Court Opinion

ID: 4584584
Source: CourtListenerOpinion
Date Created: 2020-11-06 23:00:38.090147+00
Date Added: 2024-06-11T08:48:16.355889
License: Public Domain

FILED
                                                                           NOV 5 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                            NOT FOR PUBLICATION                       SUSAN M. SPRAUL, CLERK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-19-1246-TLS
ADRIANNE MARCIA MOORE,
           Debtor.                                   Bk. No. 2:19-bk-10379-ER

ADRIANNE MARCIA MOORE, dba
Moore Family Child Care,
               Appellant,
v.                                                   MEMORANDUM*
UNITED STATES TRUSTEE,
               Appellee.

               Appeal from the United States Bankruptcy Court
                     for the Central District of California
                Ernest M. Robles, Bankruptcy Judge, Presiding

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

                                 INTRODUCTION

      Chapter 111 debtor Adrianne Marcia Moore appeals from the

      *
        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.
      1
         Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Local Rule” references are to the Local
Bankruptcy Rules for the United States Bankruptcy Court for the Central District of
California, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and
all “Civil Rule” references are to the Federal Rules of Civil Procedure.
bankruptcy court’s order denying her motion to reconsider an order

dismissing her bankruptcy case. Because she does not articulate a basis

under Civil Rule 60(b) for reversal and because the record does not

otherwise support her, we AFFIRM.

                                        FACTS2

       Moore accompanied her chapter 11 petition with bankruptcy

schedules that evidenced bleak prospects for case success: monthly

expenses exceeded income and secured debts exceeded the value of the

related collateral. True, the schedules referenced a belief in future

improved income, but this assertion was unsupported by any specifics.

       Improved finances never materialized. Instead, irregularities in the

conduct of the case quickly became apparent, and the United States Trustee

(“UST”) filed a motion seeking case dismissal with a 180-day refiling bar,

conversion, or appointment of a chapter 11 trustee (“Dismissal Motion”)

based on Moore’s failure to comply with the Bankruptcy Code, Local

Rules 2015-2(a)(1) and (b)(2),3 and the Guidelines and Requirements for

       2
         We exercise our discretion to take judicial notice of documents electronically
filed in Moore’s bankruptcy cases. See Atwood v. Chase Manhattan Mortg. Co. (In re
Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
       3
        Local Rule 2015-2(a)(1) requires debtors in possession to “timely provide the
United States trustee with financial, management and operational reports, and such
other information requested by the United States trustee pursuant to the Guidelines . . .
as necessary to properly supervise the administration of a chapter 11 case.” Local
Rule 2015-2(b)(2) requires debtors in possession to file monthly operating reports by the
                                                                            (continued...)

                                            2
Chapter 11 Debtors in Possession (“Guidelines”). Moore’s violations

included her failure to file all required operating reports, timely proof of

prepetition bank account closures, and a 90-day projection of cash flow,

and, as later was identified, her failure to open debtor in possession

accounts.

      Moore did not timely oppose the Dismissal Motion. And before the

hearing, the bankruptcy court issued a tentative ruling granting it and

dismissing the case with a 180-day refiling bar based on Moore’s

compliance deficiencies, history of five dismissed bankruptcy cases in the

prior nine years, and lack of any meaningful progress in the case. The

tentative discussed and rejected the option of conversion.

      But despite the lack of a written response, Moore’s counsel attended

the hearing. And notwithstanding the severity of the non-compliance, the

bankruptcy court granted Moore an additional month to cure her

deficiencies. In return, Moore, through counsel, agreed that if she failed to

do so, the UST could submit an application for case dismissal.

      Following the hearing, the bankruptcy court entered its order

(“Compliance Order”) memorializing the agreement and providing that

Moore must cure all compliance items “by no later than July 18, 2019,” or

the UST may apply for case dismissal with a 180-day bar, without further

      3
        (...continued)
fifteenth day of the month following the month that is the subject of the report.

                                            3
notice and hearing.

      Moore did not appeal or otherwise contest the Compliance Order.

She then failed to provide proof that she timely cured all deficiencies before

the deadline,4 and the bankruptcy court entered a dismissal order

(“Dismissal Order”).

      Moore filed a motion to reconsider or vacate the Dismissal Order ten

days after its entry. She: (I) emphasized that her first two bankruptcies had

been filed without her permission; and (ii) provided an excuse for failing to

close her prepetition bank accounts. For reasons carefully articulated in its

order (“First Reconsideration Order”), the bankruptcy court denied the

motion.

      Then, eighteen days after entry of the First Reconsideration Order,

Moore filed a second reconsideration motion, which again requested that

the Dismissal Order be vacated and that the previous denial of

reconsideration be vacated. This motion described Moore’s efforts and

difficulties in opening debtor in possession bank accounts, as well as her

communications with the UST’s office concerning the status of her

compliance. But she failed to state a legal basis for her motion or to dispute

that she failed to close her prepetition bank accounts and to provide the

      4
        Moore’s counsel informed the UST’s office that Moore had opened a debtor in
possession account by the deadline, but shortly after, she had to search for another bank
after one financial institution unexpectedly closed her account.

                                            4
UST with a ninety-day cash flow projection.

      The bankruptcy court issued a memorandum decision and order

denying this renewed reconsideration request (“Second Reconsideration

Order”). The bankruptcy court found that Moore did not present any new

facts or previously unavailable evidence warranting reconsideration. In

addition, the bankruptcy court found that Moore failed to adequately

explain her inability to satisfy each requirement of the Compliance Order.

      Moore timely appealed the Second Reconsideration Order.

                                  JURISDICTION

      The bankruptcy court had jurisdiction pursuant to 28 U.S.C. §§ 1334

and 157(b)(2)(A).

      Moore did not timely appeal from the Dismissal Order and First

Reconsideration Order; we thus lack jurisdiction to hear any appeal related

to those orders. See Rule 8002(b)(1); Dobard v. S.F. Bay Area Rapid Transit

Dist., No. 93-17293, 56 F.3d 71, 1995 WL 309554, at *1 (9th Cir. Mar. 19,

1995) (interpreting Fed. R. App. P. 4(a)(4)). “An appeal from an order

denying a [Civil Rule] 60(b) motion brings up for review only the

correctness of that denial and does not bring up for review the final

judgment.”5 Tennant v. Rojas (In re Tennant), 318 B.R. 860, 866 (9th Cir. BAP

      5
       Although the Rules do not specifically permit a motion to vacate case dismissal,
we construe Moore’s second reconsideration motion as a motion for relief from order
under Civil Rule 60(b), made applicable by Rule 9024, because it was filed more than
                                                                           (continued...)

                                           5
2004) (internal citation and quotation marks omitted). Accordingly, our

review is limited to the Second Reconsideration Order. Id.

                                           ISSUE

       Did the bankruptcy court abuse its discretion in denying Moore’s

second reconsideration motion?

                              STANDARD OF REVIEW

       We review the denial of a Civil Rule 60(b) motion for relief from

judgment for an abuse of discretion. In re Fernandez, 227 B.R. at 177. 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. See TrafficSchool.com, Inc. v. Edriver Inc.,

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

       We may affirm on any basis supported by the record. Shanks v.

Dressel, 540 F.3d 1082, 1086 (9th Cir. 2008).

                                     DISCUSSION

       While not raised by Moore, we observe that the bankruptcy court

       5
        (...continued)
fourteen days after entry of the First Reconsideration Order. See Fernandez v. GE Capital
Mortg. Servs., Inc. (In re Fernandez), 227 B.R. 174, 177 (9th Cir. BAP 1998), aff’d, 208 F.3d
220 (9th Cir. 2000). Had the motion been filed within fourteen days of entry of the First
Reconsideration Order, then it would have been considered a motion for
reconsideration under Civil Rule 59, made applicable by Rule 9023. Negrete v. Bleau (In
re Negrete), 183 B.R. 195, 197 (9th Cir. BAP 1995), aff’d, 103 F.3d 139 (9th Cir. 1996).

                                              6
incorrectly identified Civil Rule 59(e), and not Civil Rule 60(b), as

governing Moore’s second reconsideration motion. As discussed supra,

because it was filed more than fourteen days after entry of the order, it was

a Civil Rule 60(b) motion. In re Negrete, 183 B.R. at 197. Any resulting error,

however, was harmless; the record and the bankruptcy court’s findings

adequately support its denial.

      Moore fatally failed to identify grounds under, and indeed did not

even cite to, Rule 9024 and Civil Rule 60(b) in her second reconsideration

motion. Similarly, she did not provide any statutory or other legal

authority for her requested relief. Also, she provided no evidence justifying

her failure to completely comply with the Compliance Order. The new

arguments and evidence she submitted were known and available to her

before the Dismissal Order was entered; they could not be grounds for

Civil Rule 60(b) relief. Marlyn Nutraceuticals Co., Inc. v. Mucos Pharma GmbH

& Co., 571 F.3d 873, 880 (9th Cir. 2009). Rather, Moore used her

reconsideration motions to reargue the UST’s Dismissal Motion. Civil Rule

60(b) provides no basis for reconsideration of issues already raised and

ruled upon based on facts that were otherwise available when originally

briefed. See In re Negrete, 183 B.R. at 197.

      On appeal, Moore begins her argument with misstatement; she

alleges that in seeking the Dismissal Order the UST failed to acknowledge

that she had obtained a debtor in possession bank account before her

                                         7
July 18, 2019 compliance deadline. This is factually inaccurate; the UST’s

application for the Dismissal Order discussed her difficulties in opening an

account, and the bankruptcy court mentioned this contention in its

memorandum decision. It, nevertheless, found that Moore’s attempt to

open and maintain debtor in possession accounts “is not an adequate

explanation for her inability to satisfy other requirements, such as closing

of all pre-petition accounts.”6 We agree. The bankruptcy court’s findings

that Moore did not timely comply with the reporting requirements

mandated by the Compliance Order in multiple other respects are

supported by the record.

      Moore’s opening brief on appeal also contains a number of additional

arguments regarding the validity of the Dismissal Order, which were

waived by Moore’s failure to include them in her reconsideration motions,

see In re Mortg. Store, Inc., 773 F.3d at 998, or are legally insufficient.

      First, the bankruptcy court dismissed the case under the Compliance

Order; it did not rely on cause based on a substantial or continuing loss to

the estate, gross mismanagement, or failure to timely file a disclosure

statement or plan. Second, the record is clear that the bankruptcy court

appropriately considered the best interests of the creditors and estate when

      6
        Moore’s opening brief also includes unsubstantiated musings regarding the
financial institution’s motivations behind closing her debtor in possession accounts,
which were not raised with the bankruptcy court and therefore will not be considered.
Mano-Y & M, Ltd. v. Field (In re Mortg. Store, Inc.), 773 F.3d 990, 998 (9th Cir. 2014).

                                            8
it decided to dismiss, rather than convert, the case. Third, she cannot assert

a due process violation when the bankruptcy court utilized the procedures

she agreed to in the Compliance Order. Finally, her challenge to imposition

of the 180-day bar is precluded by the consensual terms of the Compliance

Order and is moot as the 180-day period has expired. See In re Fernandez,
227 B.R. at 178.

                               CONCLUSION

      Based on the foregoing, we AFFIRM.

                                       9