In re: Natalia Aleksandrovna Neal

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: August 22, 2025
• Docket: 24-1134
• Status: Unpublished

Opinion

FILED AUG 22 2025 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY.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. OR-24-1134-GBL NATALIA ALEKSANDROVNA NEAL, Debtor. Bk. No. 3:22-bk-31714-PCM

SHARON ELIZABETH NEAL, Appellant, v. MEMORANDUM* NATALIA ALEKSANDROVNA NEAL, Appellee.

Appeal from the United States Bankruptcy Court for the District of Oregon Peter C. McKittrick, Bankruptcy Judge, Presiding

Before: GAN, BRAND, and LAFFERTY, Bankruptcy Judges.

INTRODUCTION

Creditor Sharon Elizabeth Neal (“Sharon”)1 appeals the bankruptcy

court’s orders denying her motion to dismiss the chapter 13 2 case of debtor

* 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 Because the parties share a last name, we refer to Sharon Neal as “Sharon” and

Natalia Neal as “Debtor” to avoid any confusion. No disrespect is intended. 2 Unless specified otherwise, all chapter and section references are to the

Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure. Natalia Aleksandrovna Neal (“Debtor”) and denying her “renewed”

motion to dismiss, which the court construed as a motion for

reconsideration.

After obtaining stay relief, US Bank, N.A. (“US Bank”) foreclosed the

deed of trust encumbering Debtor’s residence (the “Property”), and Debtor

amended her chapter 13 plan to remove treatment of claims secured by the

Property. After the bankruptcy court confirmed the amended plan, Debtor

challenged the foreclosure in state court. The state court entered a

stipulated judgment holding that Debtor’s interest in the Property was not

extinguished by the foreclosure sale and US Bank’s lien remained in full

force and effect.

Sharon then moved to dismiss the bankruptcy case, arguing that

Debtor violated the terms of the confirmed plan by incurring new debt

without the trustee’s consent or notice to creditors. The bankruptcy court

denied the motion because Debtor fully disclosed both her interest in the

Property and the underlying debt, and the state court judgment merely

returned Debtor and US Bank to the position they were in on the petition

date. The court denied Sharon’s motion for reconsideration because she

failed to demonstrate any basis for relief and merely rehashed arguments

raised in the prior motion.

Sharon does not demonstrate an abuse of discretion. We AFFIRM.

2 FACTS 3

Debtor acquired the Property in 2008 as her sole property. She

borrowed $690,000 and secured the note with a deed of trust. At the time of

purchase, Debtor was married to Sharon’s son, and she permitted Sharon

to live at the Property until her divorce in 2017. After the divorce, Debtor’s

ex-husband moved out, but Sharon refused to leave the Property. Since

then, Debtor and Sharon have been involved in multiple bankruptcies and

state court lawsuits involving the Property.

Debtor filed the present chapter 13 petition in October 2022. She

listed Sharon as holder of a claim for $185,592, secured by a judicial lien on

the Property, which Sharon acquired from De Lage Landen Financial

Services. Debtor filed an initial chapter 13 plan which proposed to cure a

default with US Bank through a mortgage modification, and to strip

several judicial liens, including Sharon’s, as impairing her homestead

exemption.

Sharon and US Bank each filed motions for stay relief. After

obtaining in rem stay relief, US Bank conducted a nonjudicial foreclosure in

February 2023, taking title to the Property through a credit bid. Although

Sharon did not timely file a proof of claim, the bankruptcy court held that

her stay relief motion was sufficient to constitute an informal proof of

3 We exercise our discretion to take judicial notice of documents electronically filed in the bankruptcy case. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). 3 claim, and because the Property had been foreclosed, it allowed her claim

as an unsecured claim.

Debtor filed an amended plan which proposed to treat unsecured

claims, and which removed reference to the Property and treatment of

secured claims and judicial liens. The bankruptcy court confirmed the

amended plan over Sharon’s objection in April 2023.

After confirmation, Debtor sued US Bank in state court, alleging that

it failed to provide her adequate notice of the foreclosure. The parties

agreed to a stipulated judgment which the court entered in June 2024. The

stipulated judgment stated that Debtor’s interest in the Property was not

extinguished by the foreclosure and US Bank’s note and deed of trust

remained in full force and effect. Pursuant to the stipulated judgment, the

foreclosure sale “remained valid as to all other persons and parties.” 4

In July 2024, Sharon filed a motion and supplemental motion to

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

stipulated judgment created a new debt which Debtor acquired without

disclosure or approval. Sharon further asserted that Debtor engaged in a

pattern of filing bankruptcy cases to delay and frustrate creditor actions.

She claimed that while Debtor was negotiating the stipulated judgment

with US Bank, she was behind on her monthly plan payments and asking

4 Sharon argues that the state court judgment violates Oregon law. The propriety of the state court judgment is not before us. 4 the court to modify her confirmed plan. 5 Sharon argued that the case

should be dismissed because Debtor’s actions constituted a material default

and demonstrated bad faith.

Debtor opposed the Motion to Dismiss and argued that the stipulated

judgment did not alter the rights of any creditors. She noted that the

Property and secured debt were fully disclosed in her schedules, and she

did not default under the plan.

The bankruptcy court denied the Motion to Dismiss for reasons

stated on the record at the August 8, 2024 hearing. After the court denied

the Motion to Dismiss, Sharon filed a renewed motion to dismiss (the

“Motion for Reconsideration”), again seeking dismissal based on her

assertion that Debtor incurred debt without disclosure or approval. The

bankruptcy court construed the Motion for Reconsideration as a motion to

alter or amend pursuant to Civil Rule 59(e), made applicable by Rule 9023.

The court denied the Motion for Reconsideration because Sharon did

not identify any intervening change in law or new evidence, and she did

not demonstrate a clear error of law or resulting manifest injustice; she

merely rehashed arguments made in the Motion to Dismiss. The

bankruptcy court noted that, to the extent Sharon was arguing for

dismissal based on Debtor’s bad faith in filing the case, the confirmation

5 In April 2024, Debtor filed a notice of post-confirmation amendment which suspended payments for three months and extended the plan period to 44 months. No party objected to the post-confirmation amendment. 5 order conclusively determined her lack of bad faith. The court entered a

written order, and Sharon timely appealed.

JURISDICTION

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

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

ISSUES

Did the bankruptcy court abuse its discretion by denying the Motion

to Dismiss?

Did the bankruptcy court abuse its discretion by denying the Motion

for Reconsideration?

STANDARD OF REVIEW

We review for abuse of discretion the bankruptcy court’s decision

whether to dismiss a chapter 13 case for cause. Schlegel v. Billingslea (In re

Schlegel), 526 B.R. 333, 338 (9th Cir. BAP 2015). We also review for

an abuse of discretion the bankruptcy court’s order denying a motion to

alter or amend under Civil Rule 59(e). In re Frantz, 655 B.R. 594, 602 (9th

Cir. BAP 2023).

A bankruptcy court abuses its discretion if it applies an incorrect

legal standard or its factual findings are illogical, implausible, or without

support in the record. TrafficSchool.com, Inc. v. Edriver, Inc., 653 F.3d 820, 832

(9th Cir. 2011).

6 DISCUSSION

Sharon argues the court erred by denying the Motion to Dismiss

because the stipulated judgment constituted a material default. She asserts

the court should have considered Debtor’s bad faith, and it erred by

denying relief under Civil Rule 59(e).

A. Scope of this appeal

As an initial matter, we must clarify the scope of this appeal.

Pursuant to Rule 8003(a), an appellant initiates an appeal by filing, within

the time limits of Rule 8002(a), a notice of appeal which conforms

substantially to the appropriate Official Form and is accompanied by the

“judgment, order, or decree, or the part of it, being appealed.” Sharon’s

notice of appeal identifies only the Motion for Reconsideration.

We can look past an appellant’s failure to comply technically with

Rule 8003 if the intent to appeal a specific order is fairly inferred and the

appellee will not be prejudiced. See Lolli v. Cnty. of Orange, 351 F.3d 410, 414

(9th Cir. 2003). “In determining whether intent and prejudice are present,

we consider first, whether the affected party had notice of the issue on

appeal; and second, whether the affected party had an opportunity to fully

brief the issue.” Le v. Astrue, 558 F.3d 1019, 1023 (9th Cir. 2009) (quoting

Meehan v. Cnty. of L.A., 856 F.2d 102, 105 (9th Cir. 1988) (quotation marks

omitted)).

Sharon argues in her opening brief that the stipulated judgment

constituted a material default under the confirmed plan, and consequently,

7 the court erred by denying the Motion to Dismiss. Thus, we can fairly infer

her intent to appeal the Motion to Dismiss. Although Debtor did not file a

brief in this appeal, she had an opportunity to address Sharon’s arguments

and was not prejudiced.

The bankruptcy court denied the Motion to Dismiss for reasons

stated on the record, but Sharon provides only a partial transcript of that

hearing which does not contain the basis for the court’s decision. An

appellant’s failure to provide necessary transcripts is cause to dismiss the

appeal. Hall v. Whitley, 935 F.2d 164, 165 (9th Cir. 1991); Kyle v. Dye (In re

Kyle), 317 B.R. 390, 393 (9th Cir. BAP 2004), aff’d, 170 F. App’x 457 (9th Cir.

2006). We have discretion to disregard this failure and decide the appeal on

the merits if an informed review is possible. In re Kyle, 317 B.R. at 393.

Here, the bankruptcy court stated in its written order denying the

Motion for Reconsideration:

The court explained on the record at the August 8 hearing that the State Court Order does not constitute a material default with respect to Debtor’s plan. Debtor fully disclosed her interest in the Property and the underlying debt in her schedules. The State Court Order merely returns Debtor and US Bank to the position they were in on the petition date. By entering into the stipulation that forms the basis of the State Court Order, Debtor did not incur new debt in violation of her confirmed plan.

The bankruptcy court’s subsequent recitation of its basis for denying the

Motion to Dismiss is sufficient for us to make an informed review of the

8 order denying the Motion to Dismiss and decide the appeal from that order

on the merits.

B. The bankruptcy court did not err by denying the Motion to Dismiss.

Section 1307(c) provides that upon the request of a party in interest,

the bankruptcy court may dismiss or convert a chapter 13 case for cause,

including a “material default by the debtor with respect to a term of a

confirmed plan.” § 1307(c)(6). The use of the word “may” in § 1307(c)

indicates that dismissal under this section is a discretionary decision of the

bankruptcy court. Sievers v. Green (In re Green), 64 B.R. 530, 530 (9th Cir.

BAP 1986).

The existence of cause under § 1307(c) does not mandate dismissal

and “do[es] not give creditors an automatic right to a dismissal.” Id. at 531.

Whether dismissal is appropriate is committed to the sole discretion of the

bankruptcy court, In re Schlegel, 526 B.R. at 339, but “[s]ection 1307(c)

provides that when making the determination as to whether to grant a

motion to dismiss or convert . . . the bankruptcy court must be guided by

what is in the best interest of the estate and creditors,” Brown v. Sobczak (In

re Sobczak), 369 B.R. 512, 519 (9th Cir. BAP 2007).

Sharon argues that by stipulating to the judgment in the state court

action, Debtor materially defaulted under paragraph 8 of the confirmed

plan. That paragraph states:

9 Debtor may not obtain credit or incur debt obligations during the life of the plan . . . unless the trustee gives written consent, the obtaining of the credit or incurring of the debt is made necessary by emergency, or debtor gives notice to all creditors and the trustee and an opportunity for hearing as if the creditor or debt were to be incurred by the trustee.

According to Sharon, the stipulated judgment had the effect of

reinstating the note and deed of trust, which was necessarily a new debt

obligation obtained by Debtor. We agree with the bankruptcy court that the

note was not a new debt, and it was fully disclosed in Debtor’s schedules.

The stipulated judgment reversed the effect of the foreclosure sale with

respect to US Bank and Debtor. It essentially returned those parties to the

position they were in as of the petition date. Signing the stipulation which

formed the basis of the stipulated judgment did not constitute a material

default of the confirmed plan by Debtor.

Sharon also argues that dismissal was warranted based on Debtor’s

bad faith in managing her financial affairs, and she claims the bankruptcy

court erred by not considering Debtor’s bad faith. Again, we agree with the

bankruptcy court that, to the extent Sharon argued that Debtor filed the

plan or petition in bad faith, she was precluded by the confirmation order.

See § 1325(a)(3), (7) (conditioning confirmation on good faith in filing the

petition and plan); Duplessis v. Valenti (In re Valenti), 310 B.R. 138, 150 (9th

Cir. BAP 2004) (“A Chapter 13 plan ‘is res judicata as to all issues that could

10 have or should have been litigated at the confirmation hearing.’”) (quoting

Great Lakes Higher Educ. Corp. v. Pardee, 193 F.3d 1083, 1087 (9th Cir. 1999)).

Sharon argues that Debtor demonstrated post-confirmation bad faith

by signing the stipulated judgment without disclosing it to creditors or the

court, at a time when she was having difficulty making her plan payments.

But her only argument why this conduct is indicative of bad faith is that

the stipulation constituted a material default of the confirmed plan. Sharon

identified no other evidence for Debtor’s alleged bad faith either to the

bankruptcy court or on appeal. Debtor’s difficulty in making her plan

payments during 2024 does not impose any additional obligation to

disclose her efforts to retain the Property, and it does not render her actions

bad faith. We discern no basis for cause to dismiss under § 1307(c).

Additionally, because § 1307(c) is permissive, the bankruptcy court

had discretion to deny the Motion to Dismiss if dismissal was not in the

best interest of creditors and the estate. Sharon offered no argument, either

to the bankruptcy court or in her opening brief, why dismissal was in the

best interest of creditors and the estate. Thus, even if we determined that

Debtor materially defaulted under the confirmed plan, Sharon has not

shown that the bankruptcy court abused its discretion by denying the

Motion to Dismiss.

11 C. The bankruptcy court did not err by denying the Motion for Reconsideration.

Under Civil Rule 59(e), the court may alter or amend a judgment if it:

“(1) is presented with newly discovered evidence, (2) committed clear error

or the initial decision was manifestly unjust, or (3) if there is an intervening

change in controlling law.” Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255,

1263 (9th Cir. 1993). A party may not use a Civil Rule 59(e) motion to

present a new legal theory for the first time, to raise legal arguments which

could have been made in connection with the original motion, or to rehash

the same arguments already presented. Wall St. Plaza, LLC v. JSJF Corp. (In

re JSJF Corp.), 344 B.R. 94, 103 (9th Cir. BAP 2006), aff’d and remanded, 277 F.

App’x 718 (9th Cir. 2008).

Sharon did not identify any newly discovered evidence or

intervening change of law. She argues the bankruptcy court committed

clear error by denying her Motion to Dismiss, but she made the same

arguments in her Motion for Reconsideration as in her Motion to Dismiss.

The bankruptcy court did not err by construing the Motion for

Reconsideration as a motion under Civil Rule 59(e), and it did not abuse its

discretion by denying relief.

CONCLUSION

Based on the foregoing, we AFFIRM the bankruptcy court’s orders

denying the Motion to Dismiss and denying the Motion for