United States Trustee v. Harshaw (In Re Harshaw)

345 B.R. 518, 2006 Bankr. LEXIS 1152, 2006 WL 1755952
CourtUnited States Bankruptcy Court, W.D. Pennsylvania
DecidedJune 27, 2006
Docket19-20884
StatusPublished
Cited by4 cases

This text of 345 B.R. 518 (United States Trustee v. Harshaw (In Re Harshaw)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Trustee v. Harshaw (In Re Harshaw), 345 B.R. 518, 2006 Bankr. LEXIS 1152, 2006 WL 1755952 (Pa. 2006).

Opinion

MEMORANDUM OPINION

m. bruce McCullough, Bankruptcy Judge.

AND NOW, this 27th day of June, 2006, upon consideration of

(a) the motion by the United States Trustee (hereafter “the Trustee”) to dismiss the instant Chapter 7 bankruptcy case of Anita and Kevin Har-shaw, the above-captioned debtors *520 (hereafter “the Debtors”), pursuant to 11 U.S.C. § 707(b), which motion the Court has already granted by Order of Court dated January 18, 2005, after a hearing that was held on January 18, 2005;
(b) the Memorandum Order entered on March 7, 2006, by the United States District Court for the Western District of Pennsylvania, Judge Conti (hereafter “the District Court”), with respect to an appeal by the Debtors of this Court’s January 18, 2005 Order of Court, wherein the District Court remanded the matter before it to this Court “so that the parties may submit evidence to th[is] ... [C]ourt and for th[is] ... [C]ourt to make findings [of fact] and set forth conclusions of law;” and
(c) the parties’ stipulation of facts, as well as the parties’ respective proposed conclusions of law, regarding the Trustee’s § 707(b) dismissal motion, each of which were submitted to this Court subsequent to the District Court’s remand;

and for the reasons set forth below, the Court enters findings of fact and conclusions of law, also set forth herein, in support of its January 18, 2005 Order of Court.

I.

As an initial matter, the Court makes the following observations and/or holds as follows with respect to those facts which are relevant to a disposition of the Trustee’s § 707(b) dismissal motion, which observations and holdings support the Court’s decision on January 18, 2005, to rule on the Trustee’s § 707(b) dismissal motion without entering formal findings of fact and conclusions of law:

(a) The parties presently agree that an evidentiary hearing is unnecessary, which is another way of saying that the parties presently do not dispute those facts that are relevant to a disposition of the Trustee’s § 707(b) dismissal motion;
(b) Furthermore, the parties presently stipulate as to such facts, see Stipulated Proposed Findings of Fact of the United States Trustee and Debtors, at ¶¶ 8 — 41 (hereafter “the Stipulation” and/or “Stipulation ¶_”);
(c) Moreover, the facts which are so presently stipulated to are precisely those facts which were asserted by the Trustee both in pleadings submitted prior to, and at the hearing held on, January 18, 2005, which factual assertions were never disputed at that time by the Debtors, see Record of 1/18/05 Hearing (commenced @ 2:30:02 p.m.); and
(d) Consequently, an evidentiary hearing was also unnecessary as of January 18, 2005.

In light of the foregoing, the Trustee’s § 707(b) dismissal motion, as of January 18, 2005, necessarily constituted a motion to be decided entirely on questions of law. Because, pursuant to Fed.R.Civ.P. 52(a), which rule is made applicable to the instant matter, 1 “[findings of fact and conclusions of law are unnecessary in determinations of motions decided on questions of law,” Wooten v. U.S. Department of Interi- or, 56 B.R. 227, 230 (W.D.La.1985) (citing In re Scrap Disposal, Inc., 15 B.R. 296, *521 297 (9th Cir. BAP 1981), for the foregoing proposition, and holding as well that written legal conclusions can be dispensed with because “[t]he district court should make an independent determination of the legal issues involved!, that is because] ... the proper standard of review of the issues of law is de novo”); see also Fed.R.Civ.P. 52(a), 28 U.S.C.A. (West 1992) (last sentence of Rule 52(a)) (“Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56 or any other motion except as provided in subdivision (c) of this rule,” which latter subdivision is inapplicable to the instant matter); Scrap Disposal, 15 B.R. at 297 (interpreting Fed.R.Civ.P. 52 and holding as well that factual findings are necessary only if a motion requires a court to determine factual issues), and since, as just explained, the Trustee’s § 707(b) dismissal motion, as of January 18, 2005, necessarily constituted a motion to be decided entirely on questions of law, the Court was warranted in ruling in the fashion that it did on January 18, 2005, that is in dispensing at that time with a written expression of formal factual findings and legal conclusions relevant to a dismissal of the Debtors’ bankruptcy case via § 707(b).

However, the foregoing notwithstanding, because the District Court has remanded with specific instructions to this Court to enter formal findings of fact and conclusions of law, 2 the Court will do precisely that. As for findings of fact, the Court finds as fact all of those facts to which the parties have now stipulated and which are set forth at Stipulation ¶¶ 8 — 45. Furthermore, the Court enters as conclusions of law those legal conclusions that it sets forth in the next section of the instant Memorandum Opinion.

II.

11 U.S.C. § 707(b) provides that:

After notice and a hearing, the court, on its own motion or on a motion by the United States trustee, but not at the request or suggestion of any party in interest, may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts if it finds that the granting of relief would be a substantial abuse of the provisions of this chapter. There shall be a presumption in favor of granting the relief requested by the debtor.

11 U.S.C.A. § 707(b) (West 2004). The Debtors concede that their “scheduled liabilities are primarily consumer debts, as defined in 11 U.S.C. § 101(8).” Stipulation ¶ 16. Thus, the only issue regarding the applicability of § 707(b) to the Debtors’ circumstances is whether this Court finds that their receipt of a Chapter 7 discharge from their unsecured debts — such debts total $114,611, see Stipulation ¶ 16 — would constitute “a substantial abuse” of the Chapter 7 bankruptcy process.

A. The Meaning of “Substantial Abuse” under § 707(b).

Neither the U.S. Supreme Court nor the Third Circuit have ruled thus far as to the meaning of “substantial abuse” for purposes of § 707(b).

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345 B.R. 518, 2006 Bankr. LEXIS 1152, 2006 WL 1755952, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-trustee-v-harshaw-in-re-harshaw-pawb-2006.