In Re Correa

58 B.R. 88, 14 Collier Bankr. Cas. 2d 399, 1986 Bankr. LEXIS 6625
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedFebruary 25, 1986
Docket16-19785
StatusPublished
Cited by16 cases

This text of 58 B.R. 88 (In Re Correa) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Correa, 58 B.R. 88, 14 Collier Bankr. Cas. 2d 399, 1986 Bankr. LEXIS 6625 (Ill. 1986).

Opinion

MEMORANDUM AND ORDER

ROBERT E. GINSBERG, Bankruptcy Judge.

This matter comes before the Court on the motion of Lawndale Trust and Savings Bank (“Lawndale”) to dismiss the debtor’s Chapter 13 petition or in the alternative to vacate the automatic stay. Lawndale also seeks costs and attorneys’ fees pursuant to Federal Rule of Civil Procedure 11 and Bankruptcy Rule 9011.

Lawndale’s motion is premised on the fact that this is the debtor’s second Chapter 13 case within the last six months. The first case was dismissed on August 1, 1985, on the grounds that the debtor failed to attend scheduled creditors’ meetings and otherwise prosecute his case towards plan confirmation and payment. Lawndale contends the debtor’s activities in the first case amounted to a willful failure to obey orders and to prosecute his case and that the debtor is therefore barred from filing the current case by § 109(f)(1) of the Bankruptcy Code. The debtor has raised the rather novel defense that he was addicted to cocaine and was under the influence of the drug virtually throughout the first case and that therefore his actions (or inactions) in that case were not “willful” for purposes of § 109(f).

Lawndale became involved in both bankruptcy cases by virtue of its perfected security interest in the debtor’s condominium apartment. In September of 1984, the debtor had defaulted on his obligations to Lawndale. Lawndale initiated foreclosure proceedings against the condominium in the Illinois state courts and obtained a foreclosure judgment. A sheriff’s sale of the apartment was scheduled for March 28, 1985. On March 25, 1985, the debtor filed his first Chapter 13 petition (case no. 85 B 3799). The trustee set the meeting of creditors, pursuant to 11 U.S.C. § 341 (“341 meeting”), for April 30, 1985, but the debt- or failed to appear. The trustee rescheduled the 341 meeting for May 28, at which time the debtor appeared but failed to bring books, records, and financial information required for an intelligent inquiry into the debtor’s financial affairs. The trustee continued the meeting to July 25 but the debtor again failed to appear. The debtor did appear in court later on July 25. The Court admonished him to appear at a creditors meeting on August 1 and produce all records required or his case would be dismissed. On August 1, the debtor failed to appear at the 341 meeting despite the Court’s order that he appear at that meeting. The debtor appeared in court later on August 1 and his case was dismissed. The debtor filed the pending Chapter 13 case on September 3, 1985, 33 days after the dismissal of his prior case and one day before *90 the sheriffs sale which Lawndale had rescheduled after dismissal of that case. 1

In response to Lawndale’s motion to dismiss pursuant to § 109(f)(1), the debtor offers numerous excuses for his conduct during the first case. His main excuse, however, remains that he was a continuous cocaine user during the pendency of that case. He claims that his cocaine addiction caused disorientation and prolonged periods of sleep, and rendered him unable to tend to his affairs as would a normal person. He says he is now a changed person. In September of 1985, during the pendency of this case, he checked into Olympia Fields Osteopathic Medical Center and participated in a 21-day drug rehabilitation program. 2 The debtor claims he is no longer addicted to cocaine as a result of this treatment.

Section 109(f)(1) provides in pertinent part that no individual may be a debtor under the Bankruptcy Code if in the preceding 180 days he or she had been a debtor in a bankruptcy case and that 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.” In adding § 109(f) to the Bankruptcy Code in 1984, Congress sought to deal with the problem of abusive repetitive filings. 130 Cong. Rec. S8894 (daily ed. June 29, 1984) (statement of Sen. Hatch). Congress clearly intended to deprive an individual debtor who filed a case and had it dismissed involuntarily for willful failure to appear at a creditors meeting or to follow court orders or to otherwise properly prosecute the case from seeking bankruptcy relief within 180 days after dismissal. Id. The debtor’s filing of this second Chapter 13 petition 33 days after the involuntary dismissal of his first case for failure to attend the 341 meetings falls squarely within the proscription of § 109(f)(1). However, because the record of dismissal of the first case contains no finding that the dismissal was for willful acts, the debtor raises the issue of whether his activity in the first case was “willful” within the meaning of § 109(f)(1). He points to his cocaine addiction during the case as evidence that he did not and could not act willfully at that time.

The Bankruptcy Code does not define the term “willful.” Nevertheless, the term is not hard to define. For purposes of § 523(a)(6), which excepts from discharge any “willful and malicious injury” inflicted by the debtor, courts have defined the term “willful” as meaning “deliberate and intentional.” See, e.g., In re Adams, 761 F.2d 1422, 1427 (9th Cir.1985). There is no reason why this approach should not be equally applicable to the term “willful” as used in § 109(f)(1). In re Fulton, 52 B.R. 627, 634 (Bankr.D.Utah 1985); In re Nelkovski, 46 B.R. 542, 544 (Bankr.N.D.Ill.1985). Thus, a debtor’s conduct is willful within the meaning of § 109(f)(1) when it is “intentional, knowing and voluntary, as opposed to conduct which is accidental or beyond the person’s control.... A willful failure to do a required act necessitates a showing that the person, with notice of their responsibility , intentionally disregarded it or demonstrated ‘plain indifference.’ ” In re Ellis, 48 B.R. 178, 179 (Bankr.E.D.N.Y.1985) (citations omitted).

There is no persuasive statement or evidence in the record to support a finding that the debtor acted involuntarily, or that his cocaine addiction and the other excuses he offered confronted him with circumstances beyond his control. The debtor’s drug addiction was a plight that resulted *91 from his volitional conduct and, as evidenced by his subsequent rehabilitation, was entirely within his control. Substance abuse, in the Court’s opinion, is indistinguishable from driving under the influence of alcohol, which some courts have found to be “willful and malicious” conduct for the purposes of § 523(a)(6). In re Adams, 761 F.2d 1422, 1426 (9th Cir.1985); In re Ray, 51 B.R. 236, 240 (BAP-9 1985); Matter of Gibbs, 53 B.R. 503, 505 (Bankr.S.D.Ohio 1984); but cf. In re Compos, 768 F.2d 1155, 1159 (10th Cir.1985); Cassidy v. Minihan, 52 B.R. 947, 950-51 (W.D.Mo.1985); In re Gonzales, 52 B.R.

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Cite This Page — Counsel Stack

Bluebook (online)
58 B.R. 88, 14 Collier Bankr. Cas. 2d 399, 1986 Bankr. LEXIS 6625, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-correa-ilnb-1986.