Court Opinion

ID: 3059222
Source: CourtListenerOpinion
Date Created: 2015-10-14 00:31:38.194741+00
Date Added: 2024-06-11T10:02:31.951753
License: Public Domain

[DO NOT PUBLISH]

                      IN THE UNITED STATES COURT OF APPEALS

                                   FOR THE ELEVENTH CIRCUIT           FILED
                                    ________________________ U.S. COURT OF APPEALS
                                                                  ELEVENTH CIRCUIT
                                            No. 11-11189           OCTOBER 17, 2011
                                                                      JOHN LEY
                                        Non-Argument Calendar           CLERK
                                      ________________________

                               D.C. Docket Nos. 1:10-cv-22256-FAM
                                      1:09-ap-01697-RAM

ADAM WIECKIEWICZ,

llllllllllllllllllllllllllllllllllllllll                              Plaintiff-Appellant,

                                               versus

EDUCATION CREDIT MANAGEMENT CORPORATION,

llllllllllllllllllllllllllllllllllllllll                            Defendant-Appellee.
                                      ________________________

                           Appeal from the United States District Court
                               for the Southern District of Florida
                                 ________________________
                                       (October 17, 2011)

Before HULL, PRYOR and ANDERSON, Circuit Judges.

PER CURIAM:

         Adam Wieckiewicz, a debtor proceeding pro se, appeals the district court’s

dismissal of his bankruptcy appeal because he repeatedly failed to comply with the
bankruptcy court’s order directing him to apply for the William D. Ford Program,

a federal loan consolidation program under which Wieckiewicz’s student loan

payments could be as low as $0 per month, depending on his income level.

      On appeal, Wieckiewicz argues that the bankruptcy court exceeded the

scope of Fed. R. Bankr. P. 7001 when it required him to apply for a consolidation

loan during his adversary proceeding, because the only purpose of an adversary

proceeding is to determine the dischargeability of a debt. Wieckiewicz contends

that a debtor’s repayment options are only one factor in determining undue

hardship, and eligibility for a consolidation program alone is not enough to

determine undue hardship. Wieckiewicz also argues that he was unaware of the

Ford Program before he filed the adversary complaint, and that the bankruptcy

court should have considered only the efforts he made before he filed the

complaint. Finally, Wieckiewicz argues that he established the three prongs of the

Brunner test for undue hardship, and that no bankruptcy court has ever coerced a

debtor to apply for a loan in order to satisfy the good faith effort requirement

under the Brunner test. Brunner v. New York State Higher Educ. Servs. Corp.,

831 F.2d 395, 396 (2d Cir. 1987). In sum, Wieckiewicz argues that the

bankruptcy court erred in dismissing his complaint when he refused to apply for

the consolidation program.

                                          2
       When reviewing decisions originating in bankruptcy court and appealed to

the district court, we sit as a second court of review, employing the same standards

of review as the district court. In re New Power Co., 438 F.3d 1113, 1117 (11th

Cir. 2006). We review legal conclusions by either the bankruptcy court or the

district court de novo and the bankruptcy court’s findings of fact for clear error.

In re Fin. Federated Title & Trust, Inc., 309 F.3d 1325, 1328-29 (11th Cir. 2002).

A dismissal for failure to comply with a court’s order is reviewed for abuse of

discretion. Betty K Agencies, Ltd. v. M/V MONADA, 432 F.3d 1333, 1337-38

(11th Cir. 2005).

       Under Fed. R. Civ. P. 41(b),1 a court has authority to dismiss actions for

failure to comply with local rules or obey court orders. Goforth v. Owens, 766

F.2d 1533, 1535 (11th Cir. 1985). Also, the power to dismiss a case “is inherent

in a trial court’s authority to enforce its orders and ensure prompt disposition of

legal actions.” State Exch. Bank v. Hartline, 693 F.2d 1350, 1352 (11th Cir.

1982). “Inherent power” describes “the control necessarily vested in courts to

manage their own affairs so as to achieve the orderly and expeditious disposition

of cases.” Link v. Wabash R.R. Co., 370 U.S. 626, 630-31, 82 S. Ct. 1386, 1389

       1
               Fed. R. Civ. P. 41 applies to bankruptcy and adversary proceedings pursuant to
Fed. R. Bankr. P. 7041.

                                               3
(1962). However, a federal court may invoke its inherent power only “when

necessary to protect its ability to function. This includes more than the power to

impose silence, respect and decorum, in its presence, and submission to its lawful

mandates; it also encompasses the power to issue orders necessary to facilitate

activity authorized by statute or rule.” In re Novak, 932 F.2d 1397, 1406 (11th

Cir. 1991) (citation, quotations, and alterations omitted; emphasis in original).

      We have held that “[i]t is well established that an order duly issued by a

court having subject-matter jurisdiction over a case or controversy before it, and

personal jurisdiction over the parties to that case or controversy, must be obeyed,

regardless of the ultimate validity of the order.” Id. at 1400. There are several

exceptions to this rule, including: (1) where adequate and effective remedies do

not exist for orderly review of the challenged ruling, and (2) where the order is

“transparently invalid” or “patently frivolous.” Id. at 1401-02.

      We have also held that “dismissal with prejudice is such a severe sanction

that it is to be used only in extreme circumstances, where there is a clear record of

delay or contumacious conduct, and where lesser sanctions would not serve the

best interests of justice.” Boazman v. Econ. Lab., Inc., 537 F.2d 210, 212 (5th Cir.

1976) (quotations and citations omitted). A lower court’s “dismissal upon

disregard of an order, especially where the litigant has been forewarned, generally

                                          4
is not an abuse of discretion.” Moon v. Newsome, 863 F.2d 835, 837 (11th Cir.

1989).

       The Bankruptcy Code provides that student loans generally are not to be

discharged. 11 U.S.C. § 523(a)(8). A narrow exception is made, however, where

“excepting such debt from discharge . . . would impose an undue hardship on the

debtor and the debtor’s dependents.” Id. The Bankruptcy Code does not define

“undue hardship,” but we have adopted the standard set forth in Brunner, 831 F.2d

at 396. See In re Cox, 338 F.3d 1238, 1241-42 (11th Cir. 2003). To establish

undue hardship, the Brunner standard requires the debtor to prove by a

preponderance of the evidence that: (1) the debtor cannot maintain, based on

current income and expenses, a “minimal” standard of living for himself and his

dependents if forced to repay the loans; (2) additional circumstances exist

indicating that this state of affairs is likely to persist for a significant portion of the

repayment period of the student loans; and (3) the debtor has made good faith

efforts to repay the loans. Brunner, 831 F.2d at 396.

       Wieckiewicz’s eligibility under the Ford Program would play a substantial

role in whether he would be able to show undue hardship under Brunner. If he

qualified for the Ford Program, Wieckiewicz’s loan payments could have been

reduced to $0 per month, and eventually the loans would be forgiven. On the

                                             5
other hand, if Wieckiewicz did not qualify, the bankruptcy judge indicated a

strong likelihood that Wieckiewicz’s loan payments were high enough that he

would be able to establish undue hardship under Brunner because he would not be

able to maintain a minimal standard of living. Defendant produced deposition

testimony showing that Wieckiewicz would very likely be eligible for the Ford

Program and sent him the forms to apply. After Wieckiewicz repeatedly refused

to complete them, the bankruptcy court eventually ordered him to apply for the

Ford Program. The record indicates that the bankruptcy court exercised

tremendous patience by extending Wieckiewicz’s deadline for applying, by

conducting an additional hearing to determine his eligibility, by giving repeated

explanations to him about why he should apply for the program, by offering to

protect him if he incurred any negative effects from applying or if Defendant

engaged in any misrepresentation, and by ultimately warning him that failure to

apply for the Ford Program would result in dismissal. Defendant even sent him

partially-filled application forms and offered to help him complete them. Instead,

Wieckiewicz steadfastly maintained that he was not eligible and that the Ford

Program would not resolve his loan problems, so he disobeyed the bankruptcy

court’s order.

                                         6
       Wieckiewicz was not free to disregard the order with impunity. As the

bankruptcy court noted several times, there existed adequate remedies for

Wieckiewicz to obtain review by appealing the order to the district court, rather

than ignoring it altogether. See 28 U.S.C. § 158(a)(1) (granting district courts

jurisdiction over “judgments, orders, and decrees” of bankruptcy judges). Also,

given the considerable importance of Wieckiewicz’s eligibility under the Ford

Program to the determination of whether he faced undue hardship under Brunner,

the bankruptcy court certainly had nonfrivolous reasons to support the order. The

bankruptcy court repeatedly exhibited patience by trying to work with

Wieckiewicz and gave repeated admonitions that failure to complete the

application would ultimately result in dismissal. For these reasons, the bankruptcy

court did not abuse its discretion by dismissing Wieckiewicz’s complaint with

prejudice after he persistently refused to comply with the order. Betty K

Agencies, 432 F.2d at 1337-38; Goforth, 766 F.2d at 1535; Moon, 863 F.2d at

837. Accordingly, we affirm the district court’s dismissal of Wieckiewicz’s

bankruptcy appeal.

       AFFIRMED.2

       2
              Wieckiewicz’s Motion for a Court Order regarding the timeliness and service of
Educational Credit Management Corporation’s response is DENIED.

                                              7