Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01155/USCOURTS-azd-2_08-cv-01155-0/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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The request for oral argument is denied because the Meshkatais have thoroughly

discussed the law and evidence and oral argument will not aid the Court’s decision. See

Mahon v. Credit Bur. of Placer County, Inc., 171 F.3d 1197, 1200 (9th Cir. 1999).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

In re: Anita Kramer Meshkatai, 

Debtor/Appellant, 

vs.

Fidelity Express Network, Inc.; and

Fidelity National Financial, Inc., 

Appellees. 

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No. CV-08-1155-PHX-DGC

No. 2:07-bk-05071-PHX-JMM

No. BAP-AZ-08-1130

ORDER

Appellant Anita Meshkatai appeals from an order dismissing her chapter 11

bankruptcy case. Dkt. #7. Appellant’s husband, Farid Meshkatai, has joined the appeal.

Dkt. #9. Appellees Fidelity Express Network, Inc. and Fidelity National Financial, Inc. have

elected not to file a response. Dkt. #13. For reasons stated below, the Court will affirm the

order of dismissal.1

I. Background.

WWAS Holdings, Pty, Ltd. (“WWAS”) sought to foreclose on a deed of trust against

the Meshkatais’ primary residence located in Paradise Valley, Arizona. Dkt. #7 at 5. The

foreclosure proceedings were automatically stayed on August 31, 2007, when Mr. Meshkatai

filed a chapter 11 bankruptcy petition. No. 2:07-bk-04382-RJH, Dkt. #1. The petition was

dismissed on September 7, 2007. Id., Dkt. #11.

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One month later, Appellant filed a chapter 11 bankruptcy petition. No. 2:07-bk05071-JMM, Dkt. #1. WWAS filed a motion to lift the automatic stay. Id., Dkt. ##44.

United States Bankruptcy Judge James Marlar granted the motion on April 9, 2008. Id.,

Dkt. ##119-20.

Appellees, who have a $13 million judgment against the Meshkatais (see id., Dkt. #44,

Ex A at 3), filed a motion to dismiss the bankruptcy case for cause. Id., Dkt. #137. Judge

Marlar issued an order granting the motion on May 6, 2008. Id., Dkt. #147. The order

contains the following provision:

If the Debtor and/or her husband, Farid Meshkatai, file any future

petition for relief under any chapter of title 11 of the United States Code, then:

(i) the venue for the filing of such petition shall be the United States

Bankruptcy Court for the District of Arizona; (ii) if the petition is filed in any

other district, then the venue of such case shall be transferred to the United

States Bankruptcy Court for the District of Arizona; and (iii) without further

Order, the Clerk of the United States Bankruptcy Court for the District of

Arizona immediately shall assign such case to the Honorable James M. Marlar

for all proceedings.

Id. ¶ 2. The Meshkatais challenge this provision. Dkt. #155; No. CV-08-1155, Dkt. ##7, 9.

II. Standard of Review.

Under 11 U.S.C. § 105(a), bankruptcy courts “may issue any order, process, or

judgment that is necessary or appropriate to carry out the provisions of [title 11].” See In re

Hessinger & Assocs., 192 B.R. 211, 216 (N.D. Cal. 1996). In ruling that future bankruptcy

filings by the Meshkatais are to be assigned to him, Judge Marlar presumably relied on the

equitable power granted him under § 105(a). See Dkt. #7 at 4. Courts “review final rulings

on § 105(a) injunctions for an abuse of discretion.” In re First Alliance Mortgage, 264 B.R.

634, 644 (C.D. Cal. 2001); see In re Reinertson, 241 B.R. 451, 454 (9th Cir. BAP 1999).

“‘A court abuses its discretion when it bases its decision on an erroneous conclusion of law

or when the record contains no evidence on which it could rationally base its decision.’”

In re Sierra Fin. Servs., Inc., 290 B.R. 718, 726 (9th Cir. BAP 2002) (citation omitted). 

III. Appellant.

Appellant does not dispute that where a bankruptcy petition is filed in bad faith, the

bankruptcy judge has authority to order that all of the debtor’s future bankruptcy filings be

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assigned to him. Appellant contends that Judge Marlar abused his discretion, however,

because his finding that Appellant “failed to ratchet down her standard of living” after filing

bankruptcy “does not equate to egregious conduct and there is nothing in the record to

support the life-time requirement to be bound by venue in the District of Arizona, let alone

one particular Judge.” Dkt. #37 at 10. 

The Court disagrees. In granting WWAS’ motion for relief from the automatic stay,

Judge Marlar specifically found that Appellant’s bankruptcy filing was a transparent attempt

to stall the foreclosure proceedings without payment to WWAS and that such cases are

“subject to dismissal as bad-faith filings[.]” No. 2:07-bk-05071-JMM, Dkt. #119 at 3.

Judge Marlar also found that Appellant maintained a “pampered and self-indulgent lifestyle”

that “does not appear conducive to the ‘belt-tightening’ expected of most debtors.” Id.

Those findings are supported by the record. Appellant’s proposed bankruptcy plan

was not effective in part because she is unemployed and her “sole income comes from

unidentified trusts or funds sent to her by her husband from mysterious or undisclosed

sources.” Id. at 2-4 & n.1. In February 2008, Appellant received $27,000 in income and

spent nearly the entire amount on such things as a nanny and a personal trainer, shopping

trips to department stores, landscape and pool maintenance, computer, cable, and cell phone

expenses for herself and her children, and pet expenses. Id., Dkt. #119 at 2-3; Dkt. #80. The

following month’s expenses totaled nearly $29,000, including ski vacations, yoga classes,

pedicures, and garden services. Id., Dkt. #135. Notably, Appellant acknowledges that

despite her substantial monthly income, she filed bankruptcy for the sole purpose of stopping

WWAS’ foreclosure proceedings. Id., Dkt. 44 at 3-5; No. CV-08-1155, Dkt. #7 at 5, ¶ 2.

“The Bankruptcy Code was created for the honest debtor.” In re Yimam, 214 B.R.

463, 466 (Bankr. D. Md. 1997). Because the record supports the finding that Appellant filed

bankruptcy in bad faith, Judge Marlar did not abuse his discretion by requiring that all of

Appellant’s future bankruptcy filings be assigned to him. 

Appellant contends that she was not given an opportunity to voice her concerns about

the requirement. No. CV-08-1155, Dkt. #7 at 9. The record shows, however, that Appellant

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filed a written objection to the requirement and submitted a proposed order of dismissal. See

No. 2:07-bk-05071-JMM, Dkt. ##143-44. Judge Marlar rejected Appellant’s proposed order

in favor of the one submitted by Appellees. Id., Dkt. ##142, 147. While Appellant may

disagree with that decision, she was not denied an opportunity to object. 

IV. Farid Meshkatai.

Mr. Meshkatai contends that by including him in the order of dismissal Judge Marlar

exceeded his jurisdiction and denied Mr. Meshkatai due process. Dkt. #9 at 10-15.

Mr. Meshkatai does not dispute that he had notice of his wife’s bankruptcy proceedings.

Nor does he dispute that only months before his wife’s bankruptcy case was filed, he filed

bankruptcy in this District for the sole purpose of thwarting WWAS’ foreclosure effort. See

id., Dkt. #44 at 7.

When debtors “have filed tag-team bankruptcies in order to avoid [a creditor’s]

legitimate efforts to recover [its] collateral,” the “multiple filings are evidence of bad faith

and evidence of the fact that the [debtors] are abusing the bankruptcy process.” In re Price,

304 B.R. 769, 773 (Bankr. N.D. Ohio 2004); see In re McCray, 342 B.R. 668, 670 (Bankr.

D.D.C. 2006); In re Copeland, 268 B.R. 273, 278 (Bankr. D. Kan. 2001); In re Kinney, 51

B.R. 840, 844-45 (Bankr. C.D. Cal. 1985). Judge Marlar specifically found that the

Meshkatais’ successive bankruptcy filings were “just gamesmanship.” No. 2:07-bk-05071-

JMM, Dkt. #44, Ex. A at 9.

Under § 105(a) of the Bankruptcy Code, Judge Marlar had both “the power and the

duty to implement an appropriate order to prevent the continuing abuse of the bankruptcy

process by the [Meshkatais].” In re Yimam, 214 B.R. at 466. The Court concludes that

Judge Marlar did not commit legal error or otherwise abuse his discretion by ordering that

future bankruptcies by Mr. Meshkatai be assigned to him. See In re Kinney, 51 B.R. at 845

(where multiple bankruptcies were filed by different members of the Kinney family in order

to avoid foreclosure “the actions of each family member [would] be imputed to the rest of

the family due to the unity of interest and concert of action”); In re McCray, 342 B.R. at 670

(barring any further bankruptcy by the debtor or her husband from giving rise to an automatic

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stay against foreclosure proceedings where the McCrays’ successive filings were in bad

faith); In re Roeben, 294 B.R. 840, 848-49 (Bankr. E.D. Ark. 2003) (finding that the debtor

and her spouse acted in concert and charging the spouse with constructive knowledge of the

bankruptcy proceedings where they previously had filed multiple bankruptcies to avoid

foreclosure); In re Allnutt, 220 B.R. 871, 890 (Bankr. D. Md. 1998) (permanently enjoining

debtor and his spouse from contesting the validity of estate sales).

V. Conclusion.

Judge Marlar did not bar the Meshkatais from filing bankruptcy in the future. He

ordered that any such cases be assigned to him. Judge Marlar had the authority to impose

that restriction under 11 U.S.C. § 105(a), and his decision to impose it was not an abuse of

discretion given the evidence of bad faith on the part of the Meshkatais. The Court will

affirm the order of dismissal. See Fed. R. Bankr. P. 8013. If the Meshkatais file bankruptcy

in the future and believe that the case should be transferred from this District or that Judge

Marlar should recuse himself, they may file motions seeking such relief.

IT IS ORDERED:

1. Judge Marlar’s order of dismissal (No. 2:07-bk-05071-JMM, Dkt. #47) is

affirmed.

2. The Clerk is directed to terminate this case.

DATED this 16th day of December, 2008.

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