IN THE MATTER OF LORRAINE E. KNAUSS
WILLIAM H. YOHN, Jr., District Judge.
Lorraine Knauss ("Appellant") has appealed from the bankruptcy court's January 30, 2013 order dismissing her Chapter 13 petition with prejudice. I affirm the order of the bankruptcy court for the following reasons.
Appellant's Chapter 13 petition relates to debts owed to Clearvue Opportunity XV ("Clearvue") arising from a mortgage and a note on 3604 Genesee Place, Philadelphia, PA 19154 ("the Property").
The involvement of Appellant and her daughter, Jessica Knauss,  with the Property dates to 1982, when Appellant purchased it with her late husband. Ownership of the Property subsequently changed twice among the Knausses. On April 28, 2006, while a previous Chapter 13 bankruptcy of Appellant was pending, Appellant deeded the Property outright to Jessica. That same date, Jessica mortgaged the Property with Clearvue (formerly Madison Equity). When neither Jessica nor Appellant paid the mortgage in a timely fashion, Clearvue foreclosed in the Philadelphia Court of Common Pleas. Clearvue won summary judgment on its foreclosure action on December 20, 2011.
Foreclosure in hand, Clearvue scheduled the Property to be sold at a Philadelphia County Sheriff's Sale on August 7, 2012 at 10:00 a.m. However, on August 6, 2012, Jessica transferred the Property to herself and Appellant jointly, for a stated consideration of $10. Appellant then filed the Chapter 13 petition at issue here on August 7, 2012 at 9:57 a.m. In the view of the Sheriff's office, Appellant's filing automatically stayed the Sheriff's Sale by the terms of 11 U.S.C. § 362.
On August 15, 2012, Clearvue moved to dismiss Appellant's Chapter 13 petition under 11 U.S.C. § 1307(c), claiming Appellant filed her petition in bad faith. On August 29, 2012, the bankruptcy court held a hearing on Clearvue's motion at which Appellant and Clearvue were represented by counsel. The court heard arguments and Appellant and Jessica testified. The bankruptcy court found the following additional facts: the Property was sufficiently encumbered that Appellant had negligible equity in it, if any, and the August 6 conveyance from Jessica to Appellant was a bad faith, evasionary tactic to forestall the Sheriff's Sale. See Transcript of August 29 , at *7-8. Despite finding the case for dismissal to be "exceedingly strong, " the bankruptcy court allowed the action-and the stay of the Sheriff's Sale-to continue while Appellant pursued relief under a Pennsylvania mortgage assistance program. Id. at *46-47. As ordered on September 19, 2012, the stay was conditional and Clearvue's motion for dismissal would be re-listed if Appellant and/or Jessica did not apply for the mortgage assistance program, failed to diligently pursue program benefits, or had their application denied. Further, any failure by Appellant and/or Jessica to make full, timely payments to Clearvue under a modified loan repayment schedule would result in an automatic lifting of the § 362 stay.
On January 3, 2013, Clearvue filed a certification that Appellant and/or Jessica had been late on their October 2012 scheduled payment. At a subsequent hearing on January 30, 2013, the Chapter 13 Trustee informed the bankruptcy court-and Appellant's counsel conceded-that Appellant had been denied the benefits she had applied for under the Pennsylvania mortgage assistance program. Thereafter, the bankruptcy court noted the terms of the September 19, 2012 order and its previous assessment of the merits of Clearvue's motion to dismiss for a bad faith filing. The bankruptcy court's January 30, 2013 order dismissed Appellant's case with prejudice and, as amended on February 4, 2013, barred Appellant and Jessica from filing a new bankruptcy petition for 180 days without prior leave of the court. The bankruptcy court denied Appellant's emergency petition to stay the dismissal pending appeal, and the Property was sold by Sheriff's Sale on February 5, 2013.
On June 10, 2013, Appellant filed this appeal from the bankruptcy court's January 30, 2013 dismissal of her Chapter 13 claim. She seeks reversal of that order to the extent that it was based on the bankruptcy court's finding that her filing was fraudulent or in bad faith. If the order is not reversed, she seeks that the order be curtailed insofar as it applies to Jessica.
II. Jurisdiction and Standard of Review
28 U.S.C. § 158(a) grants me jurisdiction to hear this appeal. See 28 U.S.C. § 158(a).
Under 11 U.S.C. § 1307(c), the bankruptcy court may dismiss for cause a Chapter 13 filing made in bad faith. In re Myers , 491 F.3d 120, 125 (3d Cir. 2007) (citing In re Lilley , 91 F.3d 491, 496 (3d Cir. 1996)). "Once a party [to a bankruptcy] calls into question a petitioner's good faith, the burden shifts to the petitioner to prove his good faith." In re Tamecki , 229 F.3d 205, 207 (3d Cir. 2000).
Determining whether a filing has been made in good faith is "a fact intensive determination better left to the discretion of the bankruptcy court." Myers , 491 F.3d at 125; Lilley , 91 F.3d at 496. Such an inquiry turns on conclusions about the petitioner's purpose and credibility, which the bankruptcy court is particularly well-positioned to assess. See id. Moreover, bankruptcy courts possess a "broad power to decide whether the petitioner has abused the provisions, purpose, or spirit of bankruptcy law.'" Myers , 491 F.3d at 126 (quoting Tamecki , 229 F.3d at 207). Accordingly, I will not set aside the factual findings of the ...