Opinion
6:18-bk-2219-TPG
06-29-2022
In re Kerry Anne Purkiss, Debtor.
ORDER DENYING DEBTOR'S MOTIONS TO REOPEN BANKRUPTCY CASE AND TO EXPUNGE BANKRUPTCY CASE RECORD
Tiffany P. Geyer, Judge.
This case came on for hearing on June 22, 2022, at 11:00 a.m. (Doc. No. 95) upon the "Motion to Reopen Bankruptcy and Request 10-20 Minute Emergency Hearing" (the "Motion to Reopen"), and the "Motion to Expunge Bankruptcy Records" (the "Motion to Expunge"), filed by the pro se Debtor, Kerry Ann Purkiss, on May 23, 2022 (Doc. Nos. 91, 92). The hearing was attended by the Debtor and by Stuart Ferderer as attorney for the Chapter 13 Trustee (Doc. No. 95). Upon consideration of the Debtor's arguments, the law, and taking judicial notice of the record in this case and of the Debtor's previous bankruptcy filing in this Court, and being otherwise fully advised in the premises, the Court denies the Motion to Reopen and the Motion to Expunge.
A court may take judicial notice of its own records. ITT Rayonier Inc. v. United States, 651 F.2d 343, 345 n.2 (5th Cir. Unit B July 20, 1981). The decisions of the United States Court of Appeals for the Fifth Circuit issued on or before September 30, 1981, are binding precedent in the Eleventh Circuit. Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir. 1981).
The Debtor has filed two bankruptcy cases. First, the Debtor filed a Chapter 7 case with her former husband Wayne S. Purkiss on September 14, 2010 (Case No. 3:10-bk-08001-PMG) and received a discharge on January 7, 2011 (Case No. 3:10-bk-08001-PMG, Doc. Nos. 1, 31). Many years later, on April 18, 2018, the Debtor filed the instant Chapter 13 case (Doc. No. 1). On July 16, 2019, the Chapter 13 case was dismissed for the Debtor's failure to make plan payments (Doc. No. 87) and on September 4, 2019, the case was closed.
During the approximately 15 months the Debtor's Chapter 13 case was pending before being dismissed, the Debtor was an active participant in her case and attended several hearings (Doc. Nos. 57, 82, 85). She filed a motion to pay the Chapter 13 filing fee in installments (Doc. No. 3) which was granted (Doc. No. 9), she opposed the dismissal of her case (Doc. No. 17) and was awarded the relief she sought (Doc. No. 24). She filed a motion to reimpose the automatic stay (Doc. No. 47) which was granted (Doc. No. 58). She filed a motion to avoid a judicial lien (Doc. No. 40). She filed a motion for referral to Mortgage Modification Mediation (Doc. No. 53) which was also granted (Doc. No. 62). She filed a Chapter 13 plan (Doc. No. 38) and later amended the plan (Doc. No. 52), although the plan was never confirmed (Doc. Nos. 85, 87). The case was closed approximately two years and ten months ago.
The Debtor now asks the Court to reopen the Chapter 13 case for the purpose of expunging it from this Court's public records (Doc. Nos. 91, 92) because it is affecting her liquidity, credit rating, and ability to qualify for a loan (Doc. No. 92). The Debtor asserts that she filed for bankruptcy based on bad advice, that some of the papers filed in the case were incorrect, that she did not participate in the case, and that she ultimately repaid her creditors. (Id. at 1, 2.) As such, the Debtor argues that the bankruptcy filing is scandalous and defamatory and is causing her irreparable harm (Doc. No. 91).
Under 11 U.S.C. § 350(b), "A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause." Requests to expunge the record of a bankruptcy case are rarely granted due to the strong presumption in favor of public access to bankruptcy filings. In re Heath, No. 16-63126-PMB, 2022 WL 993959, at *2 (Bankr. N.D.Ga. April 1, 2022) ("[O]pen inspection [of public records] is fundamental to the operation of the bankruptcy system and is the best means of avoiding any suggestion of impropriety that might or could be raised.") citing In re Bell & Beckwith, 44 B.R. 661, 664 (Bankr.N.D.Ohio 1984); In re Gitto Glob. Corp., 422 F.3d 1, 7 (1st Cir. 2005) ("unrestricted access to judicial records fosters confidence among creditors regarding the fairness of the bankruptcy system.")
The Debtor argues that cause exists to accord her relief pursuant to § 350(b) because the public record of this case is causing her irreparable harm and is scandalous and defamatory, particularly because she paid her creditors after her Chapter 13 case was dismissed. Because of this, and because of the lingering damage to her ability to obtain sufficient credit, she believes that cause exists to reopen the case to expunge what she argues to be the scandalous and defamatory record of her Chapter 13 case. Such requests are typically considered under the Court's general equitable powers conferred by 11 U.S.C. § 105(a) and/or under 11 U.S.C. § 107(b)(2), which authorizes a court to "protect a person with respect to scandalous or defamatory matter contained in a paper filed in a case under this title" upon the request of a party in interest.
11 U.S.C. 105(a) authorizes a bankruptcy court to issue any order, process or judgment that is necessary or appropriate to carry out the provisions of Title 11.
Here, the protection the Debtor seeks is expungement. However, expungement is an extraordinary remedy that bankruptcy courts decline to grant simply because a debtor changes his or her mind about filing bankruptcy or suffers from the bankruptcy case's effect on a credit report. In re Henry, No. 17-36854, 2019 WL 623873, at *2 (Bankr.S.D.Tex. Feb. 12, 2019) (denying motion to expunge where debtor voluntarily filed petition and benefitted from automatic stay); In re Duque, No. 8:16-BK-00969-CPM, 2016 WL 4239608, at *1 (Bankr. M.D. Fla. Aug. 8, 2016) (holding that § 107 does not provide "grounds for removing a bankruptcy filing from the public records or redacting those records in any way due to a debtor's strategic mistake."); Henry, 2019 WL 623873, at *1 (bankruptcy on public record resulting in difficulty obtaining credit does not constitute defamation under § 107); Heath, 2022 WL 993959, at *2 (denying debtor's request to expunge case where debtor filed the case and received benefits of automatic stay); In re Whitener, 57 B.R. 707, 710 (Bankr. E.D. Va. 1986) (finding that § 107 does not apply because the bankruptcy filings were true, and "dissemination of truthful matter cannot be enjoined merely because the matter is prejudicial . . .")
When a bankruptcy court exercises its authority to expunge a case, it is typically where the case was filed without the Debtor's authorization or knowledge. Duque, 2016 WL 4239608, at *1 citing In re John Copes, Case No. 8:16-bk-01897-CPM (debtor's counsel filed case in error); In re Michael Ferrera, Case No. 8:13-bk-15976-CPM (debtor did not sign or file the Petition, nor did he authorize anyone else to sign or file it on his behalf); In re Mangum, 2012 WL 2153788, at *2-3 (Bankr. E.D. N.C. June 13, 2012) (ordering records of bankruptcy filed in debtor's name by non-debtor spouse and without debtor's knowledge or authority be expunged, and directing the credit reporting agencies to expunge case from their records); In re Storay, 364 B.R. 194, 196-97 (Bankr. D.S.C. 2006) (granting debtors' request that a case be expunged because debtors' attorney filed bankruptcy petition without debtor's express authorization). In this case, the Court is sympathetic to the Debtor's plight and commends her repayment of her creditors and her efforts to regain her financial footing. However, neither § 105 nor § 107 provide an avenue of relief for the Debtor under the facts. The record demonstrates that the Debtor intentionally filed the Chapter 13 case, actively participated in the case, opposed dismissal of the case, and benefitted from the automatic stay.
Accordingly, the Motion to Reopen (Doc. No. 91) and the Motion to Expunge (Doc. No. 92) are DENIED.
The Clerk is directed to serve a copy of this order on all interested parties.
ORDERED.