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FILED

JUN 06 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOTFOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. EC-13-1094-JuTaKu

)

BILLY JOE JOHNSON, ) Bk. No. 12-17166

)

Debtor. ) Adv. No. 12-1150

______________________________)

)

BILLY JOE JOHNSON, ) 

)

 Appellant, )

)

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

)

JEFFREY M. VETTER, Trustee; )

UNITED STATES TRUSTEE, )

)

 Appellee. )

______________________________)

Submitted Without Oral Argument

on May 15, 2014

Filed - June 6, 2014

Appeal from the United States Bankruptcy Court

for the Eastern District of California

Honorable Fredrick E. Clement, Bankruptcy Judge, Presiding

______________________

Appearances: Appellant Billy Joe Johnson, pro se, on brief;

Gregory S. Powell, Ramona D. Elliot, P. Matthew

Sutko, Robert J. Schneider, Jr., August B. Landis

and Antonia G. Darling on brief for appellee

United States Trustee.

______________________

Before: JURY, TAYLOR, and KURTZ, 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 8013-1.

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Chapter 71 debtor Billy Joe Johnson (Debtor) appeals from

the bankruptcy court’s order granting the United States

Trustee’s (U.S. Trustee) summary judgment motion and the

judgment dismissing the underlying chapter 7 case with a

two-year bar to refiling. For the reasons stated below, we

REVERSE and REMAND for proceedings consistent with this

disposition. 

I. FACTS

Debtor filed two prior pro se chapter 7 cases in the

Eastern District of California. The first chapter 7 case was

filed on December 15, 2011. Debtor failed to attend three

continued § 341(a) meetings. On April 5, 2012, the bankruptcy

court dismissed the first chapter 7 case for failure to appear

at the § 341(a) meeting. Soon after, on April 10, 2012, Debtor

filed the second chapter 7 case in the same district. At the

initial § 341(a) meeting Debtor appeared but refused to answer

any of the chapter 7 trustee’s questions about Debtor’s

financial circumstances. Thereafter Debtor did not attend the

continued § 341(a) meeting. On August 2, 2012, the bankruptcy

court dismissed the second chapter 7 case for failure to appear

at the § 341(a) meeting. 

On August 21, 2012, Debtor filed this case, his third, pro

se. Debtor appeared at the initial § 341(a) meeting held on

October 19, 2012. However, because Debtor failed to provide the

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.

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chapter 7 trustee with the required tax returns and pay stubs,

Debtor was not asked about his financial affairs and the meeting

was continued. Debtor then failed to attend two continued

§ 341(a) meetings. 

On November 5, 2012, Debtor filed a document entitled

“Notice of Lawsuit Filing,” which indicated that he had filed

state court lawsuits against the bankruptcy judge, chapter 7

trustee, and U.S. Trustee personnel.2

On December 26, 2012, the chapter 7 trustee filed a motion

to dismiss the case because debtor failed to appear at the

§ 341(a) meeting.3 On January 4, 2013, Debtor filed his notice

of hearing and opposition to the chapter 7 trustee’s motion to

dismiss. Debtor then filed a supplement to his opposition on

January 15, 2013. These documents were off-point and did not

address the motion before the court.4 The chapter 7 trustee’s

motion to dismiss and the duplicate motion were set to be heard

on February 20, 2013.

Meanwhile, on September 7, 2012, the U.S. Trustee initiated

an adversary proceeding seeking dismissal of the current

chapter 7 case with a two-year bar to refiling. On October 11,

2012, Debtor filed an answer. The purported answer did not

2 We exercise our discretion to take judicial notice of

documents electronically filed in the underlying bankruptcy case

and adversary proceeding. See Atwood v. Chase Manhattan Mortg.

Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

3 A duplicate motion to dismiss was docketed on the same

day, December 26, 2012.

4 This characterization applies to all of Debtor’s filings

in both the bankruptcy case and adversary proceeding.

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admit or deny the allegations asserted in the complaint but

requested a venue change and jury trial due to “the court’s

decision to drag [Debtor] into an attempted murder, kidnapping

and rico case involving Minister Victor Mcgee.” On January 23,

2013, the U.S. Trustee filed the summary judgment motion, which

was set to be heard concurrently with the chapter 7 trustee’s

motions to dismiss on February 20, 2013. On February 19, 2013,

the day before the hearing, Debtor filed another document

entitled “Notice of Lawsuits” again indicating Debtor had named

the bankruptcy judge, chapter 7 trustee, and U.S. Trustee

personnel as defendants in state court lawsuits. The “Notice of

Lawsuit” document stated Debtor’s position that the bankruptcy

judge and other parties could not proceed with the hearing

because of an “obvious conflict of interest.”

At the February 20, 2013 hearing, the bankruptcy court

called the three motions together but heard the U.S. Trustee’s

summary judgment motion first. The bankruptcy court stated its

tentative ruling based upon the filed documents, but afforded

Debtor an opportunity to be heard. In his response, Debtor

failed to address the factual and legal matters relevant to the

motion. Because the bankruptcy court granted summary judgment

which included dismissal of the underlying chapter 7 case as

relief, Debtor and the chapter 7 trustee agreed that the two

motions to dismiss would be dropped as moot. The bankruptcy

court issued its final ruling in the civil minutes entered on

February 20, 2013.

II. JURISDICTION

The bankruptcy court had jurisdiction over this proceeding

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

under 28 U.S.C. § 158. 

III. ISSUES

A. Whether the bankruptcy court abused its discretion in

denying Debtor’s request for recusal;

B. Whether the bankruptcy court abused its discretion in

denying transfer of venue;

C. Whether Debtor had standing to assert the interests of

third parties;

D. Whether Debtor was denied due process;

E. Whether Debtor was entitled to a jury trial;

F. Whether the bankruptcy court erred when dismissing the

case under § 707(b) by summary judgment; and

G. Whether the bankruptcy court abused its discretion

when it imposed a two-year bar to refiling.

IV. STANDARDS OF REVIEW

A bankruptcy court’s denial of a motion for recusal is

reviewed for abuse of discretion. E. & J. Gallo Winery v. Gallo

Cattle Co., 967 F.2d 1280, 1290 (9th Cir. 1992).

A decision denying transfer of venue is reviewed for abuse

of discretion. Donald v. Curry (In re Donald), 328 B.R. 192,

196 (9th Cir. BAP 2005). 

A bankruptcy court's decision to dismiss a bankruptcy case

with prejudice is reviewed for abuse of discretion. Leavitt v.

Soto (In re Leavitt), 171 F.3d 1219, 1224 (9th Cir. 1999).

The bankruptcy court abuses its discretion when it applied

the incorrect legal rule or when its application of the law to

the facts was: (1) illogical; (2) implausible; or (3) without

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

record. United States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir.

2009) (en banc).

Questions of standing are reviewed de novo. San Diego

Cnty. Gun Rights Comm. v. Reno, 98 F.3d 1121, 1124 (9th Cir.

1996). The factual determinations underlying the bankruptcy

court’s decision on standing are reviewed for clear error.

American–Arab Anti–Discrimination Comm. v. Thornburgh, 970 F.2d

501, 506 (9th Cir. 1991).

Summary judgment orders are reviewed de novo. Tobin v. San

Souci Ltd. P’ship (In re Tobin), 258 B.R. 199, 202 (9th Cir. BAP

2001). Viewing the evidence in the light most favorable to the

non-moving party, we must determine “whether there are any

genuine issues of material fact and whether the trial court

correctly applied relevant substantive law.” Id. A bankruptcy

court’s conclusions of law are reviewed de novo. Fireman’s Fund

Ins. Co. v. Grover (In re Woodson Co.), 813 F.2d 266, 270 (9th

Cir. 1987).

V. DISCUSSION

A. Debtor’s Appellate Issues

We address first the issues raised on appeal by Debtor.

1. Recusal

Debtor alleges that the bankruptcy court was conflicted out

of ruling on the summary judgment motion because Debtor filed

state court lawsuits against the bankruptcy judge, the chapter 7

case trustee, and U.S. Trustee. The law clearly states “[a]

judge is not disqualified by a litigant’s suit or threatened

suit against him[.]” United States v. Studley, 783 F.2d 934,

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940 (9th Cir. 1986). The bankruptcy court did not abuse its

discretion by proceeding with the hearing on February 20, 2013. 

2. Standing to Pursue Third Party Rights 

In his opening brief Debtor lists alleged grievances of a

“Minister Victor McGee.” The legal rights and interests of a

third party are not at issue when deciding whether the

bankruptcy court erred in dismissing Debtor’s chapter 7 case

with a two-year bar to refiling. Further Debtor does not have

prudential standing to assert any claims of Minister Victor

McGee as Debtor “cannot rest his claim to relief on the legal

rights or interests of third parties[.]” McMichael v. Napa

Cnty., 709 F.2d 1268, 1270 (9th Cir. 1983) (citing Warth v.

Seldin, 422 U.S. 490, 499 (1975)). The bankruptcy court did not

commit clear error by failing to grant relief based upon the

alleged injuries to Minister Victor McGee. 

3. Improper Venue

Under 28 U.S.C. § 1412 a party may transfer a case properly

filed in one district to another. Rule 1014(a)(1) provides “[a]

petition filed in a proper district . . . may be transferred to

any other district if the court determines that the transfer is

in the interest of justice or for the convenience of the

parties.” A party may object to venue in its answer to the

complaint or by filing a timely motion. See Civil Rule 12(h)

made applicable by Rule 7012; Costlow v. Weeks, 790 F.2d 1486,

1488 (9th Cir. 1986). The failure to do either results in

wavier of the objection. Costlow, 790 F.2d at 1488; Hoffman v.

Blaski, 363 U.S. 335, 343 (1960). The objection to venue is

also subject to waiver when a debtor chooses the forum where the

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case is filed. Lebbos v. Tr. (In re Lebbos), 2007 WL 7540977,

at *3 (9th Cir. BAP 2007); In re Fishman, 205 B.R. 147, 149

(Bankr. E.D. Ark. 1997) (same).

Venue is proper here. Debtor filed his bankruptcy case in

the Eastern District of California, the district in which his

domicile, residence, and principal assets were situated. 

28 U.S.C. § 1408. The adversary proceeding was filed in the

same district in which the bankruptcy case was pending. 

28 U.S.C. § 1409(a).

Debtor raised his objection to venue in the answer to the

complaint. However, when the U.S. Trustee brought the summary

judgment motion, Debtor failed to reassert his objection in the

response. The bankruptcy court granted the summary judgment

motion on the merits without addressing the validity of Debtor’s

objection. We find that the bankruptcy court’s non-response to

the objection of venue is not clear error. 

First, because Debtor failed to assert the objection in his

response to the summary judgment motion, the objection was

deemed waived. 

Second, Debtor waived any objection to venue when he chose

to file his bankruptcy petition in the Eastern District of

California. Debtor not only filed this case in his chosen

forum, he filed schedules and attended the initial § 341(a)

meeting, thereby pursuing the bankruptcy case. Only after the

U.S. Trustee initiated the adversary proceeding did Debtor seek

a change in venue. Moreover, by responding to the summary

judgment motion and appearing at the February 20, 2013 hearing

Debtor participated in the adversary proceeding. By proceeding

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with the bankruptcy case and the adversary proceeding, Debtor

waived any right to object to venue.

4. Due Process Claim

Debtor argues that he did not receive due process for

reasons that we have difficulty discerning. Because the

objection was not properly raised before the bankruptcy court,

and without exceptional circumstances justifying this failure,

we decline to address this issue. Rains v. Flynn (In re Rains),

428 F.3d 893, 902 (9th Cir. 2005) (waiving plaintiff’s due

process claim on appeal where it was raised for the first time

in a reply brief before the district court); Weber v. Dep’t of

Veterans Affairs, 521 F.3d 1061, 1068 (9th Cir. 2008).

5. Right to Jury Trial 

Debtor argues that he was entitled to a jury trial. We

determine whether the Seventh Amendment applies to a given

proceeding by applying the two-part test in Granfinanciera, S.A.

v. Nordberg, 492 U.S. 33 (1989): “First, we compare the

statutory action to 18th-century actions brought in the courts

of England prior to the merger of the courts of law and equity.

Second, we examine the remedy sought and determine whether it is

legal or equitable in nature.” Id. at 42. Actions to dismiss a

bankruptcy case and impose injunctive relief are equitable in

nature and thus, fail the second prong of this test.

Accordingly, Debtor does not have a right to a jury trial in an

action under §§ 707(b)(3) and 349(a).

Even if Debtor had a right to a jury trial, a summary

judgment proceeding does not deprive a litigant of its right to

a jury trial. Slatkin v. Neilson (In re Slatkin), 525 F.3d 805,

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811 (9th Cir. 2008); Diamond Door Co. v. Lane-Stanton Lumber

Co., 505 F.2d 1199, 1203 (9th Cir. 1974) (“[S]ummary judgment is

granted as a matter of law where there is no genuine issue of

material fact, and, therefore, the province of the jury, fact

finding, is not invaded.”). 

Lastly, Debtor waived any right to a jury trial by failing

to properly serve and file his demand for a jury trial within

fourteen days after the last pleading directed to the issue was

served. See Civil Rule 38(d). 

B. Merits of the Summary Judgment Motion

Despite Debtor’s failure to establish error, our

independent review of the merits of the summary judgment motion

requires reversal. 

Civil Rule 56 mandates entry of summary judgment if the

moving party shows that there is no genuine dispute as to any

material fact and the moving party is entitled to judgment as a

matter of law. See Civil Rule 56(a) made applicable by

Rule 7056; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 

“A fact is ‘material when, under the governing substantive law,

it could affect the outcome of the case.’” Thrifty Oil Co. v.

Bank of Am. Nat’l Trust & Sav. Ass’n, 322 F.3d 1039, 1046 (9th

Cir. 2003) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986)). The evidence and all inferences drawn from it

must be construed in the light most favorable to the nonmoving

party. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n,

809 F.2d 626, 630 (9th Cir. 1987). To carry its burden of

production, a moving party must “make a prima facie showing that

it is entitled to summary judgment.” Celotex, 477 U.S. at 331.

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1. Dismissal Under Section 707(b)

Section 707(b) provides in pertinent part:

After notice and a hearing, the court, on its own

motion or on a motion by the United States trustee,

trustee (or bankruptcy administrator, if any), or any

party in interest, may dismiss a case filed by an

individual debtor under this chapter whose debts are

primarily consumer debts . . . if it finds that the

granting of relief would be an abuse of the provisions

of this chapter . . . . (emphasis added). 

“The first prerequisite to dismissal under section 707(b)

is that the debtor have primarily consumer debt; the second

requirement is a finding by the court that granting the debtor's

petition would be a ‘substantial abuse’ of Chapter 7.” Price v.

U.S. Tr. (In re Price), 353 F.3d 1135, 1138 (9th Cir. 2004)

(citing Zolg v. Kelly (In re Kelly), 841 F.2d 908, 912-13 (9th

Cir. 1988)). The Code defines “consumer debt” as debt incurred

by an individual primarily for a personal, family, or household

purpose. See § 101(8). Whether or not a particular secured

debt is included as “consumer debt” under § 707(b) depends on

the purpose of the debt. In re Kelly, 841 F.2d at 913. A

debtor is considered to have “primarily consumer debts” under

§ 707(b) when consumer debts constitute more than half of the

total debt. Id. 

The U.S. Trustee failed to meet his production burden to

show that Debtor had primarily consumer debt. Here, Debtor

indicated on his chapter 7 petition that debts are primarily

business debts. Debtor’s schedules reflect debt in the amount

of $2,775,000.00, which encompass loans on two homes in the

amount of $612,000.00, credit card claims in the amount of

$45,500.00, and an unclassified claim in the amount of $2.1

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million. Because the unclassified claim makes up more than half

of the total debt, there is a factual dispute as to whether

Debtor is considered to have primarily consumer debt. 

The summary judgment motion, along with the statement of

undisputed facts, is silent on this point. The U.S. Trustee

argues that there is no genuine dispute because Debtor did not

assert, either in responding to the complaint or when opposing

the summary judgment motion, that § 707(b) did not apply to him

because his debts are not primarily consumer debts. The

U.S. Trustee’s reliance on the absence of evidence is mistaken. 

The movant in a summary judgment motion on the merits of the

claim asserted has the production burden to establish the

elements of a prima facie case. Celotex, 477 U.S. at 331. 

Here, the U.S. Trustee failed to address the primarily consumer

debt prong in his statement of undisputed facts. Moreover he

admits in his brief that the “chapter 7 case trustee was never

able to determine . . . whether [Debtor’s] debts are primarily

consumer debts.” The civil minutes which constitute the

bankruptcy court’s ruling also fail to address this element. 

The decision therefore lacks a critical element of a claim for

dismissal under § 707(b) and the judgment must be reversed. 

2. Abuse Under Section 707(b)(3)

However, the undisputed facts do decisively establish the

other elements for dismissal for abuse. Section 707(b)(3)

provides for a finding of abuse when the debtor has filed the

petition in bad faith or the totality of the circumstances of

the debtor’s financial situation demonstrates abuse. Whether a

chapter 7 petition was filed in bad faith under § 707(b)(3)(A)

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is determined according to the standards for bad faith dismissal

used in chapter 11 and chapter 13 cases. In re Mitchell,

357 B.R. 142, 154 (Bankr. C.D. Cal. 2006).

Courts may consider the following non-exclusive factors:

(1) whether the debtor has a likelihood of sufficient future

income to fund a Chapter 11, 12, or 13 plan which would pay a

substantial portion of the unsecured claims; (2) whether the

debtor’s petition was filed as a consequence of illness,

disability, unemployment, or some other calamity; (3) whether

the schedules suggest the debtor obtained cash advancements and

consumer goods on credit exceeding his or her ability to repay

them; (4) whether the debtor’s proposed family budget is

excessive or extravagant; (5) whether the debtor’s statement of

income and expenses is misrepresentative of the debtor’s

financial condition; (6) whether the debtor has engaged in

eve-of-bankruptcy purchases; (7) whether the debtor has a

history of bankruptcy petition filings and case dismissals;

(8) whether the debtor intended to invoke the automatic stay for

improper purposes, such as for the sole objective of defeating

state court litigation; and (9) whether egregious behavior is

present. In re Mitchell, 357 B.R. at 154; Leavitt v. Soto

(In re Leavitt), 171 F.3d 1219, 1224 (9th Cir. 1999). 

Fraudulent intent is not required for a finding of bad faith,

In re Leavitt, 171 F.3d at 1224, and no single factor is

considered dispositive. In re Mitchell, 357 B.R. at 154.

The undisputed facts show that Debtor’s petition was filed

in bad faith. Debtor filed two previous chapter 7 cases in the

past fourteen months, both of which were dismissed within six

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months for failure to appear at the § 341(a) meeting. In the

second case, Debtor appeared at the initial § 341(a) meeting and

refused to answer the chapter 7 trustee’s questions regarding

his financial circumstances. In this current case, Debtor

failed to provide the chapter 7 trustee with tax returns and pay

stubs. Debtor’s failure to comply with basic procedural

requirements and insistence on filing incoherent statements on

the court’s docket constituted egregious behavior. Debtor also

engaged in serial filings and case dismissals. Accordingly, the

bankruptcy court’s finding of bad faith under § 707(b)(3)(A) was

proper given the undisputed facts. 

“No guidance is provided in § 707(b)(3)(B) as to the

factors a bankruptcy court should consider in evaluating a

request for dismissal of a bankruptcy case for abuse under the

totality of the circumstances [of debtor’s financial

situation].” Ng v. U.S. Tr. (In re Ng), 477 B.R. 118, 126 (9th

Cir. BAP 2012). Courts continue to apply the Mitchell list of

non-exclusive factors. Id. The Ninth Circuit has held that a

“debtor’s ability to pay his debts will, standing alone, justify

a section 707(b) dismissal,” In re Kelly, 841 F.2d at 914, but

does not compel a dismissal as a matter of law. In re Price,

353 F.3d at 1140.

The bankruptcy court also found that the totality of the

circumstances of the Debtor’s financial situation demonstrated

abuse. The bankruptcy court relied on the same two factors it

considered when finding that the Debtor filed in bad faith:

egregious behavior and a history of bankruptcy petition filings

and case dismissals. While the bankruptcy court was correct to

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consider the non-exclusive factors of Mitchell, its

consideration was limited to facts that did not indicate

Debtor’s ability to pay and were merely a repeat of the factors

which constitute bad faith. Since the § 707(b)(3)(B) ground is

an alternative, statutory construction would compel that the

factors considered be distinct from the § 707(b)(3)(A) factors.

United States v. Powell, 6 F.3d 611, 614 (9th Cir. 1993) (noting

that courts avoid a statutory construction that would render

another part of the same statute superfluous). Therefore the

undisputed facts do not support the alternative finding under

§ 707(b)(3)(B). This failure, however, is immaterial because

the § 707(b)(3)(A) finding was sufficient for dismissal. 

3. Two-Year Bar

Once a court has determined that cause to dismiss exists,

it must then decide what form of dismissal should apply.

Ellsworth v. Lifescape Med. Assocs., P.C. (In re Ellsworth),

455 B.R. 904, 922 (9th Cir. BAP 2011). Upon a finding of bad

faith, a bankruptcy court may dismiss a case with a permanent

bar to refiling bankruptcy to discharge existing, dischargeable

debt. 11 U.S.C. § 349(a); In re Leavitt, 171 F.3d at 1224 (bad

faith is “cause” for dismissal with prejudice under § 349(a)). 

Implicit in this authority is the power to impose a bar of

shorter duration. In re Leavitt, 209 B.R. at 942 (9th Cir. BAP

1997), aff’d 171 F.3d 1219 (9th Cir. 1999) (§ 349(a) provides

courts with authority to control abusive filings beyond the

limits of § 109(g), even in cases where the bankruptcy court

imposes a bar to refiling for a period greater than 180 days).

When dismissing with prejudice courts are to consider the

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following: (1) whether debtor misrepresented facts in her

petition, unfairly manipulated the bankruptcy code, or otherwise

filed in an inequitable manner; (2) debtor’s filing history;

(3) whether debtor only intended to defeat state court

litigation; and (4) whether egregious behavior is present. 

In re Leavitt, 171 F.3d at 1224.

The bankruptcy court’s finding of bad faith as grounds for

dismissal under § 707(b)(3)(A) alone is sufficient “cause” under

§ 349(a) to impose a bar to refiling. In re Mitchell, 357 B.R.

at 157. While not explicitly stated, the bankruptcy court

applied the standard set forth in Leavitt by finding that Debtor

unfairly manipulated the bankruptcy code without the intent to

prosecute his numerous chapter 7 cases to discharge. The

bankruptcy court relied on the following undisputed facts: in

all three of his chapter 7 cases, Debtor failed to attend the

continued § 341(a) meetings, which resulted in the dismissal of

the two prior cases; and when he did appear, as in this current

case, he failed to provide required documents. Because the

bankruptcy court applied the correct legal test under Leavitt

and the undisputed facts support a finding of cause to dismiss

with prejudice, we cannot conclude that a two-year bar to

refiling was an abuse of discretion. 

VI. CONCLUSION

For the reasons stated, we REVERSE and REMAND for further

proceedings consistent with this disposition.

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