Opinion
C/A No. 11-01034-dd.
March 18, 2011
ORDER
This matter is before the Court on a Motion to Allow Case to Proceed in the District of South Carolina ("Motion") filed by Don R. Kight, Jr. ("Debtor") on February 18, 2011. The United States Trustee ("UST") filed an Objection to Debtor's Motion on March 14, 2011. A hearing was held on March 17, 2011. At the conclusion of the hearing, the Court took the matter under advisement. After consideration of the evidence and arguments presented at the hearing, the Court makes the following Findings of Fact and Conclusions of Law.
FINDINGS OF FACT
Debtor filed for chapter 7 relief in this District on February 18, 2011. Debtor is an attorney who lives in Asheville, North Carolina and practices law in the Western District of North Carolina. Debtor practices primarily bankruptcy law and is a certified bankruptcy specialist. Debtor's Motion states that he has practiced bankruptcy law in North Carolina for over ten years and has close personal relationships with all of the trustees in the Western District of North Carolina. He also states that he is well-acquainted with all of the bankruptcy judges and the bankruptcy administrator in that district. As a result, Debtor indicates that all of these individuals would likely have a conflict of interest in his case, causing the administration of his case to be lengthy and complicated. Debtor's Motion states that while he does not currently reside in South Carolina, he has many connections to South Carolina, as he went to college and law school in the state and "regularly visits family in SC."
Debtor indicates that his bankruptcy filing was necessitated by an unfortunate combination of circumstances, including Debtor's divorce and an illness. Debtor's Schedule I shows an average monthly income, after payroll deductions, of $5,363.95. Debtor's Schedule J shows average monthly expenses of $6,590.43, leaving Debtor with a monthly negative disposable income of $1,226.48. Debtor's Schedule D shows $264,000 in secured debt and his Schedule F shows $347,931.90 of unsecured debt, the majority of which appears to be business-related. Debtor also lists $21,000 of federal priority taxes on his Schedule E.
CONCLUSIONS OF LAW
28 U.S.C. § 1408 governs venue in bankruptcy cases and provides:
Except as provided in section 1410 of this title, a case under title 11 may be commenced in the district court for the district —
(1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement, or for a longer portion of such one-hundred-and-eighty-day period than the domicile, residence, or principal place of business, in the United States, or principal assets in the United States, of such person were located in any other district; or
(2) in which there is pending a case under title 11 concerning such person's affiliate, general partner, or partnership.
In Debtor's case, venue in this District is clearly not proper. Debtor resides and operates his business in North Carolina and has done so for several years. Debtor does not do any business in South Carolina and does not own property here. Debtor is domiciled in North Carolina, and his principal assets are in North Carolina. While Debtor's Motion states that Debtor grew up and went to college and law school in South Carolina, Debtor moved away from the state upon graduation and apparently has not lived in South Carolina during any period of time since, including during any portion of the 180-day period immediately prior to his bankruptcy filing.
The applicable Federal Rule of Bankruptcy Procedure, Rule 1014, provides two paths for considering venue issues. Which path a judge should take depends upon the propriety of the original venue choice. Rule 1014(a)(2) states:
If a petition is filed in an improper district, the court, on the timely motion of a party in interest or on its own motion, and after hearing on notice to the petitioners, the United States trustee, and other entities as directed by the court, may dismiss the case or transfer it to any other district if the court determines that transfer is in the interest of justice or for the convenience of the parties.
Fed.R.Bankr.P. 1014(a)(2). While the language of this rule is not entirely clear, courts have held that Rule 1014(a)(2) permits a court to either dismiss or transfer a case, but does not allow a judge any discretion to retain a case. See In re Great Lakes Hotel Assocs., 154 B.R. 667, 671 (E.D. Va. 1992) ("To the extent a case is covered by Section 1406, a court which has found that its district is an improper venue has no option to retain jurisdiction."); In re Swinney, 300 B.R. 388, 392-93 (Bankr. M.D. Ga. 2003) (holding a bankruptcy court has no discretion to retain cases where venue is not proper, based on 28 U.S.C. § 1406); In re McDonald, 219 B.R. 804, 805-06 (Bankr. W.D. Tenn. 1998) ("The majority of courts that have ruled on the issue has held that the bankruptcy court does not have discretion to retain jurisdiction over such an improperly venued case where a creditor timely files an objection."). This court agrees with this interpretation of Rule 1014(a)(2); thus, if the Court finds that venue in Debtor's case is improper, Debtor's case must either be transferred or dismissed.
The Court has no discretion to retain a case when venue is improper, as in Debtor's case. As a result, Debtor's case must either be transferred or dismissed. Debtor indicated at the hearing that he, given only those two choices, preferred transfer of his case to North Carolina. Debtor's case should be transferred to the Western District of North Carolina.
CONCLUSION
Venue is not proper in the District of South Carolina, and in the absence of a proper basis for venue, the Court has no discretion to retain Debtor's case, but instead must either transfer or dismiss it. The Court finds that Debtor's case should be transferred to the Asheville Division of Western District of North Carolina.
AND IT IS SO ORDERED. Notice Recipients Recipients of Notice of Electronic Filing: Recipients submitted to the BNC (Bankruptcy Noticing Center):
District/Off: 0420-3 User: stork Date Created: 3/18/2011 Case: 11-01034-dd Form ID: pdf01 Total: 50 ust US Trustee's Office USTPRegion04.CO.ECF@usdoj.gov tr W. Ryan Hovis wrhovis@comporium.net intp US Bankruptcy Court Chuck_Meetze@scb.uscourts.gov aty Linda Barr linda.k.barr@usdoj.gov TOTAL: 4 db Don R. Kight, Jr. 22 Riverbend Drive Asheville, NC 28805 541659663 ADT SECURITY SERVICES INC PO BOX 371490 PITTSBURG PA 15250-7490 541659677 ADT SECURITY SERVICES INC PO BOX 371490 PITTSBURG PA 15250-7490 541659664 AMERICAN EXPRESS BANKRUPTCY DEPARTMENT 16 GENERAL WARREN BLVD MALVERN PA 19355 541659678 AMERICAN EXPRESS BANKRUPTCY DEPARTMENT 16 GENERAL WARREN BLVD MALVERN PA 19355 541659665 ATTADVERTISING PUBLISHING PO BOX 105024 ATLANTA GA 30348-5024 541659679 ATTADVERTISING PUBLISHING PO BOX 105024 ATLANTA GA 30348-5024 541659656 BANK OF AMERICA BANKRUPTCY DEPARTMENT PO BOX 650070 DALLAS TX 75265 541659666 BANK OF AMERICA BANKRUPTCY DEPARTMENT PO BOX 650070 DALLAS TX 75265 541659667 BANK OF AMERICA BANKRUPTCY DEPARTMENT PO BOX 650070 DALLAS TX 75265 541659680 BANK OF AMERICA BANKRUPTCY DEPARTMENT PO BOX 650070 DALLAS TX 75265 541659657 BBTLOAN SERVICES BANKRUPTCY DEPT PO BOX 1847 WILSON NC 27894-9965 541659681 BBTLOAN SERVICES BANKRUPTCY DEPT PO BOX 1847 WILSON NC 27894-9965 541659682 BELLSOUTH ADVERTISING PUBLISHING C/O BENJAMIN D SCHWARTZ 8625 CROWN CRESCENT COURT SUITE 110 CHARLOTTE NC 28227 541659668 BELLSOUTH ADVERTISING PUBLISHING C/O BENJAMIN D SCHWARTZ 8625 CROWN CRESENT COURT SUITE 110 CHARLOTTE NC 28227 541659660 BUNCOMBE COUNTY TAX OFFICE BUNCOMBE COUNTY COURTHOUSE 60 COURT PLAZA ROOM 320 ASHEVILLE NC 28801 541659683 BUNCOMBE COUNTY TAX OFFICE BUNCOMBE COUNTY COURTHOUSE 60 COURT PLAZA ROOM 320 ASHEVILLE NC 28801 541659669 CAPITAL ONE BANKRUPTCY DEPARTMENT PO BOX 85167 RICHMOND VA 23285 541659670 CAPITAL ONE BANKRUPTCY DEPARTMENT PO BOX 85167 RICHMOND VA 23285 541659684 CAPITAL ONE BANKRUPTCY DEPARTMENT PO BOX 85167 RICHMOND VA 23285 541659671 CHASE BANK USA NA PO BOX 15919 WILMINGTON DE 19850-5919 541659685 CHASE BANK USA NA PO BOX 15919 WILMINGTON DE 19850-5919 541659686 COFACE COLLECTIONS NORTH AMERICA INC PO BOX 8510 3001 DIVISION STREET METAIRIE LA 70011-8510 541659688 FINANCIAL ASSET MANAGEMENT SYS INC PO BOX 451409 ATLANTA GA 31145-9409 541659689 FIRST SOURCE ADVANTAGE LLC 205 BRYANT WOODS SOUTH BUFFALO NY 14228 541659690 FREDERICK J HANNA ASSOCIATES PC 1427 ROSWELL ROAD MARIETTA GA 30062 541659661 INTERNAL REVENUE SERVICE 320 FEDERAL PLACE GREENSBORO NC 27401 541659691 INTERNAL REVENUE SERVICE 320 FEDERAL PLACE GREENSBOROUGH NC 27401 541659692 IRS PO BOX 7346 PHILADELPHIA PA 19101-7346 541659693 LTD FINANCIAL SERVICES 7322 SOUTHWEST FREEWAY SUITE 1600 HOUSTON TX 77074 541659659 MELISSA M KNIGHT 4 MARLBOROUGH DRIVE ASHEVILLE NC 28805 541659676 MELISSA M KNIGHT 4 MARLBOROUGH DRIVE ASHEVILLE NC 28805 541659694 MELISSA M KNIGHT 4 MARLBOROUGH DRIVE ASHEVILLE NC 28805 541659662 NC DEPARTMENT OF REVENUE PO BOX 1168 RALEIGH NC 27602 541659695 NC DEPARTMENT OF REVENUE PO BOX 1168 RALEIGH NC 27602 541659696 ROBERT J BERNHARDT BERNHARDT AND STRAWSER 5821 FAIRVIEW ROAD SUITE 550 CHARLOTTE NC 28209 541659697 ROGERS TOWNSEND THOMAS PC ATTN MICHAEL B STEIN 2550 WEST TYVOLA ROAD STE 520 CHARLOTTE NC 28217 541659673 SALLIEMAE PO BOX 4600 WILKES-BARRE PA 18773-4600 541659698 SALLIEMAE PO BOX 4600 WILKES-BARRE PA 18773-4600 541659699 SUBSTITUTE TTEE SERV OF CAROLINA LLC ATTN JEREMY B WILKINS BROCK SCOTT PLLC 5431 OLEANDER DRIVE SUITE 200 WILMINGTON NC 28403 541659674 WELLS FARGO FINANCIAL PO BOX 98784 LAS VEGAS NV 89193-8784 541659700 WELLS FARGO FINANCIAL PO BOX 98784 LAS VEGAS NV 89193-8784 541659658 WELLS FARGO HOME MORTGAGE PO BOX 10368 DES MOINES IA 50306-0368 541659701 WELLS FARGO HOME MORTGAGE PO BOX 10368 DES MOINES IA 50306-0368 541659675 YELLOW BOOK USA 2560 RENAISSANCE BOULVARD KING OF PRUSSIA PA 19406 541659702 YELLOW BOOK USA 2560 RENAISSANCE BOULVARD KING OF PRUSSIA PA 19406 TOTAL: 46