John P. Ladika v. James C. Luker ( 1998 )

United States Bankruptcy Appellate Panel
FOR THE EIGHTH CIRCUIT
____________
98-6056EA
____________
**UNPUBLISHED**
In re: *
*
John P. Ladika, Geraldine A. Ladika, *
*
Debtors *
*
-------------------------------------------------
John P. Ladika, *
*
Debtor - Appellant, * Appeal from the United
* States Bankruptcy Court
v. * for the Eastern District
* of Arkansas
James C. Luker, *
*
Trustee - Appellee *
*
Internal Revenue Service *
*
Creditor - Appellee *
____________
Submitted: August 18, 1998
Filed: August 28, 1998
____________
Before KOGER, Chief Judge, KRESSEL and SCHERMER, Bankruptcy Judges.
____________
PER CURIAM.
On January 30, 1998, the Bankruptcy Appellate Panel filed its opinion in case number
97-6084EA in which it affirmed the bankruptcy court’s decision converting the Ladikas’
Chapter 13 case to a Chapter 7 case. Ladika v. Internal Revenue Service (In re Ladika), 215
B.R. 720 (B.A.P. 8th Cir. 1998). Subsequently, the Ladikas filed a motion to either reconvert
the case from a Chapter 7 to a Chapter 13 or for dismissal of the case. The bankruptcy court1
denied the motion in an order filed on June 18, 1998, for the reason that the Ladikas had
failed to present any grounds to support either dismissing the case or reconverting it back to
a Chapter 13. At the hearing on the motion, the bankruptcy court remarked that instead of
presenting any reasons to support their motion to reconvert or dismiss, the Ladikas simply
continued to address their ongoing dispute with the Internal Revenue Service regarding its
claim. At the hearing, the Ladikas also argued that they had not filed their original Chapter
13 petition in bad faith, which the bankruptcy court noted had been reviewed by the
bankruptcy appellate panel and that the BAP had ruled against the Ladikas on this issue.
Only John F. Ladika appeals from the bankruptcy court’s decision. Ladika timely
filed his notice of appeal on June 19, 1998. See Fed. R. Bankr. P. 8002(a).
Section 706 of the Bankruptcy Code provides for the conversion of a Chapter 7 case
to a Chapter 13 case, however, if the case has already been converted from a Chapter 13 case
to a Chapter 7 case, the debtor does not have the absolute right to convert the case back to
a Chapter 13. See In re Vitti, 132 B.R. 229, 230 (Bankr. D. Conn. 1991); 11 U.S.C. §
706(a). The bankruptcy court’s denial of the motion to reconvert the case is a final order
over which this panel has appellate jurisdiction. See In re Texas Extrusion Corp., 844 F.2d
1142 (5th Cir.), cert. denied, 488 U.S. 926, 109 S. Ct. 311 (1988); In re Carter, 84 B.R. 744
(D. Kan. 1988).
Section 707 of the Bankruptcy Code provides that a case may be dismissed for cause.
11 U.S.C. § 707(a). The bankruptcy court’s denial of the motion to dismiss made pursuant
to section 707(a) is also a final order over which this panel has appellate jurisdiction. See
In re Atlas Supply Corp., 857 F.2d 1061 (5th Cir. 1988); In re Marks, 174 B.R. 37 (E.D. Pa.
1
The Honorable James G. Mixon, Chief Judge, United States Bankruptcy Court for the
Eastern District of Arkansas.
2
1994). See also In re Koch, 109 F.3d 1285 (8th Cir. 1997)(orders denying dismissals under
section 707(b) are final appealable orders).
Both the bankruptcy court’s ruling denying the motion to reconvert the case from a
Chapter 7 to a Chapter 13 and the ruling denying the motion to dismiss may be reversed on
appeal only if this panel determines that the bankruptcy court abused its discretion. See
Atlas Supply Corp., 857 F.2d at 1063; Marks, 174 B.R. at 39; In re Texas Extrusion Corp.,
68 B.R. 712, 727 (N.D. Tex. 1986), aff’d, 836 F.2d 217 (5th Cir. 1988).
“A court abuses its discretion if it rests its conclusion on clearly erroneous factual
findings or an incorrect legal standard.” In re Cossio, 163 B.R. 150, 153 (B.A.P. 9th Cir.
1994), aff’d, 56 F.3d 70 (9th Cir. 1995). See also Apex Oil Co. v. Palans, 132 B.R. 613, 614
(E.D. Mo. 1991), aff’d in part and rev’d in part on other grounds, 960 F.2d 728 (8th Cir.
1992). Further, “[u]nder the abuse of discretion standard, this Panel must have ‘a definite
and firm conviction that the court below committed a clear error of judgment in the
conclusion it reached,’ before reversal is proper.” In re Tong Seae (U.S.A.), Inc., 81 B.R.
593, 597 (B.A.P. 9th Cir. 1988)(quoting Mission Indians v. American Management, 824 F.2d
710, 724 (9th Cir. 1987)).
The Chapter 7 Trustee, James C. Luker, filed a motion to dismiss the appeal, or in the
alternative, that the BAP consider his motion to dismiss as an appellee brief. The Trustee
urges the BAP to dismiss the appeal contending that John Ladika is merely reasserting and
re-arguing the same issues that previously have been addressed by the BAP in John Ladika’s
prior appeal in case number 97-6084EA. This panel determines that when the BAP may
properly exercise appellate jurisdiction over a final appealable order, as in this case, it is not
procedurally appropriate to dismiss the appeal. The better course of action is to decide the
appeal on the merits. Accordingly, the panel denies the Trustee’s motion to dismiss. The
panel will treat the Trustee’s motion to dismiss as an appellee brief, as requested.
We determine that the bankruptcy court did not abuse its discretion in denying the
motion to reconvert or dismiss the case and affirm the bankruptcy court’s decision. At the
hearing on the motion and in his appellate brief, Ladika rehashed the same arguments
concerning the IRS and his bad faith filing that he raised in his prior appeal in case number
3
97-6084EA and that have already been addressed and decided by the BAP. Ladika failed to
appeal from the BAP opinion affirming the bankruptcy court’s decision to convert the case
to a Chapter 7 based upon the Ladikas’ bad faith filing, and that opinion has become final
and the law of the case. See In re Cole, 89 B.R. 433, 436 (Bankr. E.D. Pa. 1988)(Under the
“‘law of the case’ doctrine,” courts refuse to reopen what has already been decided by
them.). Ladika may not have two bites at the same apple.
Additionally, we agree with the bankruptcy court that Ladika has failed to show
grounds warranting either reconversion of his case to a Chapter 13 or dismissal of the case.
Ladika wants to continue his fight with the IRS over its claim in this bankruptcy case, which
may be done effectively in a Chapter 7 case with the Chapter 7 Trustee at the helm. Further,
the Chapter 7 Trustee will do what is best for the creditors of the bankruptcy estate and will
ensure that the creditors receive a fair distribution of the Ladikas’ assets. We believe that
the bankruptcy court correctly determined that the case should remain a Chapter 7 and that
the Chapter 7 Trustee should be allowed to perform his duties on behalf of all of the creditors
of the estate.
In his appellate brief, Ladika raises several issues that are totally irrelevant to the
bankruptcy court’s ruling on the motion to reconvert or dismiss. Those issues are not
appropriately before the BAP and, accordingly, this panel will not consider those matters.
The judgment of the bankruptcy court is affirmed.
4
A true copy.
Attest.
CLERK, U.S. BANKRUPTCY APPELLATE PANEL,
EIGHTH CIRCUIT
5