Court Opinion

ID: 4514524
Source: CourtListenerOpinion
Date Created: 2020-03-11 00:00:56.765887+00
Date Added: 2024-06-11T09:48:16.968024
License: Public Domain

FILED
                                                                              FEB 10 2020
                           NOT FOR PUBLICATION
                                                                         SUSAN M. SPRAUL, CLERK
                                                                            U.S. BKCY. APP. PANEL
                                                                            OF THE NINTH CIRCUIT

             UNITED STATES BANKRUPTCY APPELLATE PANEL
                       OF THE NINTH CIRCUIT

In re:                                               BAP No. CC-19-1112-GTaL

JOSE JOEL AGUILAR and                                Bk. No. 2:19-bk-10116-NB
GUILLERMINA AGUILAR,

                    Debtors.

JOSE JOEL AGUILAR; GUILLERMINA
AGUILAR,

                    Appellants,

v.                                                    MEMORANDUM*

SPECIALIZED LOAN SERVICING, LLC;
OCWEN LOAN SERVICING, LLC;
KATHY A. DOCKERY, Chapter 13
Trustee; PHH MORTGAGE
CORPORATION; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC.,

                    Appellees.

         *
        This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value. See 9th Cir. BAP Rule 8024-1.
                   Argued and Submitted on January 30, 2020
                           at Pasadena, California

                             Filed – February 10, 2020

               Appeal from the United States Bankruptcy Court
                    for the Central District of California

           Honorable Neil W. Bason, Bankruptcy Judge, Presiding

Appearances:        Appellants Jose Joel Aguilar and Guillermina Aguilar
                    argued pro se.

Before: GAN, TAYLOR, and LAFFERTY, Bankruptcy Judges.

                                 INTRODUCTION

      Appellants Jose Joel Aguilar and Guillermina Aguilar (together

“Debtors”) appeal from a bankruptcy court order dismissing their chapter

131 case for failure to make plan payments. Debtors do not dispute that

they failed to make plan payments, and they have not provided any

argument why the case should not have been dismissed. We see no error in

the dismissal and accordingly, we AFFIRM.

      1
      Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532.

                                           2
                                         FACTS

       Debtors filed their chapter 13 petition on January 7, 2019. 2 This was

the ninth bankruptcy case filed by either or both of Mr. Aguilar or Mrs.

Aguilar since 2011.3 In addition to their principal residence, Debtors

scheduled an ownership interest in an investment property. They also

timely filed their chapter 13 plan and proposed monthly plan payments of

$811.91 for a period of sixty months, and a cure of the alleged arrearage on

the investment property in the amount of $43,886.83. The plan did not

include any payments on the debt secured by their principal residence.

       Ocwen Loan Servicing (“Ocwen”) filed a proof of claim evidencing a

claim secured by the investment property in the amount of $800,615.66

with arrears of $415,417.53. U.S. Bank, N.A. filed a proof of claim secured

by the Debtors’ principal residence in the total amount of $90,349.34 with

arrears of $111.77.

           The trustee objected to the plan on numerous grounds including that

the plan was not feasible due to the claims filed by U.S. Bank and Ocwen

and that Debtors had failed to make plan payments. Specialized Loan

Servicing (“SLS”), servicer for the U.S. Bank claim, also objected to the plan

       2
         We exercise our discretion to review the bankruptcy court’s docket as
appropriate. See Woods & Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2
(9th Cir. BAP 2008).
       3
       See Case Nos. 1:11-bk-12880-MT; 2:13-bk-11933-ER; 2:13-bk-14222-RN; 2:13-bk-
17439-BB; 2:13-bk-23380-WB; 2:13-bk-28245-BR; 2:13-bk-31634-NB; 2:14-bk-25034-VZ.

                                             3
because it failed to treat the debt on the principal residence. Debtors filed a

response to the SLS objection disputing the validity of the claim.

       In March 2019, the bankruptcy court held an initial hearing on

confirmation of Debtors’ plan and continued the hearing to April 2019.4 At

the continued hearing, the trustee stated that Debtors had not made any

plan payments. The trustee also argued that based on the claims filed in the

case, an amended plan would require monthly payments of approximately

$10,000, which would not be feasible based on Debtors’ income.

       Debtors acknowledged that their plan payments would need to be in

excess of $10,000 to cure the arrearage on the investment property. They

also admitted that they had not made any plan payments. They opposed

dismissal only by stating that they intended to file adversary proceedings

against the secured creditors. The bankruptcy court dismissed the case, and

Debtors timely appealed.

                                   JURISDICTION

       The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.

                                         ISSUE

       Did the bankruptcy court abuse its discretion in dismissing the

Aguilars’ bankruptcy case?

       4
        Debtors did not provide a transcript of this hearing and it is not readily
available from the bankruptcy court docket.

                                             4
                             STANDARD OF REVIEW

      We review the bankruptcy court’s decision to dismiss a chapter 13

case for abuse of discretion. Schlegel v. Billingslea (In re Schlegel), 526 B.R.

333, 338 (9th Cir. BAP 2015). A bankruptcy court abuses its discretion if it

applies the wrong legal standard, misapplies the correct legal standard, or

makes factual findings that are illogical, implausible, or without support in

inferences that may be drawn from the facts in the record. TrafficSchool.com,

Inc. v. Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011).

                                  DISCUSSION

      Section 1307(c) allows the court to dismiss a chapter 13 case for

“cause,” including failure to commence making timely plan payments

under § 1326. See § 1307(c)(4). Section 1326 requires debtors to commence

making monthly payments as proposed in their plan not later than 30 days

after the order for relief or the filing of the plan, whichever is earlier. The

decision to dismiss a chapter 13 case under § 1307(c) is discretionary. In re

Schlegel, 526 B.R. at 339.

      Debtors do not dispute that they failed to make plan payments and

they have not provided any argument directed to this statutory basis for

dismissal. Instead, they argue that Ocwen’s proof of claim contained forged

documents and that both Ocwen and SLS have engaged in various illegal

activities.

      Regardless of whether Debtors intended to file adversary

                                         5
proceedings to contest the amount or validity of the secured claims, the

bankruptcy code requires that they make payments in accordance with

their proposed plan. Here, they were required to commence plan payments

in February 2019, but failed to commence payments as required, and failed

to make any payments throughout the pendency of the case.

      Section 1307(c)(4) allows the bankruptcy court to dismiss a case

under these facts, and dismissal here is not an abuse of discretion.

                              CONCLUSION

      For the reasons set forth above, we AFFIRM the bankruptcy court's

order dismissing Debtors’ chapter 13 case.

                                      6