Appleton v. Belmore (In Re Belmore)

68 B.R. 889, 1987 Bankr. LEXIS 23
CourtUnited States Bankruptcy Court, M.D. Pennsylvania
DecidedJanuary 12, 1987
DocketBankruptcy No. 5-86-00386, Adv. No. 5-86-0082
StatusPublished
Cited by18 cases

This text of 68 B.R. 889 (Appleton v. Belmore (In Re Belmore)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Appleton v. Belmore (In Re Belmore), 68 B.R. 889, 1987 Bankr. LEXIS 23 (Pa. 1987).

Opinion

OPINION AND ORDER

THOMAS C. GIBBONS, Bankruptcy Judge:

In this adversary proceeding the Trustee requests that all debts listed by the debtors in their 1986 petition be found non-dis-chargeable and that the debtors’ 1986 petition be dismissed. This proceeding was started by the Trustee in response to the debtors’ attempts to obtain a discharge and enlarged exemptions under a new bankruptcy petition, even though the debtors’ prior petition which affects substantially the same debts is still pending. For the reasons provided herein, we dismiss the debtors’ 1986 petition. Also, the Trustee argues in response to the debtors’ motion to void liens and preserve exemptions that the debtors’ motion should be dismissed. It appears that the Trustee is incorrect as to the debtors’ 1985 case.

FINDINGS OF FACT

An evidentiary hearing was held from which we make the following findings of fact. 1

1. On February 27, 1985, the Belmores filed a petition in bankruptcy under Chapter 7 of the Bankruptcy Code.

2. As a result of litigation brought on behalf of James and Leanne Ritter, we denied the debtors’ discharge on February 28, 1986 pursuant to § 727(a)(2) and (a)(4) of the Bankruptcy Code.

3. On July 9, 1986, the District Court issued an Order upholding the Bankruptcy Court’s Order.

4. Also, the Belmores’ February 27, 1985 bankruptcy case is still pending.

5. Nonetheless, on June 18, 1986, the Belmores filed a second petition in bankruptcy claiming as exempt all personal property in their possession as of that date.

6. On July 16, 1986, the Trustee filed a complaint asking that all debts listed or scheduled in the debtors’ 1986 bankruptcy case be found nondischargeable and that the case be dismissed.

DISCUSSION

In addressing this proceeding, we must determine whether the debtors can maintain their June 1986 bankruptcy petition and obtain a discharge and enlarged ex *891 emptions even though their 1985 petition is still pending. The debtors argue that they are entitled to maintain their second petition pursuant to § 109(f) of the Bankruptcy Code which provides:

(f) Notwithstanding any other provision of this section, no individual may be a debtor under this title who has been a debtor in a case pending if—
(1) the case was dismissed by the court for willful failure of the debtor to abide by orders of the court, or to appear before the court in proper prosecution of the case; or
(2) the debtor requested and obtained the voluntary dismissal of the case following a filing of a request for relief from the automatic stay provided by section 362 of this title.

The debtors reliance on § 109(f) as authority to file their 1986 bankruptcy case is misplaced. Congress enacted § 109(f) of the Bankruptcy Code for the purpose of preventing abusive repeat filings. 2 Bankr. Serv. L.Ed., § 11; 93 P. 65 (Supp. 1986). More specifically, § 109(f) was enacted to prevent repeat filings within 180 days following the filing of a request to lift the stay. Id. Also, § 109(f) was enacted so that a debtor would not be eligible for bankruptcy relief if a prior case filed by the same debtor had been dismissed within 180 days for willful failure to abide by court orders or to appear before the court. Id. While the circumstances described in § 109(f) do not exhaust the possibilities for abusing the Code by refiling following dismissal of a case, § 109(f) only applies when the particular situations described therein are present. 2 Collier on Bankruptcy, H 109.06, p. 109-28 (15th Ed.1986). Upon close inspection, it appears that the circumstances described in § 109(f) are not present in this case. Thus, we cannot find that § 109(f) gives the debtors the authority to file their 1986 case.

The clear weight of authority in this country holds that when a bankruptcy action is pending, a subsequent action which purports to effect the same debt cannot be maintained. Prudential Insurance Company of America v. Colony Square Company, 40 B.R. 603 (Bankr.N.D.Ga.1984); Prudential Insurance Company of America v. Colony Square Company, 29 B.R. 432 (Bankr.W.D.Pa.1983). “This proposition arises from well-established notions of orderly administration of justice, the court’s inherent right to protect its own jurisdiction, and the court’s duty to preclude, where possible, an abuse of the bankruptcy laws.” Prudential Insurance Company v. Colony Square Company, 40 B.R. 603, 605 (Bankr.N.D.Ga.1984).

In this instance, the debtors have filed their June 1986 bankruptcy petition even though the February 1985 petition is pending. Also, the debtors’ 1986 petition purports to affect nearly the same debts as does the 1985 bankruptcy petition. The liabilities listed in the 1986 bankruptcy schedules are very similar to those listed in the 1985 schedules. The only differences are that the debt owed to James and Leanne Ritter was increased from Thirty-Four Thousand ($34,000.00) Dollars to Thirty-Seven Thousand Six Hundred Seventy-Seven and 44/100 ($37,677.44) Dollars. Also, Western Auto Supply Company’s secured debt which is listed on the 1985 schedules at Ten Thousand Eight Hundred and Sixty ($10,860.00) Dollars is listed on the 1986 schedules as an unsecured claim valued at Thirty Thousand ($30,000.00) Dollars. All other debts are exactly the same. In fact, the debtors have simply reproduced their prior list of debts and submitted this reproduction as part of their schedules.

In their 1985 case, the debtors were denied a discharge pursuant to § 727(a)(2) and (a)(4) and their appeal was dismissed by the District Court. Thereafter, the debtors filed a second bankruptcy while their first bankruptcy was still pending to obtain enlarged exemptions and a discharge. Using a second bankruptcy petition the debtors are attempting to circumvent our Order of February 1986 by obtaining a discharge of debts which was disallowed in the debtors’ 1985 bankruptcy case. We cannot allow such a circumvention. Thus, because the debtors’ 1986 petition lists nearly the same debts as the debtors’ 1985 petition which is still pending and *892 because we view the debtors’ second petition as an attempt to circumvent our February 1986 Order equity requires that we dismiss the debtors’ 1986 bankruptcy petition. 2

Assuming that we allow the debtors to maintain their 1986 bankruptcy case, the debtors would still be denied a discharge of their debts which existed when the debtors filed their 1985 petition. After closely reviewing the arguments set forth by the various parties, we find that § 523(a)(10) not § 727(a)(7) is applicable to the present situation. Case law reveals that if the debtors were denied a discharge in a previous case under the Bankruptcy Code, the exception of § 523(a)(10) is applicable. 3 Klapp v. Landsman (In re Klapp), 706 F.2d 998 (9th Cir.1983); 4

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Cite This Page — Counsel Stack

Bluebook (online)
68 B.R. 889, 1987 Bankr. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/appleton-v-belmore-in-re-belmore-pamb-1987.