June 9, 1992), debtor asserts that if the appropriate date is the date of conversion he should be entitled to a discharge nonetheless because the clerk’s office erred in converting his case too soon and contrary to an instruction contained in his motion to convert.
The bankruptcy code and applicable case law is quite clear that the date of the original filing and not the date of conversion is the date which concludes the six year period barring a subsequent chapter 7 discharge.
Finally, I believe my decision to act, sua sponte, in this matter is warranted under
The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action necessary or appropriate to ... prevent an abuse of process.
In this regard I respectfully disagree with Chief Judge Kent Lindquist’s opinion
Bankruptcy Rule 4004 places a strict 60 time limit upon the filing of a complaint objecting to a general discharge under
§ 105 speaks in terms of the power of the Court in carrying out or enforcing Court orders or rules or preventing abuse of process, and not to enforcing sua sponte the substantive rights which otherwise belong to the creditors, the trustee or the United States.
In re Canganelli,
However, the preceding analysis ignores the clear mandate of
Pro se debtor Burrell’s improper use of the bankruptcy system has been nothing short of “an abuse of process.” In a memorandum opinion dated October 26, 1992, this court denied Burrell in forma pauperis status due to his “utter lack of good faith” with regards to his numerous frivolous appeals from the orders of this court. Throughout the long and protracted history of this case it has become overwhelmingly clear to the court that Burrell’s sole purpose for filing bankruptcy was to harass, hinder, frustrate, and delay the actions of a creditor, Ervin G. Letterlough.
Burrell’s bankruptcy case has revolved around one asset: a dump truck owned by Ervin G. Letterlough. Prepetition, Letter-lough attempted to sell the dump truck to Burrell pursuant to a written contract. After receiving possession of the dump truck Burrell never paid any part of the purchase price called for under the contract. In fact, Burrell converted the truck by removing the engine and placing it in the body of another truck frame.
Letterlough filed suit against Burrell, obtained a judgment, and had the sheriff seize the truck pursuant to a writ of execution. Moreover, the state court found that Burrell committed fraud upon Letterlough and awarded attorney’s fees and costs.
Subsequently, Burrell filed the instant bankruptcy case, initially as a chapter 13. After a series of chapter 13 plans could not be confirmed pursuant to well taken objections of the trustee and Letterlough, Bur-rell moved to convert to chapter 7 on the eve of the sixth year anniversary of the commencement of his previous chapter 7 case.
While Mr. Burrell was in chapter 13, this court went to some lengths to accord him every opportunity to propose a confirmable plan, notwithstanding numerous instances of his failing to comply with chapter 13 procedures and the rules. Burrell’s noncompliance required the court on at least three instances to order his case reinstated from imminent dismissal. The court’s last reinstatement order was entered on May 29, 1992. Burrell filed his motion to convert to chapter 7 on June 3, 1992; on that date there was pending a motion by the chapter 13 trustee to dismiss the ease because of Burrell’s failure to make plan payments as required by
A review of Burrell’s case file reveals rather clearly that throughout his chapter 13 he was merely biding his time until he reached what he believed was the magic date of June 13, 1992, when he could safely convert. He never proposed a confirmable plan, and it is unlikely that he could have.
During the course of this case, which is now over one year old, Burrell has amassed an enormous case file with multiple contested matters and adversary proceedings. Most of the documents filed by Burrell have been spurious, frivolous, incomprehensible, or not otherwise in accordance with the Bankruptcy Rules. At one point Burrell filed a frivolous complaint against Letterlough’s attorney and the sheriff's office, which prompted Rule 11 sanctions from this court. That ruling was affirmed by the district court on appeal.
In short, if any case ever involved such rare circumstances that would warrant the bankruptcy court’s sua sponte denial of a debtor’s discharge under 727(a)(8) to “prevent an abuse of process,” this is such a case. Inaction by the court in such a case would undermine the integrity of the bankruptcy system.
Accordingly, the court will enter an order providing that no order of discharge will be entered in this case.
Notes
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(a) Conversion of a case from a case under one chapter of this title to a case under another chapter of this title constitutes an order for relief under the chapter to which the case is converted, but, except as provided in subsections (b) and (c) of this section, does not effect a change in the date of the filing of the petition, the commencement of the case, or the order for relief.