Opinion
Case No. 98-19013-SSM
October 29, 1999
Nathan Fisher, Esquire, Fairfax, Virginia, of Counsel for the debtor
David Alan Sattler, Esquire, Brooks, Suiters Sattler, P.C., Arlington, VA, for of Counsel First Savings Bank of Virginia
MEMORANDUM OPINION AND ORDER
Before the court is the motion of First Savings Bank of Virginia to reopen the debtor's closed chapter 7 case for the purpose of filing a motion to have the debtor held in contempt. No response has been filed by the debtor, nor did the debtor appear at the hearing held on October 26, 1999. Nevertheless, upon review of the record, the court concludes that prosecution of a motion for contempt would be fruitless, since the debtor's conduct, as set forth in the motion to reopen, would not support a finding of contempt. Accordingly, reopening of the case would be a waste of judicial resources.
Debtor's counsel of record was not served with the motion. Service (by mail) on the debtor was at a different address than shown on the bankruptcy petition. In view of the disposition of the motion, I need not reach the issue of whether service was adequate. See also Local Bankruptcy Rule 5010-1.
Facts
Leonard Lee Wilkerson ("the debtor") filed a voluntary chapter 13 petition in this court on December 22, 1998. First Savings Bank of Virginia ("the Bank") filed a motion for relief from the automatic stay in order to foreclose under a deed of trust against the debtor's residence located at 3817 So. 16th Street, Arlington, Virginia, as well as a motion to dismiss for bad faith filing, based on the debtor's status as a serial filer. The debtor then elected to convert his case to chapter 7, but did not appear at the meeting of creditors in the converted case. His case was dismissed on February 12, 1999, based on that failure. Prior to the closing of the case, a consent order was presented granting the motion and terminating the automatic stay to allow foreclosure to proceed. That order was signed on February 18, 1999, and entered on the docket the following day. The case was then closed on March 25, 1999.
As set forth in the motion to reopen, this was the debtor's third chapter 13 filing in this court in the space of nine months. Both prior cases had been dismissed based on the debtor's failure to commence making payments under the chapter 13 plan. According to the motion, the debtor has made no payments at all to the Bank since September 1997.
Following the dismissal of the present case, the debtor filed (on March 24, 1999) yet a. fourth chapter 13 petition, this time in the United States Bankruptcy Court for the District of Maryland. That case was ultimately dismissed on August 20, 1999. The motion to reopen the prior case was then filed in this court on October 6, 1999.
Discussion I.
Under § 350(b), Bankruptcy Code, a closed bankruptcy case "may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause." The decision whether to reopen a closed case is discretionary with the court. Hawkins v. Landmark Finance Co. (In re Hawkins), 727 F.2d 324 (4th Cir. 1984). A case should not be reopened, however, when doing so would be futile and a waste of judicial resources. In re Carberry, 186 B.R. 401, 402-03 (Bankr. E.D. Va. 1995) (Tice, J.) (denying motion to reopen no-asset case to schedule omitted creditor). The threshold issue, therefore, is whether, if the case were to be reopened, meaningful relief could be accorded to the Bank.
II.
That the actions of the debtor, as set forth in the motion, constitute an egregious abuse of the bankruptcy system is hardly to be doubted. And those actions, sad to say, are hardly unique: as any bankruptcy judge will attest, serial bankruptcy filings — and the appropriate judicial response — are a persistent and vexing problem. The narrow issue, however, is whether the debtor's actions constitute contempt of any order entered by this court. The operative language of the consent order of February 18, 1999 is as follows:
IT IS ORDERED, ADJUDGED AND DECREED that the automatic stay granted the Debtor pursuant to 11 U.S.C. § 362 be and hereby is terminated, annulled, modified or conditioned so as to permit [the Bank] to exercise its rights as a secured creditor to foreclose upon the Property[.]
The sole effect of the order is to terminate a stay. Put another way, nothing in the order in express terms or by fair implication directs the debtor to perform, or to refrain from performing, any action. The debtor's subsequent filing in Maryland — on the eve of a scheduled March 25, 1999, foreclosure sale — may very well have been sanctionable as an abuse of the system, but if so, the appropriate forum in which to pursue such sanctions would have been the court in which the abusive petition was filed. But since the debtor's actions, however sanctionable in another forum, did not violate the terms of the order entered by this court, no basis exists for this court to hold the debtor in contempt. That being the case, no purpose would be served by reopening the case.
The issue of whether the filing would provide an independent civil cause of action against the debtor for abuse of process is not before me, and I express no view.
ORDER
For the foregoing reasons, it is
ORDERED:
1. The motion to reopen is denied.
2. The clerk will mail a copy of this memorandum opinion and order to the debtor, counsel for the debtor, counsel for the Bank, and the United States Trustee.