Court Opinion

ID: 9940961
Source: CourtListenerOpinion
Date Created: 2024-02-15 18:02:42.413484+00
Date Added: 2024-06-11T13:46:04.837157
License: Public Domain

UNITED STATES BANKRUPTCY APPELLATE PANEL
           FOR THE FIRST CIRCUIT
                      ________________________

                         BAP NO. MB 99-084
                      ________________________

                       IN RE: JOHN R. COTE,
                               Debtor.
                      ________________________

                            JOHN R. COTE,
                              Appellant,

                                    v.

        DOREEN A. SOLOMON, CHAPTER 13 TRUSTEE,
     UNITED STATES TRUSTEE, and DANIEL S. BLECK, ESQ.,
                        Appellees.

                      ________________________

           Appeal from the United States Bankruptcy Court
                   for the District of Massachusetts
            (Hon. Carol J. Kenner, U.S. Bankruptcy Judge)
                     ________________________

                        Before
     GOODMAN, HAINES AND CARLO, U.S. Bankruptcy Judges

                      _________________________

     Leonard A. Frisoli and Frisoli & Associates, on brief for Appellant.

                      _________________________

                           February 24, 2000
                      _________________________
Per Curiam.

     The Debtor, John R. Cote, appeals from the July 26, 1999

bankruptcy court order that dismissed his case pursuant to 11

U.S.C. §109(g) and from the August 30, 1999 order that denied the

debtor’s motion to vacate the dismissal.1    For the reasons set

forth below, the July 26, 1999 order is vacated and the matter is

remanded for an evidentiary hearing on the issue of whether Cote

willfully failed to comply with orders of the bankruptcy court,

or otherwise engaged in conduct violative of 11 U.S.C. §109(g)

such that he should be precluded from refiling another petition
for 180 days.

I.   Background.
     The Debtor alleges that he, Peter Fuccione and Steven Hurley
are trustees and beneficiaries of the Genoa Realty Trust.       Each

filed separate bankruptcy cases.2     The cases of Cote and
Fuccione were assigned to Judge Kenner.     Hurley’s case was
assigned to Judge Feeney.   Cote filed his Chapter 13 petition on

June 14, 1999, but did not file his Chapter 13 plan, Schedules
and Statement of Financial Affairs.    See Order Dismissing Case,

July 26, 1999.   The bankruptcy court ordered Cote to file these

     1
           Because Cote filed a motion to vacate and/or alter the
dismissal order, the dismissal did not become final until August
30, 1999. Since 180 days have not yet passed, the appeal is not
moot. Carey v. Askenase (In re Carey), 221 B.R. 571, 572 (B.A.P.
1st Cir. 1998).
     2
          John Cote dba Genoa Realty Trust (“Cote”) filed Case
No. 99-15018; Peter Fuccione dba Genoa Realty Trust (“Fuccione”)
filed Case No. 99-15019; and Steven M. Hurley dba Genoa Realty
Trust (“Hurley”) filed Case No. 99-15045.

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documents by June 29, 1999.    Prior to the expiration of the

deadline, Cote filed a motion to extend the time for filing these

documents.   Judge Kenner endorsed the motion on July 1, 1999,
extending the time for filing to July 16, 1999.3    Prior to the

expiration of the extended deadline, Cote filed a pleading titled

“Motion for Joint Administration Pursuant to Rule 1015 and
Additional Time to File Plan.”    This pleading was filed with a

caption containing all three case numbers, (App. at 5),     but

apparently was not entered on the docket in the two cases

assigned to Judge Kenner.4    On July 22, 1999, the motion was

filed again, with a separate caption for the Cote case.     The July

22, 1999 re-filed motion was denied without hearing by an

endorsed order entered by Judge Kenner on July 26, 1999.     (App.
at 7).

     At the same time the Cote motion for joint administration

was being considered without hearing by Judge Kenner, Judge
Feeney had scheduled the Hurley motion for joint administration

for hearing on July 26,1999, at 2:15 p.m.    (App. at 8).   Prior to

the Hurley hearing, on July 26, 1999, Judge Kenner denied the

     3
          Specifically, the endorsement states “Allowed in part.
The time is extended to 7/16/99 at 4 p.m.” July 1, 1999
endorsement. (App. at 4).
     4
          The July 16, 1999 motion was the first one filed, and
had a caption that contained the names and case numbers of the
three cases that were the subject of the motion for joint
administration. Ironically, even though this pleading does not
appear to have been docketed in Cote’s case because it utilized
this multiple case caption, the bankruptcy court utilized the
same multiple case caption when it denied Cote’s motion to vacate
the dismissal. (App. at 2).

                                  3
Cote motion for joint administration and motion to extend time

without notice to any of the parties or opportunity for hearing.

By separate order on the same date, Judge Kenner dismissed Cote’s
case pursuant to 11 U.S.C. §109(g) concluding that Cote had

“failed to comply with the Court order to file the Chapter 13

plan.”    See Order Dismissing Case, July 26, 1999. (App. at 1).

II.   The Appeal.

      The bankruptcy court dismissed Cote’s case pursuant to 11

U.S.C. 109(g), which provides, in relevant part:

                 Notwithstanding any other provision of
            this section, no individual or family farmer
            may be a debtor under this title who has been
            a debtor in a case pending under this title at
            any time in the preceding 180 days if-

                 (1) the case was dismissed by the court
                 for willful failure of the debtor to
                 abide by orders of the court, or to
                 appear before the court in proper
                 prosecution of the case; ...

11 U.S.C. §109(g)(1).5

      Cote argues that there was no evidence that he willfully

failed to abide by orders of the bankruptcy court.    The complete
text of the bankruptcy court order, including all findings of

fact and conclusions of law, is as follows:

                 Debtor filed a chapter 13 petition on
            June 14, 1999, but failed to file his chapter
            13 Plan and Schedules and Statement of
            Affairs. The Court then ordered the Debtor to
            file those documents by June 29, 1999.     By

      5
          The bankruptcy court did not specifically reference
section 109(g)(1), but the court’s conclusion that the debtor
failed to comply with court orders implicates only section 11
U.S.C. § 109(g)(1).

                                  4
         motion filed June 25, 1999, the Debtor sought
         an extension of time to comply with the order;
         the Court endorsed the motion on July 1, 1999
         as follows: “Allowed in part - the time is
         extended to July 16, 1999 at 4 PM.”
              The Debtor filed the Schedules and
         Statement on July 16, 1999, but no Chapter 13
         Plan. To date, the Debtor has failed to file
         his Chapter 13 Plan.
              On July 22, almost a week after his
         chapter 13 Plan was due, the Debtor filed a
         motion for additional time to file his plan,
         saying he needed more time to ‘sort out
         Debtors (sic) financial affairs.’     Atlantic
         Bank and Trust Company, a large secured
         creditor, opposed that motion.      The Court
         denied that motion because the Debtor failed
         to demonstrate any basis for a further
         extension of time.
              Based on Debtor’s failure to comply with
         the Court order to file the Chapter 13 Plan,
         this case is hereby DISMISSED pursuant to
         section 109(g).

Order Dismissing Case, July 26, 1999.

       “Willful” is not defined in the statute, but, at a
minimum, that determination should not be made without notice to

the debtor and an opportunity for hearing.   Once the bankruptcy

court concluded that the Debtor appeared to have failed to abide

by the court’s prior orders, Cote was entitled to an opportunity

to present evidence to justify the alleged failures.

     There was no notice to Cote that dismissal with prejudice

pursuant to 11 U.S.C. §109(g)(1) might be a sanction for his

failure to file a plan by the previously extended deadline.    It

appears that the bankruptcy court relied on the debtor’s failure

to have filed a plan by the extended deadline of July 16, 1999.

However, the Debtor’s motion to vacate the dismissal suggests

that the Debtor’s July 16, 1999 Motion for Joint Administration

                               5
Pursuant to Rule 1015 and Additional Time to File Plan, (App. at

5), extended the deadline, at least until the Debtor had notice

of the denial of that motion.    The endorsement denying this
motion was entered July 26, 1999, the same day the bankruptcy

court dismissed the Debtor’s case for failure to file the plan.

       If we assume that the denial of the motion to extend the
deadline triggered the deadline for Cote to file his Chapter 13

plan, we cannot imagine how Cote could have reasonably known of

the denial of the extension prior to the dismissal of his case.

If Cote didn’t know of the denial of the extension, he did not

know that he had an immediate obligation to file his plan.

Because the Debtor did not have notice and an opportunity to be

heard, there is no record from which this panel could affirm the
bankruptcy court’s conclusion that the Debtor’s conduct was a

willful violation of a court order.

III.    Conclusion.
       We VACATE only that portion of the July 26, 1999 order that

dismissed Cote’s case pursuant to 11 U.S.C.§109(g) and REMAND the

matter to the bankruptcy court for further proceedings consistent

with this decision.

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