Opinion
CASE NO. 15-11163-tmd
2016-07-26
IN RE: Donald D. DITTO and Kristin K. Ditto, Debtors.
Amber Vazquez Bode, Austin, TX, for Debtors. Deborah A. Bynum, U.S. Trustee, Austin, TX, for U.S. Trustee.
Amber Vazquez Bode, Austin, TX, for Debtors.
Deborah A. Bynum, U.S. Trustee, Austin, TX, for U.S. Trustee.
ORDER DENYING MOTION TO RECONSIDER
TONY M. DAVIS, UNITED STATES BANKRUPTCY JUDGE
On July 26, 2016, the Court considered the Debtors’ Motion to Reconsider and Set Aside Dismissal and the Response to Motion of the United States Trustee to Dismiss Case Pursuant to 11 U.S.C. § 707(b) [ECF 51], the Objection filed by the U.S. Trustee [ECF 60], related pleadings, and the docket in this case. On April 11, 2016, the U.S. Trustee filed a Motion to Dismiss Chapter 7 Case for Abuse [ECF 44], which included language that gave the Debtors twenty-one days to respond to the motion and warned that failure to file a timely response might result in the Court granting the motion without further notice or hearing. Twenty-eight days later, the Court entered an order granting the motion because no response was filed by the Debtors [ECF 46]. The next day, the Debtors filed an untimely response to the Motion to Dismiss, but did not seek relief from the order granting the dismissal motion until another twenty-eight days later when the Debtors filed their Motion to Reconsider. The Court set the Motion to Reconsider for hearing on July 19, 2016 because it did not contain objection language, but the Debtors sought continuance of the hearing due to counsel's unavailability. Now, seventy-eight days have passed since the case was dismissed.
When a deadline cannot be met, the Bankruptcy Rules provide a specific procedure to follow for seeking relief from the deadline. Generally, parties may seek extension of the twenty-one day response deadline pursuant to Rule 9006(b), which grants the court authority to extend the deadline for cause shown.
The Bankruptcy Rules also provide ways to seek relief from an order after it is entered. When an order is entered, a party may move for a new trial or to amend the order no later than 14 days after entry of the order. See Bankruptcy Rule 9023 (making Rule 59 of the Federal Rules of Civil Procedure applicable in bankruptcy cases). And if no motion is filed before that 14-day deadline, a party may seek relief from the order under Bankruptcy Rule 9024, which makes Rule 60 of the Federal Rules of Civil Procedure applicable to bankruptcy cases. To obtain relief under Rule 60, the party must show one of the grounds specified by that Rule and the motion requesting the relief "must be made within a reasonable time ...."
Here, the Debtors did not request an extension of the deadline and so the Court entered the dismissal order. The Debtors then failed to move for a new trial or seek amendment of the order before the 14-day deadline contained in Rule 59 and so the dismissal order is now final. Although the Debtors eventually filed a motion seeking reconsideration of the dismissal order, the motion is deficient on its face because the Debtors cited no authority or grounds for reconsideration. Also, it has now been over two months since the automatic stay terminated. Reinstating the stay, and the case, at this point may prejudice the Debtors’ creditors. In general, relief from a bankruptcy case dismissal must be sought quickly to be "made within a reasonable time" to avoid prejudice to creditors. This can be facilitated by seeking an expedited hearing under Local Rule 9014(e). As the Motion to Reconsider is deficient on its face, the Court finds that the Motion to Reconsider should be denied.
ACCORDINGLY, IT IS ORDERED that Debtors’ Motion to Reconsider and Set Aside Dismissal and the Response to Motion of the United States Trustee to Dismiss Case Pursuant to 11 U.S.C. § 707(b) [ECF 51] is DENIED.