Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02911/USCOURTS-ca10-88-02911-0/pdf.json

Parties Involved:
Armellia Kruse
Appellant
Ralph Jerome Kruse
Appellant
Northwest Kansas Production Credit Association
Appellee
The Federal Land Bank of Wichita
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT FI LED 

United States Court of Appeals 

·r ent:h Ci!'c<Jit 

In re: RALPH JEROME KRUSE and 

ARMELLIA KRUSE, 

Debtors, 

ARMELLIA KRUSE and RALPH JEROME 

KRUSE, 

Appellants, 

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APk ~ 6 1990 

.ROBERT L. fiOECKER 

Clerk 

) (D.C. 

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Nos. 88-2909 & 

88-2911 

Nos. 87-4199 & 

87-4198) 

v. ( D. Kan. ) 

THE FEDERAL LAND BANK OF WICHITA and 

NORTHWEST KANSAS PRODUCTION CREDIT 

ASSOCIATION, 

Appel lees. 

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ORDER AND JUDGMENT* 

Before McKAY, SEYMOUR, Circuit Judges, and KANE,** District Judge. 

**Honorable John L. Kane, Senior District 

District Court for the District of 

designation. 

Judge, United States 

Colorado, sitting by 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 88-2911 Document: 01019967088 Date Filed: 04/26/1990 Page: 1 
This appeal turns on the issue of whether debtors are 

permitted to file a second bankruptcy proceeding before the first 

ha s been closed. In the instant case, the bankruptcy court 

d ismissed the debtors' second filing, and the district court 

a ffirmed. We affirm the district court. 

These consolidated cases arise from the same bankruptcy 

proceeding. The debtors filed their Chapter 11 proceeding in the 

Topeka division of the United States Bankruptcy Court for the 

Distr i ct of Kansas. After the bankruptcy court approved the 

Cha p ter 11 plan, the debtors paid 100% of the payments to 

uns e cured creditors set forth in the plan. However, before the 

final decree had been entered in that proceeding, The Federal Land 

Bank of Wi chita (FLB) filed a notice of intent to foreclose on the 

d ebtors' farm. In response, the debtors filed their Chapter 12 

proceeding in the Kansas City division of the bankruptcy court. 

Creditor Northwest Production Credit Association (PCA) moved to 

d ismiss the Chapter 12 proceeding on the ground that the Chapter 

11 proceeding was not yet closed. In the alternative, PCA 

reque sted that the Kansas City bankruptcy court transfer the 

Chapt er 1 2 proceeding to the Topeka division. This motion was 

j o ined by FLB which argued that the debtors did not qualify as 

f a mi ly farmers for the purposes of Chapter 12 due to the lease of 

their land to a corporation for whom they had been subsequently 

employed as farm managers. The Chapter 12 case was transferred to 

Topeka, and the bankruptcy judge in Topeka granted the creditors' 

motion t o dismiss on both grounds. The district court affirmed. 

2 

Appellate Case: 88-2911 Document: 01019967088 Date Filed: 04/26/1990 Page: 2 
We review the legal determinations of the district court de 

novo, although we accept the factual findings of the bankruptcy 

court unless they are clearly erroneous. Branding Iron Motel, 

Inc. v. Sandlian Equity, Inc. (In re Branding Iron Motel, Inc.), 

79 8 F.2d 396, 399-400 (10th Cir. 1986). 

As the district court stated in its order of November 1, 

1988 , the law is well settled that a debtor cannot properly be in 

more than one voluntary bankruptcy proceeding at one time. 

Fres hman v. Atkins, 269 U.S. 121, 122 (1925); In re Prudential 

Ins . Co. v. Colony Square Co., 29 Bankr. 432, 436 (W.D. Pa. 1983); 

In re Stahl, Asano, Shigetomi Assoc., 6 Bankr. 232, 232 (Bankr. D. 

Haw . 1 980); see also Ginsberg v. Thomas, 170 F.2d 1, 2 (10th Cir. 

1948) . 

The record before the district court and on appeal reflects 

that the debtors' Chapter 11 proceeding had not been "closed" at 

the time they filed their Chapter 12 petition. Bankruptcy Rules 

2 015 (a)(6) and (7) set forth the steps which the debtor must take 

to close a bankruptcy proceeding. 1 The debtors did not make the 

1 Rule 2015 (6) and (7) provide: 

(6) within 30 days after the date of the order 

confirming a plan or within such other time as the court 

may fix, [the debtor must] file a report with the court 

concerning the action taken by the trustee or debtor in 

possession and the progress made in the consummation of 

the plan and file further reports as the court may 

direct until the plan has been consummated; (7) after 

consummation of a plan, file an application for a final 

decree showing that the plan has been consummated, and 

the names and addresses, if known, of the holders of 

claims or interests which have not been surrendered or 

released in accordance with the provisions of the plan 

and the nature and amounts of claims or interests, and 

other facts as may be necessary to enable the court to 

pass o n the provisions to be included in the decree. 

3 

Appellate Case: 88-2911 Document: 01019967088 Date Filed: 04/26/1990 Page: 3 
necessary reports or filings concerning their Chapter 11 filing 

until after they filed their Chapter 12 action. Nor had the 

bankruptcy court entered a decree in the Chapter 11 case as of the 

date of the Chapter 12 filing. 2 11 U.S.C. § 350(a); 3 Bankruptcy 

Rule 3022. 4 Therefore, since the debtors' Chapter 11 proceeding 

was not yet closed, their Chapter 12 petition was properly 

dismiss ed. 

Because we agree with the district court that the debtors 

were precluded from filing under Chapter 12 until their Chapter 11 

filing was closed, we do not reach the question of whether the 

debtors meet the definition of "family farmers" under the 

bankruptcy code. 

The judgment of the United States District Court for the 

District of Kansas is AFFIRMED. 

The mandate shall issue forthwith. 

ENTERED FOR THE COURT 

PER CURIAM 

2 Indeed, the bankruptcy court had not entered a final decree 

in the Chapter 11 action as of the filing of the appeal in this 

court. Brief of Appellee PCA at 3; Brief of Appellee FLB at 4. 

3 11 U.S.C. § 350(a) provides: "After an estate is fully 

administered and the court has discharged the trustee, the court 

shall close the case." 

4 Rule 3022 states: 

After an estate is fully administered, including 

distribution of any deposit required by the plan, the 

court shall enter a final decree (1) discharging any 

trustee if not previously discharged and cancelling the 

trustee's bond; (2) making provision by way of 

injunction or otherwise as may be equitable; and (3) 

closing the case. 

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Appellate Case: 88-2911 Document: 01019967088 Date Filed: 04/26/1990 Page: 4