United States Bankruptcy Appellate Panel of the First Circuit
PAUL FRANCIS, Debtor. PAUL FRANCIS, Appellant.
from the United States Bankruptcy Court for the District of
Massachusetts (Hon. Frank J. Bailey, U.S. Bankruptcy Judge)
Carmenelisa Perez-Kudzma, Esq., on brief for Appellant.
Tester, Cabán, and Fagone, U.S. Bankruptcy Appellate
Fagone, U.S. Bankruptcy Appellate Panel Judge.
Francis (the "Debtor") refused to comply with
several orders issued by the bankruptcy court. On its own
initiative, the court denied the Debtor a chapter 7
discharge. The Debtor has appealed the order denying his
discharge (the "Order"), contending that the
bankruptcy court should have dismissed the case and that the
court lacked the authority to deny him a discharge sua
sponte. We AFFIRM.
2017, the Debtor's chapter 13 case was dismissed due to
his failure to file required documents. About two and a half
months later, the Debtor filed another case, the one in which
this appeal arises. This case began under chapter 13 but was
later converted to chapter 11. The chapter 11 case was not
successful. Due to the Debtor's accumulated omissions,
including his failure to file a plan and disclosure
statement, the bankruptcy court granted a motion by the
United States trustee and issued an order converting the case
to one under chapter 7. In so doing, the bankruptcy court
considered whether dismissal or conversion would be in the
best interests of the creditors and the estate. Based, in
part, on the likely existence of equity for unsecured
creditors in a chapter 7 case, the court decided that
conversion was the right option. The Debtor appealed that
decision and the Panel affirmed. See Francis v.
Harrington (In re Francis), BAP No. MB 18-012, 2019 WL
1265316 (B.A.P. 1st Cir. Mar. 14, 2019).
failures that contributed to the conversion of the case were
not the Debtor's only failures to comply with the
Bankruptcy Code and court orders. When it converted the case,
the bankruptcy court also issued an order (the "Order to
Update") requiring the Debtor to file: (1) an Official
Form 108-a Statement of Intention for Individuals Filing
Under Chapter 7 (the "Statement of Intention")
"[w]ithin 30 days of the filing of [his] bankruptcy
petition or the scheduled date of the § 341 Meeting of
Creditors, whichever is earlier"; and (2) a schedule
listing post-petition creditors by April 3, 2018 or a
statement that he had none. The Order to Update warned:
Failure to file the required documents with the Clerk's
Office may result in the dismissal of your case. . . .
Please note that if not dismissed earlier, the case
MUST be automatically dismissed under 11
U.S.C. § 521(i) if certain documents are not filed
within 45 days of the date of the filing of the petition. If
you file another bankruptcy petition within 12 months of the
dismissal, the automatic stay may be limited or may not take
effect depending upon your circumstances.
Debtor did not comply with the Order to Update. He also
failed to appear at the § 341 meeting of creditors as
apparent effort to secure the Debtor's compliance, the
bankruptcy court entered another order (the "Second
Order"), this time requiring the Debtor to file the
missing documents by July 19, 2018. The Second Order also
warned "that refusal to obey a lawful order of the court
is grounds for denial of discharge in chapter 7" under
the Debtor failed to comply with the Second Order, the
bankruptcy court issued yet another order, this one on August
13, 2018 (the "Order to Show Cause"). The Order to
Show Cause required the Debtor "to show cause in
writing, with supporting affidavit(s), why he should not be
denied a discharge for refusal to obey a lawful order of the
after the Order to Show Cause was issued, the Debtor's
counsel filed a statement indicating: (1) the Debtor had not
provided her with the list of post-petition creditors or
Statement of Intention; (2) she hoped to obtain the
Debtor's court-ordered affidavit the following day; and
(3) she would file all required documents on or about August
bankruptcy court then scheduled a hearing on the Order to
Show Cause for September 18, 2018 and directed the Debtor to
appear at the hearing. The court rescheduled the hearing for
September 25, 2018 at the Debtor's request. On September
21, 2018-more than five months after the expiration of the
deadline prescribed in the Order to Update-the Debtor finally
filed a "Notice of No Post[-]Petition Creditors,"
representing he had no post-petition creditors. Additionally,
on September 23, 2018, the Debtor filed a Statement of
Intention, indicating that he intended to retain and redeem
days later, at the hearing on the Order to Show Cause, the
Debtor's attorney explained that the Debtor had been
confused about what was required of him in his bankruptcy
case and that it was difficult for him to comply with court
orders because his wife managed the family's financial
matters. The bankruptcy court then examined the Debtor to
ascertain whether he received court notices:
THE COURT: Mr. Francis, we sent you a number of notices
concerning things that you needed to do in connection with
your case. We sent them to your counsel . . . but we also
sent them to you, right? Did you get those notices? . . . .
MR. FRANCIS: Yes.
THE COURT: All right. You opened them up and you read them.
Is that right?
MR. FRANCIS: Well, yes. My wife did it. . . . I don't
collect the mail. My wife ...