John Biedka

Opinion

NOT RECOMMENDED FOR PUBLICATION

File Name: 26b0004n.06

BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

┐

IN RE: JOHN S. BIEDKA; RAENETTE L. BIEDKA, │

Debtors. │

JOHN S. BIEDKA; RAENETTE L. BIEDKA, │ Debtors-Appellants,

> No. 24-8027 │ │

v. │ │ │

U.S. TRUSTEE, │ Trustee-Appellee. │

┘

Appeal from the United States Bankruptcy Court for the Northern District of Ohio at Cleveland.

No. 24-10370—Suzana K. Koch, Bankruptcy Judge.

Argued: March 24, 2026

Decided and Filed: August 18, 2026

Before: BAUKNIGHT, Chief Bankruptcy Appellate Panel Judge; GREGG and MERRILL, Bankruptcy Appellate Panel Judges.

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COUNSEL

ARGUED: Charles J. Van Ness, VAN NESS LAW, Mayfield Heights, Ohio, for Appellants. Andrew Beyer, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Charles J. Van Ness, VAN NESS LAW, Mayfield Heights, Ohio, for Appellants. Amy L. Good, Spencer Lutz, UNITED STATES DEPARTMENT OF JUSTICE, Cleveland, Ohio, for Appellee.

MERRILL, J., delivered the opinion of the Panel in which BAUKNIGHT, C.J., and GREGG, J., concurred. BAUKNIGHT, C.J. (pp. 18–25), delivered a separate concurring opinion.

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_________________

OPINION

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CHARLES R. MERRILL, Bankruptcy Appellate Panel Judge.

Debtors John and Raenette Biedka (the “Debtors”) appeal from both an order denying their motion for an extension of time to file a pretrial brief and an order dismissing their Chapter 7 case. Because the Bankruptcy Court provided no explanation regarding its denial of the Debtor’s extension request, we conclude the Bankruptcy Court abused its discretion. Relying on precedent from the Sixth Circuit Court of Appeals, we further conclude that the Bankruptcy Court abused its discretion when it dismissed the Debtors’ case under Bankruptcy Rule 7041.1 We therefore reverse and remand on both issues.

ISSUES ON APPEAL

Debtors have stated the issues on appeal as follows:2

I. Whether the Bankruptcy Court erred or otherwise abused its discretion in determining that Debtors’ case should be dismissed for failure to comply with a Scheduling Order;

II. Whether the Bankruptcy Court erred or otherwise abused its discretion in denying Debtors a discharge under 11 U.S.C. § 727;

III. Whether the Bankruptcy Court erred or otherwise abused its discretion in dismissing Debtors’ case pursuant to 11 U.S.C. § 707(b)(1) and (b)(3);

1All further references to the Federal Rules of Civil Procedure will be “Rule ___.” All further references to the Federal Rules of Bankruptcy Procedure will be “Bankruptcy Rule ___.”

2In Appellants’ Principal Brief, Debtors raise only two of these issues: (1) Whether the Bankruptcy Court erred or otherwise abused its discretion in determining that Appellants’ bankruptcy case should be dismissed for failure to timely comply with a Scheduling Order, and in denying Appellants’ Motion for Leave to File Witness and Exhibit List and Trial Brief, Instanter; and (2) Whether the Bankruptcy Court erred or otherwise abused its discretion in failing to consider whether Appellants’ bankruptcy case should be dismissed pursuant to 11 U.S.C. § 707(b)(3)(B). (Compare Appellants’ Statement of the Issues on Appeal at 1, BAP Case No. 24-8027, ECF No. 10, with Appellants’ Principal Br. at 11, BAP Case No. 24-8027, ECF No. 19.) The remainder of the issues are therefore waived. Kellar v. Yunion, Inc., 157 F.4th 855, 882–83 (6th Cir. 2025); see Fed. R. Bankr. P. 8014(a)(8).

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IV. Whether the Bankruptcy Court erred or otherwise abused its discretion in denying Debtors’ Motion for Leave to File Witness and Exhibit List and Trial Brief, Instanter; and V. Whether the Bankruptcy Court’s rulings and orders below were arbitrary and capricious, unjust, and against the manifest weight of evidence.

JURISDICTION AND STANDARD OF REVIEW

The Panel has jurisdiction to hear appeals “from final judgments, orders, and decrees”

issued by a bankruptcy court pursuant to 28 U.S.C. § 158(a)(1). Because the United States Bankruptcy Court for the Northern District of Ohio has authorized appeals to the Panel, and no party has filed to have the appeal heard by a district court, this appeal is properly before the Panel. 28 U.S.C. § 158(b), (c); Fed. R. Bankr. P. 8005; Gen. Order No. 1997-27 (N.D. Ohio July 9, 1997).

“Orders in bankruptcy cases qualify as ‘final’ when they definitively dispose of discrete disputes within the overarching bankruptcy case.” Ritzen Grp., Inc. v. Jackson Masonry, LLC, 589 U.S. 35, 37, 140 S. Ct. 582, 586 (2020) (citing Bullard v. Blue Hills Bank, 575 U.S. 496, 501, 135 S. Ct. 1686, 1692 (2015)). An order dismissing a bankruptcy case is a final order. Badalyan v. Holub (In re Badalyan), 236 B.R. 633, 635 (B.A.P. 6th Cir. 1999). It “draws into question all prior non-final rulings and orders,” like the Bankruptcy Court’s denial of the Debtors’ request to extend the time to comply with the scheduling order. Pittman ex rel. Sykes v. Franklin, 282 F. App’x 418, 423 (6th Cir. 2008).

An appellate court applies an abuse of discretion standard when reviewing both a decision to dismiss a bankruptcy case and a determination of excusable neglect, or lack thereof. Estate of Ruth Ann Johnson v. Law Offices of Davis A. Sims, PLLC, No. 25-6166, 2026 WL 2111795, at *2 (6th Cir. July 22, 2026); Turner v. City of Taylor, 412 F.3d 629, 649 (6th Cir. 2005). A bankruptcy court abuses its discretion when it relies upon clearly erroneous findings of fact or when it improperly applies the law or uses an erroneous legal standard. Johnson, 2026 WL 2111795, at *2 (citing Memphis A. Philip Randolph Inst. v. Hargett, 2 F.4th 548, 554 (6th Cir. 2021)).

A bankruptcy court’s findings supporting dismissal of a bankruptcy petition are factual determinations. Riverview Trenton R.R. Co. v. DSC, Ltd. (In re DSC, Ltd.), 486 F.3d 940, 944 (6th Cir. 2007). Findings of fact are reviewed under the clearly erroneous standard. Fed. R. Bankr. P.

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8013. A finding of fact is clearly erroneous “when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Tedeschi v. Falvo (In re Falvo), 227 B.R. 662, 663 (B.A.P. 6th Cir. 1998) (citations omitted).

Conclusions of law are reviewed de novo. Nicholson v. Isaacman (In re Isaacman), 26 F.3d 629, 631 (6th Cir. 1994). “De novo review requires the Panel to review questions of law independent of the bankruptcy court’s determination.” Cundiff v. Cundiff (In re Cundiff), 227 B.R. 476, 477 (B.A.P. 6th Cir. 1998) (citations omitted).

FACTS

The facts in this appeal are not in dispute. After the Debtors filed their Chapter 7 petition in February 2024, Andrew R. Vara, United States Trustee - Region 9 (“UST”) filed a motion to dismiss (“MTD”) under § 707(b)(1) and (3). In the MTD, the UST premised dismissal on Mr. Biedka’s new well-paying job with Ford Motor Company.3 The Debtors objected to the MTD, asserting that the totality of the circumstances underlying their financial situation warranted remaining in Chapter 7 bankruptcy.

On July 9, 2024, the Bankruptcy Court held a preliminary hearing on the MTD and, determining that an evidentiary hearing was necessary to resolve the dispute, proposed a hearing date of October 17, 2024. On July 17, 2024, the Bankruptcy Court issued an order (“EHO”) setting October 17, 2024, as the evidentiary hearing date on the MTD. The EHO required the parties to file exhibit and witness lists (“Lists”) “[n]o later than one week before the evidentiary hearing date” and a trial brief (“Brief”) “[a]t least three business days before the evidentiary hearing date.” (Evid. Hr’g Order at 1–3, Bankr. No. 24-10370, ECF No. 27.) The EHO made clear that “[i]f a party fails to comply with the requirements of this Order, such failure may result in dismissal, default, sanctions, or other consequences the Court deems appropriate.” (Id. at 4.)

3The UST alleged that the Debtors provided proof of income showing that Mr. Biedka earns $4,768.61 in gross income and $3,961.64 in net income every two weeks, with net monthly pay of $7,923.28. (Mot. to Dismiss at 3, Bankr. No. 24-10370, ECF No. 20.) Notwithstanding the Debtors’ increased income, the question of whether their Chapter 7 case should have been dismissed for abuse under § 707(b)(3) is not before the Panel because the Bankruptcy Court did not dismiss the bankruptcy case under that Code section.

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During a telephonic status conference on September 17, 2024, the parties requested an extension of the discovery deadlines and a rescheduling of the evidentiary hearing to a later date. The Bankruptcy Court agreed to extend discovery deadlines but denied the request to reschedule the hearing in order to maintain efficiency and keep the case progressing. (Order Granting Mot. to Extend Time for Disc., Bankr. No. 24-10370, ECF No. 37; Order Denying Mot. to Continue Evid. Hr’g, Bankr. No. 24-10370, ECF No. 38.) Thus, the court again confirmed the October 17, 2024 evidentiary hearing on the MTD as well as all pretrial deadlines in the EHO.

The UST timely filed his Lists on October 8, 2024. The Debtors’ counsel, Charles Van Ness (“Van Ness”) filed the Lists late on October 11, 2024, one day after the deadline. Subsequently, the UST timely filed his Brief on October 11, 2024. Van Ness failed to timely file the Debtors’ Brief three business days prior to the hearing. Citing the Debtors’ failure to file a Brief, the UST filed a second motion to dismiss (“Second MTD”) on October 15, 2024. (Second Mot. to Dismiss, Bankr. No. 24-10370, ECF No. 47.) The Second MTD did not cite to any authority as the basis for relief. The Bankruptcy Court ordered oral arguments on the Second MTD to be heard at the October 17, 2024 hearing.

On October 16, 2024, between at 8:18 p.m. and 9:35 p.m.,4 two days after the deadline and on the eve of the hearing set for 1:30 p.m. the next day, Van Ness filed two versions of the Debtors’ Brief5 and a Motion for Leave to File Instanter (“Instanter Motion”), stating that the failure to comply with the deadlines in the EHO was attributable to counsel’s own mistake and inadvertent omission.6 (Trial Br. of Debtors, Bankr. No. 24-10370, ECF No. 50 (filed at 8:18 p.m.); Trial Br. of Debtors, Bankr. No. 24-10370, ECF No. 51 (filed at 8:53 p.m.); Instanter Mot., Bankr. No. 24-

4 Several hours earlier, the attorney for the UST filed the parties’ stipulations of fact, which were not required by the EHO. (Stipulations upon Mot. of the United States Trustee to Dismiss Case for Abuse Under 11 U.S.C. § 707(b)(1) and (3), Bankr. No. 24-10370, ECF No. 49.)

5The second Brief was reformatted to correct large blank spaces in the initial Brief, reducing the Brief from eight to six pages.

6The Debtors’ Instanter Motion was filed “pursuant to Fed. R. Civ. P. 6(b)(2) due to mistake and an inadvertent omission.” (Instanter Mot. at 1, Bankr. No. 24-10370, ECF No. 52.) Rule 6(b)(2) governs exceptions for extending time, whereas Rule 6(b)(1)(B) governs extending time “on motion made after the time has expired if the party failed to act because of excusable neglect.” We assume Van Ness intended to cite Rule 6(b)(1)(B) but erroneously cited Rule 6(b)(2). In any event, the reliance on Rule 6 is misplaced because Bankruptcy Rule 9006 applied instead.

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10370, ECF No. 52 (filed at 9:35 p.m.).) In the Instanter Motion, Van Ness explained that he mistakenly believed the Lists were due three business days (rather than seven days) before the hearing, arguing a “busy schedule and recent experience with the Court’s 3-business day rule on motion dockets led to the inadvertent mistake.” (Id.) As for his failure to timely file a Brief, counsel argued:

With regard to the Trial Brief, Debtors’ counsel relied upon 25+ years of optional briefing on contested motions (versus adversary proceedings) rather than a careful reading of the Court’s scheduling order. This is the first contested evidentiary hearing that counsel had scheduled before this Court,7 and will certainly not make the same mistake again. Contrary to the assertions of the United State [sic] Trustee, Debtors’ counsel has never considered or needed an opposing parties’ trial brief to understand the facts and issues in a matter. This information was addressed (or should have been) in discovery. The suggestion that a bankruptcy case should be dismissed on a mere technicality is difficult to comprehend or justify where no prejudice has resulted. Debtors should not be punished due to an unprecedented and inadvertent by [sic] error by counsel.

(Id. at 1–2 (emphasis in original).)

At 10:42 a.m. on the morning of October 17, 2024, the Bankruptcy Court signed a one-

word order8 denying the Instanter Motion, which was not entered until 37 minutes before the 1:30 p.m. evidentiary hearing. (Order, Bankr. No. 24-10370, ECF No. 53.) Van Ness, thus, did not learn of the denial until the Court informed him of such at the start of the hearing. The Court then asked the parties to address the UST’s Second MTD. The UST argued that the Debtors’ failure to comply with the EHO prejudiced the UST’s ability to prepare for trial because Van Ness “waited to file their trial brief until 8:53 PM last night (October 16, 2024).” (Order Granting Mot. to Dismiss Case at 5, Bankr. No. 24-10370, ECF No. 57.) The UST asked the court to dismiss the

7As the Bankruptcy Court noted in its Dismissal Order, this statement is inaccurate. Van Ness, in fact, had six previous contested matters scheduled before the Bankruptcy Court in the prior year, all of which had scheduling orders also mandating that trial briefs were due three business days before the evidentiary hearing. (Order Granting Mot. To Dismiss Case at 5 n.2, Bankr. No. 24-10370, ECF No. 57.)

8Rather than enter a traditional order, the Bankruptcy Court stamped the first page of Van Ness’s Instanter Motion with the word “DENIED,” added the Court’s signature and date, and entered that single page into the record. (Order, Bankr. No. 24-10370, ECF No. 53.) The Bankruptcy Court later stated in its order dismissing the case that “[o]n October 17, 2024, the Court denied Debtors’ [Instanter Motion], without prejudice to the alternative relief that was requested therein—to convert the case to Chapter 13.” (Order Granting Mot. to Dismiss Case at 5, Bankr. No. 24-10370, ECF No. 57.)

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case or otherwise rule in the UST’s favor on all issues of law and fact. The Bankruptcy Court asked the Debtors about their willingness to convert the case to a Chapter 13 “in lieu of a more severe result” (id.), but after a brief recess, the Debtors declined.

Instead, Van Ness attempted to address the UST’s dismissal arguments, insisting “there’s been no prejudice. . . . They’ve been through thousands of these cases. They’re hardly prejudiced.” (Order Granting Mot. to Dismiss Case at 6, Bankr. No. 24-10370, ECF No. 57.) Van Ness further argued that “[a] trial brief in an evidentiary hearing is an onerous task and a burden for debtors and their counsel to perform.” (Id.) As for his filing deficiencies, Van Ness stated: “I made a mistake as far as the trial brief is concerned. I guess I made a mistake with regard to the witness and exhibit list.” (Id.)

Van Ness then took issue with the requirement that parties submit trial briefs prior to the hearing, stating: “[t]he argument that I have to lay out my entire trial strategy in a trial brief? That doesn’t even make any sense. Nobody ever does that. . . .” (Id.) The Bankruptcy Court asked counsel: “is the Debtor requesting to convert to Chapter 13 now, such that, the evidentiary hearing does not need to go forward?” (Id.) The Debtors again declined to convert to Chapter 13, noting their “intent was to be here today to testify and to have the U.S. Trustee present their case.” (Id.) Van Ness added, “in the alternative of dismissal, if the Court was to find that cause exists for the dismissal, we would ask for leave for a short period of time to convert the case at that point.” (Id.)

Upon conclusion of the hearing, the Bankruptcy Court orally granted the UST’s Second MTD. In so ruling, the Bankruptcy Court explained it had “thought very carefully about the conduct of future litigants and to deter similar litigants from such misconduct in the future.” (Id.) The Bankruptcy Court added that it would be willing to consider a motion to reinstate the case and convert to Chapter 13, should the Debtors file one (id. at 6–7), which they did not.

On October 31, 2024, the Bankruptcy Court entered an order dismissing the Debtors’ case (the “Dismissal Order”) under Rule 41(b) as made applicable by Bankruptcy Rule 7041 and 9014(c). Observing that “[a] scheduling order ‘is not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril,’” (Dismissal Order at 7, Bankr. No. 24-10370, ECF No. 57 (citing Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 610 (9th Cir.

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1992) (citation modified))), the Bankruptcy Court explained that Rule 41(b) serves as a means to achieve “management of its docket and avoidance of unnecessary burdens on the tax-supported courts and opposing parties . . . [sic] A [court] must be given substantial discretion in serving these tasks.’” (Id. at 7–8 (citing Sexton v. Uniroyal Chem. Co., 62 F. App’x 615, 618 (6th Cir. 2003) (quoting Knoll v. Am. Tel. & Tel. Co., 176 F.3d 359, 363 (6th Cir. 1999))).) Ultimately, the primary issue leading to dismissal was Van Ness’s noncompliance with the deadlines in the EHO, although the Dismissal Order held the Debtors, not their attorney, responsible for the failure to meet deadlines: “The Court is familiar with Debtors’ counsel’s work and knows him to be a highly competent and ethical attorney. Therefore, Debtors’ failure was due to their own fault, and the first factor is satisfied.” (Dismissal Order at 9, Bankr. No. 24-10370, ECF No. 57.)

Notably, the Dismissal Order, entered two weeks after the hearing, was the first indication of the Bankruptcy Court’s reliance upon Rule 41(b) as the basis for dismissing the case. Neither the Bankruptcy Court nor the UST referenced Rule 41(b) at the October 17, 2024 hearing. The Debtors had no opportunity to rebut the factors that the Bankruptcy Court weighed before ultimately dismissing the case for their failure to prosecute.

The Debtors now appeal both the Bankruptcy Court’s denial of the Instanter Motion and the Dismissal Order. This Panel held oral arguments on March 24, 2026, at which time Debtors’ counsel clarified that the missed deadlines were solely his mistake, not his clients’ mistake. Van Ness also confirmed that he was wholly unaware that Rule 41(b) was at issue, until he received the Dismissal Order two weeks after the hearing. The UST candidly acknowledged during oral argument before the Panel that he did not seek dismissal of the Debtors’ case under Rule 41(b), nor was he aware that the Bankruptcy Court was even considering it.

DISCUSSION

For the reasons outlined herein, the Panel finds that the Bankruptcy Court abused its discretion in entering a one-word order denying the Instanter Motion without any explanation. The Bankruptcy Court further abused its discretion by dismissing the bankruptcy case without first giving notice of the basis for dismissal and by failing to satisfy the Sixth Circuit’s stringent requirements for Rule 41-based dismissals due to attorney noncompliance.

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I. Denial of the Instanter Motion, Without Application of the Pioneer Factors, Was Improper.

In their Instanter Motion, the Debtors cited Rule 6(b)(2) to support their request for an enlargement of time to file their Brief after expiration of the deadline directed in the EHO. The Debtors did not cite to any legal standard that would control the Bankruptcy Court’s decision related to this request. The Bankruptcy Court entered a one-word order denying the Instanter Motion on the morning of the evidentiary hearing. Subsequently, after filing this appeal, the Debtors cited Rule 6(b)(1)(B) to support their contention that the Bankruptcy Court abused its discretion in denying the Instanter Motion. However, Rule 6 does not apply in bankruptcy proceedings at all. Instead, Bankruptcy Rule 9006 controls the computation of time, and extension of deadlines, in both the main bankruptcy case and adversary proceedings related thereto. Further, both Rule 6 and Bankruptcy Rule 9006 require a showing of excusable neglect in order to extend a deadline after its expiration. Although the Debtors never mentioned excusable neglect nor assert the appropriate test related to this standard, the Bankruptcy Court abused its discretion by entering a single-word order denying the Instanter Motion.

The Supreme Court established the governing legal standard for excusable-neglect determinations in Pioneer Investment Services Company v. Brunswick Associates Limited Partnership, 507 U.S. 380, 113 S. Ct. 1489 (1993). Pioneer requires a trial court to balance four principal factors when considering excusable neglect: (1) the danger of prejudice to the nonmoving party, (2) the length of the delay and its potential impact on judicial proceedings, (3) the reason for the delay, including whether the delay was within the reasonable control of the moving party, and (4) whether the late-filing party acted in good faith.9 Id. at 395; e.g., Nafziger v. McDermott Int’l, Inc., 467 F.3d 514, 522 (6th Cir. 2006). Despite enunciating this test, the Supreme Court noted that excusable neglect “is a somewhat ‘elastic concept’[.]” Pioneer, 507 U.S. at 392 (citation omitted). The Sixth Circuit Court of Appeals has explained that the Pioneer factors “do not carry equal weight; the excuse given for the late filing must have the greatest import. While [other

9The Sixth Circuit treats Pioneer as a four-factor test, having held that “[t]he plain language in Pioneer suggests that the excusable neglect analysis comprises four factors and that the third factor, the reason for the delay, includes the question of whether the delay was within the reasonable control of the movant.” Cmty. Fin. Servs. Bank v. Edwards (In re Edwards), 748 F. App’x 695, 699 (6th Cir. 2019).

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factors] might have more relevance in a closer case, the reason-for-delay factor will always be critical to the inquiry.” United States v. Munoz, 605 F.3d 359, 372 (6th Cir. 2010) (citations omitted); see also Proctor v. N. Lakes Cmty. Mental Health, 560 F. App’x 453, 459–60 (6th Cir. 2014) (“The fact that the district court did not comb through each and every factor is not dispositive because the determination of excusable neglect is an elastic concept and because not all of the factors carry equal weight in each case.” (citations omitted)).

Appropriate analysis of the “excusable neglect” standard required the Bankruptcy Court to apply the Pioneer factors to the facts of the case. Ballinger v. Smith (In re Smith), No. 20-8015, 2021 WL 212361, at *2 (B.A.P. 6th Cir. Jan. 21, 2021). Here, the Bankruptcy Court issued a single-word order denying the Instanter Motion without any explanation. Although the facts of this case are clear, and it is tempting to apply the Pioneer test at this stage, “[i]t is beyond this Panel’s calling to make factual findings and weigh the Pioneer factors in the first instance.” Id. Accordingly, the Panel will reverse the Bankruptcy Court’s decision and remand the issue for proper application of the Pioneer factors.

II. Dismissal Under Rule 41

The Bankruptcy Court dismissed the Debtors’ Chapter 7 case pursuant to Rule 41(b), as made applicable in contested matters by Bankruptcy Rule 9014(c). Rule 41(b) provides:

(b) Involuntary Dismissal; Effect. If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it. Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal not under this rule—except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19—operates as an adjudication on the merits.

Fed. R. Civ. P. 41(b). Rule 41 can serve as “a safeguard against delay in litigation and harassment of a defendant.” Acosta v. Reparto Saman Inc. (In re Acosta), 497 B.R. 25, 33 (Bankr. D.P.R. 2013) (citations omitted). Although a court may consider lesser sanctions, “[d]ismissal for lack of prosecution is appropriate without consideration of lesser sanctions where the plaintiff has engaged in ‘extreme conduct’, such as knowing disobedience of a court order.” Id. at 34 (citations omitted); see Link v. Wabash R.R. Co., 370 U.S. 626, 630–32, 82 S. Ct. 1386, 1388–89 (1962) (finding that federal courts, even sua sponte, may dismiss a case for any of the reasons prescribed in Rule 41(b)).

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Dismissals under Rule 41(b) “‘operate[ ] as an adjudication on the merits,’” unless the dismissal order states otherwise. Bearup v. Cintas Corp., No. 1:21-cv-151, 2025 WL 2163701, at *2 (S.D. Ohio July 30, 2025) (quoting Fed. R. Civ. P. 41(b)).10

The Sixth Circuit has adopted the following four-part test for evaluating whether a case should be dismissed for failure to prosecute under Rule 41(b):

(1) whether the party’s failure is due to willfulness, bad faith, or fault; (2) whether the adversary was prejudiced by the dismissed party’s conduct; (3) whether the dismissed party was warned that failure to cooperate could lead to dismissal; and (4) whether less drastic sanctions were imposed or considered before dismissal of the action.

Knoll, 176 F.3d at 363. While none of the factors is typically dispositive on its own, a case is properly dismissed where there is a clear record of delay or “contumacious conduct.” Id. (citing Carter v. City of Memphis, 636 F.2d 159, 161 (6th Cir. 1980)); see also Schafer v. City of Defiance Police Dep’t, 529 F.3d 731, 737 (6th Cir. 2008) (deeming Rule 41(b) “a harsh sanction,” appropriate where there is “a clear record of contumacious conduct by the plaintiff”). The Sixth Circuit has been “reluctant to uphold the dismissal of a case . . . merely to discipline an errant attorney because such a sanction deprives the client of his day in court.” Knoll, 176 F.3d at 363 (quoting Buck v. U.S. Dep’t of Agric., Farmers Home Admin., 960 F.2d 603, 608 (6th Cir. 1992)).

Here, the Bankruptcy Court premised its dismissal of the Debtors’ case on the UST’s Second MTD, a pleading which sought dismissal as a sanction for the Debtors’ failure to timely file their Brief and Lists. Such a sanction was appropriate, the UST argued, because the EHO

10The Debtors incorrectly assert that the Bankruptcy Court’s use of Rule 41 in a contested matter was procedurally improper, arguing that Bankruptcy Rule 7041 is typically applied to adversary proceedings rather than contested matters. (Appellants’ Br. at 31, BAP Case No. 24-8027, ECF No. 19.) While it is true that Bankruptcy Rule 7041 incorporates Rule 41 in adversary proceedings, Bankruptcy Rule 9014(c) makes Rule 41 applicable in contested matters such as the present dispute. See Fed. R. Bankr. P. 9014(c)(1) (“Unless this rule or a court order provides otherwise, the following rules apply in a contested matter: . . . 7041 . . . .”).

The Debtors also incorrectly assert that dismissal under Rule 41(b) “is not an independent power of the court.” (Appellants’ Br. at 31, BAP Case No. 24-8027, ECF No. 19.) Although Rule 41(b) provides for dismissal “on the motion of the defendant,” district courts have discretion to dismiss an action sua sponte pursuant to Rule 41(b). See, e.g., Link, 370 U.S. at 629–30 (“The authority of a federal trial court to dismiss a plaintiff’s action with prejudice because of his failure to prosecute cannot seriously be doubted.”); Rogers v. City of Warren, 302 F. App’x 371, 375 n.4 (6th Cir. 2008) (“[I]t is well-settled [sic] that the district court can enter a sua sponte order of dismissal under Rule 41(b).”); Carpenter v. City of Flint, 723 F.3d 700, 704 (6th Cir. 2013) (holding the same).

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provided that “[i]f a party fails to comply with the requirements of this Order, such failure may result in dismissal, default, sanctions, or other consequences the Court deems appropriate.” (Evid. Hr’g Order at 4, Bankr. No. 24-10370, ECF No. 27.) The UST then explained that he was prejudiced by the Debtors’ failure to file a brief and thereby prevented from preparing for trial. The UST did not cite Rule 41, instead arguing that precedent supported dismissal in circumstances where a party had not complied with a pretrial order. Moreover, the UST did not argue for the application of Rule 41 at the hearing on his Second MTD. Nonetheless, the Bankruptcy Court raised and applied Rule 41 for the first time in the written order it issued two weeks later.

Therefore, the dismissal in this case was based on the repeated non-compliance with the EHO by Van Ness rather than any misconduct by the Debtors. Specifically, the UST filed the Second MTD because Van Ness failed to timely file the Debtors’ Brief after belatedly filing the Debtors’ Lists. The Dismissal Order allocates responsibility for the late filings to the Debtors themselves, but there is absolutely nothing in the record to support this determination. Instead, the factual recitation in the Dismissal Order primarily addresses the actions, or inactions, of Van Ness, not his clients. In fact, the Dismissal Order quotes Van Ness’s acceptance of responsibility for these failures. See supra at p. 7. At no time did Van Ness (or the UST, for that matter) ever suggest that the Debtors were in any way responsible for non-compliance with the EHO. As such, the Bankruptcy Court’s factual finding was clearly erroneous.

Where the misconduct warranting dismissal is that of the attorney, not the client, the Sixth Circuit has applied the four-factor test more stringently. In Lovingood v. Monroe County, the Circuit reaffirmed this long-held stance. No. 22-5022, 2022 WL 17069662, at *5 (6th Cir. Nov. 17, 2022). The suit in Lovingood arose out of injuries the plaintiff sustained during a traffic stop. Id. at *1. During the initial phase of the case, the court grew frustrated with the plaintiff’s inability to comply with pretrial orders. Id. at *2. At a pretrial conference, the court identified certain issues that the plaintiff, or his attorney, needed to address in order for the case to proceed to trial. Id. The court then rescheduled the trial and set a second pretrial conference. Id. At the second pretrial conference, the plaintiff had not cured the issues identified at the previous hearing, so the court dismissed the case with prejudice. Id. at *2–3.

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In Lovingood, the District Court had included a standard dismissal warning in both of its scheduling orders. 2022 WL 17069662, at *7. To emphasize this warning, the District Court bolded and italicized the dismissal language in the second pretrial order. Id. Despite these two boilerplate warnings, the Sixth Circuit was “not satisfied that Lovingood’s counsel had adequate notice that the court was contemplating its harshest sanction.” Id. For this reason, the Circuit determined that the district court had abused its discretion in dismissing the case.

It explained its more rigorous application of the four-factor test for such cases where, as here, dismissal hinges on the party’s attorney’s conduct rather than the party’s own actions:

With regard to the first factor, this court has stated that dismissal of an action for an attorney’s failure to comply should only be ordered where there is a clear record of delay or contumacious conduct. Similarly, with regard to the third factor, the court has explained that where a plaintiff has not been given notice that dismissal is contemplated, a district court should impose a penalty short of dismissal unless the derelict party has engaged in bad faith or contumacious conduct. Finally, with regard to the fourth factor, although it is clear that the failure of the district court to impose or make explicit its consideration of lesser sanctions is not fatal, this court recently stated that, in the absence of such consideration, and in the absence of contumacious conduct, an alternate sanction that would protect the integrity of pretrial procedures should be utilized rather than dismissal with prejudice.

Id. at *3, (quoting Harmon v. CSX Transp., Inc., 110 F.3d 364, 367–68 (6th Cir. 1997)).

The Sixth Circuit in Lovingood began its analysis by acknowledging that the Supreme Court “has afforded no merit to the contention that dismissal of [a party’s] claim because of his counsel’s unexcused conduct imposes an unjust penalty on the client.” Id. (quoting Link, 370 U.S. at 633). However, the Circuit explained: “recognizing that the sanction of dismissal with prejudice deprives a plaintiff of his day in court due to the inept actions of his counsel, this [c]ourt has expressed an extreme reluctance to uphold the dismissal of a case merely to discipline a party’s attorney.” Id. (quoting Mulbah v. Detroit Bd. of Educ., 261 F.3d 586, 590 (6th Cir. 2001)).

Due to these concerns, the Circuit explained it has “applied the four-factor test [for application of Rule 41] more stringently in cases where the conduct of a [party’s] attorney is the reason for dismissal” and has “increasingly emphasized directly sanctioning the delinquent lawyer rather than an innocent client.” Id. (quoting Mulbah, 261 F.3d at 591); see also Carter, 636 F.2d at 161 (“Dismissal is usually inappropriate where the neglect is solely the fault of the attorney.”).

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Lovingood “acknowledged that ‘a pattern of this type of behavior [tardy filings] may be sanctionable’” but also pointed out that the Sixth Circuit had previously found dismissal unwarranted “where a district court judge had not made a specific finding of bad faith or prejudice.” 2022 WL 17069662, at *4 (discussing Stough v. Mayville Cmty. Schs., 138 F.3d 612, 613–15 (6th Cir. 1998)).

Applying Lovingood’s more stringent test, this Panel concludes that the Bankruptcy Court’s decision did not satisfy three prongs: first, the Sixth Circuit has held that use of Rule 41 dismissal as a sanction for attorney misconduct or noncompliance effects an unfair result because it deprives the client, a potentially innocent party, of his or her day in court absent some contumacious conduct which has not been established here; second, the Debtors did not receive sufficient due process in relation to the dismissal of their case pursuant to Rule 41; third and finally, the court failed to adequately offer alternative sanctions to dismissal. The Panel will address these issues seriatim below.

a. Dismissal as a Sanction for Attorney Misconduct or Noncompliance

In this case, the Bankruptcy Court premised its dismissal entirely upon Van Ness’s failure to meet deadlines established by the EHO. Nothing in the Dismissal Order indicates that the Debtors’ actions, or inactions, caused Van Ness to miss the filing deadlines. Moreover, the Dismissal Order is devoid of any findings of willful or bad faith conduct by the Debtors or that Van Ness intended to thwart the litigation. (Dismissal Order at 9, Bankr. No. 24-10370, ECF No. 57.) Nonetheless, the Dismissal Order summarily assigns the blame for the missed deadlines to the Debtors. Clearly, it is the responsibility of an attorney to track, and meet, deadlines set by a court during litigation. See Ohio Prof. Cond. Rule 1.3 cmt. 3. In effect, the Bankruptcy Court transferred responsibility for meeting these deadlines from Van Ness to his clients and thereby “deprive[d] [the Debtors] of [their] day in court due to the inept actions of [their] counsel.” Mulbah, 261 F.3d at 590 (quoting Patterson v. Grand Blanc Twp., 760 F.2d 686, 688 (6th Cir. 1985)). The findings in the Dismissal Order do not meet the more stringent standard required by Mulbah and Lovingood for a Rule 41 dismissal. Finding no clear record of delay or contumacious conduct on Van Ness’s part, the first prong of Lovingood’s enhanced Rule 41 test for dismissal has not been met.

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b. Insufficient Notice of Dismissal under Rule 41

In this matter, prior to entry of the Dismissal Order, the Debtors did not receive notice from either the UST or the Bankruptcy Court of the possibility that their case could be dismissed pursuant to Rule 41(b). Although the Debtors were on notice regarding possible dismissal under § 707(b), and were prepared to address that issue, Rule 41 is a separate form of relief which has a different legal standard. As such, the Debtors and their counsel had neither sufficient notice of, nor opportunity to rebut, the applicability of Rule 41 to their case.

The Sixth Circuit requires trial courts to issue a form of heightened notice to a party whose case might be dismissed under Rule 41. See Harris v. Callwood, 844 F.2d 1254, 1256 (6th Cir. 1988). The Circuit has explained that it has “frequently reversed district courts for dismissing cases because litigants failed to appear or comply with pretrial orders when the district courts did not put the derelict parties on notice that further noncompliance would result in dismissal.” Mulbah, 261 F.3d at 593 (quoting Vinci v. Consol. Rail Corp., 927 F.2d 287, 288 (6th Cir. 1991)) (emphasis added). This heightened notice requirement is contained in the third prong of the Rule 41 test and comes in the form of a warning which must be issued prior to the entry of an order of dismissal. To comply with the third prong, the warning must be directed at the noncompliant party, not contained in the boilerplate language of a pretrial order. See Vinci, 927 F.2d at 288.

Here, the Debtors did not receive any notice regarding dismissal under Rule 41, much less a warning that their noncompliance would lead to dismissal. In fact, the non-specific language contained in the pretrial order which vaguely threatens dismissal is the only reference to dismissal in this proceeding other than the motions filed by the UST.11 Coupled with the complete lack of a directed warning in this case, the Bankruptcy Court’s boilerplate language in the EHO, “while not to be construed as a hollow warning,” does not constitute “the kind of warning [the Circuit] envisioned in Harris when [it] spoke of notice that “‘further non-compliance would result in

11Likewise the district court’s warning in Lovingood, 2022 WL 1709662, at *7, the boilerplate warning language in the Bankruptcy Court’s EHO did not by itself constitute an adequate warning satisfying the fourth prong of the stringent Rule 41 test.

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dismissal.’” Vinci, 927 F.2d at 288 (quoting Harris, 844 F.2d at 1256). The third prong of Lovingood’s enhanced Rule 41 test for dismissal has not been met.

c. Failure to Consider Alternate Sanctions to Dismissal

The fourth part of the Rule 41 test considers whether a trial court employed alternative sanctions in lieu of dismissal. When considering the fourth part of the test, the Sixth Circuit has often described it as deeply “intertwined” with the “question of adequate notice.” See Mulbah, 261 F.3d at 593. In practical terms, this has meant that the Circuit has “frequently reversed district courts for dismissing cases because litigants failed to appear or comply with pretrial orders when the district courts did not put the derelict parties on notice that further noncompliance would result in dismissal.” Vinci, 927 F.2d at 288 (quoting Harris v. Callwood, 844 F.2d 1254, 1256 (6th Cir. 1988)).

Accordingly, the Panel could terminate its review by noting the failure of notice in this case and referring to the analysis on that issue herein above. However, in Mulbah, the Sixth Circuit also emphasized that “[t]he sanction of dismissal is appropriate only if the attorney’s actions amounted to failure to prosecute and no alternative sanction would protect the integrity of the pretrial process.” 261 F.3d at 594 (quoting Carter, 636 F.2d at 161); see also Lovingood, 2022 WL 17069662, at *3. Given that the Bankruptcy Court in this matter explicitly addressed the fourth part of the test, and the Circuit has expressed a preference for the use of alternate sanctions instead of dismissal, the Panel will analyze the alternative offered by the Bankruptcy Court.

Here, the Bankruptcy Court failed to offer alternative sanctions of the kind that the Sixth Circuit’s precedent recognizes as appropriate for the circumstances. Although the Bankruptcy Court proposed conversion to Chapter 13 as an alternative to dismissal, conversion is not an alternate “sanction,” but a separate form of relief available to debtors at virtually any time notwithstanding their counsel’s behavior or impact on the case.12 See 11 U.S.C. § 706(a) (“The

12In brief, a Chapter 13 proceeding allows debtors to retain their assets and receive a discharge in exchange for periodic payments to their creditors over a period of three to five years. It is possible that debtors in certain circumstances may conceive of Chapter 13 as a form of sanction because of the eligibility requirements for Chapter 7 imposed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“the BAPCPA”). Under the BAPCPA, some debtors who have filed a Chapter 7 bankruptcy may be deemed ineligible based on a statutory means test that balances their income level against certain allowable expenses. See 11 U.S.C. § 707(b)(2). Where the means

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debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title.”). Instead, the Circuit emphasized using “alternate sanction[s]” that correct the underlying harm created by the bad acts of the attorney as a precursor to dismissal. Mulbah, 261 F.3d at 593; Lovingood, 2022 WL 17069662, at *3 (quoting Harmon, 110 F.3d at 368). Such sanctions could come in the form of “levying a fine, barring [the attorney] from participating in oral argument, or any other disciplinary action.” Id.; see also, e.g., In re Lebbos, 385 B.R. 737, 752 n.42 (Bankr. E.D. Cal. 2008), aff’d in part, 422 B.R. 235 (E.D. Cal. 2009), aff’d, 362 F. App’x 863 (9th Cir. 2010) (suggesting reprimands, fines, suspensions, the imposition of costs or attorney fees, the preclusion of claims or defenses, and/or the presentation of evidence as part of a party’s case in chief). None of these lesser penalties appear to have been considered by the Bankruptcy Court prior to the dismissal of the Debtors’ case.

As the Lovingood court reaffirmed, “in the absence of contumacious conduct, an alternate sanction that would protect the integrity of pretrial procedures should be utilized[.]” 2022 WL 17069662, at *4 (citation omitted). Due to the absence of a clear record of contumacious conduct in this case, coupled with the lack of an adequate alternative sanction, this Panel is not satisfied that the Bankruptcy Court appropriately employed dismissal under Rule 41. For the reasons stated, we find that the Bankruptcy Court abused its discretion when it denied the Debtors’ Instanter Motion without explanation and when it dismissed their case under Bankruptcy Rule 7041.

CONCLUSION

For the foregoing reasons, the Bankruptcy Court’s denial of the Instanter Motion and dismissal of the Debtors’ bankruptcy case is REVERSED and REMANDED for further proceedings.

test determines that a debtor is ineligible for Chapter 7, their case will be dismissed, or they have the option to convert to a Chapter 13. Even in these circumstances, Chapter 13 is an alternative form of relief, not a sanction.

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_________________

CONCURRENCE

_________________

SUZANNE H. BAUKNIGHT, Chief Bankruptcy Appellate Panel Judge, concurring.

Every judge – male or female, young or old, new or experienced – has every right – indeed an obligation – to set a standard for his or her courtroom, including a requirement that parties and their counsel follow all court rules and orders. Court rules and procedures, after all, provide consistency and predictability, which every party seeks. Equal justice under the law is impossible without them. While I agree with the Panel’s reversal and remand of the Bankruptcy Court’s decisions to deny the Instanter Motion and dismiss the Debtors’ bankruptcy case under Rule 41(b), I write separately to discuss some of the possible options for the Bankruptcy Court’s consideration on remand and to address directly Mr. Van Ness’s obstinate and disrespectful approach to the Bankruptcy Court’s requirements.

The Instanter Motion, which was filed at 9:35 p.m. the night before the scheduled evidentiary hearing, reads, in its entirety:

Now come Debtors, by and through counsel, and hereby move this Honorable Court for leave to file their Witness and Exhibit List and Trial Brief in this matter, instanter, as filed on July 31, 2024 [sic] as Docket No. 46, and October 16, 2024 as Docket Nos. 50/51, pursuant to Fed. R. Civ. P. 6(b)(2) due to mistake and an inadvertent omission. For cause, Debtors’ counsel did not become realize [sic] that the Witness and Exhibit lists were due 7 days before the Evidentiary Hearing, and was under the mistaken belief it was due three (3) business days in advance. Although Debtors’ counsel filed the Witness and Exhibit List three (3) business days, [sic] a more careful review of the Contested Matter Scheduling Order revealed the 7-day requirement. Debtors’ counsel did not intentionally flaunt the deadline, and respects the Court’s authority to establish new standards for matters in her Court. Unfortunately, a busy schedule and recent experience with the Court’s 3-business day rule on motion dockets led to the inadvertent mistake. Furthermore, Debtors’ counsel did not realize the error until receiving the renewed Brief of the United States Trustee to Dismiss the case.. [sic] With regard to the Trial Brief, Debtors’ counsel relied upon 25+ years of optional briefing on contested motions (versus adversary proceedings) rather than a careful reading of the Court’s scheduling order. This is the first contested evidentiary

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hearing that counsel had scheduled before this Court, and will certainly not make the same mistake again. Contrary to the assertions of the United State [sic] Trustee, Debtors’ counsel has never considered or needed an opposing parties’ [sic] trial brief to understand the facts and issues in a matter. This information was addressed (or should have been) in discovery. The suggestion that a bankruptcy case should be dismissed on a mere technicality is difficult to comprehend or justify where no prejudice has resulted. Debtors should not be punished due to an unprecedented and inadvertent by [sic] error by counsel. Wherefore, for good cause shown, Debtors respectfully request leave to file their Witness and Exibit [sic] List and Trial Brief, instanter, in this matter.

(Instanter Mot., Bankr. No. 24-10370, ECF No. 52 (emphasis in original).)

The Instanter Motion, in addition to being replete with typographical errors, failed to cite the applicable rule or standard. Federal Rule of Bankruptcy Procedure 9006(b)(1)(B) (not the cited Federal Rule of Civil Procedure 6(b)(2)1) governs the Instanter Motion and requires a showing of excusable neglect.

The EHO made clear that the due date for the witness list was “[n]o later than one week before the evidentiary hearing date.” (Evid. Hr’g Order at ¶ 3, Bankr. No. 24-10370, ECF No. 27.) It also required exhibits to be exchanged among counsel “[n]o later than one week before the evidentiary hearing date,” with exhibits to be delivered to chambers “at least three business days2 before the evidentiary hearing date.” (Id. at ¶¶ 4–5 (emphasis added).) The UST filed his Lists on October 8, nine days before the scheduled hearing date. (See Bankr. No. 24-10370, ECF Nos. 43, 44.) On October 11, which was three business days before the evidentiary hearing, the UST timely filed his Brief at 1:01 p.m. (Bankr. No. 24-10370, ECF No. 45.) At literally the eleventh hour (i.e., 11:05 p.m.) on October 11, Mr. Van Ness filed Debtor’s Lists, three days late. (Bankr. No. 24-10370, ECF No. 46.)

At the end of the business day on October 15, 2024, when Debtors had still not filed their Brief that had been due no later than October 11, the UST filed his Second MTD. (Mot. of the

1Rule 6(b)(2) would not have applied even if Rule 6 applied to contested matters.

2Thus, the witness list was due to be filed and the exhibits were to be exchanged between counsel no later than October 10, and the exhibits were to be delivered to chambers no later than October 11 because a federal holiday fell on Monday, October 14, three calendar days before the hearing date.

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U.S. Trustee to Dismiss Case or, in the Alternative, to Find in Favor of the U.S. Trustee on Issues and Law and Fact, Bankr. No. 24-10370, ECF No. 27.) Notwithstanding the UST’s Second MTD, Mr. Van Ness did not file a properly formatted Brief for another 27 hours. (See Trial Br. of Debtors, Bankr. No. 24-10370, ECF No. 51.) Then, 42 minutes later, Mr. Van Ness filed the Instanter Motion. (See Instanter Mot., Bankr. No. 24-10370, ECF No. 51.) These late-night filings allowed only 4.5 business hours for consideration before the next day’s 1:30 p.m. evidentiary hearing.

Apparently treating the Instanter Motion with the same degree of care with which it was prepared, the Bankruptcy Court denied the Instanter Motion through a one-word order signed at 10:42 a.m. on the morning of the evidentiary hearing. (Order, Bankr. No. 24-10370, ECF No. 53.)3 Clearly, the Bankruptcy Court had discretion to deny the Instanter Motion,4 but it was error not to provide a reason for doing so. Simply, the one-word denial order was insufficient. So, too, was the Bankruptcy Court’s announcement at the beginning of the October 17 hearing: “So I did see the Motion for Leave to File Instanter, filed by Debtors’ counsel. I denied that earlier this morning. I think that denial is without prejudice to the alternative relief that was requested therein to convert to Chapter 13.” (Tr. of Oct. 17, 2024 Hr’g, Bankr. No. 24-10370, ECF No. 705 at 3:16- 21.)

3Although the order was signed at 10:42 a.m., the clerk did not enter it until 12:53 p.m.

4Courts are not required but are “‘permitted, where appropriate, to accept late filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the party’s control.’ Determining whether a party’s ‘neglect’ is ‘excusable,’ is an equitable determination based on all relevant circumstances surrounding the party’s omission.” In re Linqto Texas, LLC, No. 25-90186, 2026 WL 1083376, at *4 (Bankr. S.D. Tex. Apr. 21, 2026) (quoting Pioneer Inv. Servs. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 388, 395, 113 S. Ct. 1489 (1993)).

5Notably, Mr. Van Ness failed to comply with Federal Rule of Bankruptcy Procedure 8009(a)(4) and (b)(1)

when he failed to order the transcript of the October 17, 2024 hearing and designate it as part of the record on appeal. See Fed. R. Bankr. P. 8009(a)(4) (requiring that the record on appeal include “any opinion, findings of fact and conclusions of law relating to the issues on appeal, including transcripts of all oral rulings” in addition to “any transcript ordered under [Rule 8009](b)”) and (b)(1) (requiring the appellant to either order the transcript or file with the bankruptcy clerk a certificate stating that the appellant is not ordering a transcript). The UST designated the tobe -ordered transcript as part of the record on appeal. (U.S. Trustee’s Designation of Add’l Items to be Included in the Record on Appeal at p.2, Bankr. No. 24-10370, ECF No. 67.) Incredibly, notwithstanding that Mr. Van Ness’s failure to comply with the rules and the Bankruptcy Court’s order is at the heart of this appeal, he opposed the UST’s request for additional time to file his appellee’s brief on the basis that the UST had not timely ordered the transcript, citing Rule 8009(b)(3) without acknowledging his own failure to comply with the rule. (Resp. in Opp. to Appellee’s Mot. for Ext. of Time to file Response Br., BAP Case No. 24-8027, ECF No. 23.)

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Instead, the Bankruptcy Court easily could have explained that denial was based on Mr.

Van Ness’s failure to identify the correct rule or standard for allowing the late-filed Lists and Brief6 or on his lack of regard for the Bankruptcy Court’s directives based on his stated opinion that a trial brief was “optional” and unnecessary. As recently explained by one bankruptcy court:

The “need for the neglect to be ‘excusable’ under Pioneer is to deter . . . parties from freely ignoring court ordered deadlines in the hope of winning a permissive reprieve under the procedural rules[.]” Neither ignorance, such as “failing to read and follow the court’s local rule[,]” nor “a misconstruction of a procedural rule constitutes excusable neglect.”

In re Sturgill, No. 24-32482, 2026 WL 797182, at *2 (Bankr. S.D. Ohio Mar. 19, 2026)

(citation modified) (quoting In re Sterling Rubber Prods. Co., 316 B.R. 485, 493, 491 (Bankr. S.D. Ohio 2004), aff’d, 337 B.R. 729 (B.A.P. 6th Cir. 2006) (citation modified). On remand, the Bankruptcy Court may simply apply the excusable neglect standard and rule with explanation on the Instanter Motion.

Turning to the dismissal under Rule 41(b), the Panel discussed the “stringent” four-factor test utilized by the Sixth Circuit “for cases where, as here, the dismissal hinges on the [debtors’] attorney’s conduct rather than the [debtors’] own actions”:

“(1) whether the party’s failure is due to willfulness, bad faith, or fault; (2) whether the adversary was prejudiced by the dismissed party’s conduct; (3) whether the dismissed party was warned that failure to cooperate could lead to dismissal; and (4) whether less drastic sanctions were imposed or considered before dismissal of the action.” Mulbah v. Detroit Bd. Of Educ., 261 F.3d 586, 589 (6th Cir. 2001).

Lovingood v. Monroe Cnty., Tenn., No. 22-5022, 2022 WL 17069662, at *3 (6th Cir. Nov. 17, 2022). In addition to the failure of the Bankruptcy Court to give Debtors notice of the proposed dismissal under Rule 41(b), the Bankruptcy Court did not address any alternate sanction except

6As recently stated by the Supreme Court:

Federal courts adhere to the principle of party presentation. That principle—the rule that points not argued will not be considered—distinguishes our adversarial system of justice from an inquisitorial one. Because courts are essentially passive instruments of government, we rely on the parties to frame the issues for decision and decide only the questions presented.

Margolin v. Nat’l Ass’n of Immigr. Judges, 608 U.S. ___, 146 S. Ct. 1285, 1288 (2026) (citation modified).

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for the repeated reminder to Debtors that they could convert to Chapter 13. Thus, the Bankruptcy Court’s dismissal under Rule 41(b) did not satisfy the fourth factor of the Sixth Circuit’s test for dismissal when an attorney’s failure, and not the party’s failure, is at issue. As explained by the Sixth Circuit, “although it is clear that the failure of the district court to impose or make explicit its consideration of lesser sanctions is not fatal, . . . in the absence of such consideration, and in the absence of contumacious conduct, an alternate sanction that would protect the integrity of pretrial procedures should be utilized rather than dismissal with prejudice.” Harmon v. CSX Transp., Inc., 110 F.3d 364, 367–68 (6th Cir. 1997).

After the Bankruptcy Court advised that it had denied the Instanter Motion without prejudice so that it would not consider the trial brief, it repeatedly offered conversion from Chapter 7 to Chapter 13 as an option for Debtors. (See Tr. of Oct. 17, 2024 Hr’g, Bankr. No. 24-10370, ECF No. 70 at 3:19–21; 5:18–6:4; 7:6–13; 10:6–15.) In fact, in its initial oral ruling on October 17, the Bankruptcy Court acknowledged Debtors’ alternative request in their trial brief that in lieu of dismissal, they should be allowed to convert, and the Bankruptcy Court stated that Debtors still would have the option to file a motion to reinstate the case and convert it to Chapter 13. (Id. at 13:10–17; 13:22–14:2.) Ultimately, however, because Mr. Van Ness “summarily ignored” the EHO, which “is not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril,” and in consideration of “the conduct of future litigants in this court and to deter similar litigants from such misconduct in the future,” the Bankruptcy Court opted to dismiss the case. (Id. at 12:8; 12:18–21; 13:18–21.)

Setting aside the Bankruptcy Court’s failure to provide any notice of its intent to apply Rule 41(b) to dismiss the case, the Bankruptcy Court’s written opinion could have addressed Mr. Van Ness’s failure to comply with the directives in the EHO in ways that might have been deemed lesser sanctions than dismissal, including but not limited to requiring Mr. Van Ness to show cause why he should not be required to disgorge fees or by holding the evidentiary hearing as scheduled but not allowing Debtors to present their case in chief by disallowing their presentation of witnesses or exhibits.

The Bankruptcy Court also could have addressed directly Mr. Van Ness’s blatant condescension and defiance concerning the Court and its directives. Mr. Van Ness took the stance

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before the Bankruptcy Court and this Panel that the directive to file a pretrial brief was unnecessary and was essentially busywork that he had never been required to complete in his twenty-plus years of experience as an attorney before the Bankruptcy Court. He stated: “[W]hat, I have to lay out my entire trial strategy in a trial brief? That doesn’t even make any sense. Nobody ever does that.” (Tr. of Oct. 17, 2024 Hr’g, Bankr. No. 24-10370, ECF No. 70 at 9:5–7.)

Yet, when the Bankruptcy Court stated that the pretrial brief was “not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril,” and Debtors’ case was being dismissed in consideration of “the conduct of future litigants in this court and to deter similar litigants from such misconduct in the future,” Mr. Van Ness took offense with the Bankruptcy Court’s use of the word “misconduct” rather than “mistake,” arguing that his conduct was not intentional. (Id. at 14:13–17.) His own words, however, made clear that his failure to file a trial brief was not a mistake or error but, instead, was a conscious decision not to comply with directives from the Bankruptcy Court that he deemed pointless:

A trial brief in an evidentiary hearing is – it’s an onerous task and a burden for Debtors and their counsel to perform, and it’s because we’ve got people who are filing bankruptcy because of need, because of finances, that can’t afford to pay the costs. If you could only see how much money the government has spent. Where’s the FedEx box, Liz? Forty or $50 on that, another $50 on exhibits, a paralegal, expedited transcripts on depositions. You’re basically pricing us out of the ball game, Your Honor. I didn’t make -- I made a mistake as far as the timing, but it wasn’t intentional. The Court knows there’s been a lot of new rules put in, one of which is this three-day rule. Sometimes it’s three days, sometimes it’s not. There’s parts of the scheduling brief. But I made the mistake as far as the trial brief’s concerned. I guess I made it with regard to the witness and exhibit list. But I don’t even understand the insinuation that there’s prejudice. Never in my career has anyone relied on a trial brief to determine what the issues are in a case. I understand the Court may, and I apologize if that was something that prejudiced the Court, but it wasn’t an intention. This is something that’s been amongst counsel for months. We’ve been talking about this. It’s a pretty simple issue, very narrow. Everything’s been laid out. There was discovery. The U.S. Trustee did not ask for a single -- did not -- received every single item they asked for timely. They took a deposition as requested. They receive it. There’s no surprises here. . . . We do basically set the law. We don’t put every single element, every single fact we expect to hear. I mean, I’d be writing a brief about things I don’t even know are going to occur. I don’t know what the testimony for certain will be today. But the reality that a trial brief has prejudiced

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the United States Trustee, they’ve been through thousands of these cases. They’re hardly prejudiced. They know the law better than anyone. Half the time they’ve written it. So I don’t believe that it’s fair to say that there’s been prejudice, and I also don’t think it’s fair to deny the Debtors their opportunity to present their case today. The U.S. Trustee has the burden, and at this point, I understand what the Court is saying, but the trial brief is not evidence. It’s not going to be admitted into testimony. The U.S. Trustee has seen what we’ve said. Regardless of whether it’s on the record or not, it doesn’t matter.

(Id. at 7:23–9:25.)

At oral argument before this Panel, Mr. Van Ness doubled down on his disregard for the Bankruptcy Court’s orders and, in particular, criticized the judge: “I’m not naïve here . . . . I’ve been practicing law for 35 years. I believe this is a young judge who tried to make her mark and let everyone know that she was in charge of her courtroom.”7 Further, he acknowledged to this Panel that he would not have filed a Brief at all had the UST not filed a Second MTD. Indeed, it can be inferred that he eventually filed the initial, improperly formatted version of the Brief at 8:18 p.m. on the eve of the evidentiary hearing only after the UST filed the parties’ Stipulations upon Motion of the United States Trustee to Dismiss Case for Abuse Under 11 U.S.C. § 707(b)(1) and (3) at 6:25 p.m. that same evening. (Bankr. No. 24-10370, ECF No. 49). Mr. Van Ness further claimed that the Bankruptcy Court’s reference in the Dismissal Order to six other cases with contested matters in which scheduling orders with the same deadlines had been entered was factually inaccurate because those cases ultimately did not go to hearing, ignoring the fact that the Bankruptcy Court had entered pretrial orders directing the parties to file pretrial documents so that the scheduling order in this case was not “the first contested evidentiary hearing that [he] had scheduled before this Court.” (Instanter Motion at 1, Bankr. No. 24-10370, ECF No. 52.)

“Litigants are held accountable for the acts and omissions of their chosen counsel.” Couch v. Panther Petroleum, LLC (In re Couch), 704 F. App’x 569, 575 (6th Cir. 2017) (citation modified) (quoting Pioneer, 507 U.S. at 396–97); see also Kellum v. Comm’r of Social Sec., 295 F. App’x 47, 50 (6th Cir. 2008) (“[T]he actions of a privately retained attorney are imputed to the

7The “young judge” referred to by Mr. Van Ness was appointed October 2, 2023.

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client.”); Allen v. Murph, 194 F.3d 722, 723–24 (6th Cir. 1999) (finding that “an attorney’s inexcusable neglect is normally attributed to his client” when the attorney was careless and did not seek “an extension of time in order to preserve the clients’ rights”). However, as noted in the Panel’s opinion, the Sixth Circuit has been reticent to dismiss a case based solely on the failure of a litigant’s counsel. Thus, remand to the Bankruptcy Court for an explanation and analysis consistent with the Panel’s opinion is appropriate.