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. The

application was granted. On the same date that the case was filed, the clerk of the bankruptcy

court issued two notices regarding deficiencies in the debtor’s filings. The first notice

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 Deficiency,” notified the debtor that his petition was not filed on

the official bankruptcy form and gave him one business 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 June 25, 1999, the debtor filed the summary of his schedules, a statement of

affairs, a declaration concerning the schedules, and all required schedules, with the exception

of Schedule H.

Also on June 25, 1999, the debtor moved the bankruptcy court to allow him to amend

his matrix to add a creditor without payment of the required $20.00 fee. The bankruptcy

court granted the debtor’s motion, but then went 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 bankruptcy court denied the debtor’s motion on the same day. On July 1, 1999, the

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) deals with dismissal on request of the debtor and § 1307(c) provides in pertinent

part: 

[O]n 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 . . . .

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 proceeded sua sponte without the request of a party in interest or the United States

Trustee, and the court was not enforcing or implementing court orders or rules or preventing

an abuse of process. No notice was given to the debtor of the deficiencies 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 “incomplete and incomprehensible” and agree that the
4

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 perfectly

appropriate. The debtor was given notice of the serious deficiencies in his filing and failure

to comply with the Federal Rules of Bankruptcy Procedure 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 been met, cause would have existed, and the requirement of a request of a party in

interest obviated since the court would be dismissing based on the debtor’s failure to comply

with its court’s order and rules.

CONCLUSION

For the foregoing reasons, we reverse the bankruptcy court’s dismissal of the debtor’s

case. 

A true copy.

Attest:

CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE

EIGHTH CIRCUIT.