Source: https://lundinonchapter13.com/Content/Section/152.7
Timestamp: 2019-12-08 18:08:11
Document Index: 645053332

Matched Legal Cases: ['§ 152', '§ 152', '§ 105', '§ 305', '§ 1307', '§ 1307', '§ 105', '§ 105', '§ 105', '§ 105', '§ 105', '§ 105', '§ 1307', '§ 105', '§ 305', '§ 105', '§ 105', '§ 105', '§ 312', '§ 141', '§ 105', '§ 305', '§ 305', '§ 332', '§ 152', '§ 105', '§ 105', '§ 331', '§ 151', '§ 152', '§ 1307', '§ 1307', '§ 1307', '§ 105', '§ 1307', '§ 1307', '§ 1307', '§ 105', '§ 521', '§ 1307', '§ 109', '§ 109', '§ 109', '§ 105', '§ 1307', '§ 105', '§ 1307', '§ 1328', '§ 105', '§ 1307', '§ 105', '§ 1307', '§ 105', '§ 109', '§ 1307', '§ 109', '§ 109', '§ 1307', '§ 1307', '§ 105', '§ 1322', '§ 1322', '§ 1307', '§ 1325', '§ 105', '§ 105']

§ 152.7 Sua Sponte Dismissal
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 152.7, at ¶ ____, LundinOnChapter13.com (last visited __________).
Updater Cases (35)
There are too many reported decisions dismissing Chapter 13 cases on the court’s own “motion.”1
Dismissal of a Chapter 13 case by the court without a request from a creditor, the Chapter 13 trustee or the U.S. trustee is at best awkward and can be a procedural and substantive nightmare.2 Although 11 U.S.C. § 105 probably permits bankruptcy judges to initiate dismissal when “necessary or appropriate to enforce or implement court orders or rules or to prevent an abuse of process,”3 the procedure is almost inevitably corrupted. Section 305 of the Code has also been cited as authority for dismissal of a Chapter 13 case on the initiative of the bankruptcy judge,4 but § 305 would require that “the interests of creditors and the debtor would be better served by such dismissal.”5
The reported decisions do not indicate that bankruptcy judges file motions, although it is clear from Bankruptcy Rule 1017(f) that dismissal for cause under § 1307(c) “shall be requested by motion” under Bankruptcy Rule 9014. It is not clear to whom or by whom notice is given of a hearing for sua sponte dismissal. The reported decisions demonstrate that often the debtor has no notice that the bankruptcy judge intends to prosecute a motion to dismiss; the debtor does not know the cause the bankruptcy judge will assert and debtor’s counsel has no opportunity to prepare appropriate evidence to answer the court’s concerns.6
It is not clear how a creditor or other party in interest appears in opposition to the court’s initiative. In some jurisdictions, action by the court to dismiss the case takes the form of a “show cause” order requiring the debtor to appear and explain why the case should not be dismissed.7 Other creditors would certainly be parties in interest to such a hearing—especially, for example, a creditor that has been granted relief from the stay and does not want the case dismissed.8 But the chances are great that the show-cause order was not noticed to all creditors. And if by happenstance the creditor knows to appear at the court’s hearing on dismissal, creditor’s counsel is in the awkward position of litigating against the bankruptcy judge—sometimes on the same side as the debtor; other times in opposition to both the debtor and the court.
A few reported decisions recognize statutory and procedural limits on sua sponte dismissal of Chapter 13 cases. Soon after the enactment of the 1978 Code, in dicta in a footnote in Tenney v. Terry (In re Terry),9 the U.S. Court of Appeals for the Eighth Circuit stated, “As we read § 1307, a court cannot order dismissal or conversion on its own motion.”10
Nearly 20 years later, the Bankruptcy Appellate Panel for the Eighth Circuit in Minkes v. LaBarge (In re Minkes),11 gave this account of the holding in Terry and the subsequent enactment of § 105 of the Bankruptcy Code:
[In] Tenney v. Terry (In re Terry), 630 F.2d 634, 636 n.5 (8th Cir. 1980) . . . the 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.12
In Minkes, the bankruptcy court sua sponte dismissed a Chapter 13 case because the pro se debtor’s plan was “incomplete and incomprehensible.” The Eighth Circuit BAP explained that this dismissal was procedurally defective and was not supported by § 105(a):
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.13
Minkes is a sound caution about the use of sua sponte powers to dismiss Chapter 13 cases. Section 105(a) is not carte blanche for independent action by bankruptcy judges to dismiss Chapter 13 cases. That the plan does not comply with the requirements for confirmation may be grounds to deny confirmation and/or to dismiss the case upon the motion of the Chapter 13 trustee, the U.S. trustee or a creditor; but § 105(a) will not support sua sponte dismissal of a Chapter 13 case based on failure of a condition for confirmation. Even when the Chapter 13 case threatens the implementation of court orders or rules or presents an abuse of process for purposes of § 105(a), sua sponte dismissal is not appropriate without notice to the debtor, the Chapter 13 trustee, the U.S. trustee and all creditors.
There are enough other interests at risk that bankruptcy courts should rarely, if ever, be the proponent of a motion to dismiss a Chapter 13 case. Sua sponte action confuses the rights and responsibilities of the true parties. Bankruptcy courts that routinely “show cause” Chapter 13 cases for dismissal without a motion by a party in interest discourage creditor diligence and distort the role of the bankruptcy judge as a judicial officer who decides, not creates, controversies. The Chapter 13 trustee, the U.S. trustee and creditors can be trusted to police Chapter 13 cases and to seek dismissals under § 1307(c) when and on terms that are appropriate.14
1 See In re Gore, 60 B.R. 869 (E.D. Mo. 1986) (Court affirms sua sponte dismissal of debtor’s third Chapter 13 petition; finding of bad faith is not clearly erroneous.); In re Fleury, 294 B.R. 1, 5 (Bankr. D. Mass. 2003) (“Although the statute does not specifically allow a court to dismiss a case on its own motion, courts now recognize that a court’s sua sponte dismissal is permitted through the 1986 amendments of 11 U.S.C. § 105.”); In re Pennino, 291 B.R. 842 (Bankr. W.D. Ark.) (Bankruptcy court dismisses debtor’s sixth Chapter 13 case pursuant to § 305 based on finding that sole purpose of the Chapter 13 case is delay while the debtor litigates a RICO action with respect to the Goddard Hotel in Hot Springs, Arkansas.), aff’d, 299 B.R. 536 (B.A.P. 8th Cir. 2003); In re Williams, No. 02-31639, 2002 WL 1477634 (Bankr. W.D.N.C. May 31, 2002) (unpublished) (On the court’s own motion, fourth Chapter 13 case is dismissed with an injunction prohibiting the debtor from filing in any U.S. bankruptcy court for one year.); In re Dent, 275 B.R. 625 (Bankr. M.D. Ala. 2002) (On bankruptcy court’s order to show cause, Chapter 13 case is dismissed with prejudice to refiling for 180 days and debtor’s attorney is sanctioned $500 for violations of Bankruptcy Rule 9011 when second case was filed less than two months after dismissal of prior case, debtor failed to commence making payments in both cases, second petition failed to reveal prior case and statement of financial affairs in second case failed to reveal prepetition repossession of car that debtor’s attorney claimed caused the hasty second filing.); In re W.F.C. Real Estate Trust #1, 236 B.R. 90 (Bankr. S.D. Fla. 1999) (Bankruptcy court sua sponte dismisses Chapter 13 case on ground that a trust cannot be a debtor under Chapter 13.); In re Falotico, 231 B.R. 35, 42 (Bankr. D.N.J. 1999) (Sua sponte dismissal with prejudice that no automatic stay will arise upon any future filing: debtor filed three Chapter 13 cases to stop a foreclosure, failed to pay taxes and to repair property with the result that mortgage holder is now unsecured, plan would pay next to nothing and debtor’s dealings with mortgage holder lacked good faith. “The court recognizes that dismissal of the instant case was not sought by Wilshire and that the debtor has not had formal notice of the court’s intent to dismiss his case. However, 11 U.S.C. § 105(a) provides . . . ample authority for its sua sponte dismissal of the case.”); In re Greene, 127 B.R. 805 (Bankr. N.D. Ohio 1991) (1986 amendments to § 105 make it “crystal clear” that the bankruptcy court has sua sponte authority to dismiss a Chapter 13 case. Case was dismissed without prejudice where debtor missed the 15-day time limits imposed by Bankruptcy Rules 3015 and 1007(c) by nine days, counsel offered no excuse for missing the deadlines, and counsel offered no assurance that counsel or debtor would meet future deadline.); In re Dilley, 125 B.R. 189, 198 (Bankr. N.D. Ohio 1991) (Nothing in the Code precludes sua sponte action to dismiss an abusive Chapter 13 case. Section 349(a) “appears to contemplate sua sponte action. Section 105(a) expressly provides for sua sponte action by the court.”); In re Fricker, 116 B.R. 431, 442 (Bankr. E.D. Pa. 1990) (“Although no interested party had filed a motion to dismiss this case, we have little doubt that, in light of the 1984 amendments to 11 U.S.C. § 105(a), we are empowered to dismiss a bankruptcy case sua sponte. . . . The instant case presents the rare instance where this extraordinary power . . . must be exercised if the sanctity of our orders and the requirements of the Bankruptcy Code are to merit respect. . . . The debtors by their counsel have proceeded in such a fashion as to convince us that they had filed and proceeded in this case in a convoluted and dilatory manner solely to further delay.”); In re Dyke, 58 B.R. 714 (Bankr. N.D. Ill. 1986) (involving sua sponte dismissal of second of debtor’s two pending Chapter 13 cases on “bad-faith” and “abuse of bankruptcy” grounds); In re Brooks, 51 B.R. 741 (Bankr. S.D. Fla. 1985) (Apparently on court’s motion, court dismisses case with prejudice to the filing of any bankruptcy case within a year where debtor could not reasonably cure the default on the only scheduled debt, a home mortgage.); In re Lewis, 51 B.R. 353 (Bankr. E.D.N.Y. 1985) (Apparently on court’s motion, court dismisses case where debtor fraudulently filed petition using her mother’s name in order to stay the foreclosure of real property legally titled in her mother and then moved to amend the caption of the petition to reveal the real debtor.).
2 See discussion of sua sponte conversion in § 312.2 [ Conversion Sua Sponte ] § 141.5 Conversion Sua Sponte.
3 See Hammers v. IRS (In re Hammers), 988 F.2d 32, 34–35 (5th Cir. 1993) (“While the Code does not expressly prescribe for sua sponte dismissal . . . the 1986 amendment to section 105(a) accommodates such a result.”); In re Fleury, 294 B.R. 1 (Bankr. D. Mass. 2003) (Sua sponte dismissal of a Chapter 13 case is not specifically authorized by the Bankruptcy Code, but it is permitted through the 1986 amendments of 11 U.S.C. § 105.).
4 See In re Pennino, 291 B.R. 842, 843–45 (Bankr. W.D. Ark. 2003) (“Section 305 . . . permits a court to dismiss a pending case regardless of the debtor’s eligibility for relief. . . . [A]bstention under 11 U.S.C. § 305 is appropriate. Not only is reorganization remote and patently not feasible, there is no valid purpose under these facts for a chapter 13 reorganization.”), aff’d, 299 B.R. 536 (B.A.P. 8th Cir. 2003).
5 11 U.S.C. § 305(a)(1) (emphasis added).
6 See § 332.1 [ Procedure, Timing and Form ] § 152.1 Procedure, Timing and Form. See, e.g., Muessel v. Pappalardo (In re Muessel), 292 B.R. 712, 717–18 (B.A.P. 1st Cir. 2003) (“The Bankruptcy Code requires ‘notice and a hearing’ before a Chapter 13 case may be dismissed. . . . The Bankruptcy Rules contemplate that dismissal by the bankruptcy court shall only occur after the parties, including the debtor, are notified of the reasons for dismissal and the date of the hearing. See Fed. R. Bankr. P. 1017(f). . . . [T]he bankruptcy court sua sponte dismissed the Debtor’s Chapter 13 case on alternate grounds without notice or a meaningful opportunity for the Debtor to be heard on those grounds. The bankruptcy court’s actions violated the Debtor’s fundamental rights to procedural due process and the express requirements of the Bankruptcy Code.”); Minkes v. LaBarge (In re Minkes), 237 B.R. 476, 478 (B.A.P. 8th Cir. 1999) (Bankruptcy court inappropriately dismissed Chapter 13 case sua sponte. “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.”); In re Falotico, 231 B.R. 35, 42 (Bankr. D.N.J. 1999) (“The court recognizes that . . . the debtor has not had formal notice of the court’s intent to dismiss his case. However, 11 U.S.C. § 105(a) provides . . . ample authority for its sua sponte dismissal of the case.”).
7 See, e.g., In re Head, 223 B.R. 648, 651 (Bankr. W.D.N.Y. 1998) (Based on a sua sponte “order to show cause” bankruptcy court dismisses Chapter 13 cases filed by nonresidents when it appears the cases were filed by “names” resident in Canada who were seeking to use the United States bankruptcy laws to manage their liability to Lloyd’s of London. “Counsel for the Debtors called attention to the international character of these cases even before he filed them. He did so in the course of seeking guidance from the Clerk’s office regarding local procedures, practices and customs. Consequently, when the cases were filed they were brought directly to the attention of this writer, as Chief Judge. It was immediately evident that the ‘residence’ addresses provided for some of the Debtors could not possibly be permanent residences, and it was evident from certain of the schedules and statements that the Debtors lived, worked and in most instances, owned substantial assets in Canada, though the schedules seemed conspicuously incomplete. Under 11 U.S.C. § 105(d), the Court issues a sua sponte ‘Order to Show Cause’ directing the Debtors and counsel to appear before the Court for the purpose of addressing these apparent deficiencies and for the issuance of further appropriate orders.”).
8 See §§ 331.1 [ Strategic Considerations: Consequences of Voluntary Dismissal ] § 151.3 Strategic Considerations: Consequences of Voluntary Dismissal and 336.1 [ Strategic Considerations ] § 152.6 Strategic Considerations.
9 630 F.2d 634 (8th Cir. 1980).
10 630 F.2d at 636 n.5.
11 237 B.R. 476 (B.A.P. 8th Cir. 1999).
12 237 B.R. at 478 n.2.
13 237 B.R. at 478. Accord Muessel v. Pappalardo (In re Muessel), 292 B.R. 712 (B.A.P. 1st Cir. 2003) (Bankruptcy court’s sua sponte dismissal of Chapter 13 case on alternative ground without notice or opportunity to be heard violated procedural due process.); In re Lewis, 227 B.R. 886, 890 n.7 (Bankr. W.D. Ark. 1998) (In a note, “[i]n light of the overwhelming evidence of bad faith, the Court directed that the case be dismissed. 11 U.S.C. § 1307, however, permits dismissal only upon request of a party in interest and after notice and hearing. The Court does not have the authority to sua sponte direct dismissal of a chapter 13 case without notice and hearing when the determination regarding dismissal is based on a determination of the merits of a chapter 13 plan. [Tenney v. Terry (In re Terry),] 630 F.2d 634 (8th Cir. 1980) . . . . See In re Meints, 222 B.R. 870 (D. Neb. 1998) (bankruptcy court has authority to dismiss chapter 13 case sua sponte for grounds other than those going to merits of the plan).”).
14 See In re Conley, 105 B.R. 116 (S.D. Fla. 1989) (When the parties filed a stipulation for dismissal of a Chapter 13 case without prejudice, it was held to be inappropriate for the bankruptcy court on its own motion to enter an order of dismissal with prejudice to the filing of a bankruptcy case within one year.).
In re Glover, No. 11-60033, 2013 WL 4106652 (9th Cir. Aug. 13, 2013) (unpublished) (Hawkins, Thomas, McKeown) (Sua sponte dismissal of eighth bankruptcy case with five-year bar to refiling was appropriate under §§ 1307(c) and 105(a) based on egregious facts including unfair manipulation of the Bankruptcy Code and a pattern of abuse of Chapter 13 cases.).
Olson v. Van Meter (In re Olson), No. NV-17-1168-LTiF, 2018 WL 989263, at *5–*6, *7 (B.A.P. 9th Cir. Feb. 5, 2018) (unpublished) (Lafferty, Tighe, Faris) (In a marijuana case, BAP reverses sua sponte dismissal by bankruptcy court that made no fact-finding or legal conclusions with respect to cause under § 1307(c). Debtor was 92 years old, legally blind, living in assisted living facility. Shopping center was quitclaimed to the debtor the same day the Chapter 13 petition was filed. Among the tenants was a marijuana dispensary, legal under California law. Lease was apparently arranged by debtor’s son on behalf of an LLC that owned and managed the shopping center before transfer to the debtor. Plan proposed to terminate lease to dispensary and to sell the property to pay creditors. “[T]he bankruptcy court did not articulate the legal basis for its ruling or make findings to support its conclusions that the [Controlled Substances Act] was being violated and that that violation was grounds for dismissal. . . . Some courts have held that, to the extent estate assets are used for or generated by the operation of a federally prohibited marijuana business, a trustee or debtor in possession may not administer those assets without violating federal law. . . . The bankruptcy court here made no finding, however, that the trustee would be administering the proceeds of an illegal business, and there is no evidence in the record that the rents were to be used to fund the plan. Some courts have held that a bankruptcy filing or a plan of reorganization proposed by a debtor who is involved in an illegal enterprise is not in good faith, even where the debtor does not have a subjective bad motive, is in legitimate need of bankruptcy relief, and there is otherwise no indicia of an attempt to abuse the bankruptcy process. . . . [S]ome courts have concluded that a debtor engaged in an illegal business who seeks bankruptcy relief comes into court with unclean hands and is not eligible for relief. . . . The bankruptcy court here made no finding of bad faith or unclean hands. Further, it concluded that it was a crime for Debtor to be accepting rents from Mr. Bass’ business without making any findings showing that all the elements of a CSA violation had been established (such as the requirement that the conduct be ‘knowing’).” In a concurring opinion: “This Debtor’s plan did not necessarily require the rental income from the dispensary to fund the proposed payments. . . . The sale of Debtor’s real property would have been simply a liquidation of legal estate assets. . . . Any prosecution . . . would require a showing that Debtor knew that Mr. Bass leased the property to operate a marijuana dispensary, and that she intended to allow that use. The Debtor’s personal knowledge is an especially critical inquiry for an elderly, blind woman residing in assisted living with an attorney-in-fact in charge of the lease. . . . Debtor’s son’s knowledge in acting for her cannot be imputed to Debtor for purposes of showing criminal knowledge and intent. . . . Although debtors connected to marijuana distribution cannot expect to violate federal law in their bankruptcy case, the presence of marijuana near the case should not cause mandatory dismissal.”).
Erum v. Wells Fargo Bank, N.A. (In re Erum), No. HI-17-1144-BTaL, 2017 WL 5895732 (B.A.P. 9th Cir. Nov. 29, 2017) (unpublished) (Brand, Taylor, Lafferty) (Bankruptcy court appropriately dismissed Chapter 13 case sua sponte with 180-day bar to refiling when debtor with experience in multiple bankruptcy cases over many years failed to file required documents after extended deadlines and numerous warnings.).
Swartout v. Johnson (In re Swartout), No. EC-16-1187-BJuTa, 2017 WL 1371298, at *4 (B.A.P. 9th Cir. Apr. 12, 2017) (unpublished) (Brand, Jury, Taylor) (In a battle between the Chapter 13 trustee and an intransigent debtor’s counsel over a $180 payment, bankruptcy court did not give adequate notice that failure to file a modified plan would be cause for dismissal. “[T]he bankruptcy court did not provide any warning whatsoever that failure to file a modified plan would result in dismissal of Debtor’s chapter 13 case. Under Ninth Circuit law, ‘involuntary dismissal sua sponte requires that there has been notice giving a warning that dismissal is imminent.’”).
Walker v. Danielson (In re Walker), No. CC-16-1011-TaKuKi, 2016 WL 5957274 (B.A.P. 9th Cir. Oct. 13, 2016) (unpublished) (Taylor, Kurtz, Kirscher) (Debtor failed to allege any ground for relief from sua sponte order dismissing pro se skeletal Chapter 13 petition when debtor failed to provide a transcript on appeal and did not address deficiency notice, order to comply and notice of intent to dismiss case issued by bankruptcy court before petition was dismissed.).
In re Zuckerman, No. MS 12-085, 2013 WL 8374121, at *2 (B.A.P. 1st Cir. Apr. 24, 2013) (unpublished) (Deasy, Kornreich, Godoy) (Section 105(a) empowers bankruptcy court to sua sponte dismiss Chapter 13 case when debtor failed to file a certificate of service after being ordered to do so. Bankruptcy court repeatedly issued orders requiring the debtor to file missing documents. Debtor responded each time until bankruptcy court ordered debtor to file a certificate of service with respect to the Chapter 13 plan. The debtor missed the deadline for filing that certificate of service and the bankruptcy court sua sponte entered order of dismissal. "It was entirely appropriate for the bankruptcy court to have set and enforced a deadline in which the debtor must file a certificate of service for the chapter 13 plan. . . . The powers bestowed upon the court in § 105(a) include the equitable and discretionary power to dismiss a case sua sponte under § 1307(c)(1).").
Randle v. Enmark (In re Randle), No. EC-07-1349-DCMo, 2008 WL 8448825, at *4 (B.A.P. 9th Cir. June 30, 2008) (unpublished) (Dunn, Carroll, Montali) (Citing Tennant v. Rojas (In re Tennant), 318 B.R. 860 (B.A.P. 9th Cir. Dec. 10, 2004) (Montali, Perris, Brandt), failure to timely file list of creditors after multiple warnings from bankruptcy court was cause for sua sponte dismissal notwithstanding § 1307(c)(9). "Although § 1307(c)(9) speaks in terms of a dismissal on this basis only upon motion by the U.S. Trustee, we previously have held that in the absence of a motion by the U.S. Trustee, § 105(a) authorizes the bankruptcy court to dismiss a case sua sponte for failure to comply with § 521(1).").
Tennant v. Rojas (In re Tennant), 318 B.R. 860, 869-71 (B.A.P. 9th Cir. Dec. 10, 2004) (Montali, Perris, Brandt) (Sua sponte dismissal for failure to file statement of affairs within time required by "comply order" was appropriate notwithstanding § 1307(c)(9) and Rule 1017(c). When debtor did not file complete schedules, plan and statement of financial affairs, clerk issued "Order to Comply with Bankruptcy Rules 1007 and 3015(b) and Notice of Intent to Dismiss Case under 11 U.S.C. § 109(g)(1)." Order gave debtor 15 days to file missing documents or face dismissal with restrictions on refiling for 180 days. Debtor filed all of required documents except statement of financial affairs, which according to a declaration of counsel, was missing by mistake. "[Section 1307(c)(9)] authorizes only the United States trustee to move for a dismissal of Debtor's bankruptcy case and excludes other parties in interest from doing so. The restrictive language in Section 1307(c) must be considered in light of the language of Section 105(a) . . . . The court can dismiss a case sua sponte under Section 105(a). . . . Section 105(a) makes 'crystal clear' the court's power to act sua sponte where no party in interest or the United States trustee has filed a motion to dismiss a bankruptcy case. . . . The language of Section 105(a) is unambiguous. The statute was revised in 1986 to overrule prior decisions prohibiting a court from acting sua sponte when the statute authorized only a party in interest to act. . . . This compels the conclusion that the requirement 'only on request of the United States trustee' in Section 1307(c)(9) does not preclude the court from acting sua sponte. The section is intended to restrict any other party in interest, but not the court. . . . The court's authority to dismiss a bankruptcy case sua sponte under Section 105(a) is not restricted by Rule 1017(c) . . . Rule 1017(c) is only applicable if the court dismisses a case on a motion pursuant to . . . 1307(c)(9). It does not govern the procedure if the court chooses to proceed under its authority to act sua sponte in accordance with Section 105(a). . . . [I]f a case involves only very narrow procedural aspects, a court can dismiss a Chapter 13 case without further notice and a hearing if the debtor was provided 'with notice of the requirements to be met.' . . . Thus, a procedure is 'perfectly appropriate' that notifies the debtor of the deficiencies of his petition and dismisses the case sua sponte without further notice and a hearing when the debtor fails to file the required forms within a deadline.").
Lomagno v. Fitzgerald (In re Lomagno), No. MW 03-023, 2004 WL 6030756, at *2 (B.A.P. 1st Cir. Mar. 11, 2004) (unpublished) (Lamoutte, de Jesus, Haines) (It is not appropriate for bankruptcy court to sua sponte dismiss Chapter 13 case at hearing on objection to confirmation when debtor did not have notice that dismissal was risk. "This Panel has previously held that a bankruptcy court cannot sua sponte dismiss a Chapter 13 case without the notice and opportunity to be heard required by the Bankruptcy Code and Bankruptcy Rules. . . . In [Muessel v. Pappalardo (In re Muessel), 292 B.R. 712 (B.A.P. 1st Cir. May 13, 2003) (Haines, Carlo, Deasy)], the Panel first addressed whether a bankruptcy court has authority to dismiss a Chapter 13 case sua sponte and concluded that it does. . . . The Panel in Muessel then found that 'both the Bankruptcy Code and Bankruptcy Rules require prior notice to the debtor of any hearing, accompanied by a motion or order to show cause specifying the reasons for dismissal, before dismissal may be considered.'"), remanded to 320 B.R. 473 (B.A.P. 1st Cir. Feb. 9, 2005) (de Jesus, Vaughn, Carlo), aff'd, 429 F.3d 16 (1st Cir. Nov. 14, 2005) (Lipez, Howard, Restani).).
Fuccione v. Solomon (In re Fuccione), No. MB 99-083, 2000 WL 35916011 (B.A.P. 1st Cir. Feb. 24, 2000) (Goodman, Haines, Carlo) (Dismissal with § 109(g)(1) bar to refiling based on failure to timely file plan was not appropriate when debtor did not have notice that bankruptcy court was considering dismissal with prejudice as a sanction.).
Cote v. Solomon (In re Cote), No. MB 99-084, 2000 WL 35916012 (B.A.P. 1st Cir. Feb. 24, 2000) (Goodman, Haines, Carlo) (Dismissal with § 109(g)(1) bar to refiling based on failure to timely file plan was not appropriate when debtor did not have notice that dismissal with prejudice might be sanction for failure to file plan by extended deadline.).
Quinn v. Bank of N.Y. Mellon, No. 5:17-cv-137, 2018 WL 3448213, at *3–*4 (D. Vt. July 16, 2018) (Crawford) (Notwithstanding withdrawal of trustee’s motion to dismiss, bankruptcy court has authority under § 105 to dismiss for cause under § 1307(c). “Section 1307(c) requires the motion of a party in interest or the United States trustee. . . . Here, the Trustee had withdrawn her motion to dismiss . . . . Section 1307(c), however, is not the only source of authority for dismissal. Section 105 of the Bankruptcy Code clearly authorizes a bankruptcy court to take any action necessary to carry out the provisions of the code . . . . § 105 authorizes a bankruptcy court to dismiss a case under § 1307(c).”).
In re Serra, No. 17-Civ-22224-COOKE, 2018 WL 1516624, at *3 (S.D. Fla. Mar. 28, 2018) (Cooke) (Bankruptcy court failed to give ailing debtor adequate notice before it dismissed Chapter 13 case. Pro se debtor lived at a property owned by the debtor’s daughter that had been foreclosed before the petition and with respect to which a writ of possession was pending. Mortgagee was only creditor and moved for stay relief. Bankruptcy court set a hearing on confirmation and stay relief but debtor was injured, bedridden and unable to attend. Bankruptcy court denied confirmation, granted stay relief and dismissed the Chapter 13 case. “While a bankruptcy court may dismiss a case on its own motion, Trustee has cited to no law indicating a case can be dismissed without notice to the debtor and an opportunity for her to be heard. . . . I therefore reverse the Order Denying Confirmation and Dismissing Chapter 13 Case and remand to the bankruptcy court for proper notice and a hearing.”).
Kaur v. Grigsby, No. PWG-17-7, 2017 WL 4050229, at *3 (D. Md. Sept. 13, 2017) (Grimm) (Sua sponte dismissal is appropriate when debtor asked for extension of time to file schedules and other documents but then missed new deadline in spite of warning that dismissal would result. “It is an abuse of the process Kaur elected to pursue to request an extension and then fail to meet that extension without showing cause for the delay and timely seeking additional time.”).
Martin v. Awve, 558 B.R. 889 (W.D. Wis. Sept. 28, 2016) (Peterson) (Sua sponte dismissal of case was not appropriate because debtor was entitled to notice and an opportunity to oppose dismissal—notwithstanding that it appeared case was filed to upset a divorce proceeding.).
In re Miller, 526 B.R. 857, 861 (D. Colo. Sept. 23, 2014) (Blackburn) (Sua sponte dismissal upon death of debtor was appropriate. Hardship discharge under § 1328(b) based on death of debtor did not satisfy requirement of "further administration" under Bankruptcy Rule 1016.).
Tasic v. Labarge (In re Tasic), No. 4:13CV00474 ERW, 2013 WL 2425130 (E.D. Mo. June 4, 2013) (unpublished) (Webber) (Sua sponte dismissal not appropriate without notice and hearing opportunity.).
In re Sharp, No. 06-13151, 2007 WL 107674, at *1 n.2 (E.D. Mich. Jan. 9, 2007) (unpublished) (Appeal of Chapter 13 Case Management Order that would dismiss case without a hearing if debtor did not timely file Chapter 13 Confirmation Hearing Statement is moot because debtor filed statement and plan was confirmed; debtor lacks standing to challenge similar orders in other Chapter 13 cases. District court notes: "the practice of dismissing a case without particular notice in the circumstances set forth in the Case Management Order relies on an assumption which may be inappropriate and unjustified.").
In re Wilcoxon, No. 18-62228-rk, 2018 WL 6016540, at *1–*3 (Bankr. N.D. Ohio Nov. 15, 2018) (Kendig) (In seventh bankruptcy case, court sua sponte requires debtor to pay filing fees from multiple previous Chapter 13 cases in which debtor filed installment payment motions but did not pay fees. After multiple failed Chapter 13 cases all filed to stop collection action and all dismissed without payments to trustee and without prepetition briefing certificate, court finds cause under § 105(a) that if the current case is dismissed at any time the debtor will be barred from refiling for five years without prior permission. “The Bankruptcy Code provides multiple grounds for involuntary conversion or dismissal of a Chapter 13 case, and one such ground is the ‘nonpayment of any fees and charges required under chapter 123 of title 28.’ 11 U.S.C. § 1307(c)(1). There is nothing in the statute that expressly limits the term ‘any fees’ to those accrued in the current proceeding. . . . However, there is a split in authority on this issue, with some courts interpreting the very same statutory provision to mean that only fees incurred during the instant case can serve as grounds for dismissal or conversion. . . . This Court does not believe there to be any provision within the Code that would explicitly prevent it from ordering the payment of filing fees from previous bankruptcy cases. . . . Debtor will be ordered to pay monthly installment payments of $100 . . . until the $1,240 in combined filing fees . . . have been paid in full. . . . The Bankruptcy Code ordinarily allows for the dismissal of a bankruptcy case with prejudice for up to 180 days . . . . However, under 11 U.S.C §§ 105(a) and 349(a), courts have the authority to prevent refiling for even longer periods of time, ‘where there is sufficient cause.’ . . . Should this current case be dismissed at any time, this Court finds that there is sufficient cause to do so with prejudice, and to bar Debtor from refiling for 5 years from the date of dismissal, unless he seeks and obtains relief prior to filing[.]”).
In re Grason, No. 17-70925, 2017 WL 8897093 (Bankr. C.D. Ill. Aug. 21, 2017) (Gorman) (Bankruptcy court recommends to district court dismissal of appeal filed in forma pauperis when debtor has financial ability to pay the fee for appeal but didn’t do so. Debtor sought to appeal order dismissing Chapter 13 case after bankruptcy court show-cause order for dismissal based on simultaneous Chapter 13 and Chapter 7 cases pending that related directly to the same debts.).
In re Payer, No. 10-33656, 2016 WL 5390116, at *2–*4 (Bankr. D. Colo. May 5, 2016) (Tallman) (On Court’s Order to Show Cause, cause for dismissal that debtors failed to make required direct payments to mortgagee. Confirmed plan required payment of mortgage arrearage and maintenance of regular postpetition mortgage payments directly to holder of first mortgage. Trustee filed Notice of Final Cure Payment under Bankruptcy Rule 3002.1(f) to which mortgagee responded that prepetition arrearages had been paid in full but debtor was more than $10,000 behind in postpetition mortgage payments. No party requested specific action from the bankruptcy court, and the court issued its show-cause order after the trustee filed a notice that the case was fully administered. “‘[P]ayments under the plan’ includes payments made directly to a mortgage holder when provision for that direct payment is a term of a debtor’s confirmed plan. . . . Debtors are in material default under the terms of their confirmed Plan. . . . [I]t leaves over $10,000.00 that the Debtors had committed to use for making ongoing mortgage payments under their confirmed Plan unaccounted for. . . . [A] discharge in this case would allow the Debtors to extinguish the [junior lien] . . . on the Debtors’ residence. . . . [C]ause exists to either dismiss the Debtors’ case or convert it to a case under chapter 7.”).
In re Wimmer, 512 B.R. 498, 513 (Bankr. S.D.N.Y. June 30, 2014) (Morris) (Neither § 1307(c) nor Law v. Siegel, __ U.S. __, 134 S. Ct. 1188, 188 L. Ed. 2d 146 (Mar. 4, 2014), precludes sua sponte dismissal under § 105(a) of case filed by ineligible Chapter 20 debtor. "Dismissal can be accomplished through §§ 109(e) and 105(a) without § 1307(c). Sections 1307(c) and 109(e) deal with different scenarios. Section 1307(c) 'sets out the standard ("cause") that a bankruptcy court must apply in deciding whether, in its discretion, an already filed Chapter 13 case should be dismissed or converted to Chapter 7.' . . . Section 1307(c) sets forth several examples of cause, none of which include ineligibility to be a debtor. All of the examples deal with conduct taking place after the case is filed. The § 109(e) determination, however, is made 'on the date of filing of the petition.' . . . Its purpose is to 'ensure that the excess monthly incomes of Chapter 13 debtors [are] not wildly out of proportion to the debts they seek to repay.' . . . Its original role was that of 'gatekeeper, determining which proprietors was [sic] small enough to reorganize under Chapter 13 and which had to file for Chapter 11 relief, where they would have to comply with more exacting requirements.' . . . Given this gatekeeper function, it makes little sense to tie § 109(e) to § 1307(c). 'The matter of eligibility is one that must be determined at the outset.' Sua sponte dismissal may be appropriate to 'preserve the use of . . . resources to cases involving debtors eligible to file under [chapter 13].' . . . The requirements of § 1307(c) are not contravened by sua sponte dismissal pursuant to §§ 105(a) and 109(e), and the principals [sic] laid out in Law v. Siegal are not infringed.").
In re Green, No. 13-02513-8-RDD, 2014 WL 985467 (Bankr. E.D.N.C. Mar. 13, 2014) (Doub) (Sua sponte dismissal with prejudice ordered after pro se debtor failed to cure service deficiencies with respect to motions for sanctions for stay violations. Debtor had five prior cases. Motions failed to state plausible grounds for violations of stay. Attorney fees of $1,500 awarded against debtor.).
In re Yuen, No. 13-30249-H3-13, 2013 WL 3430768, at *1 (Bankr. S.D. Tex. July 8, 2013) (Paul) (Court rejects its own order to show cause with respect to dismissal when evidence did not show that debtor filed case to "gain an unfair advantage in a two-party dispute.").
In re King, 461 B.R. 789 (Bankr. D. Alaska Oct. 25, 2010) (MacDonald) (Case dismissed sua sponte when debtor could not propose plan that would satisfy § 1322(a)(2) requirement to pay priority domestic support obligation in full.).
In re Leonard, No. 09-32725, 2009 WL 1475138, at *4 (Bankr. E.D. Tenn. May 22, 2009) (Stair) (17th case is dismissed with 365-day bar to refiling. No discharge, no confirmed plan and no filing fee paid in prior 16 cases. Debtor had "propensity to willfully ignore the court's Orders.").
In re Banini, No. 09-17399/JHW, 2009 WL 1362829 (Bankr. D.N.J. May 14, 2009) (Wizmur) (Denying pro se debtor's second motion for extension to complete required documents, cause to dismiss case included multiple failures to complete filing, to obtain credit counseling and to complete installment fee payments.).
In re Lowell, No. 07-10348, 2008 WL 2077915 (Bankr. D. Vt. May 14, 2008) (unpublished) (Brown) (Sua sponte dismissal for unreasonable delay prejudicial to creditors when plan was not confirmed after continuances and stay relief had been granted to principal creditor.).
In re Bell, No. 04-75161, 2008 WL 80728, at *3 (Bankr. C.D. Ill. Jan. 7, 2008) (Gorman) (Notice of potential sua sponte dismissal is given after denial of motion to amend confirmed plan to pay unscheduled IRS claim that was not provided for in plan; existence of IRS priority claim means that plan was not capable of confirmation for failure to pay priority claims in full, and under In re Escabedo, 28 F.3d 34, 35 (7th Cir. 1994), confirmation entered in violation of § 1322(a)(2) is "nugatory.").
In re Jackson, No. 06-13808ELF, 2007 WL 1188202 (Bankr. E.D. Pa. Apr. 18, 2007) (On court's sua sponte notice to consider dismissal under § 1307(c)(1), case is dismissed based on prejudicial delay for seven months, with case still not ready for confirmation.).
In re Thomas, No. 06-10714-DK, 2006 WL 4547175 (Bankr. D. Md. Sept. 5, 2006) (Motion to reconsider court's dismissal of case is denied when debtor and her attorney failed to appear for hearing on second amended plan and third amended plan was not timely filed.).
In re Estate of Roberts, No. 05-26653 ESD, 2005 WL 3108224 (Bankr. D. Md. Aug. 15, 2005) (unpublished) (Case filed by executor of deceased is dismissed sua sponte with finding that decedent's estate is not a "person" eligible for Chapter 13 relief.).
In re Hague, 334 B.R. 486 (Bankr. D. Mass. July 1, 2005) (After denying confirmation based on lack of good faith, court set show cause why case should not be dismissed; case was two-party dispute where debtors were attempting to defeat state court litigation.).
In re Bulson, 327 B.R. 830 (Bankr. W.D. Mich. May 27, 2005) (Hughes) (After sua sponte revoking confirmation, case is also dismissed. Debtors had been noticed that case would be dismissed if they did not achieve confirmation. Debtors' attorney affirmatively represented plan was in compliance with § 1325 confirmation requirements, when it was not. Misrepresentation sufficiently fraudulent to require revocation of confirmation and dismissal.).
In re Wheeler, 323 B.R. 758, 765 (Bankr. W.D. Wash. Apr. 26, 2005) (Dismissal pursuant to "strict compliance" order denying confirmation that required debtor to file two consecutive pay stubs within 30 days else Chapter 13 petition would be dismissed was a permitted sua sponte dismissal under § 105(a). Citing Tennant v. Rojas (In re Tennant), 318 B.R. 860 (B.A.P. 9th Cir. 2004), "the Trustee, or a creditor, may utilize a strict compliance order that allows the Court's sua sponte dismissal of a Chapter 13 case without further notice, in accordance with 11 U.S.C. § 105(a).").