Opinion
CASE NO. 17-11843
08-07-2020
IN THE MATTER OF: SANDRA J. BENEDICT Debtor
NOT INTENDED FOR PUBLICATION DECISION OVERRULING DEBTOR'S OBJECTION
On August 07, 2020
In this chapter 7 case, Manufacturers and Traders Trust Company has filed a motion for the abandonment of its collateral - real estate - from the bankruptcy estate. See, 11 U.S.C. § 554(b). All creditors and parties in interest have been given notice of both the motion and the opportunity to object to it and no objections have been filed within the time required - with the exception of a pro se objection from the debtor. Although the debtor is represented by counsel, the court has elected to address this improper filing, see, Fed. R. Bankr. P. Rule 9011(a) (every paper shall be signed by at least one attorney of record or may be stricken), because the debtor represents that counsel has declined to file it and, by addressing the objection directly rather than simply striking it, the court can explain why counsel was correct in refusing to file it.
An attorney may not file baseless pleadings on a client's behalf (no matter how much the client may beg), see, In re TCI Ltd., 769 F.2d 441 (7th Cir. 1985) (attorneys should not yield to the temptation to file baseless pleadings to appease clients); McCandless v. Great Atlantic and Pacific Tea Co., Inc., 697 F.2d 198, 201-02 (7th Cir. 1983) ("About half of the practice of a decent lawyer is telling would-be clients that they are damned fools and should stop."); In re Villa Madrid, 110 B.R. 919, 924 (9th Cir. BAP 1990) ("[t]he importunities of a desperate client do not relieve an attorney of the affirmative duty of reasonable inquiry imposed by Rule 9011"); Matter of Haggerty, 542 B.R. 849 (Bankr. N.D. Ind. 2015); Fed. Bankr. P. Rule 9011(b), (c) (sanctions may be upon attorneys and parties for filings which lack a sufficient legal or factual basis). The objection explains the reasons for the debtor's financial problems, emphasizes that the property is the family home and that she wants to work with the mortgage holder in order to bring the payments current. Accepting all that as true, none of it provides a legal or a factual basis for denying the creditor's motion and keeping the property in the bankruptcy estate in a Chapter 7 case such as this. As result the objection lacks any legal or factual merit and may be overruled without the need for a hearing, see, N.D. Ind. L.B.R. B-9014-1(a), and counsel properly declined to file it.
The debtor filed for relief under Chapter 7 and received her discharge more that two years ago. Her case remains open because the trustee is administering assets unrelated to the property in question. See, Trustee's Status Report, filed Sept. 24, 2019. In a Chapter 7 case, a motion to abandon property is viewed from the perspective of creditors and the bankruptcy estate; the best interests of the estate. See, 11 U.S.C. § 554(b) ("burdensome . . . or of inconsequential value and benefit to the estate"); In re Wilson, 94 B.R. 886,889 (Bankr. E.D. Va. 1989). In other words, the question is not whether the property is important to the debtor, but whether it can do anything for the debtor's creditors. That is part of the reason this and other courts have concluded that a chapter 7 debtor lacks standing to object to the abandonment of property from the bankruptcy estate. See, Behling v. M&I Marshall & Ilsley Bank Silver Spring Dev., 86 B.R. 144, 146 (W.D. Wis. 1988) (debtor has no standing to appeal abandonment); In re Moore, 450 B.R. 849, 852 (Bankr. N.D. Ind. 2011); Matter of Drost, 228 B.R. 208, 210 (Bankr. N.D. Ind. 1998) (abandonment does not harm the debtor because it returns property to him). See also, In re Cult Awareness Network, Inc., 151 F.3d 605, 607-09 (7th Cir. 1998) (chapter 7 debtors generally do not have standing to participate in the administration of the bankruptcy estate because they have no pecuniary interest in it). The debtor's entire objection is based upon her need for and use of the property; while understandable, that has nothing to with whether it benefits her creditors. See, In re Tyler, 15 B.R. 258, 260 (Bankr. E.D. Pa. 1981). So, not only does the debtor have no standing to object to the motion, her objections have no merit.
Debtor's objection to the motion for abandonment filed on behalf of Manufacturers and Traders Trust Company is overruled, and that motion should be granted. An order doing so will be entered.
/s/ Robert E . Grant
Chief Judge, United States Bankruptcy Court