The trustee is a nominal appellee only. He did not participate in any proceedings in the 1 bankruptcy court or on appeal.



## United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

No. 99-6053EM

In re: * * Sherwin Samuel Minkes, * * Debtor. * * Sherwin Samuel Minkes, * * Debtor-Appellant, * * Appeal from the United States v. * Bankruptcy Court for the * Eastern District of Missouri. John V. LaBarge, Jr., * Chapter 13 Trustee, * * Trustee-Appellee

. * 1

Submitted: August 2, 1999 Filed: August 9, 1999
Before KOGER, Chief Judge, KRESSEL, and SCOTT, Bankruptcy Judges.
KRESSEL, Bankruptcy Judge.2

The debtor appeals from the bankruptcy court’s dismissal of his Chapter 13 case

. Because we conclude that the dismissal did not comport with the procedural requirements of the Bankruptcy Code, we reverse.

BACKGROUND
The debtor filed, without the assistance of an attorney, a petition under chapter 13 on June 16, 1999, together with an application to pay the filing fee in installments. Th e application was granted. On the same date that the case was filed, the clerk of t he bankruptcy court is sued two notices regarding deficiencies in the debtor’s filings. The first notic e entitled “24-Hour Notice of Deficient Filing,” notified the debtor that unless he filed, within 24 hours, a matrix and a verification of the matrix, his case would be dismissed. The second, entitled simply “Notice of D eficiency,” notified the debtor that his petition was not filed on the official bankruptcy form and gave him one busi ness day to file a new petition or his case would be dismissed. The next day, the debtor complied with both notices by filing a matrix with verification and a bankruptcy petition using the official bankruptcy form. As a result of his compliance, the debtor’s case was not dismissed.

On J une 25, 1999, the debtor filed the summary of his schedules, a statement o f affairs, a declaration concerning the schedules, and all required sched ules, with the exception of Schedule H. Also on June 25, 1999, the debtor moved the bankrupt cy court to allow him to amend his matrix to add a creditor without payment of the required $20.00 fee. The bankruptc y court granted the debtor’s motion, but then wen t on to find that the debtor’s Chapter 13 plan was “incomplete and incomprehensible” and sua sponte dismissed his case. On June 30, 1999, the debtor filed a motion asking to “rescind” the order of dismissal. The bankrup tcy court denied the debtor’s motion on the same day. On July 1, 1999, th e debtor filed a notice of appeal.See Tenney v. Terry ( In re Terry ), 630 F.2d 634, 636 n. 5 (8 Cir. 1980) where the 2 th Eighth Circuit held that the court could not sua sponte dismiss a Chapter 13 case following denial of confirmation of a plan. Subsequent to Terry , Congress amended § 105 to provide that the requirement of a request of a party in interest can be obviated and the court may proceed sua sponte to enter orders to “enforce or implement court orders or rules, or to prevent an abuse of process.” See 11 U.S.C. § 105(a). Section 105(a) does not dispense with the requirement of notice and a hearing, however. “After notice and a hearing” is a bankruptcy term of art which does not always require 3 an actual hearing to occur, but does require appropriate notice and an appropriate opportunity for a hearing. See 11 U.S.C. § 102(1).

3 DISCUSSION
Dismissal of a chapter 13 case is dealt with in two subdivisions of § 1307. Section 1307(b) dea ls with dismissal on request of the debtor and § 1307(c) provides in pertinen t part: [O]n request of a party in interest or the United States trustee and after

notice and a hearing, the court may conv ert a case under this chapter to a case under chapter 7 of this title, or may dismiss a case under thi s chapter, whichever is in the best interests of credito rs and the estate, for cause . . . . See 11 U.S.C. § 1307(c).
The three principle requirements of dismissal under § 1307 are: (1) the request of a party in interest or the United States Trustee, (2) notice and a hearing, and (3) a showing 2 3 of cause. We do not think any of the three conditions have been met here. The bankruptcy court proc eeded sua sponte without the request of a party in interest or the United State s Trustee, and the court was not enforcing or implementing cour t orders or rules or preventing an abuse of process. No notice was given to the debtor of the deficiencie s 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. Lastly, while we agree wholeheartedly with the bankruptcy court’s assessment that the debtor’s plan was “incompl ete and incomprehensible” and agree that the4

plan was not confirmable, we disagree that the filing of one unconfirmable plan, in and of itself, is sufficient cause for dismissal of a Chapter 13 case. Our holding should not hamper the bankruptcy court’s ability to administer its cases. For example, we think the court’s handling of the debtor’s original filings was perfectl y appropriate. The debtor was given not ice of the serious deficiencies in his filing and failure to comply with the Federal Rules of Bankruptcy Pr ocedure and Forms, was given a deadline to cure those deficiencies, and was told that his case would be dismissed if he failed. A subsequent dismissal would have been appropriate because the notice requirements would have be en met, cause would have existed, and the requirement of a request of a party i n interest obviated since the court would be dismissing bas ed on the debtor’s failure to comply with its court’s order and rules.

CONCLUSION For the foregoing reasons, we reverse the bankruptcy cour t’s dismissal of the debtor’s
case. A true copy.

Attest:
CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE EIGHTH CIRCUIT.