United States District Court, E.D. Pennsylvania
J. PAPPERT, J.
Marinari filed for Chapter 13 bankruptcy. Robert Murphy, one
of Marinari's creditors, filed an adversary proceeding
against her and moved to convert her Chapter 13 case to one
under Chapter 7. Without ruling on Murphy's motion or
resolving his adversary proceeding, the Bankruptcy Court
dismissed Marinari's Chapter 13 case on her request. It
later denied Murphy's motion to reconsider the dismissal
order. Murphy now appeals from those two orders. For the
reasons that follow, the Court affirms the Bankruptcy
Court's judgment in all respects.
2004, Murphy sued Marinari and her ex-husband in state court
for fraudulent misrepresentation and for breaching a contract
to restore his vintage automobile. See R., Vol. X,
at 21-26 (State Ct. Compl., Ex. 1, Adversary Bankr. Doc. No.
After her attorney withdrew from the case without telling
her, Marinari failed to appear for several hearings, and the
state court entered a default judgment against her and her
ex-husband. See Id. at 32 (State Ct. J., Ex. 2,
Adversary Bankr. Doc. No. 1); id., Vol. IX, at 47-48
(Order Denying Reconsideration, Ch. 13 Bankr. Doc. No. 151).
years later, Marinari filed for Chapter 13 bankruptcy.
See id., Vol. I, at 19- 24 (Ch. 13 Voluntary Pet.,
Ch. 13 Bankr. Doc. No. 1). To ensure that this proceeding did
not discharge his judgment against her, Murphy filed an
adversary complaint with the Bankruptcy Court. See id.,
Vol. X, at 116-33 (Am. Adversary Compl., Adversary Bankr.
Doc. No. 22). He also moved to either dismiss Marinari's
Chapter 13 proceeding or convert it to a Chapter 7
proceeding. See id., Vol. I, at 128-29 (Mot. to
Dismiss or Convert, Ch. 13 Bankr. Doc. No. 25). The
Bankruptcy Court scheduled a hearing on the conversion
motion, but Murphy requested repeated continuances. See
id., Vol. IX, at 49. Before that hearing took place,
Marinari filed an application to voluntarily dismiss her
Chapter 13 case under 11 U.S.C. § 1307(b). See
id., Vol. VII, at 53 (Appl. to Dismiss, Ch. 13 Bankr.
Bankruptcy Court initially dismissed Marinari's Chapter
13 case, but it later granted Murphy's motion to
reconsider. See id., Vol. VIII, at 50 (Order
Granting Mot. to Reconsider, Ch. 13 Bankr. Doc. No. 123). It
also ordered Murphy to file a brief discussing “whether
a debtor has an absolute right to dismissal under §
1307(b).” Id. Murphy chose instead to rely on
his initial motion to reconsider rather than file another
brief. See Id. at 61 (Order Dismissing Ch. 13 Case,
Ch. 13 Bankr. Doc. No.129). At a hearing, the Bankruptcy
Court announced that it would treat Marinari's
“application” for dismissal as a formal motion to
dismiss under § 1307(b); neither party objected. See
Id. at 61-62.
the hearing, the Bankruptcy Court again dismissed
Marinari's Chapter 13 case. It found that Murphy had
forfeited his chance to request that the Court impose any
conditions should it dismiss Marinari's Chapter 13
case. See Id. at 62 & n.2. The
Court also found that Murphy had notice of and an opportunity
to object to Marinari's application for dismissal.
See Id. at 61. It then determined that Marinari had
an absolute right to dismiss her Chapter 13 case under §
1307(b). See Id. at 62-66 & n.3. In dismissing
the case, the Court-with Marinari's consent-ordered that,
if Marinari filed for bankruptcy again within two years,
Murphy's adversary case would pick up where it left off,
just before the pretrial hearing. See Id. at 67.
again moved for reconsideration. See Id. at 81-113
(Second Mot. to Reconsider, Ch. 13 Bankr. Doc. No. 131). As
before, he argued that dismissal under § 1307(b) was
improper because Marinari had (1) neither formally moved nor
served him with a motion to dismiss and (2) filed her Chapter
13 case in bad faith. See Id. at 82-83, 93-94.
Murphy also claimed that the Bankruptcy Court erred in
dismissing the Chapter 13 case while his adversary proceeding
and various motions for sanctions were pending. See
Id. at 96. Throughout the motion, Murphy alleged that
Marinari (or the Bankruptcy Court) violated various
constitutional and statutory provisions, though he provided
no factual or legal support for those assertions. See,
e.g., id. at 87.
Bankruptcy Court denied this second reconsideration motion
after oral argument and supplemental briefing. See
id., Vol. IX, at 52-53. Though it struggled to
understand Murphy's “somewhat incoherent”
arguments, id. at 49 n.6, the Bankruptcy Court
thoroughly addressed and rejected each proffered ground for
reconsideration or vacatur, see Id. at 53-64. As it
had done earlier, the Court explained the varying views from
other circuits on whether the right to dismissal under §
1307(b) is absolute or subject to a bad-faith exception; it
added that Murphy's disagreement with its adherence to
the absolute view was not grounds for reconsideration.
See Id. at 56-60. The Bankruptcy Court also found
that: (1) “all motions for sanctions had been resolved,
” id. at 52 n.10; (2) Murphy caused the delay
in consideration of his motion to convert, see Id.
at 60 n.18; (3) he forfeited both his right to request an
evidentiary hearing on his allegations of bad faith, see
id., and any objection to the Court's treatment of
Marinari's application for dismissal as a formal motion,
see Id. at 63 n.24; (4) Murphy made a
“strategic decision to seek conversion” rather
than ask for conditions on Marinari's dismissal,
id. at 62; and (5) he had notice of and a hearing on
Marinari's motion for dismissal, see Id. at 63
n.24. Based on those findings, the Bankruptcy Court concluded
that Murphy “failed to articulate any grounds which
would justify reconsidering or vacating” the order
dismissing Marinari's Chapter 13 case. Id. at
now appeals the orders dismissing Marinari's Chapter 13
case and denying his second motion to
reconsider. See (Am. Certificate of Appeal,
ECF No. 7). He presents three questions for review, asking
whether the Bankruptcy Court (1) erred by dismissing
Marinari's Chapter 13 case under 11 U.S.C. §
1307(b); (2) abused its discretion by imposing inadequate
conditions on the dismissal; and (3) erred by denying
Murphy's second motion to reconsider. See
Aplt.'s Opening Br. at 3-7.
courts review final judgments of a bankruptcy court
“under traditional appellate standards.”
Stern v. Marshall, 564 U.S. 462, 475 (2011). Legal
conclusions are reviewed de novo, “factual
findings for clear error, and . . . exercises of discretion
for abuse thereof.” In re Ross, 858 F.3d 779,
783 (3d Cir. 2017). When a party fails to preserve an issue,
the district court reviews for plain error. See Forrest
v. Parry, 930 F.3d 93, 113 (3d Cir. 2019); see also
In re Walters, 649 Fed.Appx. 273, 275 (3d Cir. 2016)
(unpublished) (noting that the plain-error “standard
applies with respect to bankruptcy court proceedings”).
first argues that the Bankruptcy Court erred by dismissing
Marinari's Chapter 13 case under 11 U.S.C. §
1307(b). See Aplt.'s Opening Br. at 24-31.
Though difficult to follow, his argument seems to have three
parts. First, Murphy claims that the Bankruptcy Court erred
in ruling that Marinari had an absolute right to dismissal
under § 1307(b). See Id. at 24-29. Second, he
posits that dismissal was improper because Marinari never
formally moved to dismiss her Chapter 13 case. See
Id. at 29- 30. Third, Murphy reasons that the Bankruptcy
Court erred in ...