1

RECOMMENDED FOR FULL-

Pursuant to Sixth Circ

ELECTRONIC CITATION: 2000 F

File Name: 00a0

UNITED STATES COU

FOR THE SIXTH 

____________

In re: AMC MORTGAGECOMPANY, INC.,

Debtor.

________________________AMC MORTGAGE COMPANY,

INC.,

Plaintiff-Appellant,

v.

TENNESSEE DEPARTMENT OFREVENUE,

Defendant-Appellee.

Appeal from the United St

for the Middle District of Te

No. 97-01037—Thomas A. H

Argued: April 2

Decided and Filed: M

Before: MARTIN, Chief Judge

Circuit Judg
2 In re AMC Mortgage Co. No. 99-5498

_________________

COUNSEL

ARGUED: Harry Willis Miller III, MILLER &ASSOCIATES, Nashville, Tennessee, for Appellant. SallyRamsey, OFFICE OF THE ATTORNEY GENERAL,Nashville, Tennessee, for Appellee. ON BRIEF: Harry

Willis Miller III, MILLER & ASSOCIATES, Nashville,Tennessee, for Appellant. Sally Ramsey, Kathleen A. Ayres,OFFICE OF THE ATTORNEY GENERAL, Nashville,Tennessee, for Appellee.

_________________

OPINION

_________________

BOYCE F. MARTIN, JR., Chief Judge. AMC Mortgage

Company, Inc. appeals the decision of the district courtaffirming the dismissal of its Chapter 11 bankruptcy petitionfor failure to make payments due under the Chapter 11 plan.For the reasons stated below, we AFFIRM.

I.

On March 25, 1994, AMC filed a Chapter 11 petition in the

United States Bankruptcy Court for the Middle District ofTennessee. Prior to this, in February 1992, AMC filed ataxpayer lawsuit in Tennessee state court against theTennessee Department of Revenue challenging the taxassessed against AMC from 1987 to 1990. Accordingly, onits Chapter 11 Disclosure Statement, AMC listed the state’sclaim as “disputed” and included its claim against the state asan asset.

After filing its Chapter 11 petition, AMC removed the state

court tax action and filed motions in bankruptcy court todetermine its 1993 tax liability and whether it was entitled toa refund for taxes paid from 1982 through 1986. Thebankruptcy court heard argument on these motions on July 26,
6 In re AMC Mortgage Co. No. 99-5498

special rules governing actions against the State . . . [and]suits against the State can be maintained only asauthorized by statutes; . . . statutes permitting suitsagainst the State must be strictly construed; . . . andgeneral procedural statutes do not apply against the Stateunless the State is specifically named therein.

T.C.A. § 28-1-105 does not specifically name the state.Construing the language of the savings statute strictly, itcannot be applied against the state. See id. 

Under T.C.A. § 67-1-1801(b), AMC had ninety days from

the date the notice of assessment was mailed to file suit. Itsinitial suit may have been timely, but once AMC took anon-suit in the case, the ninety-day limit had passed, AMCwas barred from reinstating the dismissed action, and theassessment became final. Thus, the litigation was “resolved”within the meaning of AMC’s confirmed Chapter 11 plan andAMC should have begun making payments to the state. 

The record is clear that no payments were made before the

state filed its motion to dismiss the Chapter 11 case. A failureto make a payment required under the plan is a materialdefault and is cause for dismissal. See In re H.R.P. Auto

Center, Inc., 130 B. R. 247, 256 (Bankr. N.D. Ohio 1991).The bankruptcy court’s decision to dismiss the case for causeunder 11 U.S.C. § 1112(b)(8) was proper. 

Following AMC’s voluntary dismissal of its state tax

claims, adjudication of those claims became final and AMCshould have begun making payments as required by theconfirmed plan. Failure to make those payments is a materialdefault and the bankruptcy court did not abuse its discretionin dismissing the case. The decision of the bankruptcy courtdismissing AMC’s Chapter 11 case is AFFIRMED. 

No. 99-5498 In re 

1994. The court abstained under 2remanded the case to the DavidChancery Court. Thereafter, on Ocentered into an agreed order that:

[a]ll issues raised by AMC Determination of Tax RefuDetermination of Tax Liability cin Tennessee state court in procedures set forth in T.C.A. Se

the Tennessee Taxpayers Reprocedures may be modified Bankruptcy Code and specifical

AMC’s bankruptcy plan was con1995. In the plan, the litigation Department of Revenue, referred to as follows:

Class 2: The only member of claim of TDR is currently being in litigation pending in Chancpayment to this class shall be resuntil the resolution of said litigTDR is successful, its allowepursuant to 11 U.S.C. § 1129(a)((72) months at a rate of nine per 

On April 25, 1996, AMC filed complaint in the state court actiondepartment’s assessments for 198and 1991 to 1995. The state object9, 1996, the Chancery Court allowe1993 and 1995 assessments, but either time-barred or unsupported provided that AMC could file an adid not file an amended complaint1997, AMC filed a voluntary non-sstate was dismissed. 
4 In re AMC Mortgage Co. No. 99-5498

Four months later, on June 4, 1997, the department filed a

motion to dismiss the Chapter 11 case under 11 U.S.C.§ 1112(b)(8), arguing that the state litigation was over andthat AMC had failed to begin making the payments due underthe confirmed bankruptcy plan. AMC objected to the motionto dismiss and again asked the bankruptcy court to decide theissues that were voluntarily dismissed in the Tennessee statecourt proceeding, and to assume jurisdiction over the taxmatters. The bankruptcy court held that AMC had voluntarilyended its lawsuit when it chose not to appeal the ChanceryCourt decision. Accordingly, the court granted thedepartment’s motion to dismiss the Chapter 11 case. AMCappealed and the district court, adopting the recommendationof the magistrate, affirmed the bankruptcy court’s decision. 

II.

This court reviews a bankruptcy court’s decision directly,

not the district court’s review of the bankruptcy decision. See

Trident Assocs. Ltd. Partnership v. Metropolitan Life Ins.Co., 52 F.3d 127, 130 (6th Cir. 1995). The bankruptcycourt’s findings of fact are reviewed for clear error, while itsconclusions of law are reviewed de novo. See TridentAssocs., 52 F.3d at 130; Laguna Assocs. Ltd. Partnership v.Aetna Cas. and Sur. Co., 30 F.3d 734, 737 (6th Cir. 1994). 

It is settled law in this circuit that a bankruptcy court may

dismiss a case under Chapter 11 for cause. See 11 U.S.C.

§ 1112(b); Trident Assocs., 52 F.3d at 130. The bankruptcy

court has broad discretion to dismiss a Chapter 11 case under11 U.S.C. § 1112(b). See Matter of Woodbrook Associates,

19 F.3d 312, 316 (7th Cir. 1994); In re Lumber Exch. Bldg.Ltd. Partnership, 968 F.2d 647, 648 (8th Cir. 1992); In reGonic Realty Trust, 909 F.2d 624, 626-27 (1st Cir. 1990); Inre Koerner, 800 F.2d 1358, 1368 (5th Cir. 1986).Accordingly, the decision to dismiss the case will be upheldunless it was an abuse of discretion, defined as “a definite andclear conviction that the trial court committed a clear error ofjudgment.” Bowling v. Pfizer, Inc., 102 F.3d 777, 780 (6thCir. 1996).

No. 99-5498 In re 

AMC argues that a voluntary no

the Tennessee Rules of Civil Pjudgment. See Merchants and Mav. Johnson, 403 S.W.2d 10Furthermore, AMC argues that undone year after its voluntary dismisaction. Thus, AMC argues that it the terms of the confirmed plan be10, 1998 to reinstate its case. 

Although AMC is correct that 

voluntary non-suit, and that such judgment, AMC does not have a yT.C.A. § 28-1-105 is the general that a plaintiff, after a voluntary disyear to refile the dismissed actionstatute specifically limits the time tax assessment to ninety days. S(“A suit challenging the assessmenFiled within ninety (90) days from notice of assessment to the taxpayThe Tennessee Supreme Court has does not apply to the state unlesnamed in the statute. See Automo122 S.W.2d 453, 454-55 (Tenn. plaintiff sued to recover an allegedismissed the suit, and then sought savings statute. See id. The courdo not apply to the state “unless thId. at 458. The court went on to say creates the right of action expressla suit to enforce the action may bessence of the right and the limilimitation of the right.” Id. At the notion that the state, as sovereign, permission. See Alden v. Main(1999). The Tennessee Supreme Howe, 906 S.W.2d 910, 914 (1995