Taal v St Mary's Bank

2014 DNH 003

• Court: District Court, D. New Hampshire
• Decided: January 10, 2014
• Docket: 13-CV-194-PB
• Status: Published

Opinion

Taal v St Mary's Bank 13-CV-194-PB 1/10/2014 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Baboucar B. Taal

v. Civil No. 13-cv-194-PB Opinion No. 2014 DNH 003 St. Mary's Bank, et al.

MEMORANDUM AND ORDER

Baboucar Taal seeks appellate review of the bankruptcy

court's dismissal of his Chapter 13 bankruptcy petition. St.

Mary's Bank, Discover Bank, and the law firm of Niederman,

Stanzel & Lindsey oppose Taal's petition. I affirm the

Bankruptcy Court's dismissal order.

I. BACKGROUND

In 2009, St. Mary's and Discover independently sued Taal in

New Hampshire district courts. St. Mary's received a judgment

of $6,196.62 and Discover received a judgment of $10,454.71.

Taal unsuccessfully appealed both judgments to the New Hampshire

Supreme Court. Although both judgments are final, St. Mary's

remains involved in state court litigation concerning the

propriety of its disposal of collateral Taal surrendered to satisfy the loan.

Taal has been held in contempt by state courts for failing

to comply with prior orders to pay the judgments. Rather than

making required payments, Taal filed a Chapter 13 bankruptcy

petition.

Taal actively participated in his Chapter 13 proceedings,

filing countless motions on his own behalf. Taal's activity,

however, was not necessarily aimed at a prompt resolution of his

proceedings. From the beginning, Taal had difficulties

complying with bankruptcy court rules. On September 24, 2012,

the bankruptcy court issued a contingent notice of dismissal

that was subsequently waived after Taal paid a delinquent filing

fee. Taal then failed to disclose his tax records to St. Mary's

upon its request, as required by the bankruptcy code. See 11

U.S.C. § 521(e)(1). In late September and early October, St.

Mary's filed affidavits of noncompliance and a proposed order of

dismissal for Taal's failure to turn over these documents. On

October 4, 2012, after a hearing, the court directed Taal to

provide the documents to St. Mary's, noting that failure to

comply with its order could result in dismissal of his case.

The next day, the court granted a motion to continue the

2 confirmation hearing until November 16, presumably after Taal

was to have given St. Mary's the appropriate documents. Over

the next month, Taal continued to file motions to, among other

things, avoid a lien and initiate an adversary proceeding

against St. Mary's, both of which were denied by the court.

On November 16, 2012, the court held the hearing to discuss

the potential confirmation of Taal's Chapter 13 Plan. St.

Mary's had objected to confirmation on the grounds that the plan

failed to meet required statutory parameters. That day, the

court issued the following order:

Trustee to submit a proposed order forthwith regarding payments. Confirmation is denied. On or before January 18, 2013 the debtor (s) must file with the Court an amended plan, serve a copy of the amended plan and a notice of confirmation hearing as required by Federal Rules of Bankruptcy Procedure 2002(b) and 3015(d) and LBR 3015-(b) , and file a certificate of service with the Court, failing which the case may be dismissed. If an amended plan is timely filed and served, a confirmation hearing will be held on March 8, 2013 at 9:00 a.m.

Doc. No. 3-13. Taal subsequently filed, among other things, a

motion for contempt on November 27, 2012, a motion for sanctions

on December 17, 2012, and a further motion for sanctions on

December 26, 2012, alleging that St. Mary's attorney had failed

to file a required corporate disclosure document. On December

3 28, 2012, Taal filed a required bankruptcy form detailing his

current income. On January 2, 2013, he filed an objection to

the creditors' proofs of claim, a motion requesting production

of documents that was subsequently denied, and a further motion

for sanctions. The next day, Taal filed several subpoena

requests. On January 7, he filed amendments to the required

current income forms, and on January 14 he filed objections to

the creditors' motion to quash the subpoena requests. On

January 17, 2013, Taal filed a motion to amend the court's order

denying his request for document production. Taal did not,

however, file an amended confirmation plan by January 18, as

required by the court's November 16 order.

On January 25, 2013, the court dismissed Taal's bankruptcy

case, quoting its November 16 order directing Taal to file an

amended confirmation plan by January 18, 2013, "failing which

the case may be dismissed." The dismissal order then stated:

"As of the date of this order, the Debtor has failed to file an

amended plan and certificate of service with the Court in

compliance with the Order. Accordingly, the case is hereby

dismissed for want of prosecution." Doc. No. 5-1 (emphasis

omitted). Four days later, Taal submitted a motion to amend the

4 dismissal order, claiming that he never received notice of the

November 16, 2012 order, and requesting leave until February

25, 2013 to submit an amended confirmation plan. On February 5,

2013, the court responded that a Certificate of Notice indicated

that a copy of the November 16 order had been mailed to Taal's

address and that Taal had received other documents mailed to the

same address throughout the proceedings. The court also noted

that, at the November 16 hearing, it had orally directed Taal to

file his amended plan by January 18, 2013 or risk dismissal, and

had explained that it would issue an order that day summarizing

the hearing's outcome.

On February 12, 2013, Taal filed another motion to amend,

arguing that the court unfairly dismissed his case based on a

single failure to file "while excusing other parties time and

time again." Taal filed a similar motion on March 12 that the

court denied two days later, noting that "[t]he Debtor's

arguments . . . do not evince any exceptional circumstance -

only that the Debtor feels the Court homed in on a minor

procedural flaw and unfairly dismissed the bankruptcy case

because of it." Doc. No. 5-8. On April 24, 2013, Taal filed a

notice of appeal with this court.

5 II. STANDARD OF REVIEW

This court has jurisdiction to hear appeals from final

judgments, orders, and decrees issued in bankruptcy court

pursuant to 28 U.S.C. § 158(a)(1). When reviewing a decision by

a bankruptcy court, the district court reviews legal conclusions

de novo and upholds findings of fact unless they are clearly

erroneous. Fed. R. Bankr. P. 8013; Palmacci v. Umpierrez, 121

F.3d 781, 785 (1st. Cir. 1997); Askenaizer v. Moate, 406 B.R.

444, 447 (D.N.H. 2009). In discretionary matters, a bankruptcy

court abuses its discretion if it "ignores a material factor

deserving of significant weight, relies upon an improper factor

or makes a serious mistake in weighing proper factors." Howard

v. Lexington Invs., Inc., 284 F.3d 320, 323 (1st Cir. 2002)

(internal quotation marks omitted).

III. ANALYSIS

To the extent that they are intelligible, Taal's arguments

center upon the bankruptcy court's alleged procedural unfairness

and abuse of discretion in dismissing his petition. Among other

things, Taal argues that: (1) the court "abused . . . judicial

6 and legal obligation[s] to arbitrate on the facts" when it

dismissed his case on procedural grounds; (2) he was denied due

process because he lacked notice of the court's November 16

order; and (3) his income schedules. Doc. No. 4-2, are the

equivalent of a confirmation plan and thus fulfill the

requirements of the November 16 order.

I must consider whether the bankruptcy court abused its

discretion in dismissing Taal's petition for failing to timely

file a Chapter 13 plan. A bankruptcy court's dismissal for

failure to file a confirmation plan is discretionary, and if

"the bankruptcy court's conclusion[s] supporting dismissal are

supported by the facts there is no abusive discretion." In re

Burgos, 476 B.R. 107, 111 (S.D.N.Y. 2012) (citing In re Dudley,

273 B.R. 197, 199 (8th Cir. BAP 2002)); see also Howard, 284

F.3d at 323 (holding that it is "entirely appropriate" for a

bankruptcy court to set and enforce a deadline for a debtor to

file tax returns). A bankruptcy court "may issue any order,

process, or judgment" that it deems necessary, and can "sua

sponte, tak[e] any action or mak[e] any determination necessary

or appropriate to enforce or implement court orders or rules, or

to prevent an abuse of process." 11 U.S.C. § 105(a). The

7 bankruptcy code also grants the court the power to dismiss a

Chapter 13 case for cause, which includes the "failure to file a

plan timely." Id. § 1307(c)(3). The Ninth Circuit Bankruptcy

Appellate Panel characterizes § 1307(c)(3) as "an important

restriction on a chapter 13 debtor who, unlike a chapter 11

debtor, is the only entity that may file a plan." In re

Ellsworth, 455 B.R. 904, 916 (9th Cir. BAP 2011) (citing 8

Collier on Bankruptcy 1 1321.01 (Alan N. Resnick & Henry J.

Sommer, eds., 16th ed. 2011)). A party may seek modification or

clarification of an order, but a litigant flouts a court's

specific order at its peril. Id. The First Circuit has noted

that Chapter 13 allows a debtor many benefits over other

bankruptcy proceedings, but "[t]o obtain these benefits. Chapter

13 debtors are required to act swiftly. They must file a plan

within 15 days of the petition, and must commence payments under

the plan within 30 days. Failure to act in a timely manner is

grounds for dismissal." Howard, 284 F.3d at 321 n.l (citations

omitted).

Here, the bankruptcy court appropriately set and enforced a

deadline for timely filing an amended plan. Although Taal was

active in litigation, he was lax in responding to creditors and

8 to the court's directives to file his tax returns. He was given

explicit instructions - both in a court order and during the

hearing preceding the order - that a failure to timely file a

plan would lead to his case's dismissal. This was not his first

such warning. Taal did not file the plan, and the bankruptcy

court properly exercised its discretion under 11 U.S.C. §

1307(c)(3) to dismiss the case.

Taal's arguments otherwise are unavailing.1 Taal clearly

had notice of the order and the potential consequences of

violating it, whether by certified mail or by attending the

November 16 hearing. His income and expenditure forms are also

manifestly not a confirmation plan or the equivalent thereof.

Pursuant to 11 U.S.C. § 1322, a plan shall provide for, among

other things, the submission of future earnings to the

To the extent that it is intelligible, Taal also appears to allege an equal protection violation based upon the bankruptcy court forgiving creditors' minor procedural faults but dismissing his case for a similarly minor fault. This argument, among other flaws, as alleged would not permit a "reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). An equal protection claim must include facts "sufficient to convey specific instances of unlawful discrimination," and "[a] plaintiff may not prevail simply by asserting an inequity and tacking on the self-serving conclusion that the defendant was motivated by a discriminatory animus." Coyne v. City of Somerville, 972 F.2d 440, 444 (1st Cir. 1992)(quotations omitted). 9 supervision and control of the trustee. Taal's income and

expenditure forms were required federal bankruptcy filings that

contain some information that might overlap with a potential

plan, but lack any information on plan payments. Further, Local

Bankruptcy Rules specify a form that must be used by Chapter 13

petitioners. LBR 3015-1. Taal used this form in submitting his

initial plan. Doc. No. 2-10. The November 16, 2012 order noted

that Taal's amended plan must also conform to Local Rule 3015.

Considering Taal's prior compliance with the local rules

regarding plan submissions, his assertion that the income and

expenditure forms constitute a plan, or substantial compliance

with a plan, amounts to nothing more than a flimsy, post hoc

rationalization for his failure to abide by court rules.

In addition to his central argument, Taal alleges various

bankruptcy court failures and creditor malfeasance. As

discussed above, this case centers upon the propriety of the

bankruptcy court's dismissal of Taal's claim for failing to

timely file an amended Chapter 13 plan. I need not address the

merits of Taal's charges because each of his complaints has no

bearing on the ultimate disposition of the case.

10 Finally, Taal claims that an appeals court "always favors

cases disposition of the merits [sic]." Taal overstates a

fundamental policy of the law - a policy necessarily balanced by

the courts' need to prevent undue delays. See Richman v. Gen'1

Motors Corp., 437 F.2d 196, 199 (1st Cir. 1999) . Courts must

have the ability to "establish orderly processes and manage

their own affairs," and "disobedience of court orders is

inimical to the orderly administration of justice and, in and of

itself, can constitute extreme misconduct." Young v. Gordon,

330 F.3d 76, 81 (1st Cir. 2003) . Here, the court properly

exercised this discretionary balancing in dismissing Taal's

petition without prejudice.

IV. CONCLUSION

For the foregoing reasons, I affirm the Bankruptcy Court's

dismissal of Taal's Chapter 13 petition.

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

cc: Counsel of Record