Gebhardt v. Hardigan, No. 4:2013cv00125 - Document 25 (S.D. Ga. 2014)
Court Description: ORDER affirming the Bankruptcy Court's Order denying Appellant's motion to convert or dismiss; and directing that the Clerk shall terminate all deadlines and motions, and close this case. Signed by Judge J. Randal Hall on 09/19/2014. (jah)
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Gebhardt v. Hardigan Doc. 25 ii.i I N THE IINITED STATES DISTRICT COI'RT FOR THE SOUTHERN DISTRICT OF GEORGIA SAVAI{NAII DIVISION IN * * * * * * * * * * * * * * * * * * THE MATTER KENNETH R. HARDIGAN, Debtor GUY G. GEBHARDT, ACTING UNITED STATES TRUSTEE, Appellant, V. KENNETH R. HARDIGAN, Appellee. [0tq 4:13-cv-00125-.lRH Bankruptcy Case: No. L2-40484-LWD ORDER annea'ls SunTrust Kenneth f rom R. or, in not err Chapter and the Bankruptcv United and test did States ("Appellee") to to refusing in not when March uvJ afternative, 11- circumstances uy UqrrJ\! LIIg Hardigan's the did R:nkrttnf r:rz Cottrtt s ihc Bank's Guy Trustee states united Acting convert err in assessing the motions abuse, convert to Lhe the this to a Chapter to totality Court 11 Court Bankruptcy 7 case Chapter applying denying 7 filing Because dismiss. ) 2013 Order 29, Trustee's Chapter ("Appel1ant" Gebhardt one under of AFFIRMS the the Court' s Order. Dockets.Justia.co BACKGROT'ND I. is Appellee (Doc. no. his 3. ) 11 A n n e rl lfeue ' s u nl/yu 7 process. oT, in banLrrrntarr natit-i6n (Doc. no. abuse of presumpt.ion no that. Court determined test" of 1l- U.S.C. 437, 440 (Bankr. S.D. ability to pay, his Chapter "total-itv of the circumstances" AppeIlee's on based the that held 11 under U.S.C. the S 158(a) (1) Court error, Court reviews and its 5 6 7 F . 3 d 1 , 2 9 I, to declined 1l- U.s.C. II. This factors, appellate and Bankruptcy 459. abuse in forth 11 CourL not did Additionally, petition to a 446-47. jurisdiction Rules Court's Bankruptcy conclusions L296 (1-1t.hCir. given that petition Appellee's at 490 B.R. AI{D STAI{DARD OF REVIEW has lega1 rd. "means t.he The Bankruptcy at B.R. Bankruptcy on set that Chapter constituted Appellee's convert S 706(b) - iII'RISDICTION the 490 the alleged test 4-5. ) the a to ground Of at 5-I4 case Hardigan, 7 pet.ition at 5-5 Haggiggn, re In Court Bankruptcy Chapter no. based on a number of abuse. constitute the (Doc. S 707 (b) (3) (B) . U.S.C. re no. the based Appellant 2013) . Ga. In exist.ed. S 707(b)(2) on for undisputed the motion, on the ruling is an abuse Constituted fn 5-5.) It convert to Georgia. petition (Doc. t.o dismiss alternative, t.he 7 f-.) at nalure. in 20L2 23, Savannah, Chapter 5-L4 no. consumer May on his filed (Doc. 20L2. moved Appellant Chapter 7, primarily are debts He 19.) 1-, on March bankruptcy t.hat at. 5-1 in residing cardj-ologist. a de novo. 2009) . 8001 pursuanL et factualIn re seq. findings Globe to 28 On appeal, for Mfg. cl-ear Corp., In U.S.C. S 707(b) (3), t1 under r r nI r . z f o r aLrrrse of (l1th L298-99 it when (l1th the facL." findings Tn presents appeal This in erred u.S.C. S 707 (b) (3) (B) ; d e n r z in c r A n o e l l a n t t 1,253, 7,27r F. 3d 7L9 (2) and to 11 under dismi-ss erred Court 11 11 under a Chapter to convert BankruptcY the Bankruptcy t.he whether to whether motion APPeI Iant's CrPPsAr of application Kulakowski, the "the presumption of abuse by j-n bad debtor's faith; 11 abuse does considering or financial- (2) the fails formula. "the situation would 11 not (1) arise, whether totality abuse an of however, which the " 7r u.s.c. 3 provisions of is calculated court filed abuse where Even the debtor the the presumption A S 707 (b) (2) . of re 7 case a Chapter of "means test," U.S.C. S e e In discretion. dismissalbe T h e Court 20L3) - S 707 (b) (1) . U. S. C. debtor statutory a re1ief of for Courtts test. circumstances" an abuse of for Code provides granting where the arises the Rankrrtnl-r:rz fhe 735 F.3d 1296, L299 (11th Cir. Code] . " lthe of "totality The Bankruptcy where r r: rh ra l l e nr y err e s ur c v q f Anncllanf nlrl/errqrru r determination this reviews S 707 (b) (3) (B) Under L1- u.S.c. 'l An vII find makes clearly or s 706(b). A. Dismissal by (1) issues: s motion .'yI rtrY u.s.c. of discretion DISCUSSION two denying Court vvrr_), faw of 1296, F.3d its abuses Piazza, re 735 20l.3) . Cir. III. i n Kulakowski, principle wrong of "applies erroneous re court review Is] court] district 2OI3) . A bankruptcy Cir- have considerable courts " Ithe In " discretion. abuse constitutes relief "bankruptcy when challenged, and, discretion" 7 Chapt.er whether determining the circumstances. this may st.ill petition . . of s 707(b)(3) (A-B) the In petition AppelIee's (Bankr. the portion meaningful of by or Chapter rel-ief 13 necessities; (B) incurred; and Hardigan, 490 B.R. 446 B.R. to pointed pay 'result. 638, be collapse market impaired Annel snree": creditorsi and AppeIIee ryurrvrrrY Id. system. In should of rrlr'Ir'v++\ r and, makes dismissed second, "j-ntent, -l ee and income. In re (citing In re dictated and to attempting contrary f resh real eslaLe the calamity; through fairly a Appell-ee's l-l- proceeding; not ability Appellee's held Court dealt was not Bankruptcy the challenging have were a Appellee's pre-bankruptcy honorably "game" the with bankruptcy 451'-57 . Appellant test, alone at years over "qnendi no factors unforeseeable an constituted of debtor debts the a to ability the 20L3) aJ-though that, a Chapter by (6) and provide to case, Ga. S.D. Bankruptcy the debts debLor's the other abuse, toward repay 11 Chapter Ga. 2010) ). found Court incurred were debts (S.D. to which over (Bankr. for depriving wj-thout of was caused ability l-3 Chapter period 447 642 efforts a repay to abilit.y eligibility debtor's stability 437, Specif ically, would start a time the Bankrupt.cy The in the 0) (3) the expenses debtor's the Truax, (5) Bankruptcy the t.he bankruptcy whet.her debtor's the distribution "meaningful" reduce (4) ; creditors; with negotiate (2) sudden calamity; or an unforeseen (1) 459 437 , B. R. determination, factors: debts ; 49 0 Hardigan , its making following on rel-ied. Court re In totality the under abuse constitute test . 201-3). In ca. S.D. not would t.hat found court Bankruptcy Lhe case, circumstances the of present the the two the claims. case Bankruptcy unscrupulous based Court's First, the on ability Court behavior the improperly or of application Bankruptcy to relied unethical- pay this Court factor on issues dealings. " {Annellant's his by creditors re B4I F.2d pay his will, debts a of dismissal a that state to pay. ability to pay Circuj-t decllned her test circumstances (11th In rn €.g., 'ability pay.' narr /'\ ' Tn (Bankr. N.D. v q of more y . I t re on solely the t.he Eleventh pay to ability his t.otality-of-theto Witcher , than just Nov. 563 pay 7 02 but one 61-9 , 623 is F. 3d 8, that the debtor's 10-745L4-WLH, 20I0 ) ability dismissal- for (Bankr. M.D. (citing evaluaLion show to ability WL 4882059, several 2010) UST must the mathematical 20L0 See, abuse. Fla. in on a debtor's solely Thus, pay, to 707(b) (3) (B) requires circumstances.' Rudmose, No. Ga. compel 558, section the found dj-smj-ssal- based required fnstead, the'totality something re have to B.R. 424 cou1d have to courLs insufficient Lavin, re ("Congress of is itself, and of fn considered. warrant Emphasi-ztng that ability that demonstrating [, ] " under Fla. however, cases, rely debtor's dispositive aJ-one be many other fact, a "whelher s-Dto can be utilized, that 707 (b) (emphasis added). 20L2) Cir. decide may be t.hat f actor to sufficient a result. such dictate (Bankr- These to ability section permissibly may but. one factor is is abuse") for court They do not can debts case bankruptcy ability or 7 Chapter a fr] e.9., See, debtor's 607 595, alone, standing ("a justify alone, 36a B.R. Henebury, pay, 19BB) Cir. standing to ("ability 200'7) (9th 9I1 re In dismissal"); 908, repay to ability abuse. find Appellant arguing, Lhe found to alone, standing weight corresponding so In to ability IAppe1lee'sl giwen have AppelIant contention, of a7.) at courLs where sufficient, KeI1y, (Id. court." cases several cit.es nature shoul-d have been ... creditors first the to "overwhelming bankruptcy the As 21.) at the that alleges repay Brief cases for at *3 the proposition alone second Appellant's with issue of good fait.h, good faith are iridications debtor's is it true aFpellee's "financiaf situation, prospects, the in fact Appellee that debt, unsecured his of financialand t.he his reduced little retain 437, a totality estate, bankruptcy, and on incurred, real 490 B.R. fair future were 21-.) at relied the the (Bankr. 455 S.D. 2013). based Thus, and the Court abused based on ability it.s careful- revi-ew briefs, parties' Order its a on his debts following Hardigan, re on the Brief afso bearing surrendered wil-I, In it including " which or sold and propert.y. secured ca. manner have t.hat factors other of mu]titude to Appellee's addressed creditors, his with dealinqs honorable subjective relating (Appellant's Court Court's Specifically, of factors any t.hat irrelevant. Bankruptcy the use court's the arguing above. l-isted factors abuse"). Bankruptcy the pay to an ability a case for of addresses seven takes Appellant While other that hold dismissaf claim the of application justify to noL sufficient is generally also "courts that I by discretion pay to cannot refusing or alone find that find to the Court' s Bankrupt.cy of process relied on abuse factors t.he other by Bankruptcy the of in analysis. B. Conversion Under convert Appellant argues that. section a1so app1y. Court will the to Chapter case Appellee's that 705 (b) the findinqs Court not Brief of apply at fact 25.) for As clear to S 706(b). when concl-uded erred where failure 11 U.S.C. 11 under Bankruptcy shou]d (Appellant's revi-ew a Court's Bankruptcy challenges next Appellant S 705 (b) L]- u. S. C. it 707 (b) section cou]d discussed above, error concfusions and the of In faw de novo. (11-th 1296 L29L, 2009\ . Cir. 706 (b) Sectj-on party and 7 case to decision to the qq-sRe al- q4O (Bankr. D.N.M. section ability to repay (4) and re In (relying re to fact: of under continued j-nvofved. Tn re had the 7 Chapter Appettee all Hardigan, 11 plan a would 490 B.R. 437, 44'7, N.D. 20a3) following repay debts; was "dubj-ous" if could all 451-53 Ga. . the benefit 11 from Cir. contract.or; not for benefit 8th credit.ors unsecured conversion to a Chapter (Bankr. made ability and a conf irmation) order, a Chapter grounds would (B-A. P. for its of between and months; in Court debtor's the of 692-94 57o pay and potent.ial Appellee cl-aim disputed 683, B.R. 489 the 853 whether immediate interest in 465 B.R. Gordon, confirmation of likelihood parties Court, Bankruptcy find.ings the Schl-ehuber , on abilit"y The wit.hin whether (1) confirmation of likelihood 824, determining of absence will Rep. No. S. 454 B.R. appropriate: be the Q) the See In conversion. 20L2) ; debt. i (3) reconversion; plan; would conversion 706(b) on what mandatory; in factors on various relied have Courts the converL.") to any decision in discretion based not is secLion leaving Lobera, 706 (b) ] (" lsection a convert This interest." in re fn al-so may instead court, parties aII see Q978) ; 20LI) its use should of benefit the of discretion "sound interested an S 706 (b) . requiremenLs, additional of court 1-1. 1-1 U. S. C. Chapter any the inure most a provide not does to the hearing, a and reguest upon that, provides noti-ce after Chapter the 567 F.3d Corp. , Mfg. Globe re the gJ-ven the case be paid parties (Bankr. S-D. Ga. 2013) Upon Bankruptcy a careful Court's revj-ew factual- of findings the record, were not I clearly f ind that erroneous. the and Accordingly, section 705 (b) not in err to refusinq the applying the fact, case the convert to of findings those standard deferential highly to Bankruptcy 'l dh=nl-ar vrrs}/ ev! 1 Court of did I CONCLUSION As discussed flrdar donrri nn sha1l terminate Anno all above, I I :nl_ t q t.he motion to AFFIRMS f he convert or dismiss. and motions, deadl-ines oRDER ENTERED at Court Augusta, Georgia, Rankrrrntr:rr a n d C L O S El h i s this /94O ", Courtt s The Clerk case. september, 20]-4 H UNITED STATES DISTRICT DISTRICT 1 ,JUDGE OF GEORGIA discussion of the The Court does not address the Bankruptcy Court's is sufficient 706 (b) and 707 (b) because there interplay between sections Court did not err in the Bankruptcy that to determine in the record evidence 705(b) alone. refusing convert the case under section to 8
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