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FILED

FEB 13 2017

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-16-1230-LNTa

)

LOUIS C. NEMETH, ) Bk. No. 8:16-bk-11919-CB

)

Debtor. )

______________________________)

)

LOUIS C. NEMETH, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

AMRANE COHEN, Chapter 13 )

Trustee; WELLS FARGO BANK, )

N.A., )

)

Appellees. )

______________________________)

Submitted Without Oral Argument

on January 19, 2017

Filed - February 13, 2017

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding

_________________________

Appearances: Appellant Louis C. Nemeth pro se on brief; Jay K.

Chien on brief for appellee Amrane Cohen,

Chapter 13 Trustee. 

_________________________

* This disposition is not appropriate for publication.

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.
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Before: LAFFERTY, TAYLOR, and NOVACK,** Bankruptcy Judges.

INTRODUCTION

Debtor filed a chapter 131 plan proposing no ongoing

payments to the mortgage creditor and understating the arrearage

owed to that creditor. The creditor filed an objection to

confirmation. The chapter 13 trustee filed a notice warning that

if the Debtor’s plan was not confirmed at the confirmation

hearing, the case could be dismissed upon an oral motion. 

Debtor, who appeared pro se, contended at the confirmation

hearing that his obligation to the mortgage creditor had been

discharged in a prior chapter 7 case and that he had rescinded

the obligation. Debtor also contended that the mortgage creditor

was not entitled to payment because it had not filed a proof of

claim to substantiate the debt. At the confirmation hearing, the

chapter 13 trustee informed the court that the Debtor had not

made his first plan payment and was not making mortgage payments. 

The bankruptcy court dismissed the case with a 180-day bar to

refiling.

We AFFIRM the dismissal; in the meantime, the 180-day bar

has expired, rendering moot the appeal of that aspect of the

court’s order. 

** Hon. Charles Novack, United States Bankruptcy Judge for

the Northern District of California, sitting by designation.

1 Unless otherwise indicated, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, 

“Rule” references are to the Federal Rules of Bankruptcy

Procedure, and “Civil Rule” references are to the Federal Rules

of Civil Procedure. “LBR” references are to the Local Bankruptcy

Rules of the Bankruptcy Court for the Central District of

California.

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FACTS

Appellant Louis Nemeth filed a chapter 13 petition on May 5,

2016. This filing began Debtor’s third bankruptcy case. Debtor

had previously filed a chapter 7 petition on April 20, 2012 and

received a discharge. A few months later, on November 14, 2012,

he filed a chapter 13 petition, which was dismissed December 3,

2012 for failure to file schedules, statements, or a plan.

In this case, Debtor filed the required documents, including

a chapter 13 plan. Debtor listed on Schedule A/13 his residence

in Orange, California with a value of $620,000.2 Debtor listed

only two creditors, the IRS and “Nationstar Mortgage, LC” [sic]. 

The record reflects that Nationstar Mortgage, LLC (“Nationstar”)

was the servicing agent for Debtor’s secured obligation to Wells

Fargo Bank, National Association, as Trustee for Structured

Adjustable Rate Mortgage Loan Trust Mortgage Pass-Through

Certificates, Series 2007-3 (“Wells Fargo”). 

No secured debt was listed on Schedule D. Schedule E/F

reflected a debt to the IRS of $35,000, of which $15,000 was

listed as a priority claim. Debtor also listed an unsecured

nonpriority debt to Nationstar of $624,000 with the notation “I

do not really owe this debt and it is disputed.” Schedules I and

J reflected a monthly net income of $1,350, and the plan provided

for monthly payments of $305.43 for 36 months, resulting in a

base plan amount of $10,995.50; the plan was estimated to pay

2 Debtor provided a limited record on appeal. Thus, we have

exercised our discretion to review the bankruptcy court’s docket,

as appropriate. See Woods & Erickson, LLP v. Leonard (In re AVI,

Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP 2008).

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100% to allowed unsecured claims. The plan included a payment to

secured creditor “Nation Star (disputed)” of $138.89 per month on

a $5,000 arrearage claim.

On May 19, 2016, Appellee Amrane Cohen, chapter 13 trustee

(“Trustee”) filed a “Notice That Trustee May Make an Oral Motion

to Dismiss or Convert This Case for Cause” (the “Notice”). The

proof of service attached to the Notice reflects that it was

served on Debtor. The Notice provided that if the plan was not

confirmed by the court at the initial confirmation hearing, 

the Court will also consider the Chapter 13 Trustee’s

motion to dismiss the case, including dismissal with a

180-day bar against refiling under 11 U.S.C. Section

109(g), or to convert the Chapter 13 Case to Chapter 7,

should the Debtor(s) fail to: (1) comply with 11 U.S.C.

Section 1307; (2) comply with 11 U.S.C. Section 1322;

(3) comply with 11 U.S.C. Section 1325; (4) comply with

Local Bankruptcy Rule 3015-1; and/or, (5) comply with

orders of the Court.

NOTICE IS FURTHER GIVEN that opposition, if any,

to such oral motion by the Trustee may be presented at

that hearing.

Shortly thereafter, Wells Fargo filed an objection to

confirmation. Wells Fargo alleged that it was the holder of a

promissory note and deed of trust against Debtor’s residence. 

Wells Fargo objected to Debtor’s proposed plan on grounds that

the plan was not adequately funded to pay the pre-petition

arrearage of $152,160.34, did not provide for ongoing payments on

Debtor’s secured obligation to Wells Fargo, and that Debtor had

not made any monthly payments since filing his petition. Wells

Fargo also alleged that Debtor had filed the plan in bad faith

because Debtor had not made any payments “in years” and had filed

his prior bankruptcy cases to avoid making payments. The

objection requested that confirmation be denied and the case

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dismissed with a 180-day bar. The objection was supported by the

declaration of an assistant secretary for Nationstar.

In response to the objection to confirmation, Debtor filed

an “Objection with Motion to Strike” alleging that he had never

done business with either Wells Fargo or Nationstar, that in any

event the debt had been discharged in his prior chapter 7 case,

and that Debtor had rescinded the loan. Debtor also noted that

neither Wells Fargo nor Nationstar had filed a proof of claim. 

On that basis, Debtor requested the objection to confirmation be

stricken as “an insufficient defense, redundant matter,

immaterial, impertinent, and/or scandalous matter” that would

“unfairly prejudice” Debtor. Attached to Debtor’s objection were

copies of certified letters dated April 21, 2015 from Debtor and

Brenda Nemeth to Nationstar and Wells Fargo purporting to rescind

the mortgage.

At the confirmation hearing, counsel for Trustee appeared

and informed the court that notice of the plan was insufficient,3

that Debtor was one plan payment delinquent, that Trustee would

be filing an objection to exemptions, and that although a postpetition mortgage payment declaration had been filed, it

indicated that Debtor had not made any payments. Debtor took the

position that he did not need to make payments because neither

Wells Fargo nor Nationwide had filed a proof of claim to

“substantiate their debt.” The bankruptcy court told Debtor that

3 LBR 3015-1(b)(3) requires that the plan be served on

creditors at least 28 days before the 341 meeting. Here, the

plan was served on June 6, 2016; the 341 meeting was scheduled

for June 14, 2016.

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he was required to make the ongoing payments regardless of

whether the creditor had filed a proof of claim and noted that

Debtor had already unsuccessfully disputed the obligation in

state court. With that, the bankruptcy court dismissed the case. 

Because it was not Debtor’s first bankruptcy filing, the court

also imposed a 180-day bar to refiling under § 109(g). The court

entered a written order of dismissal on July 8, 2016. Debtor

timely appealed. The 180-day bar expired January 4, 2017.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(A) and (L). We have jurisdiction under

28 U.S.C. § 158.

ISSUE

Did the bankruptcy court abuse its discretion in dismissing

Debtor’s bankruptcy case?

STANDARD OF REVIEW

We review the bankruptcy court’s decision to dismiss a case

for abuse of discretion. Leavitt v. Soto (In re Leavitt),

171 F.3d 1219, 1223 (9th Cir. 1999); Ellsworth v. Lifescape Med.

Assoc., P.C. (In re Ellsworth), 455 B.R. 904, 914 (9th Cir. BAP

2011). In applying this standard, we conduct a two-step inquiry:

(1) we review de novo whether the bankruptcy court identified the

correct legal rule to apply to the relief requested; and (2) if

it did, we consider whether the bankruptcy court’s application of

the legal standard was illogical, implausible or without support

in inferences that may be drawn from the facts in the record. 

Id. (citing United States v. Hinkson, 585 F.3d 1247, 1261-62 &

n.21 (9th Cir. 2009) (en banc)).

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We may affirm on any basis supported by the record. Caviata

Attached Homes, LLC v. U.S. Bank, N.A. (In re Caviata Attached

Homes, LLC), 481 B.R. 34, 44 (9th Cir. BAP 2012).

DISCUSSION

Section 1307(c) provides, in relevant part:

on request of a party in interest or the United

States trustee and after notice and a hearing, the

court may convert a case under this chapter to a case

under chapter 7 of this title, or may dismiss a case

under this chapter, whichever is in the best interests

of creditors and the estate, for cause, including--

(1) unreasonable delay by the debtor that is

prejudicial to creditors;

. . . 

(4) failure to commence making timely payments under

section 1326 of this title[.]

The enumerated list of causes in § 1307(c) is not exclusive,

and a bankruptcy court may find cause to dismiss in other

circumstances, such as when a debtor has filed a bankruptcy

petition or plan in bad faith. In re Ellsworth, 455 B.R. at 915. 

Although the statute requires “notice and a hearing,” a

bankruptcy case may be dismissed sua sponte by the bankruptcy

court pursuant to § 105(a). Tennant v. Rojas (In re Tennant),

318 B.R. 860, 869-70 (9th Cir. BAP 2004).

Debtor argues on appeal that the bankruptcy court erred in

dismissing his case because (1) there was no pending motion to

dismiss; (2) the court based its ruling on an erroneous view of

the facts; (3) the court failed to rule on Debtor’s motion to

strike Wells Fargo’s objection to confirmation; and (4) the court

did not make findings of fact or conclusions of law as required

under Civil Rule 52, applicable in bankruptcy via Rule 7052. 

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Accordingly, Debtor asks us to reverse and remand for further

factual findings and a ruling on Debtor’s motion to strike.

We find Debtor’s arguments unconvincing. In asserting that

there was no pending motion to dismiss, which is essentially a

due process argument, Debtor disregards both the language of the

Notice and the provisions of LBR 3015-1. The Notice explained

that if the Debtor’s plan was not confirmed at the confirmation

hearing, the case could be dismissed, including with a 180-day

bar, if the Debtor had not complied with §§ 1307, 1322, 1325 or

LBR 3015-1. LBR 3015-1 provides that a case may be dismissed for

failure to make plan payments (LBR 3015-1(k)(4)) or for failure

to make postpetition mortgage payments (LBR 3015-1(m)). 

Section 1307(c)(4) provides that a case may be dismissed for

failure to commence making timely plan payments. Accordingly,

Debtor cannot fairly argue that he was not on notice that the

case could be dismissed at the confirmation hearing.

Debtor’s second contention, that the bankruptcy court based

its ruling on an erroneous view of the facts, is not supported by

the record. Debtor does not assert that he had made timely plan

payments. Instead Debtor focuses on the plan deficiencies noted

by the bankruptcy court. Debtor insists he owes nothing to Wells

Fargo because the obligation was discharged in Debtor’s prior

chapter 7 case and Debtor rescinded the loan. Debtor is correct

that his personal liability was discharged in his chapter 7. 

However, this did not eliminate Wells Fargo’s security interest

or its ability to enforce that interest via foreclosure, absent

timely payments. See Dewsnup v. Timm, 502 U.S. 410, 418-19

(1992). And there is nothing in the record to suggest that any

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purported rescission was effective.4

Debtor also argues that he was not obligated to provide for

Wells Fargo in the plan because Wells Fargo had not filed a proof

of claim, and it was required to prove up its claim. However, a

creditor need not file a proof of claim before plan confirmation,

and a debtor bears the burden of proof on all elements of plan

confirmation. Meyer v. Hill (In re Hill), 268 B.R. 548, 552 (9th

Cir. BAP 2001). The cases Debtor cites to the contrary, Lundell

v. Anchor Construction Specialists, Inc. (In re Lundell),

223 F.3d 1035, 1039-40 (9th Cir. 2000), and Wright v. Holm

(In re Holm), 931 F.2d 620, 623 (9th Cir. 1991), involve claim

objections, which carry different burdens of proof. See

Rule 3001(f). Here, Debtor did not provide any plausible

evidence to support his proposed plan treatment of Wells Fargo. 

That said, Debtor was not necessarily required to provide for the

discharged debt to Wells Fargo in his plan, but, to the extent he

did, he was required to comply with § 1325(a)(5) and 1322(b)(2).5

4 To the contrary, assuming the notice of rescission was

made under TILA, it was untimely. See 15 U.S.C. § 1635(f) (an

obligor’s right of rescission expires three years after the date

of consummation of the loan transaction). The letters attached

to Debtor’s objection/motion to strike indicate the loan date was

January 30, 2007; the letters are dated April 21, 2015, more than

eight years later.

5 Section 1325(a)(5) provides three options for the

treatment of allowed secured claims. Either (1) the holder of

the secured claim must have accepted the plan; (2) the plan must

provide for the retention of the lien and the value of property

to be distributed on that claim must be not less than the allowed

amount of the claim; or (3) the debtor must surrender the

collateral. Section 1322(b)(2) prohibits modification of the

rights of holders of claims secured only by a security interest

(continued...)

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Debtor’s plan did not comply with those provisions. 

Next, Debtor argues that the bankruptcy court erred in not

ruling on Debtor’s motion to strike. However, once the

bankruptcy court found grounds to dismiss the case, there was no

purpose to be served by ruling on the motion to strike, which

became moot.

Finally, Debtor argues that the bankruptcy court erred by

not making findings of fact and conclusions of law as required

under Rule 7052. Although Rule 7052 requires the bankruptcy

court to make findings and conclusions in contested matters, the

failure to do so does not necessarily require remand if the

record supports the bankruptcy court’s ruling. We may consider

any issue supported by the record and may affirm on any basis

supported by the record, even where the issue was not expressly

considered by the bankruptcy court. Fernandez v. GE Capital

Mortg. Servs., Inc. (In re Fernandez), 227 B.R. 174, 177 (9th

Cir. BAP 1998), aff’d, 208 F.3d 220 (9th Cir. 2000) (citing

In re E.R. Fegert, Inc., 887 F.2d 955, 957 (9th Cir. 1989) and

In re Pizza of Hawaii, Inc., 761 F.2d 1374, 1379 (9th Cir.

1985)).

Here, the record supports the bankruptcy court’s ruling. 

Debtor’s failure to make plan payments is an adequate ground for

dismissal under § 1307(c)(4) and LBR 3015-1. This circumstance

also supports a finding of unreasonable delay that is prejudicial

to creditors, a ground for dismissal under § 1307(c)(1). 

5(...continued)

in real property that is the debtor’s principal residence.

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Debtor also argues that the record does not support the

bankruptcy court’s imposition of a 180-day bar. Although we are

not convinced that the imposition of a bar to refiling was

justified without an explicit finding of a willful failure to

abide by an order of the bankruptcy court,6 this aspect of the

appeal is now moot because the 180 days expired January 4, 2017. 

See In re Fernandez, 227 B.R. at 178. Because we cannot fashion

any effective relief from that aspect of the bankruptcy court’s

order, we have no jurisdiction to review its propriety. 

CONCLUSION

For the reasons explained above, the bankruptcy court did

not abuse its discretion in dismissing Debtor’s chapter 13 case. 

Accordingly, we AFFIRM.

6 Under § 109(g), a 180-day bar to refiling may be imposed

if “the case was dismissed by the court for willful failure of

the debtor to abide by orders of the court, or to appear before

the court in proper prosecution of the case.”

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