In re: Daniel Adam Borsotti

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: March 23, 2021
• Docket: CC-19-1193-FSG
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED MAR 23 2021 SUSAN M. SPRAUL, CLERK U.S. BKCY.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-19-1193-FSG DANIEL ADAM BORSOTTI, Debtor. Bk. No. 2:19-bk-12719-VZ

DANIEL ADAM BORSOTTI, Appellant, v. MEMORANDUM * NATIONSTAR MORTGAGE, LLC; NANCY K. CURRY, Chapter 13 Trustee, Appellees.

Appeal from the United States Bankruptcy Court for the Central District of California Vincent Zurzolo, Bankruptcy Judge, Presiding

Before: FARIS, SPRAKER, and GAN, Bankruptcy Judges.

INTRODUCTION

Chapter 13 1 debtor Daniel Adam Borsotti 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. 1Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all “Rule” references are to the Federal bankruptcy court’s orders granting relief from the automatic stay and

dismissing his case. He had notice of both motions and opportunities to file

papers in opposition, but he did not do so. He argues on appeal that the

bankruptcy court wrongly denied him physical access to the court and

lacked jurisdiction over him.

The bankruptcy court did not err. We AFFIRM.

FACTS 2

A. Prepetition events

In March 2008, Mr. Borsotti borrowed $400,000 pursuant to an

adjustable rate note and deed of trust concerning real property located in

Santa Clarita, California (the “Property”). He defaulted in April 2016.

Mr. Borsotti initiated a chapter 7 case and a chapter 13 case in 2017

and 2018, respectively. Both cases were quickly dismissed. 3

Appellee Nationstar Mortgage, LLC (“Nationstar”), as the holder of

the note, scheduled a foreclosure sale in February 2019.

Rules of Bankruptcy Procedure. 2 We also exercise our discretion to review the bankruptcy court’s docket in this case, as appropriate. See Woods & Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP 2008). 3 Mr. Borsotti requested that we take judicial notice of the two prior bankruptcy cases, in addition to three U.S. district court cases and “the entire bankruptcy cases ever filed.” The motions panel granted that request to the extent the merits panel would take judicial notice of the existence of the cases and docket matters in those cases. However, it cautioned that the merits panel would not “read the entire file of each case.”

2 B. The current chapter 13 case

Mr. Borsotti, proceeding pro se, filed another chapter 13 petition in

March 2019. He claimed that he was the sole owner of the Property and

that there were no secured creditors (other than himself). He represented

that he was not employed and left blank all income information. He

calculated his total monthly expenses as $1,235.

Mr. Borsotti filed his proposed chapter 13 plan, but it was completely

blank, other than his signature, followed by “DO NOT CONSENT.”

Nationstar objected to confirmation of the plan. It argued that the

plan was filed in bad faith and pointed to the two dismissed bankruptcy

cases filed within two years of the present case.

Mr. Borsotti filed a motion requesting that the court allow him entry

to the courthouse without proof of identification. He apparently did not

have government-issued photo identification and the court security officers

did not accept his birth certificate or business registration certificate. He

claimed that he was “interrogated, assaulted, battered, and harassed.” The

bankruptcy court denied his motion.

The chapter 13 trustee, Nancy K. Curry (“Trustee”), represented that

Mr. Borsotti appeared at his § 341 meeting of creditors without an

acceptable form of photo identification and proof of his social security

number. She continued the meeting, but Mr. Borsotti again refused to

provide proper identification and proof of his social security number and

refused to answer her questions or allow her to administer the oath. She

3 continued the meeting once more. Mr. Borsotti maintains that he was

always courteous and reasonable, but the Trustee yelled at him and treated

him disrespectfully.

C. Nationstar’s motion for relief from the automatic stay

Nationstar filed a motion for relief from the automatic stay (“Stay

Relief Motion”). It argued that Mr. Borsotti had filed the case in bad faith

and sought in rem relief under § 362(d)(4).

Mr. Borsotti sought an extension of time to file his response. He

argued that he had requested but not yet received Americans with

Disabilities Act (“ADA”) paperwork. He also represented that the Trustee

had offered to provide him with new evidence, but she had not done so.

The bankruptcy court denied the request for an extension of time, and

Mr. Borsotti did not file any further response.

The bankruptcy court noted that the Stay Relief Motion was

unopposed. It granted the motion under §§ 362(d)(1) and (d)(4), finding

that the petition was part of a scheme to hinder, delay, or defraud creditors

because the Property was involved in multiple bankruptcy cases and

Mr. Borsotti was involved in the scheme.

D. The Trustee’s motion to dismiss

While the Stay Relief Motion was pending, the Trustee filed a motion

to dismiss the case with prejudice (“Motion to Dismiss”). She argued that

Mr. Borsotti filed the petition in bad faith because he failed to file a

complete plan, did not propose any plan payment, and did not have any

4 net monthly income with which to fund a chapter 13 plan. She pointed out

that he had filed two other petitions in the past two years. She also argued

that Mr. Borsotti failed to cooperate at the § 341 meeting of creditors.

Mr. Borsotti requested an extension of time to respond to the Motion

to Dismiss. He maintained that he had been barred from online access to

the court’s docket and physical access to the courthouse. He contended that

his disabilities prevent him from comprehending the court’s rules and

proceedings and that he needed an ADA advocate.

The court did not immediately rule on the request for an extension of

time. Mr. Borsotti did not file any further response.

The bankruptcy court held a hearing on the Motion to Dismiss.

Mr. Borsotti did not appear, and the bankruptcy court dismissed the case. 4

The following day, Mr. Borsotti filed a motion to voluntarily dismiss

his case. He said that he “lack[ed] the capacity to litigate this case.”

That same day, the bankruptcy court entered an order granting the

Motion to Dismiss and dismissing the chapter 13 case. It also required

Mr. Borsotti to obtain court approval before filing another bankruptcy case.

It later denied his motion for voluntary dismissal as moot.

Mr. Borsotti filed a timely notice of appeal from the orders granting

the Stay Relief Motion and the Motion to Dismiss. 5

4 The hearing is not noted on the bankruptcy court’s docket. However, the Trustee represented that her staff attorney was present and Mr. Borsotti did not appear. 5 In response to the panel’s order setting this case on the non-hearing calendar, 5 JURISDICTION

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

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

ISSUES

(1) Whether the bankruptcy court erred in granting Nationstar relief

from the automatic stay.

(2) Whether the bankruptcy court erred in dismissing Mr. Borsotti’s

chapter 13 case.

STANDARD OF REVIEW

We review for an abuse of discretion the bankruptcy court’s orders

dismissing a case and granting relief from the automatic stay. See Leavitt v.

Soto (In re Leavitt), 171 F.3d 1219, 1223 (9th Cir. 1999); First Yorkshire

Holdings, Inc. v. Pacifica L 22, LLC (In re First Yorkshire Holdings, Inc.), 470

B.R. 864, 868 (9th Cir. BAP 2012).

To determine whether the bankruptcy court has abused its discretion,

we conduct a two-step inquiry: (1) we review de novo whether the

bankruptcy court “identified the correct legal rule to apply to the relief

Mr. Borsotti filed a paper in which he (among other things) argued that the denial of in- person oral argument violated his due process rights because he needed to present evidence, and he demanded information such as the taxpayer identification numbers of the judges on the panel, an explanation of the other cases on the calendar, and the definition of “each and every word, phrase, and expression . . . that of a 4th grade[r] can comprehend.” We reject this request. The BAP has discretion to decide matters without a hearing. Rule 8019(b); 9th Cir. BAP Rule 8019-1. Mr. Borsotti has no right to present evidence to an appellate forum, and the panel has no obligation to provide any of the information he requests.

6 requested” and (2) if it did, we consider whether the bankruptcy court’s

application of the legal standard was illogical, implausible, or without

support in inferences that may be drawn from the facts in the record.

United States v. Hinkson, 585 F.3d 1247, 1262-63 & n.21 (9th Cir. 2009) (en

banc).

DISCUSSION

A. The bankruptcy court did not err in granting Nationstar relief from the automatic stay. Mr. Borsotti does not address any of the bankruptcy court’s reasons

for granting Nationstar relief from the automatic stay. We discern no error.

The bankruptcy court may grant relief from the automatic stay under

§ 362(d)(1) when the movant demonstrates “cause” for relief. Delaney-

Morin v. Day (In re Delaney-Morin), 304 B.R. 365, 369 (9th Cir. BAP 2003).

The statute does not define what constitutes cause for relief from the stay.

Instead, cause is determined on a case-by-case basis. Id.

Section 362(d)(4) allows the bankruptcy court to “grant in rem relief

from the automatic stay . . . to prevent schemes using bankruptcy to thwart

foreclosures through one or more real property transfers or bankruptcies.”

Jimenez v. ARCPE 1, LLC (In re Jimenez), 613 B.R. 537, 545 (9th Cir. BAP

2020). If the order is properly recorded, it can be binding “in any other

bankruptcy case filed in the next two years purporting to affect the same

real property.” In re First Yorkshire Holdings, Inc., 470 B.R. at 870. Relief

under this subsection requires the movant to prove three elements:

7 First, debtor’s bankruptcy filing must have been part of a scheme. Second, the object of the scheme must be to delay, hinder, or defraud creditors. Third, the scheme must involve either (a) the transfer of some interest in the real property without the secured creditor’s consent or court approval, or (b) multiple bankruptcy filings affecting the property.

Id. at 870-71.

Nationstar sought stay relief on the basis that Mr. Borsotti had filed

multiple bankruptcy cases affecting the Property and that those cases were

part of a scheme to delay, hinder, or defraud creditors.

It is undisputed that Mr. Borsotti had filed three bankruptcy cases in

a two-year period. The bankruptcy court found that his multiple cases were

part of a scheme to delay, hinder or defraud creditors and that Mr. Borsotti

was involved in this scheme. Mr. Borsotti did not file any opposition to the

Stay Relief Motion. The bankruptcy court did not abuse its discretion in

granting the Stay Relief Motion. 6

B. The bankruptcy court did not err in dismissing the chapter 13 case.

Mr. Borsotti does not address most of the bases for dismissal of his

6 Nationstar argues that the notice of appeal was defective because it misidentified the orders on appeal. We will overlook this technical error. Cf. Le v. Astrue, 558 F.3d 1019, 1022-23 (9th Cir. 2009) (Even if an order “‘does not appear on the face of the notice of appeal,’ we consider: ‘(1) whether the intent to appeal a specific judgment can be fairly inferred and (2) whether the appellee was prejudiced by the mistake.’” (quoting Lolli v. Cty. of Orange, 351 F.3d 410, 414 (9th Cir. 2003))). It was fairly obvious that Mr. Borsotti intended to appeal the orders granting relief from stay and dismissing the case, even though he listed the wrong date, and Nationstar had the opportunity to brief the issue.

8 case. We discern no error.

Under § 1307(c), the bankruptcy court may dismiss a chapter 13 case

or convert it to a chapter 7 case for cause, whichever is in the best interests

of creditors and the estate. Although not specifically stated in the statute,

“[a] Chapter 13 petition filed in bad faith may be dismissed ‘for cause’

pursuant to 11 U.S.C. § 1307(c). To determine if a petition has been filed in

bad faith courts are guided by the standards used to evaluate whether a

plan has been proposed in bad faith.” Eisen v. Curry (In re Eisen), 14 F.3d

469, 470 (9th Cir. 1994) (citations omitted). “The test is whether a debtor is

attempting to unreasonably deter and harass creditors or attempting to

effect a speedy, efficient reorganization on a feasible basis.” Marsch v.

Marsch (In re Marsch), 36 F.3d 825, 828 (9th Cir. 1994). 7

The Trustee argued that dismissal was warranted because

Mr. Borsotti filed the case in bad faith, did not cooperate with the Trustee

at the § 341 meeting of creditors, and was not eligible for chapter 13 relief

because he did not have a regular source of income.

The Ninth Circuit has instructed that courts are to consider the “totality of the 7

circumstances” when dismissing a case for bad faith. Those factors include: (1) whether the debtor “misrepresented facts in his [petition or] plan, unfairly manipulated the Bankruptcy Code, or otherwise [filed] his Chapter 13 [petition or] plan in an inequitable manner,” (2) “the debtor's history of filings and dismissals,” (3) whether “the debtor only intended to defeat state court litigation,” and (4) whether egregious behavior is present. In re Leavitt, 171 F.3d at 1224 (citations omitted).

9 On appeal, Mr. Borsotti does not address the first and third points.

He only contends that he attempted to comply at the § 341 meeting of

creditors, but the Trustee was belligerent and refused to accept his birth

certificate as valid proof of identification.

The debtor must provide valid photo identification if requested at the

meeting of creditors. Section 521(h) requires that, on request of the trustee,

the debtor shall provide “a document that establishes the identity of the

debtor, including a driver’s license, passport, or other document that

contains a photograph of the debtor” or other similar identification.

Similarly, Rule 4002(b)(1) provides that a debtor must bring to the § 341

meeting of creditors: (1) “a picture identification issued by a governmental

unit” or other information that establishes the debtor’s identity; and

(2) evidence of the debtor’s social security number or a written statement

that such document does not exist. Rule 4002(b)(1). As the bankruptcy

court cautioned Mr. Borsotti in his first bankruptcy case, “[b]irth

certificates do not contain pictures and do not constitute valid

identification for debtors, as the Trustee cannot determine from that

document whether the debtor is the person identified in that certificate.” In

re Borsotti, Case No. 2:17-bk-16088-BB, 2017 WL 4117322, at *3 (Bankr. C.D.

Cal. Sept. 14, 2017).

Mr. Borsotti’s refusal to cooperate with the Trustee and provide valid

photo identification warrants dismissal. Additionally, his blank plan,

inaccurate and incomplete schedules, and his lack of a regular income also

10 evidence bad faith and are independent bases for dismissal. Finally, we

note that Mr. Borsotti filed his own motion to dismiss the case; thus, he

agreed (at least at one time) with the dismissal of his case. The bankruptcy

court did not err.

C. Mr. Borsotti’s other arguments are meritless.

Rather than directly address the two orders on appeal, Mr. Borsotti

raises a host of other issues in his briefs. None of his arguments suggest

reversible error.

Mr. Borsotti argues that the court improperly barred him from the

courthouse by requiring him to provide photo identification. But federal

courts may require photo identification of anyone entering their facilities.

Foti v. McHugh, 247 F. App’x 899, 901 (9th Cir. 2007) (“Appellants do not

have a constitutional right to enter the federal building anonymously.”).

Further, Mr. Borsotti could have asserted his legal contentions without

entering the courthouse by mailing to the clerk written oppositions to the

motions, but he failed to do so.

Relatedly, Mr. Borsotti argues that courthouse security assaulted and

battered him and that various bankruptcy and non-bankruptcy judges, the

Trustee, and the court clerks were hostile to him. Even if he proved these

allegations, they would not excuse his many failings that led to the

bankruptcy court’s orders, such as his failure to provide identification at

the § 341 meeting as required by statute, his filing of a blank chapter 13

plan, and his lack of any net income with which to make plan payments.

11 Mr. Borsotti argues that he has a mental disability and did not

understand the court orders, rules, and law. Although a court may give

him some leeway as a pro se litigant, the court is always a neutral arbiter

that should not help any party prosecute the bankruptcy case. Contrary to

Mr. Borsotti’s arguments, the ADA does not apply to the federal courts. See

Roman v. Jefferson at Hollywood LP, 495 F. App’x 804, 806 (9th Cir. 2012)

(“While the [ADA] requires state courts to make disability

accommodations, the ADA does not apply to federal courts.”).

Mr. Borsotti argues that the bankruptcy court lacked jurisdiction over

him. This argument is absurd on its face. When he filed his bankruptcy

petition, he voluntarily submitted himself to the court’s jurisdiction.

Moreover, his contention that he is a “sovereign citizen” not bound by the

laws of the United States is “frivolous, irrational and unintelligible.” United

States v. Alexio, No. CR 13-01017 JMS, 2015 WL 4069160, at *2 (D. Haw. July

2, 2015) (citation and alterations omitted). 8

CONCLUSION

Mr. Borsotti requests that we take judicial notice of hundreds of pages of 8

documents that assert a sovereign-citizen-type position. We decline to do so.