Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02482/USCOURTS-casd-3_12-cv-02482-1/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

In re

JORDAN MARINKOVIC BAUMAN,

Debtor. 

JORDANA BAUMAN,

Appellant,

Case Nos. 12cv2476 - IEG (RBB)

 12cv2482 - IEG (BLM)

Bankruptcy Case No: 11-11223-PB

ORDER VACATING DISMISSAL

AND REMANDING TO THE

BANKRUPTCY COURT FOR

FURTHER PROCEEDINGS.

vs.

THOMAS H. BILLINGSLEA, JR.,

CHAPTER 13 TRUSTEE, et al.,

Appellees. _______________________________

MEL M. MARIN,

 Appelant,

 vs.

THOMAS H. BILLINGSLEA, JR.,

CHAPTER 13 TRUSTEE, et al.,

Appellees.

Before the Court are two appeals arising from the same underlying Chapter 13

bankruptcy proceeding. Appellants, Debtor Jordana M. Bauman and her brother,

Mel M. Marin, each appeal the bankruptcy court’s September 12, 2012 dismissal

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order. For the reasons below, the dismissal order is VACATED, and the matter is

REMANDED to the bankruptcy court for further proceedings consistent herewith. 

BACKGROUND

Debtor Bauman filed a voluntary Chapter 13 bankruptcy petition on July 5,

2011. [See Doc. No. 22, (Excerpts of Record (“E.R.”)) at 63.] On August 1, 2011,

Debtor’s brother, Marin, filed a motion asserting standing as a creditor on behalf of a

family trust. [E.R. at 64.] On August 5, 2011, Debtor filed a proposed Chapter 13

plan (the “Plan”). [E.R. at 65.] On August 12, 2011, the Chapter 13 Trustee filed

objections to confirmation of the Plan and a motion to dismiss pursuant to 11 U.S.C.

§1307(c)(5), both noticed for hearing on October 19, 2011. [Id.] On August 19,

2011, creditor Wells Fargo Bank, N.A., filed objections to confirmation, also noticed

for hearing on October 19, 2011. [Id.] On September 6, 2011, Bauman filed an

opposition to the objections and motion to dismiss. [Id.] On October 19, 2011, the

bankruptcy court took the objections and motion to dismiss under submission

without ruling on the validity of either. [E.R. at 66.]

Nearly a year later, on September 12, 2012, the bankruptcy court issued a

short written order dismissing Bauman’s petition on grounds that “[m]ore than

enough time ha[d] elapsed for debtor to step forward and correct all the deficiencies

in her proposed plan . . . [and that she] ha[d] failed to show how amendment might

salvage her plan.” [E.R. at 67.] By the present appeals, Debtor and her brother

request that the bankruptcy court’s dismissal order be vacated.1

DISCUSSION

A. Jurisdiction and Standard of Review

The Court has jurisdiction over appeals from final judgments of the

1 Appellants’ voluminous motion practice in this matter, both before the bankruptcy court and on appeal, has approached vexatiousness. And the Court is wellaware of Appellant Marin’s “extensive history of frivolous litigation.” Marin v.

Escondido Care Center, 2012 WL 5463688, at *2 (S.D. Cal. Nov. 7, 2012); see also id. at *2 n.3, 4. Accordingly, Appellants are hereby cautioned that unchecked, frivolous

motion practice may result in a vexatious litigant order.

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bankruptcy court, see 28 U.S.C. § 158(a)(1); In re City of Desert Hot Springs, 339

F.3d 782, 787 (9th Cir. 2003), and reviews findings of fact for clear error and

conclusions of law de novo, see FED. R. BANKR. P. 8013(a); In re Int’l Fibercom,

Inc., 503 F.3d 933, 940 (9th Cir. 2007). 

B. The Bankruptcy Court’s Dismissal Order is Void

Dismissal of Chapter 13 petitions is governed by § 1307(c), which requires:

(1) notice and a hearing; and (2) a showing of cause. See 11 U.S.C. § 1307(c). 

Here, neither requirement was met and thus dismissal was improper. 

1. Inadequate Notice and Hearing

“Pursuant to 11 U.S.C. section 1307(c), a Chapter 13 case can only be

dismissed ‘after notice and a hearing’.” In re Krueger, 88 B.R. 238, 241 (9th Cir.

BAP 1988) (quoting 11 U.S.C. section 1307(c)). Per statute, “‘after notice and a

hearing’ means: ‘such notice as is appropriate in the particular circumstances and

such opportunity for a hearing as is appropriate in the particular circumstances.’” Id.

(quoting 11 U.S.C. section 102(1)(A)). “The essential point is that the court should

give counsel a meaningful opportunity to be heard.” In re Rosson, 545 F.3d 764,

775 (9th Cir. 2008). But although this statutory “concept of notice and a hearing is

flexible,” “dismissal . . . [is] not appropriate where substantive issues are to be

determined.” In re Tennant, 318 B.R. 860, 870 (9th Cir. BAP 2004) (citing In re

Minkes, 237 B.R. 476, 478-79 (8th Cir. BAP 1999)). 

Here, the bankruptcy court dismissed for failure to correct purported

deficiencies that had never been identified as substantively valid. With these

“substantive issues [yet] to be determined,” dismissal was inappropriate. Id. at 870;

see also In re Minkes, 237 B.R. at 478-79 (reversing bankruptcy court dismissal

order because “[n]o notice was given to the debtor of the deficiencies with his plan,

with an opportunity to either argue that the plan was not deficient or to correct the

plan to meet the perceived problems”).

“Moreover, notice is not only a statutory requirement, but a constitutional

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requirement as well.” In re Krueger, 88 B.R. 238, 241. “The due process clause of

the Fifth Amendment requires that due process be provided before property can be

taken.” Id. “An elementary and fundamental requirement of due process in any

proceeding which is to be accorded finality is notice reasonably calculated, under all

of the circumstances, to apprise interested parties of the pendency of the action and

afford them an opportunity to present their objections.” Mullane v. Central Hanover

Bank & Trust Co., 339 U.S. 306, 314 (1950); In re Leeward Subdivision Partners,

LLC, 2010 WL 6259983, at *9 (9th Cir. BAP 2010) (same).

Here, the bankruptcy court took under submission contested objections

without identifying which, if any, warranted rebuttal, much less correction, by

Appellants. Then, nearly a year later, the bankruptcy court issued a dismissal order,

which faulted Appellants for failing to correct those purported deficiencies even

though they had never been identified as warranting correction. By failing to

identify which purported deficiencies warranted a response, the bankruptcy court left

Appellants without any meaningful opportunity to respond and thereby violated due

process. See In re Rosson, 545 F.3d at 776 (due process violated where “overall

process provided by the bankruptcy court failed to afford [debtor] a meaningful

opportunity to be heard”); In re Dunn, 2010 WL 6451888, at *7 (9th Cir. BAP 2010)

(finding bankruptcy court’s failure to provide adequate notice a violation of due

process). Accordingly, the bankruptcy court’s dismissal order is not only statutorily

improper, but void as a deprivation of due process. In re Krueger, 88 B.R. at 241

(“An order is void if it is issued by a court in a manner inconsistent with the due

process clause of the Fifth Amendment.”). 

2. Inadequate Showing of Cause

Furthermore, the bankruptcy court’s dismissal order failed to require a

sufficient showing of cause. The order’s basis for cause is denial of plan

confirmation under §1307(c)(5), which “requires, at a minimum, that the court must

afford a debtor an opportunity to propose a new or modified plan following the

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denial of plan confirmation.” In re Nelson, 343 B.R. 671, 675-676 (9th Cir. 2006). 

Because the bankruptcy court failed to identify the purported deficiencies in the

Plan, Bauman had no an opportunity to propose a new or modified plan addressing

those purported deficiencies. Without that opportunity, dismissal pursuant to

§1307(c)(5) was improper. Id.; accord In re Eardley, 2009 WL 7809924, at * (9th

Cir. BAP 2009) (a “court ordinarily must afford a debtor an opportunity to amend a

plan before dismissing a chapter 13 case for ‘cause.’”); In re Minkes, 237 B.R. at

478 (“we disagree that the filing of one unconfirmable plan, in and of itself, is

sufficient cause for dismissal of a Chapter 13 case.”). 

In sum, the Court finds the bankruptcy court’s dismissal both statutorily

improper under §1307(c) and constitutionally improper because of a violation of due

process. Accordingly, the bankruptcy court’s dismissal order is VACATED. In re

Krueger, 88 B.R. at 241 (a district court “properly vacate[s] [a] dismissal order . . .

issued in violation of the Debtor’s due process rights.”). 

CONCLUSION

For the reasons above, the Court hereby VACATES the bankruptcy court’s

September 12, 2012 dismissal order and REMANDS to the bankruptcy court for

further proceedings consistent herewith. 

IT IS SO ORDERED.

DATED: August 29, 2013 _________________________________

IRMA E. GONZALEZ, 

United States District Court

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