Court Opinion

ID: 3213595
Source: CourtListenerOpinion
Date Created: 2016-06-15 20:01:04.698862+00
Date Added: 2024-06-11T07:39:34.523095
License: Public Domain

NOT FOR PUBLICATION                            FILED
                      UNITED STATES COURT OF APPEALS                       JUN 15 2016
                                                                      MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

 In re: JAY P. CLARK, DBA Crystal                 No.14-35242
 Springs Ranch,
                                                  D.C. No. 1:13-cv-00305-EJL
            Debtor,

 ------------------------------                   MEMORANDUM*
 JAY P. CLARK, DBA Crystal Springs
 Ranch,

            Appellant,

      v.

 TOM DEVRIES; DEVRIES FAMILY
 FARM, LLC; SIMPLOT GROWER
 SOLUTIONS; MURPHY LAND
 COMPANY, LLC,

            Appellees.

                   Appeal from the United States District Court
                             for the District of Idaho
                    Edward J. Lodge, District Judge, Presiding

                              Submitted May 6, 2016**
                                 Portland, Oregon

      *
       This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
      **
        The panel unanimously concludes this case is suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
Before: TASHIMA, TALLMAN, and HURWITZ, Circuit Judges.

      Jay Clark, d/b/a Crystal Springs Ranch (“Debtor”), appeals an order of the

district court affirming the bankruptcy court’s conversion of his Chapter 12 case into

one under Chapter 7. We have jurisdiction under 28 U.S.C. § 158(a), (d). Rosson

v. Fitzgerald (In re Rosson), 545 F.3d 764, 770 (9th Cir. 2008) (“[A] bankruptcy

court order converting a case from one under another chapter of the Bankruptcy

Code to one under Chapter 7 is a final and appealable order.”). We affirm.

      1.     Although Debtor moved voluntarily to dismiss his Chapter 12 petition,

the district court had the power to instead convert the case to one under Chapter 7

“upon a showing that the debtor has committed fraud in connection with the case.”

11 U.S.C. § 1208(d); see also In re Rosson, 545 F.3d at 774 (holding that a Chapter

13 debtor’s right to voluntary dismissal under 11 U.S.C. § 1307 “is not absolute, but

is qualified by the authority of a bankruptcy court to deny dismissal on grounds of

bath-faith conduct”).

      2.     The bankruptcy judge’s decision to convert Debtor’s case to Chapter 7

was not an abuse of discretion. See Levesque v. Shapiro (In re Levesque), 473 B.R.
331, 335 (B.A.P. 9th Cir. 2012) (“We review an order regarding conversion of a case

for abuse of discretion.”). After a state court declared that Debtor had no right to

possess or enter Crystal Springs Farm, and while his Chapter 12 case was pending,

Debtor entered a contract with DeVries for the sale of 1500 tons of alfalfa hay to be

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grown on that land. Debtor did not disclose the state court’s ruling to DeVries,

received $135,000 as a down payment on the hay, and failed to deliver the hay to

DeVries. Debtor’s purported belief that he had a legal right to the hay does not

render immaterial the information he omitted telling DeVries—that a state court had

determined he had no right to possess or even enter the land on which the hay grew.

Debtor clearly understood the state court’s determination, and nevertheless failed to

disclose it. The bankruptcy judge thus reasonably rejected Debtor’s claim that he

operated in good faith.

      AFFIRMED.

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