In re: Michael Stinchfield

CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedMarch 13, 2018
DocketCC-17-1209-STaF
StatusUnpublished

This text of In re: Michael Stinchfield (In re: Michael Stinchfield) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Michael Stinchfield, (bap9 2018).

Opinion

FILED MAR 13 2018 1 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-17-1209-STaF ) 6 MICHAEL STINCHFIELD, ) Bk. No. 9:17-bk-10015-PC ) 7 Debtor. ) ______________________________) 8 ) MICHAEL STINCHFIELD, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM* 11 ) SPECIALIZED LOAN SERVICE; ) 12 UNITED STATES TRUSTEE, ) ) 13 Appellees. ) ______________________________) 14 Submitted Without Oral Argument 15 on February 22, 2018 16 Filed – March 13, 2018 17 Appeal from the United States Bankruptcy Court for the Central District of California 18 Honorable Peter H. Carroll, Bankruptcy Judge, Presiding 19 20 Appearances: Appellant Michael Stinchfield, on brief, pro se. 21 Before: SPRAKER, TAYLOR, and FARIS, Bankruptcy Judges. 22 23 24 25 26 * This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8024-1. 1 INTRODUCTION 2 Michael Stinchfield appeals from an order dismissing his 3 chapter 111 bankruptcy case. The day before the case was 4 dismissed, debtor’s son and attorney-in-fact, Dana Stinchfield, 5 filed a declaration conceding that Michael2 had been unsuccessful 6 in arranging a sale of his real property sufficient to fund a 7 feasible chapter 11 plan and that he could not fund (or confirm) 8 a plan within a reasonable time. Dana further stated that he had 9 directed Michael’s attorney to request dismissal of the case. 10 Dana’s declaration provided sufficient grounds to support 11 the bankruptcy court’s dismissal for cause under § 1112(b). 12 Accordingly, we AFFIRM. 13 FACTS 14 The underlying chapter 11 case was not Michael’s first 15 bankruptcy case. The bankruptcy court had dismissed two 16 chapter 13 cases during the prior year for failure to file 17 essential bankruptcy case documents.3 As a result, no automatic 18 19 1 Unless specified otherwise, all chapter and section 20 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all “Rule” references are to the Federal Rules of Bankruptcy 21 Procedure, Rules 1001-9037. All “Civil Rule” references are to 22 the Federal Rules of Civil Procedure. 2 23 For ease of reference, we refer to Michael and Dana by their first names. 24 3 Michael’s chapter 13 case no. 9:15-bk-12415-PC was 25 commenced on December 8, 2015, and dismissed on January 6, 2016, 26 for failure to file the required bankruptcy schedules and statements. Michael’s chapter 13 case no. 9:16-bk-10109-PC was 27 commenced on January 21, 2016, and dismissed on November 3, 2016, for failure to file a required proposed order converting the case 28 to chapter 11.

2 1 stay went into effect upon the filing of Michael’s chapter 11 2 petition. § 362(c)(4)(A)(i). Michael filed his first motion 3 seeking to impose the stay on February 6, 2017 (“First Stay 4 Motion”). Dana signed the First Stay Motion and the accompanying 5 declarations on Michael’s behalf.4 6 The motion and declarations explained that Michael owned two 7 parcels of residential real property, one known as the Garden 8 Street Property, worth roughly $2.2 million, and the other known 9 as the State Street Property, worth roughly $1.5 million. 10 Michael and Dana identified the Garden Street Property as their 11 primary residence. Michael proposed to sell the State Street 12 Property to fund his chapter 11 plan and pay his creditors. 13 According to Michael, he had sufficient equity in the property to 14 be sold to accomplish these goals.5 The secured creditors 15 holding liens on the two parcels of real property opposed the 16 First Stay Motion. The bankruptcy court denied the stay motion 17 because it was not filed within the thirty-day time limit 18 specified in § 362(c)(4)(B). 19 Even though Michael was represented by counsel in his 20 chapter 11 case, he filed on May 4, 2017, in pro per, a motion 21 22 4 During the entire time his chapter 11 case was pending, 23 Michael was serving time as an inmate in a state prison. This is the reason Michael was acting through Dana as his attorney in 24 fact. Initially, Michael characterized his incarceration as “my physical incapacitation.” Later in the case, his attorney 25 specifically disclosed the fact of his incarceration. 26 5 Michael stated that the State Street Property had a first 27 trust deed encumbering it in the amount of $1,019,388, and the Garden Street Property had a first trust deed encumbering it in 28 the amount of $1,700,000.

3 1 seeking to stay the foreclosure of his properties (“Second Stay 2 Motion”). No law was cited, and it is unclear what legal 3 authority Michael relied upon to support the requested stay. In 4 his moving papers, Michael detailed a series of misfortunes that 5 struck his family leading up to his bankruptcy case filings and 6 elaborated on his prior efforts to sell one or the other of his 7 two properties to pay off all of his creditors. The bankruptcy 8 court denied the Second Stay Motion without explanation the same 9 day it was filed. 10 On May 23, 2017, Michael’s counsel of record, Bryan Diaz, 11 filed a motion for reconsideration of the denial of the First 12 Stay Motion (“Stay Reconsideration Motion”). Diaz asserted that 13 the untimeliness of the First Stay Motion was the result of his 14 excusable neglect. Diaz filed along with the Stay 15 Reconsideration Motion additional evidence regarding Michael’s 16 desire to sell one or the other of his properties in the hopes of 17 paying off his unsecured creditors and paying off the mortgage 18 arrears on the property not sold.6 This evidence included 19 appraisals of each property suggesting that Michael had 20 significant equity in each property. Diaz set the motion for 21 hearing at the same time as Michael’s continued chapter 11 status 22 conference. The bankruptcy court’s status conference order 23 stated that both the debtor and his counsel were required to 24 25 6 At the time of the First Stay Motion, Michael’s papers 26 indicated he only was interested in selling the State Street Property. By the time his counsel filed the Stay Reconsideration 27 Motion, Michael apparently was willing to sell either of his two properties to finance his chapter 11 plan and save the remaining 28 property from foreclosure.

4 1 appear at the status conference and any continuance thereof, 2 unless excused by the court. The status conference order further 3 specified that “[f]ailure to comply with this order may result in 4 sanctions including dismissal, conversion, or appointment of a 5 trustee.” 6 A few hours before the June 28, 2017 hearings, Diaz filed a 7 declaration signed under penalty of perjury by Dana. In it, Dana 8 reiterated that he had been acting in the bankruptcy case, and 9 continued to act, as Michael’s attorney in fact. Dana also 10 recounted the history of his unsuccessful efforts to market and 11 sell one or the other of the two properties. 12 Based on these efforts, Dana declared: 13 12. Despite my best efforts to manage the estate and properly market each asset of the estate to fund a 14 Chapter 11 plan within a reasonable time, I am simply unable to sell any asset for sufficient income to fund 15 a Chapter 11 plan. 16 13. I apologize for [sic] late filing of this declaration but I wanted to exhaust all avenues before 17 I conceded that a Chapter 11 plan is currently unfeasible. Specifically, there was a potential buyer, 18 with cash, that wanted to see the Garden property but the showing is not scheduled until tomorrow.

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In re: Michael Stinchfield, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-michael-stinchfield-bap9-2018.