FILED
AUG 16 2023
NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
In re: BAP No. OR-23-1005-LBG
BRENT EVAN WEBSTER,
Debtor. Bk. No. 19-34090-PCM
BRENT EVAN WEBSTER,
Appellant. MEMORANDUM∗
Appeal from the United States Bankruptcy Court
for the District of Oregon
Peter C. McKittrick, Bankruptcy Judge, Presiding
Before: LAFFERTY, BRAND, and GAN, Bankruptcy Judges.
INTRODUCTION
Debtor Brent Evan Webster appeals the bankruptcy court’s denial of
his motion to reopen his chapter 13 1 bankruptcy case. As a dismissed
bankruptcy case cannot be reopened, we see no error and AFFIRM.
∗ This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
1 Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code,
11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.
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FACTS2
A. The bankruptcy filing
Webster filed his chapter 7 case on November 4, 2019. In early
December 2019, the bankruptcy court granted his motion to convert his
case to chapter 13. In his schedules he claimed a disputed 50% ownership
interest in real property valued at $332,840.50 secured by disputed liens of
approximately $420,000. He reported that he is unemployed with income of
$600 per month from work as a handyman with total monthly expenses of
$600 which included no residence rental expense and/or payment of a
mortgage.
B. The chapter 13 plan and subsequent events
Webster filed his initial chapter 13 plan proposing to pay $50 per
month for 36 months. Select Portfolio Services (“SPS”) objected to the plan
noting that it did not pay arrearages owed to it of $24,000, nor pay the
regular monthly payment, property taxes or insurance. The chapter 13
trustee objected to the plan noting, among other things, the lack of
feasibility. The Oregon Department of Justice, Division of Child Support
(“DOJ”) also objected to the plan noting that priority claims of $74,048 for
past due child support were not provided for in the plan.
In response, Webster filed objections to nine proofs of claim
including the DOJ claim, and a one-page response to the various objections
2
We exercise our discretion to take judicial notice of documents electronically
filed in the underlying bankruptcy case and adversary proceedings. See Atwood v.
Chase
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to his plan. At the first hearing on confirmation of the plan, the bankruptcy
court denied confirmation and gave Webster time to file an amended plan.
Webster’s first amended plan did not change the plan payment of $50, but
it proposed also to pay creditors “[a]ny non-exempt proceeds from
Aramark Lawsuit listed on Schedule B, line 33[.]”3
Webster also filed three separate one-page “Notice[s] of an
Adversary Complaint” against SPS, the DOJ and creditors Alex and Connie
Trail. In the notices, Webster demanded a jury trial “to challenge the claim .
. . as invalid and fraudulent.” No separate complaint was filed with the
“notices.” Each of the adversary defendants filed motions to dismiss the
respective adversary proceeding filed against them.
On April 16, 2020, the bankruptcy court conducted a hearing on the
claims objections as well as the motions to dismiss. After some discussion,
the bankruptcy court denied confirmation of the amended plan giving
Webster the opportunity to file another amended plan and continued the
hearing to April 30, 2020.
Webster’s second amended plan proposed monthly plan payments of
$0.00 for 60 months; it also proposed to pay into the plan any amounts due
to him from tax refunds. The plan removed the proposal to contribute the
proceeds from the “Aramark Lawsuit” as provided in the previous plan.
Manhattan Mortg. Co. (In re Atwood),
293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
3 Schedule B, line 33, disclosed a claim against a third party without naming the
party. The basis for the claim was “neighbor purposely caused death of family pet and a
annuity dispu (sic).”
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The bankruptcy court conducted a continued hearing on April 30,
2020 at which time it explained its rulings on the motions to dismiss the
adversary proceedings and on the claims objections. With respect to the
SPS objection, the court indicated that an evidentiary hearing would be
required. With respect to the DOJ objection, the court requested a
declaration from the DOJ to authenticate certain documents. As to the
remaining issues, the bankruptcy court dismissed each of the adversary
proceedings and overruled the claims objections.
At the end of the hearing, the bankruptcy court warned Webster that
if it overruled his DOJ claim objection, he would have to pay the priority
claim in full over the life of the plan. The DOJ filed the requested
declarations thereafter and the bankruptcy court entered its order
overruling the objection.
Webster filed his third amended plan on June 2, 2020 which
continued to provide for no monthly plan payments.
C. The evidentiary hearing and resulting dismissal of the chapter 13
case
On July 2, 2020, the bankruptcy court conducted a lengthy telephonic
hearing on Webster’s objection to the SPS claim, a motion to dismiss the
case filed by creditor Azonia Haney, and confirmation of the most recent
chapter 13 plan. The bankruptcy court permitted direct and cross-
examination of Webster and four other individuals.
After additional argument, the bankruptcy court overruled the
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objection to SPS’s claim, denied confirmation of Webster’s plan, and
granted the motion to dismiss the bankruptcy case, finding that Webster
was unable to fund a plan and that his plan was proposed in bad faith. The
court indicated that dismissal would be without a bar on refiling.
D. The motion to reopen the chapter 13 case
On December 28, 2022, approximately two years and five months
after dismissal, Webster filed a motion to reopen his chapter 13 case. The
motion largely repeated Webster’s prior arguments and asserted “mistake,
inadvertence, surprise of excusable neglect” with no facts or evidence
supporting those allegations.
The bankruptcy court denied the motion one week later without a
hearing. In its order, the court noted that, under § 350(b), the case could not
be reopened as a matter of law since the case had been dismissed and not
“closed.” The court also explained that even if it considered the motion to
reopen as a motion to vacate the dismissal of the case, there was no cause
shown to vacate the dismissal. Finally, the court considered the motion
under Civil Rule 60(b), made applicable to this matter by Rule 9024, and
ruled that the request was not made within a reasonable amount of time
nor did Webster offer any reason why the court should reconsider its prior
ruling that the plan was proposed in bad faith and was not feasible.
Webster appealed.
JURISDICTION
The bankruptcy court had jurisdiction under
28 U.S.C. §§ 1334 and
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157(b)(2)(A). We have jurisdiction under
28 U.S.C. § 158.
ISSUE
Did the bankruptcy court err in denying Webster’s motion to reopen
his chapter 13 case?
STANDARD OF REVIEW
We review a refusal to reopen a bankruptcy case for an abuse of
discretion. McGhan v. Rutz, (In re McGhan),
288 F.3d 1172, 1178 (9th Cir.
2002) (citations omitted). To determine whether the bankruptcy court has
abused its discretion, we conduct a two-step inquiry: (1) we review de
novo whether the bankruptcy court “identified the correct legal rule to
apply to the relief requested” and (2) if it did, we consider whether the
bankruptcy court’s application of the legal standard was illogical,
implausible, or without support in inferences that may be drawn from the
facts in the record. United States v. Hinkson,
585 F.3d 1247, 1263 (9th Cir.
2009) (en banc).
DISCUSSION
A. The bankruptcy court did not abuse its discretion in denying the
motion to reopen the chapter 13 case.
1. Only a closed case may be reopened.
Section 350(a) provides: “[a]fter an estate is fully administered and
the court has discharged the trustee, the court shall close the case.” Section
350(b) provides: “[a] 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
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cause.” As we noted in Landress v. Cambridge Land Co. II, LLC (In re
Cambridge Land Co. II, LLC),
626 B.R. 319, 324 (9th Cir. BAP 2021), only a
case “closed” under § 350(a) can be “reopened” under § 350(b) (citing
cases). A case that is dismissed is not closed under § 350(a) and therefore
cannot be reopened.
It is beyond cavil that the chapter 13 case with no confirmed plan was
not fully administered and therefore could not be closed pursuant to
§ 350(a). It was not closed and cannot be reopened. And Webster offers no
argument or authority otherwise in his brief.
2. The motion provided no evidence to establish a basis to
reopen the case.
Section 350(b) requires a showing that reopening a bankruptcy case
will “accord relief to the debtor,” or that there is other cause. Webster
provided no basis for relief or other cause either in the motion to reopen or
in his appellate brief. His chapter 13 case was dismissed largely based on
his third amended chapter 13 plan which proposed no monthly payments
to creditors. His motion to reopen made no offer to change his proposed
plan and therefore reopening his case will provide him no relief.
Moreover, as Webster’s objection to the DOJ claim had been
overruled, he was required to pay the priority claim of $74,048 over 60
months. The bankruptcy court found (and his schedules make obvious)
that the payment of that claim in full through the plan, required under
§ 1322(a)(2), was not possible. Webster offered no evidence or even
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argument in his motion to reopen nor on appeal as to how he would be
able to pay that claim through a chapter 13 plan.
As the bankruptcy court also noted, even if the case could have been
reopened under § 350(b), the request was made well beyond what might be
deemed a “reasonable period” of time. Fanning v. Alta Gold Co. (In re Alta
Gold Co.),
236 F.App’x. 266, 267 (9th Cir. 2007) (“Given the length of time
the case was closed and the opportunities that [the party] had to raise the
concerns [it now raises], the bankruptcy court did not abuse its discretion
in refusing to reopen the case after three years.”) (citing Vasquez v. Adair (In
re Adair),
253 B.R. 85, 89 (9th Cir. BAP 2000) (“[I]t is appropriate to consider
the length of time between closure of the case and the request to reopen.”)).
The bankruptcy court did not abuse its discretion in denying the
motion to reopen.
CONCLUSION
For the reasons set forth above, we AFFIRM.
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