Michelle Marinari v. ( 2021 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 19-3642
__________
IN RE: MICHELE MARINARI, a/k/a Michelle Frank,
Debtor
ROBERT J. MURPHY,
Appellant
v.
Michele Marinari
__________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Nos. 2-17-cv-00922 and 2-17-cv-02496)
Honorable Gerald J. Pappert, U.S. District Judge
__________
Submitted Under Third Circuit L.A.R. 34.1(a)
on November 17, 2020
Before: JORDAN, KRAUSE, and RESTREPO, Circuit Judges
(Opinion filed: January 19, 2021)
__________
OPINION *
__________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
KRAUSE, Circuit Judge.
Appellant Robert Murphy, who held an outstanding judgment against Michele
Marinari and filed an adversary complaint in her Chapter 13 bankruptcy proceeding,
challenges the Bankruptcy Court’s dismissal of Marinari’s case pursuant to 11 U.S.C.
§ 1307(b). The District Court affirmed. Because we perceive no error in the Bankruptcy
Court’s rulings, we too will affirm.
I. Discussion 1
On appeal, Murphy argues that the Bankruptcy Court improperly dismissed
Marinari’s case, that the Bankruptcy Court should have imposed additional conditions on
the dismissal, and that the Bankruptcy Court erred by denying his motion for
reconsideration. None of these arguments are persuasive. We address each in turn.
A. The propriety of dismissal
Murphy offers three reasons the Bankruptcy Court should not have dismissed
Marinari’s case. His first and primary argument is that § 1307(b) does not permit dismissal
1
The District Court had jurisdiction under 28 U.S.C. § 158(a), and we have
jurisdiction under 28 U.S.C. §§ 158(d) and 1291. Like the District Court, “we review the
[Bankruptcy Court’s] legal determinations de novo, its factual findings for clear error, and
its exercises of discretion for abuse thereof.” In re Tribune Co., 972 F.3d 228, 237 (3d Cir.
2020). We may affirm the decision below on any ground supported by the record, TD Bank
N.A. v. Hill, 928 F.3d 259, 270 (3d Cir. 2019), and although Marinari opted not to file a
responsive brief, “we w[ill] not reverse a correctly entered order simply because the
appellee did not file a brief on the appeal,” Hunt v. Acromed Corp., 961 F.2d 1079, 1081
n.4 (3d Cir. 1992).
2
where a debtor acts in bad faith. 2 But even assuming arguendo that § 1307(b) does have a
bad faith exception, we agree with the District Court that Murphy failed to plead any facts
that would suggest Marinari acted in bad faith, much less in the “extraordinary” or
“atypical” fashion that other courts have found sufficient to satisfy a bad faith exception in
the bankruptcy context. See Marrama v. Citizens Bank of Mass., 549 U.S. 365, 375 n.11
(2007) (in the context of 11 U.S.C. § 706); In re Rosson, 545 F.3d 764, 773–74 (9th Cir.
2008) (in the context of § 1307(b)).
Second, Murphy faults the Bankruptcy Court for granting dismissal in the absence
of a formal motion to dismiss, which is required by the bankruptcy rules. Fed. R. Bankr.
P. 1017(f)(2), 9013. But Murphy had sufficient notice that the Bankruptcy Court intended
to treat Marinari’s self-styled “application” as a motion to dismiss, he did not object to that
approach, and he had the opportunity to brief and be heard on the dismissal issue. App.
62–63. Murphy therefore had “notice ‘reasonably calculated . . . to apprise [him] of the
pendency of the [motion] and afford [him] an opportunity to present [his] objections,’”
which “more than satisfied [his] due process rights.” United Student Aid Funds, Inc. v.
Espinosa, 559 U.S. 260, 272 (2010) (quoting Mullane v. Cent. Hanover Bank & Tr. Co.,
339 U.S. 306, 314 (1950)).
Murphy’s third argument is that the Bankruptcy Court should not have granted the
dismissal while his motions for sanctions and conversion to Chapter 7 were still pending
2
Section 1307(b) provides that “[o]n request of the debtor at any time, if the case
has not been converted . . . , the court shall dismiss [the] case,” 11 U.S.C. § 1307(b), and
we have not resolved the question whether § 1307(b) grants a debtor the absolute right to
dismiss or has an exception for bad faith, see In re Ross, 858 F.3d 779, 784 (3d Cir. 2017).
3
and without holding an evidentiary hearing. This objection, too, is unavailing, as Murphy
had the opportunity—and failed—to request an evidentiary hearing at the hearing that was
held on the motion to dismiss; the Bankruptcy Court had already resolved his motions for
sanctions when it dismissed Marinari’s case; and § 1307(b) allows for dismissal “at any
time” prior to conversion. 11 U.S.C. § 1307(b).
In short, the Bankruptcy Court did not err when it dismissed Marinari’s case.
B. The conditions of dismissal
Murphy next argues that the Bankruptcy Court placed “meaningless” and
“unconstitutional[]” conditions on the dismissal of Marinari’s case. Appellant’s Br. 5. We
review dismissal conditions for abuse of discretion. See In re Ross, 858 F.3d 779, 786 (3d
Cir. 2017).
Here, the Bankruptcy Court provided that Murphy’s adversary action would resume
if Marinari filed for bankruptcy again within two years. That ensured the adversary
proceeding would continue from where it left off if Marinari refiled within that timeframe,
and, unless and until that occurred, Murphy could seek collection on his judgment in the
ordinary course. True, Murphy did request “additional appropriate conditions” after the
hearing on dismissal, App. 107, but that belated request was too vague to preserve the issue,
cf. In re Teleglobe Commc’ns. Corp., 493 F.3d 345, 376–77 (3d Cir. 2007), and regardless,
given the dearth of support Murphy offered to show bad faith by Marinari, the Bankruptcy
Court did not abuse its discretion, much less violate due process, by declining to impose
any additional conditions, cf. In re Ross, 858 F.3d at 782, 786–87 (requiring a basis in the
4
record and a “legitimate rationale” for dismissal conditions predicated on alleged bad faith
conduct).
C. Murphy’s motion for reconsideration
Finally, Murphy argues that the Bankruptcy Court improperly denied his motion for
reconsideration. “[W]e review a lower court’s determination regarding a motion to
reconsider for an abuse of discretion,” and “such a motion should be granted only where
the moving party shows . . . ‘(1) an intervening change in the controlling law; (2) the
availability of new evidence . . . ; or (3) the need to correct a clear error of law or fact or to
prevent manifest injustice.’” In re Energy Future Holdings Corp., 904 F.3d 298, 311–12
(3d Cir. 2018) (quoting United States ex rel. Schumann v. Astrazeneca Pharms. L.P., 769
F.3d 837, 848–49 (3d Cir. 2014)). Murphy presented no change in law or new evidence in
his motion for reconsideration, and in any event, as we have explained, there was no error
in the Bankruptcy Court’s rulings. 3
3
We typically “view[] a motion characterized as a motion for reconsideration as the
‘functional equivalent’ of a Rule 59(e) motion,” Jones v. Pittsburgh Nat’l Corp., 899 F.2d
1350, 1352 (3d Cir. 1990) (citation omitted), and we therefore apply the standard for Rule
59(e) to Murphy’s motion here, see In re Energy Future Holdings Corp., 904 F.3d at 311;
Fed. R. Civ. P. 59(e); Fed. R. Bankr. P. 9023. But insofar as Murphy also grounds his
motion for reconsideration on Rule 60(b), we see no basis for relief under that provision
either. See Fed. R. Civ. P. 60; Fed. R. Bankr. P. 9024. Murphy has not demonstrated
“excusable neglect,” identified “newly discovered evidence,” pleaded any facts suggesting
Marinari engaged in “fraud” or “misconduct,” or established that “the judgment is void,”
Fed. R. Civ. P. 60(b)(1)–(4), (d)(3), and he has failed to show “extraordinary circumstances
where, without . . . relief, an extreme and unexpected hardship would occur,” Cox v. Horn,
757 F.3d 113, 115 (3d Cir. 2014) (articulating standard for Rule 60(b)(6) relief). Likewise,
to the extent Murphy bases his argument on Rule 52, it is also without merit, as we see no
5
II. Conclusion
For the foregoing reasons, we will affirm the District Court’s order.
“errors . . . that require correction.” U.S. Gypsum Co. v. Schiavo Bros., Inc., 668 F.2d 172,
180 (3d Cir. 1981); see Fed. R. Civ. P. 52; Fed. R. Bankr. P. 7052, 9014(c).
6