Court Opinion

ID: 4423420
Source: CourtListenerOpinion
Date Created: 2019-08-07 17:00:26.712443+00
Date Added: 2024-06-11T13:33:43.778881
License: Public Domain

By order of the Bankruptcy Appellate Panel, the precedential effect
                        of this decision is limited to the case and parties pursuant to
                    6th Cir. BAP LBR 8024-1(b). See also 6th Cir. BAP LBR 8014-1(c).

                                         File Name: 19b0006n.06

                      BANKRUPTCY APPELLATE PANEL
                                     OF THE SIXTH CIRCUIT

 IN RE: KELLI PRATHER,                                        ┐
                                                  Debtor.     │
                                                               >        No. 18-8037
                                                              │
                                                              ┘

                         Appeal from the United States Bankruptcy Court
                          for the Southern District of Ohio at Cincinnati.
                         No. 1:18-bk-12326—Beth A. Buchanan, Judge.

                                Decided and Filed: August 7, 2019

         Before: DALES, HARRISON, and WISE, Bankruptcy Appellate Panel Judges.

                                        _________________

                                              COUNSEL

ON BRIEF: H. Leon Hewitt, HEWITT FOSTER LEGAL GROUP, LTD., Cincinnati, Ohio, for
Debtor. Daniel M. McDermott, OFFICE OF THE UNITED STATES TRUSTEE, Cincinnati,
Ohio, for Trustee.
                                        _________________

                                              OPINION
                                        _________________

       TRACEY N. WISE, Bankruptcy Appellate Panel Judge. Debtor/Appellant Kelli Prather
appeals from an Order granting a Motion to Dismiss her chapter 7 bankruptcy case with a two-
year bar on refiling, filed by Appellee Daniel M. McDermott, United States Trustee for Region 9
(“Trustee”). Debtor’s appeal lacks merit for several reasons.
 No. 18-8037                                      In re Prather                                           Page 2

                                             ISSUE ON APPEAL

        Debtor, who appeared pro se in the bankruptcy court but is represented by counsel herein,
presents one issue on appeal: “Did Debtor Notice [sic] receive notice of the proceedings
requiring her to file documents?” (BAP No. 18-8037, ECF No. 13 (“Debtor’s Brief”) at 3.)1

                                               JURISDICTION

        The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this
appeal. The United States District Court for the Southern District of Ohio has authorized appeals
to the Panel, and no party timely elected to have this appeal heard by the district court.
28 U.S.C. § 158(b)(6) and (c)(1). A bankruptcy court’s final order may be appealed as of right.
28 U.S.C. § 158(a)(1). An order dismissing a bankruptcy case is a final order. In re Weixel, 494
B.R. 895, 897 (B.A.P. 6th Cir. 2013) (citation omitted).

                                                     FACTS

        A.         Debtor filed four bankruptcy cases within four years, including the case at
                   issue.

        Between October 2014 and June 2018, Debtor filed four bankruptcy petitions in the U.S.
Bankruptcy Court for the Southern District of Ohio.2 First, she filed a chapter 13 petition in
October 2014. After the case was converted, Debtor’s chapter 7 discharge was revoked because
she failed to comply with an order directing her to turn over a tax refund to the chapter 7 trustee.
Second, Debtor filed a chapter 13 petition in July 2017. That case was dismissed after Debtor
failed to turn over documents to the chapter 13 trustee. Third, Debtor filed a chapter 7 petition in
November 2017. Trustee commenced an adversary proceeding to deny Debtor’s discharge under
§ 727(a)(3), 727(a)(4), 727(a)(5) and 727(a)(6),3 and the bankruptcy court entered a default
judgment on May 23, 2018, after Debtor failed to respond to the complaint. Finally, on June 14,

        1Debtor’s     Brief identifies a second issue for appeal: “Was debtor afforded the opportunity to represent
herself?” (Debtor’s Brief at 3.) It later states that she “elected to withdraw this issue” and offers no argument on
this point. (Id. at 8.)
        2Trustee   designated pertinent documents from Debtor’s prior bankruptcy cases in the record on appeal.
        3Unless otherwise indicated, all chapter and section references are to the United States Bankruptcy Code,
11 U.S.C. §§ 101-1532.
 No. 18-8037                                    In re Prather                                         Page 3

2018, three weeks after the bankruptcy court granted the default judgment denying her discharge,
Debtor filed another chapter 7 petition. (Bank. Case No. 18-12326, ECF No 1.4) This last case
is now before the Panel.

        B.       Debtor failed to file required schedules or comply with a related deficiency
                 notice, and the bankruptcy court entered an order confirming that no
                 discharge would be awarded.

        Because Debtor’s most recent petition, filed pro se, was incomplete—she failed to file
schedules D, E, F, I, J, the Statement of Financial Affairs, and the Chapter 7 Statement of
Current Monthly Income—the bankruptcy court issued a deficiency notice on June 15, 2018,
directing Debtor to file the outstanding schedules within 14 days of her filing date. (ECF No. 9
(the “Deficiency Notice”).) Her petition listed her residential address as 1034 Sunset Ave., Fl.
#2, Cincinnati, Ohio 45205, and her mailing address as PO Box 141049, Cincinnati, Ohio 45350
(the “PO Box”). A BNC Certificate of Mailing certifies that the Deficiency Notice was served
on Debtor at the PO Box on June 17. (ECF No. 13 at 4.) Debtor did not comply with the
Deficiency Notice. In addition, because Debtor had two prior cases pending and dismissed
within a year of her newest petition, the bankruptcy court entered an order confirming that the
automatic stay was not in effect pursuant to § 362(c)(4)(A).

        C.       Trustee moved to dismiss Debtor’s case.

        On June 29, 2018, Trustee moved to dismiss Debtor’s case under § 707(a)(1), (2), and
(3), and bar future filings for two years under §§ 105(a) and 349(a). Trustee contended that
Debtor’s case should be dismissed because her discharge was denied in her prior case, she had
three other failed bankruptcy cases, she did not file all required schedules in her current case, and
substantially all of her debts were non-dischargeable. Trustee requested a two-year bar against
refiling because Debtor was a serial filer who filed her latest case in bad faith.

        4Unless otherwise indicated, all remaining references the record are to the CM/ECF record in Bankruptcy
Case No. 18-12326.
 No. 18-8037                                In re Prather                                  Page 4

       Debtor filed a timely response to Trustee’s motion, which stated:

       This response comes before the court as a plea not to dismiss the bankruptcy
       filing and/nor to bar petitioner from filing bankruptcy for two years. To date,
       petitioner was unable to find employment with a living wage and/or enough
       money to hire an attorney. Since the petition was filed, petitioner has been able to
       find gainful employment and has consulted an attorney to assist with Court
       proceedings. Petitioner is not an attorney and has experience [sic] great difficulty
       understanding legal language, drafting motion [sic] and responding to notices
       from the Trustee[.] [F]or this reason, Petition[er] is requesting that the Court
       rules [sic] against the motions [sic] to dismiss and the motion to bar the Petitioner
       from filing bankruptcy and the federal relief/protection offered through
       bankruptcy.

(ECF No. 23.) Thus, Debtor’s response does not mention anything about not having received the
Deficiency Notice, which was discussed in Trustee’s motion.

       The bankruptcy court scheduled an evidentiary hearing on the motion to dismiss for
August 16, 2018. Trustee filed a reply to Debtor’s response that provided information about
Debtor’s prior filings, argued that her repeated filings prevented creditors from foreclosing on
her property, and disputed the credibility of Debtor’s contention that she lacked the ability to
proceed without counsel, given her prior pro se bankruptcy experience. Trustee also filed a
witness and exhibit list related to the hearing.

       D.      The bankruptcy court held a hearing and continued the motion to dismiss
               contingent on counsel appearing for Debtor.

       Debtor appeared pro se at the hearing on August 16. Debtor did not offer argument or
evidence to dispute the substantive bases for Trustee’s motion. Instead, the transcript of the
hearing reflects that Debtor discussed her representation in the case with the bankruptcy court
and requested a continuance to permit counsel to appear on her behalf. (ECF No. 62.) Trustee
argued that there was no need for counsel to appear because the basis for the relief sought was
clear. Nevertheless, because Debtor represented that counsel would appear in the case on her
behalf if the motion were continued, and because the bankruptcy court wanted Debtor’s counsel
to address Trustee’s request for a two-year bar to refiling, the bankruptcy court agreed to
continue Trustee’s motion to a subsequent date, contingent upon Debtor having counsel appear
within fourteen days. However, the court expressly advised Debtor that, if no attorney appeared
 No. 18-8037                               In re Prather                                   Page 5

on her behalf within that time frame, she would grant Trustee’s motion and impose a two-year
bar to refiling.

        After the hearing, the bankruptcy court entered an order continuing the hearing on the
motion to dismiss until September 20, 2018. (ECF No. 30 (the “Continuance Order”).) The
Continuance Order stated that the continuance was contingent upon an attorney filing a notice of
appearance on Debtor’s behalf within fourteen days. It also stated: “[i]f no notice of appearance
is filed, the United States Trustee may upload an order granting the Motion of United States
Trustee to Dismiss Chapter 7 Case and Request for Two Year Bar to Re-Filing [Docket Number
18] which this Court will enter without further notice or hearing.” (Id.)

        E.         The bankruptcy court dismissed Debtor’s case with a two-year bar on
                   refiling.

        No attorney appeared in the case on Debtor’s behalf within that fourteen-day period.
Thus, the court entered an order dismissing Debtor’s chapter 7 case with a two-year bar against
re-filing on September 5, 2018. (ECF No. 34 (the “Dismissal and Bar Order”).) The Dismissal
and Bar Order referenced the Continuance Order and its contents, stated that fourteen days had
passed and no attorney had appeared on Debtor’s behalf, dismissed the case, and prohibited
Debtor from filing another bankruptcy case for two years. Debtor filed a timely notice of appeal.

                                          DISCUSSION

I.      Standard of review.

        This Panel reviews a bankruptcy court’s dismissal of a case based upon § 707(a) for an
abuse of discretion. Indus. Ins. Servs., Inc. v. Zick (In re Zick), 931 F.2d 1124, 1126 (6th Cir.
1991). “The bankruptcy court’s decision to bar the Debtor from subsequent filings for two years
… is also reviewed under the abuse of discretion standard.” Cusano v. Klein (In re Cusano),
431 B.R. 726, 730 (B.A.P. 6th Cir. 2010).         Under the abuse of discretion standard, the
bankruptcy court’s legal conclusions are reviewed de novo and its factual findings are reviewed
for clear error. Goldstein v. Bavelis (In re Bavelis), 743 Fed. App’x 670, 675 (6th Cir. 2018).
 No. 18-8037                                In re Prather                                    Page 6

II.    Debtor’s appeal lacks merit.

       Debtor’s only argument on appeal, through counsel, is that she did not receive the
Deficiency Notice. Debtor’s Brief acknowledges the “presumption that an item properly mailed
was received by the addressee” and states that “[t]he presumption arises upon proof that the item
was properly addressed, had sufficient postage, and was deposited in the mail.” (Debtor’s Brief
at 6 (citations omitted).) Debtor’s Brief notes that this is a rebuttable presumption. (Id. at 6-7
(citing Simpson v. Jefferson Standard Life Ins. Co., 465 F.2d 1320, 1323 (6th Cir. 1972); In re
Yoder Co., 758 F.2d 114, 1118 (6th Cir. 1985)).) Finally, Debtor’s Brief states that she did not
receive the Deficiency Notice:

       Debtor contends she failed to receive Notice of deficient filing and Order stated
       above. Debtor relates that she discovered the 341 Meeting was scheduled for July
       24, 2018 when she conducted a search of the Bankruptcy Court’s website when
       she was concerned that she had not received any written communication from the
       Court. Debtor attended the scheduled 341 meeting as required. Debtor states that
       she informed the chapter 7 trustee she had not received any written notices of
       deficiency and the Meeting of Creditors was adjourned until August 14, 2018. In
       the meantime, the U.S. Trustee filed a Motion to Dismiss Debtor(s) Chapter 7
       Case and Request for Two (2) Year Bar to Re-Filing. RE 18. Debtor filed a
       response on July 19, 2018. RE 23. The court entered an Order Setting Hearing
       on the U.S. Trustee’s Motion. RE 24. On August 16, 2018 a hearing was held,
       and Debtor contends that she informed the court that she had not received any
       written communications from the court and requested additional time to comply
       with Court’s order. Unfortunately, Appellant has no evidence other than her
       statement that she had not received the notices. However, Ms. Prather stands by
       her assertion.

(Id. at 7-8.) Based on this argument, Debtor “respectfully request [sic] this Court to reverse the
lower court’s Order of Dismissal dated August 16, 2018 in its entirety.” (Id. at 9.)

       A.      Debtor did not preserve the basis presented for her appeal.

       Debtor failed to identify in the appellate record where she preserved her argument for
appeal in the bankruptcy court. Service is a fact-intensive issue, and nothing in the record
reflects that Debtor raised this argument below, or that the bankruptcy court ever considered or
ruled on the issue. “Issues not litigated in the trial court are generally inappropriate for appellate
consideration in the first instance.” Friendly Farms v. Reliance Ins. Co., 79 F.3d 541, 544 (6th
 No. 18-8037                               In re Prather                                    Page 7

Cir. 1996); see also Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008) (stating
that issues not presented to, and considered by, a lower court, are generally not preserved for
appeal); Bailey v. Floyd Cty. Bd. of Educ., 106 F.3d 135, 143 (6th Cir. 1997) (“It is well-settled
that this court will not consider arguments raised for the first time on appeal unless our failure to
consider the issue will result in a plain miscarriage of justice.”). Because Debtor failed to raise
and preserve this argument in the bankruptcy court, and there is no suggestion from the briefing
in this appeal that a plain miscarriage of justice will occur unless the Panel considers this
argument on the merits, Debtor is deemed to have waived this argument. MERV Props., LLC v.
Forcht Bancorp., Inc. (In re MERV Props., L.L.C.), 539 B.R. 516, 532-33 (B.A.P. 6th Cir. 2015)
(finding that the appellant waived an argument by not presenting it first to the bankruptcy court).

       B.      Debtor failed to develop her argument regarding lack of service of the
               Deficiency Notice.

       Alternatively, Debtor’s Brief does not explain why the Dismissal and Bar Order should
be reversed even assuming it is true that Debtor did not receive the Deficiency Notice. Stated
differently, Debtor offers no reasoned argument why the bankruptcy court abused its discretion
by dismissing her case or by imposing a two-year bar on refiling. An “issue is deemed forfeited
on appeal if it is merely mentioned and not developed.” U.S. v. Clark, 469 F.3d 568, 569-70 (6th
Cir. 2006). “Issues adverted to in a perfunctory manner, unaccompanied by some effort at
developed argumentation, are deemed waived. It is not sufficient for a party to mention a
possible argument in the most skeletal way, leaving the court to . . . put flesh on its bones.”
McPherson v. Kelsey, 125 F.3d 989, 995-96 (6th Cir. 1997). To evaluate an argument on the
merits concerning the Dismissal and Bar Order would require the Panel to create that argument
for Debtor out of whole cloth. The Panel will not engage in that exercise.

       C.      The record does not support Debtor’s argument.

       While Debtor’s appeal fails for the reasons discussed above, the Panel also notes the lack
of a factual basis underpinning her argument. First, Debtor’s Brief cites no evidence whatsoever
to support the claim that she did not receive the Deficiency Notice. Counsel’s contentions in
Debtor’s Brief are not evidence. See, e.g., In re Spencer, 568 B.R. 278, 280 (Bankr. W.D. Mich.
2017) (stating that legal argument is not evidence, and that legal arguments alone are insufficient
 No. 18-8037                               In re Prather                                   Page 8

to sustain a motion requiring factual support). Second, the record contradicts Debtor’s claim.
A Certificate of Service filed in the record certifies that the Deficiency Notice was sent to the PO
Box. This Certificate of Service creates a rebuttable presumption that Debtor received the
Deficiency Notice. Yoder Co., 758 F.2d at 1118. Debtor offers no evidence to rebut the
presumption. Thus, Debtor’s argument is both unsupported and, based on the record, inaccurate.

                                         CONCLUSION

       The bankruptcy court’s Dismissal and Bar Order is AFFIRMED.