Opinion ID: 1196137
Heading Depth: 3
Heading Rank: 2

Heading: Application of Marrama to Rosson's case

Text: Rosson acknowledges in his reply brief that, after Marrama, bad-faith conduct can justify the bankruptcy court's denial of ... the right to voluntarily dismiss a [Chapter 13] petition, but he attempts to distinguish his case from Marrama on the facts, insisting that his conduct is nothing like that of the dishonest [debtor] described in Marrama.  Rosson states that  Marrama involved a debtor who consciously lied to the court, attempted to remove assets from the court's jurisdiction, and took efforts to conceal what he had done. Rosson argues that, by contrast, he merely pledged the arbitration proceeds for use in [his] Chapter 13 case, and that it is not at all obvious that [he] must have known that investing a portion of the arbitration award in repairs to the residencea valuable asset of the estatewas inconsistent with `using' the funds in his Chapter 13 case. Rosson's argument is not persuasive. Even conceding the doubtful proposition that Rosson decided in good faith that using the arbitration proceeds to remodel his home was consistent with his repeated pledges to apply that money to his Chapter 13 plan, his use of the money was still in defiance of the bankruptcy court's specific order to deposit the money with the Chapter 13 Trustee. Moreover, Rosson nevernot even in his motion for reconsiderationprovided the bankruptcy court with an explanation of what happened to the missing funds. He simply failed to deliver the funds as ordered and then, when taken to task for failing to do so, invoked his supposedly absolute right to withdraw from the bankruptcy process by requesting that his Chapter 13 petition be dismissed. Under these circumstances, it was hardly unreasonable for the bankruptcy court to conclude that Rosson sought to voluntarily dismiss his case in order to abscond with [estate] proceeds. Moreover, bad faith is a finding of fact reviewed for clear error. Leavitt, 171 F.3d at 1222-23; Eisen v. Curry ( In re Eisen ), 14 F.3d 469, 470 (9th Cir.1994) (per curiam). Even if Rosson's conduct was arguably less egregious than Marrama's, the bankruptcy court did not clearly err in finding that Rosson's failure to deliver to the Trustee $185,000 in estate assets (or, when given the chance, to explain the status of the money) amounted to atypical, bad faith debtor conduct. [13] In sum, it is clear from the record that the bankruptcy court acted to prevent what it reasonably perceived to be an abuse of process. 11 U.S.C. § 105(a). As this type of action was specifically approved by Marrama, we hold that the bankruptcy court did not abuse its discretion when it converted the case on its own motion and denied voluntary dismissal.