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FILED

NOV 01 2016

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NOT FOR PUBLICATION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. NV-15-1427-LDoKi

)

RANDALL BESSLER and ) Bk. No. 14-51963-btb

DENISE BESSLER, )

) Adv. Pro. No. 15-05014-btb

Debtors. )

 )

)

RALPH G. MERRILL, )

)

Appellant, )

)

v. ) M E M O R A N D U M* 

)

RANDALL M. BESSLER, )

)

Appellee. )

 )

Submitted Without Oral Argument 

on October 21, 2016

Filed - November 1, 2106

Appeal from the United States Bankruptcy Court

for the District of Nevada

Honorable Bruce T. Beesley, Chief Bankruptcy Judge, Presiding

________________________

Appearances: Appellant Ralph G. Merrill, pro se on brief;

Appellee Randall M. Bessler, pro se on brief

________________________

Before: LAFFERTY, DORE,** and KIRSCHER, Bankruptcy Judges.

* 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.

** Hon. Timothy W. Dore, United States Bankruptcy Judge for

the Western District of Washington, sitting by designation.
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I. INTRODUCTION

The bankruptcy court dismissed Appellant-Plaintiff Ralph

Merrill’s adversary proceeding for failure to prosecute after

Merrill failed to appear at a continued status conference. On

appeal, Merrill, who is pro se, argues that he misunderstood the

court’s instructions regarding the timing of the status

conference relative to a yet-to-be scheduled settlement

conference.

Because the record1 reveals no basis for a finding of

unreasonable delay or prejudice to defendant, and no apparent

consideration of less drastic sanctions, we find that the

bankruptcy court abused its discretion in dismissing the

adversary proceeding. We therefore VACATE and REMAND.

II. FACTUAL BACKGROUND

On February 27, 2015, Appellant Ralph Merrill filed an

adversary complaint against Appellee-Debtor Randall Bessler. 

Merrill alleged that Bessler was an antique firearms dealer, that

Merrill had consigned to Bessler several firearms, including a

rare .45 caliber German Luger pistol, and that Bessler had sold

the Luger and 40 other consigned firearms without Merrill’s

knowledge or authority and failed to turn over the proceeds. The

complaint purported to plead three claims: conversion, breach of

contract, and breach of fiduciary duty. Merrill alleged damages

1 Not all the documents referred to in this Memorandum were

included in the parties’ excerpts of record. To the extent

necessary, we take judicial notice of pleadings filed by both

parties in the adversary proceeding. Atwood v. Chase Manhattan

Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP

2003).

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of $763,000. In the prayer for relief, Merrill requested a

finding that the debt be found nondischargeable but did not

designate a specific subsection of § 523(a).2

Bessler filed an answer denying the allegations. 

Thereafter, on May 14, 2015, Merrill filed a motion for summary

judgment and request for an order to show cause why Bessler

should not be held in contempt for making false statements to the

court. Merrill did not set the matter for a hearing.

The bankruptcy court set a scheduling conference for June 2,

2015. Merrill did not appear.3 On June 8, 2015, the bankruptcy

court issued an order to show cause why the adversary proceeding

should not be dismissed for failure to appear at the June 2

scheduling conference. The matter was set for hearing on

July 29, 2015. Merrill did not file a response to the order to

show cause, but he filed an application to appear by telephone at

the hearing. 

On June 25, 2015, Bessler filed a motion to dismiss the

adversary proceeding and set it for hearing on the same date as

the continued scheduling conference. Merrill filed a motion to

2 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.

3 It is not clear why Merrill failed to appear for the

June 2 scheduling conference. The Notice of Scheduling

Conference was included with the summons issued March 2, 2015.

The bankruptcy court docket indicates that the summons was served

on Bessler via the Bankruptcy Noticing Center on March 4, 2015,

but there is no record of service of the summons/notice on

Merrill.

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strike the pleading and, as noted, an application to appear

telephonically at the July 29 hearing. 

On July 21, 2015, the bankruptcy court issued an order

indicating that the July 29 hearing would be a status conference

regarding the pending motion for summary judgment and motion to

dismiss. The order setting the status conference indicated that

the parties could appear either in person or by telephone.

At the July 29, 2015 hearing, Merrill appeared

telephonically. The bankruptcy court informed the parties that

after reading their pleadings, it intended to send them to a

settlement conference. The court strongly encouraged Merrill to

settle, stating

I think it is highly unlikely from looking at this in

the sort of not documented, confused state, various

conflicting representations. And I’m not suggesting

that anyone is lying, but you have a long and

complicated relationship that had lots and lots and

lots and lots of variables in it. And I will be

surprised if you can prove a dischargeability case. So

I’m sending you to a settlement conference.

Hr’g Tr. (July 29, 2015) 5:8-17.

Merrill asked if he could respond, but the bankruptcy court

declined that request, informing Merrill that he could not

prosecute the adversary proceeding unless he appeared in person,

and that he should save his response for the settlement

conference.4 The bankruptcy court indicated that it would not

4 The bankruptcy court stated:

No. You are in my court, this is a status

conference. I wanted to tell you this. You asked to

be allowed to appear. You are not allowed to prosecute

(continued...)

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set a trial date until after a settlement conference had

occurred, and that the court would notify the parties of the date

set for the settlement conference and the name of the settlement

judge. The court then stated that the status conference would be

continued to December 2, 2015, but that if the case had settled

before then Merrill would not be required to appear. The court

then stated: “If you’re doing anything else, you do have to be

here.” Id. 7:15-16.

At the end of the hearing, Bessler informed the court that

Merrill was incarcerated and that he believed Merrill was being

released in March 2016.5 The court commented: “Okay. We'll set

the trial after that [if] we have to. . . . I don’t know that I

realized that.” Id. 9:6-7. 

On August 6, 2015, the bankruptcy court issued a Notice of

Continued Status Hearing setting the status conference for

December 2, 2015. The notice contains a notation that “[t]he

court’s hearing calendar for the date scheduled by this Notice

4(...continued)

cases here if you are not here. So I’m not going to

hear you. I’m ordering you to a settlement conference. 

You can make your statements to the settlement judge. 

Next time there is a hearing you need to be here. I

will not let you appear by telephone.

Hr’g Tr. 6:8-14. The record does not indicate the reason for the

bankruptcy court’s apparent irritation with Merrill regarding his

telephonic appearance. As noted, the order setting the status

conference explicitly permitted telephonic appearances.

5 In Merrill’s response to the motions panel’s order

requiring him to file a complete copy of the transcript, Merrill

alleges that he had hung up the telephone before Bessler informed

the court of Merrill’s incarceration. Merrill states that he was

released from prison on November 20, 2015.

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may be viewed at www.nvb.uscourts.gov up to five days before the

scheduled hearing date to determine whether or not the hearing

has been kept on calendar.”

In late August and early September, Merrill and a deputy

clerk for the bankruptcy court exchanged emails regarding the

scheduling of the settlement conference. Merrill included those

emails in his excerpts of record, but the record does not reveal

whether the bankruptcy court ever saw or considered any of that

correspondence. On August 24, 2015, the clerk sent Merrill an

email informing Merrill of available dates for a settlement

conference of November 2, 3, or 4, 2015. The clerk requested

Merrill inform him which dates and times would suit his schedule

and stated that he was transmitting the same information to

Bessler, and that once the parties agreed on a date and time, a

scheduling order would be issued. On August 31, 2015, the clerk

sent a follow-up email asking for a response no later than

September 4, 2015. 

On September 4, 2015, Merrill replied to the clerk’s email

as follows:

Thank you for your notice. I received a written notice

from the Court a couple of weeks ago or so, informing

me of a settlement conference on the 2nd of December.

Assuming that was pretty reliable, I scheduled my

travel plans to align with that date so that I would be

in the region at that time, thus able to attend. I am

in Colorado at the present time, and would find it very

difficult to change my current travel plans for the 2nd

of December. Is there any possibility that we can

adhere to the original plan? That would help

considerably.

It appears to us from this email that Merrill was conflating

the settlement conference with the continued status conference. 

Indeed, the clerk replied the same day, explaining to Merrill

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that the settlement conference was separate from the December 2

status conference:

Reviewing the docket, I see that on 8/6 a notice was

issued continuing the 7/29 status hearing(s) to Tues.

Dec. 2. In contrast to this, what I am attempting to

coordinate is a separate settlement conference which

the Court ordered during the 7/29 hearings. My review

of the record of the 7/29 hearing(s) indicates that the

Court will not bring the matter to trial until such a

settlement conference takes place, so I wanted to give

you the opportunity for one of the November settings –

since they are the very soonest available. . . .

(emphasis added). The clerk then informed Merrill that if the

November dates were not feasible, the clerk would advise Merrill

of future dates as they became available.

A few days later, Merrill sent a reply email to the clerk

stating that his return to the Utah/Nevada area would be

difficult to manage any sooner than December and requested a date

“around that time.” On September 10, 2015, the clerk responded

with “Fair enough, Mr. Merrill. Right now, it looks like the next

chance we’ll have for settlement conferences will be sometime in

the second quarter of 2016. I'll be back in contact then.” 

The next item on the bankruptcy court’s docket is the Order

Dismissing Adversary Proceeding entered December 4, 2015. The

Order states: 

At the prior hearing on July 29, 2015, the

Plaintiff was ordered to be present at this hearing. 

There was no appearance by Plaintiff, and no pleading

filed or request for a continuance received. 

Therefore, this matter is dismissed for lack of

prosecution.

No minute entry appears on the bankruptcy court docket to

indicate that a hearing was held or to otherwise explain the

court’s ruling. 

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Merrill timely appealed.

III. JURISDICTION

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

§§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.

§ 158.

IV. ISSUE

Did the bankruptcy court abuse its discretion in dismissing

the adversary proceeding for lack of prosecution?

V. STANDARD OF REVIEW

The bankruptcy court may sua sponte dismiss an adversary

proceeding for lack of prosecution under Civil Rule 41(b),

applicable in bankruptcy via Rule 7041. See Henderson v. Duncan,

779 F.2d 1421, 1423 (9th Cir. 1986); Abandonato v. Stuart

(In re Stuart), 88 B.R. 247, 249 (9th Cir. BAP 1988). We review

the bankruptcy court’s dismissal of an adversary proceeding based

upon a plaintiff’s failure to prosecute for abuse of discretion.

Moneymaker v. CoBEN (In re Eisen), 31 F.3d 1447, 1451 (9th Cir.

1994). Dismissal is a harsh penalty to be imposed only in

extreme circumstances. Henderson, 779 F.2d at 1423.

A bankruptcy court abuses its discretion if it applies the

wrong legal standard, misapplies the correct legal standard, or

if its factual findings are illogical, implausible, or without

support in inferences that may be drawn from the facts in the

record. See TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d

820, 832 (9th Cir. 2011). To reverse for abuse of discretion, we

must have a definite and firm conviction that the bankruptcy

court committed a clear error of judgment in the conclusion it

reached upon a weighing of the relevant factors. In re Eisen,

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31 F.3d at 1451.

VI. DISCUSSION

A. Factors to be considered in determining whether dismissal is

appropriate

In determining whether to dismiss a case for lack of

prosecution, the bankruptcy court is to weigh the following

factors: (1) the public’s interest in expeditious resolution of

litigation; (2) the court’s need to manage its docket; (3) the

risk of prejudice to the defendants; (4) the public policy

favoring the disposition of cases on their merits; and (5) the

availability of less drastic sanctions. In re Eisen, 31 F.3d at

1451; Henderson, 779 F.2d at 1423; Tenorio v. Osinga

(In re Osinga), 91 B.R. 893, 894 (9th Cir. BAP 1988). No finding

of bad faith is required. Henderson, 779 F.2d at 1425.

A dismissal for lack of prosecution must be supported by a

showing of unreasonable delay. Nealey v. Transportacion Maritima

Mexicana, S.A., 662 F.2d 1275, 1280 (9th Cir. 1980). 

Unreasonable delay creates a presumption of injury to the

defense. Ash v. Cvetkof, 739 F.2d 493, 496 (9th Cir. 1984). We

give deference to the bankruptcy court in reviewing whether

unreasonable delay existed, as the bankruptcy court is in the

best position to determine what period of delay can be endured

before its docket becomes unmanageable. In re Osinga, 91 B.R. at

895; In re Stuart, 88 B.R. at 249. Because of the countervailing

interest in disposing of cases on their merits, the pertinent

question is not simply whether there has been a delay but rather

whether there has been sufficient delay or prejudice to justify

dismissal of the plaintiff’s case. Nealey, 662 F.2d at 1280.

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B. Application of the factors to the facts of this case

The bankruptcy court did not make explicit findings to

support the dismissal of the adversary proceeding, but such

findings are not required; we may independently review the record

to determine whether the bankruptcy court abused its discretion. 

Ash, 739 F.2d at 496.

1. Unreasonable delay

It appears to us that the bankruptcy court dismissed the

case based on unreasonable delay. However, we find no basis for

such a finding. It is not clear that Merrill’s failure to appear

at the December 2 status conference resulted in any delay at all. 

Rather, the delay was due to the rescheduling of the settlement

conference. Even though Merrill’s unavailability for the

November dates caused the delay in scheduling the settlement

conference, it appears that his unavailability was due to his

incarceration.6

To the extent the bankruptcy court also relied on Merrill’s

failure to appear at the original June 2 scheduling conference in

dismissing the case, it is not clear whether Merrill had notice

of the June 2 hearing; therefore, any such reliance was probably

misplaced. 

2. Prejudice

Nothing in the appellate record or the bankruptcy court

docket reflects prejudice to Bessler resulting from Merrill’s

failure to appear at the December 2 status conference, beyond the

6 The bankruptcy court may well not have recalled Bessler’s

assertion that Merrill would be incarcerated until March 2016.

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presumed inconvenience and possible expense of appearing at a

hearing that did not occur. Both parties were waiting for the

scheduling of the settlement conference, which would not have

occurred before April 2016.

3. The bankruptcy court did not consider less drastic

sanctions.

Dismissal is a harsh penalty that should be imposed only in

extreme circumstances. Henderson, 779 F.2d at 1423. Here,

dismissal was effectively with prejudice because any

nondischargeability action would be time-barred if refiled. 

Thus, Merrill has lost the opportunity to have his claims heard

on the merits. Less drastic sanctions, such as a monetary

penalty, could have been imposed, but there is nothing in the

record to suggest that the bankruptcy court considered those. 

4. Merrill’s failure to appear was based on his

misunderstanding of the court’s instructions.

Merrill argues in his brief that he believed that the

settlement conference was to occur before another status

conference would be held. Merrill contends in his opening brief

that he interpreted the court clerk’s communications to mean that

no status conference would be held until after the settlement

conference had occurred:

Merrill assumed that if the Settlement Conference was

to be rescheduled, as the Clerk clearly inferred, then

the Status Conference that was going to follow it,

would necessarily be rescheduled. Otherwise, the

“status” would not have changed for the scheduled

December 2, 2015 Status Conference, rendering it moot. 

Accordingly, Merrill cancelled his plans for travel and

awaited further notification from the Clerk of Court

who had previously advised: “I'll be back in contact

then.”

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Thus, Merrill did not appear for the December 2 status conference

because he was awaiting an order setting the date for the

settlement conference. It does not appear that the bankruptcy

court was aware of this.

Bessler argues that Merrill “repeatedly” ignored the

bankruptcy court’s orders to personally appear at hearings on

June 2, 2015, July 29, 2015, and December 2, 2015. Bessler

states that “Merrill was told at the hearing on July 29th, 2015,

that if he did not appear at the next hearing on December 2nd,

2015, that his Adversary Complaint would be dismissed.”

These assertions are not completely accurate. First,

Merrill was not required to appear in person on July 29; the

order setting the status conference explicitly permitted the

parties to appear telephonically (by making arrangements with

Court Call one day before the hearing). Second, although the

bankruptcy court told Merrill that, barring settlement, Merrill

needed to personally appear at the continued status conference,

the court did not explicitly state that a failure to appear would

result in dismissal of the adversary proceeding.

Still, the bankruptcy court’s dismissal of the adversary

proceeding was not entirely baseless: Merrill failed to appear

at the initial scheduling conference on June 2, after which the

court issued an order to show cause; the court stated on the

record on July 29, 2015 that if the case had not settled, Merrill

had to personally appear at the December 2 status conference; and

the court clerk explained to Merrill that the settlement

conference and status conference were two different hearings. 

Also, Merrill could have contacted the court to confirm whether

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the December 2 status conference was going forward. 

Notwithstanding the foregoing, as noted above, dismissal is

a harsh penalty to be imposed only in extreme circumstances. 

Henderson, 779 F.2d at 1423. At an early point in the case, the

decision to terminate is subject to further scrutiny. Taylor v.

Singh (In re Singh), 2016 WL 770195, at *5 (9th Cir. BAP Feb. 26,

2016).7 And, “in the absence of less drastic alternative

sanctions and where there is no evidence of prejudice to the

defendant, dismissal of the plaintiff’s case is improper.” 

In re Stuart, 88 B.R. at 250 (citing Raiford v. Pounds, 640 F.2d

944, 945 (9th Cir. 1981)). 

VII. CONCLUSION

Under the totality of the circumstances presented in this

appeal, we find that the the public policy favoring the

disposition of cases on their merits was not outweighed by the

court’s need to manage its docket, the risk of prejudice to the

defendant, or the public’s interest in expeditious resolution of

litigation. Moreover, the bankruptcy court did not consider

7 In Singh, the bankruptcy court dismissed the adversary

proceeding at the first status conference for plaintiff’s

counsel’s failure to file a status report as required by local

rule. Counsel did not file the status report because the parties

were in the process of preparing a stipulation and order to stay

the proceedings pending the outcome of a § 727 action brought by

the United States Trustee. We reversed, finding that counsel’s

noncompliance was minimal, and that the bankruptcy court erred in

finding risk of prejudice to the debtor where debtor was subject

to a denial of discharge proceeding as well as related adversary

proceedings. We also found that the bankruptcy court erred in

its consideration of lesser sanctions, and that on balance, the

need to manage the court’s docket did not outweigh the public

interest in having cases heard on their merits.

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lesser sanctions. Thus, the bankruptcy court abused its

discretion in dismissing the adversary proceeding.

Therefore, we VACATE and REMAND for further proceedings in

accordance with this disposition.

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