Opinion
Case No. 19-10707
09-12-2019
In re: NICOLE BALL aka NICOLE L. BALL Debtor
Chapter 7
ORDER DISMISSING CHAPTER 7 BANKRUPTCY CASE WITH A THREE-YEAR BAR TO DEBTOR NICOLE BALL / NICOLE WHITAKER-SPIVEY'S REFILING
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a) and 1334, and the standing General Order of Reference in this District. This matter is before this Court on this Court's Order to Show Cause Why Case Should Not Be Dismissed and Referred to the U.S. Attorney for Violation of 18 U .S.C. § 152 [Docket Number 34] as well as the Motion of the United States Trustee to Dismiss Chapter 7 Case with Request for Three Year Bar to Re-filing ("Motion") [Docket Number 48] and Response to the Motion ("Response") filed by Debtor Nicole Ball aka Nicole L. Ball ("Ms. Ball") [Docket Number 50]. This Court held a show cause hearing on July 18, 2019 which was adjourned to August 1, 2019 [Docket Number 45]. Ms. Ball did not appear at either show cause hearing. The United States Trustee ("UST") did appear and stood on the facts as presented in the Motion and found on this Court's docket. This Court took the matters under advisement.
For the reasons that follow, this Court finds the UST's Motion meritorious. Accordingly, Ms. Ball's case is dismissed with a three-year bar to refiling due to Ms. Ball's filing of her current bankruptcy case, using a different last name and Social security number, while being subject to a bar to refiling issued in a prior bankruptcy case.
I. FACTUAL AND PROCEDURAL BACKGROUND
Ms. Ball initiated the current bankruptcy case by filing a pro se voluntary petition under Chapter 7 of the United States Bankruptcy Code on March 5, 2019 [Docket Number 1]. Along with her voluntary petition, Ms. Ball filed a Statement About Your Social Security Number(s) (Official Form 121) [Docket Number 3] in which, under penalty of perjury, she listed her Social security number as xxx-xx-4059. In addition, Ms. Ball filed a Statement of Related Cases (LBR Form 1015-2) [Docket Number 4] in which, under penalty of perjury, she checked the box stating that she had no prior bankruptcy filings in the last eight years. This statement matched the box checked on Ms. Ball's voluntary petition in which she also represented that she had filed no bankruptcy cases within the last eight years [Docket Number 1, p. 3]. The voluntary petition was also signed by Ms. Ball under penalty of perjury [Id., p. 6].
On March 5, 2019, Eileen Field was appointed as the Chapter 7 Trustee (the "Trustee"). The § 341 Meeting of Creditors ("341 Meeting") was noticed for April 12, 2019. Ms. Ball failed to appear at the 341 Meeting on April 12, 2019. Prior to the 341 Meeting, Ms. Ball informed the Trustee that she had an illness and requested a continuance.
The continued 341 Meeting took place on May 1, 2019 and Ms. Ball was present. At the continued 341 Meeting, the Trustee noted that Ms. Ball's social security number did not match the social security number listed on her petition. The Trustee then informed Ms. Ball that she would need to file an amendment to correct the social security number, among other amendments. The 341 Meeting was then continued again to June 5, 2019, so that Ms. Ball could make the appropriate amendments. Ms. Ball failed to appear at the continued 341 Meeting and again informed the Trustee that an illness prevented her from attending. The Trustee continued the 341 Meeting to June 19, 2019, when it was held and concluded.
On June 19, 2019, Ms. Ball filed an amended Statement About Your Social Security Numbers (Official Form 121) [Docket Number 22] in which, under penalty of perjury, she listed her social security number as xxx-xx-3057. Ms. Ball's amended social security number revealed that she had filed seven prior bankruptcy cases since 2013 in the Southern District of Ohio under the names Nicole L. Whitaker-Spivey, Nicole Lyn Whitaker-Spivey or Nicole Lynn Spivey. The following is a list of these seven prior cases (all of which were dismissed prior to discharge) along with Ms. Ball's pending case:
| Case No. | Chapter | Date Filed | Date Dismissed | Reason for Dismissal |
|---|---|---|---|---|
| 13-14644 | 7 | 10/4/13 | 1/13/14 | Failure to attend Meeting ofCreditors |
| 14-12375 | 7 | 6/2/14 | 11/25/14 | Failure to attend Meeting ofCreditors |
| 14-15069 | 7 | 12/11/14 | 3/4/15 | Failure to attend Meeting ofCreditors - Dismissed with180-day bar to refiling |
| 15-11666 | 7 | 4/28/15 | 4/30/15 | Violation of order imposing180-day bar to refiling |
| Case No. | Chapter | Date Filed | Date Dismissed | Reason for Dismissal |
|---|---|---|---|---|
| 15-14150 | 7 | 10/28/15 | 1/14/16 | Failure to file schedules -Dismissed with 180-day barto refiling |
| 16-10755 | 7 | 3/4/16 | 3/7/16 | Violation of order imposing180-day bar to refiling |
| 16-14631 | 7 | 12/14/16 | 2/23/17 | Failure to file schedules orattend Meeting of Creditors- Dismissed with 3-year barto refiling |
| 19-10707 | 7 | 3/5/19 | Pending | Pending |
Based on the amended social security number, it appeared to this Court that these cases were all filed by the same individual. Accordingly, Ms. Ball filed her current bankruptcy petition using a different name and social security number while still subject to the order barring her from refiling for a three-year period that was issued by this Court on February 23, 2017 in Case Number 16-14631.
On June 27, 2019, this Court issued its Order to Show Cause Why Case Should Not Be Dismissed and Referred to the U.S. Attorney for Violation of 18 U .S.C. § 152 ("Order") [Docket Number 34]. The Order set a show cause hearing on July 18, 2019 and requested that Ms. Ball be prepared to explain why the case should not be dismissed and referred for criminal investigation to the U.S. Attorney based on what appeared to be Ms. Ball's filing of the current bankruptcy case under a different name and social security number while subject to a three-year bar to refiling. The Order included a request that the UST attend the hearing.
Based on the serious nature of Ms. Ball's filings coupled with her failure to attend the scheduled show cause hearings, this Court will prepare a separate letter to refer this matter to the U.S. Attorney for criminal investigation.
On July 17, 2019, one day before the show cause hearing, Ms. Ball filed a motion to continue [Docket Number 43] for health reasons. Accordingly, Ms. Ball failed to appear at the show cause hearing. However, the UST did attend the hearing and indicated that a motion to dismiss would be filed. This Court entered an order adjourning the show cause hearing to August 1, 2019 and requiring Ms. Ball to attend [Docket Number 45]. The order adjourning the show cause hearing further noted that this Court would not entertain any further requests for continuances [Id.].
On July 22, 2019, the UST filed its Motion requesting dismissal of Ms. Ball's case and a three-year bar to refiling for "cause" pursuant to 11 U.S.C. § 707(a) and § 349(a) [Docket Number 48]. As additional support for dismissal, the UST also noted that Ms. Ball was ineligible to be a debtor pursuant to 11 U.S.C. § 109(h) because she filed a credit counseling certificate indicating that she obtained credit counseling after the date she filed the petition [Docket Number 18].
On August 1, 2019, this Court held its first adjourned show cause hearing. Again, Ms. Ball did not appear. However, on that same day, she filed a Response [Docket Number 50] to the UST's Motion. In the Response, Ms. Ball indicated that she did not know that she was subject to a three-year bar to refiling in her prior bankruptcy case and that the reason she used a new social security number was that she was told to do so due to identity theft. She also noted a history of health issues, including cancer, strokes, and lupus, impacting her ability to attend hearings. However, she stated that she always attempted to reschedule, was not being untruthful, and had done everything she was asked to do.
Following the August 1, 2019 hearing, this Court took the matter under advisement.
II. LEGAL ANALYSIS
Section 707(a) of the Bankruptcy Code provides that a bankruptcy court may dismiss a chapter 7 bankruptcy case "for cause." 11 U.S.C. § 707(a). In the Sixth Circuit, "cause" includes dismissal of a chapter 7 case that is deemed to be filed in bad faith. Merritt v. Franklin Bank, N.A. (In re Merritt), 211 F.3d 1269 (Table), 2000 U.S. App. LEXIS 6877, at *5, 2000 WL 420681, at *2 (6th Cir. April 12, 2000); Indus. Insurance Servs., Inc. v. Zick (In re Zick), 931 F.2d 1124, 1126-27 (6th Cir. 1991); In re Johnson, 546 B.R. 83, 156 (Bankr. S.D. Ohio 2016); In re Stump, 280 B.R. 208, 213-14 (Bankr. S.D. Ohio 2002). Bad faith dismissals should not be taken lightly and should generally be reserved for egregious cases. Zick, 931 F.2d at 1129.
Unless otherwise indicated, the terms "Bankruptcy Code," "Section" and "§" refer to Title 11 of the United States Code, 11 U.S.C. § 101 et seq.
In determining whether a case warrants dismissal for bad faith, courts consider multiple factors. Id. at 1128; Johnson, 546 B.R. at 157. Relevant to this proceeding, such factors include: (1) multiple bankruptcy filings or other procedural "gymnastics"; (2) failure of the debtor to make candid and full disclosures; (3) a pattern to evade a single major creditor or judgment; and (4) other conduct or motives evidencing an abuse of the protections of the Bankruptcy Code. See Stump, 280 B.R. at 214 n.2; In re Spagnolia, 199 B.R. 362, 365 (Bankr. W.D. Ky. 1995).
When presented with particularly egregious circumstances, bankruptcy courts may impose other sanctions pursuant to §§ 105(a) and 349(a), including barring a debtor from future bankruptcy filings for a finite or indefinite period of time. Dietrich v. Nob-Hill Stadium Properties, 2007 U.S. App. LEXIS 3591, at *14-15, 2007 WL 579547, at *5 (6th Cir. Feb. 15, 2007) (concluding that "the plain language of section 349(a) appears to allow a bankruptcy court to dismiss a bankruptcy petition with prejudice, permanently, if there is sufficient cause"). See also In re Wilcoxon, 2018 Bankr. LEXIS 3616, at *7-8, 2018 WL 6016540, at *3 (Bankr. N.D. Ohio Nov. 15, 2018) (barring refiling for a period of five years based on the debtor's pattern of serial filings to frustrate creditors while ignoring his responsibilities to pay filing fees and complete credit counseling); Stump, 280 B.R. at 214-17 (dismissing a case and barring the debtors from refiling for two years based on the debtors' bad faith conduct in shielding assets from creditors while continuing to live a lavish lifestyle and take numerous vacations); In re McCoy, 237 B.R. 419, 422-23 (Bankr. S.D. Ohio 1999) (dismissing the eighth bankruptcy case filed within eight years with a permanent bar to refiling based on the debtor's failure to file requisite documents in all but one of the cases, failure to attend 341 meetings, failure to accurately disclose prior bankruptcies, filing a new case while subject to a bar order issued in a prior case, and for filing using different names and social security numbers, all in an abusive effort to delay foreclosure and collection from creditors).
Turning to the current facts, Ms. Ball's pattern of conduct is nothing short of egregious. She has filed eight bankruptcy cases in six years. The first seven cases have all been dismissed for Ms. Ball's failure to comply with the requirements of the Bankruptcy Code, such as filing the required schedules or attending the required 341 meetings, or for violating this Court's orders barring her from refiling for a period of time.
In this pending eighth bankruptcy case, Ms. Ball's conduct reaches a new level. She filed her bankruptcy petition using a different last name and social security number while prohibited from refiling for a period of three years under a bar order entered by this Court on February 23, 2017 [See Case No. 16-14631, Docket Number 20]. This Court then scheduled two show cause hearings to give Ms. Ball an opportunity to explain her actions. She failed to appear at either one. Instead, on the date of the rescheduled show cause hearing, she filed a Response stating that she did not know about the bar order, she was told to use the different social security number because of "identity theft," and that her lack of appearances was due to a host of health issues.
This Court is empathetic to Ms. Ball's medical conditions and might even be understanding of "identity theft" if true. However, nothing in Ms. Ball's Response explains how she stated in both her voluntary petition and Statement of Related Cases, that she filed no prior bankruptcy cases in the last eight years [Case No. 19-10707, Docket Number 1, p. 3 and Docket Number 4]. Ms. Ball's blatantly untruthful statements made under penalty of perjury, coupled with her failure to appear at either of the two scheduled show cause hearings, lead this court to but one conclusion. Ms. Ball filed her current bankruptcy case using a different last name and social security number and without revealing her prior bankruptcy filings in a bad faith attempt to subvert this Court's order prohibiting her from filing another bankruptcy case for three years.
To preserve the integrity of the bankruptcy process, courts facing similarly egregious conduct have dismissed cases and prohibited debtors from refiling a bankruptcy petition for a significant period of time or indefinitely. See, e.g., McCoy, 237 B.R. at 422-23; In re Millers, 90 B.R. 567, 568 (Bankr. S.D. Fla. 1988) (imposing a permanent bar against the debtors after they attempted to perpetuate a fraud on the court by altering their names and social security numbers to file their current bankruptcy proceeding while failing to list their prior bankruptcy cases). Accordingly, this Court will grant the UST's request to dismiss this bankruptcy case, with prejudice, and impose a bar prohibiting Ms. Ball from filing another bankruptcy petition for a new three-year period.
The UST correctly notes in its Motion that, according to Ms. Ball's Certificate of Counseling [Docket Number 18], Ms. Ball obtained her credit counseling only after the bankruptcy petition filing date which means she does not qualify to be a debtor. See 11 U.S.C. § 109(h)(1) (stating that, subject to exceptions not shown to be applicable here, "an individual may not be a debtor under this title unless such individual has, during the 180-day period ending on the date of filing of the petition . . . received from an approved nonprofit budget and credit counseling agency . . . an individual or group briefing . . . that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis"). While this forms an independent basis for dismissal of Ms. Ball's case, this Court focuses on the serious bad faith concerns discussed in the decision. --------
WHEREFORE, the Motion of the United States Trustee to Dismiss Chapter 7 Case with Request for Three Year Bar to Re-filing [Docket Number 48] is GRANTED.
Ms. Ball's bankruptcy case is DISMISSED with prejudice pursuant to 11 U.S.C. § 707(a) and § 349(a). Debtor Nicole Ball aka Nicole L. Ball, Nicole L. Whitaker-Spivey, Nicole Lyn Whitaker-Spivey or Nicole Lynn Spivey is prohibited from filing a bankruptcy petition under any chapter of the Bankruptcy Code and in any jurisdiction for a period of three (3) years from the date of entry of this order.
SO ORDERED.
This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
/s/ _________
Beth A. Buchanan
United States Bankruptcy Judge Dated: September 12, 2019 Distribution List:
All creditors and parties in interest
Benjamin A. Sales, Esq.