Opinion
Bankruptcy No. 03-18809DWS.
October 18, 2004
MEMORANDUM OPINION
Before the Court is the Motion of Kevin and Laurie Robinson ("Debtors") for Leave to File a Bankruptcy Case and the Objection of the Chapter 13 Trustee (the "Trustee") thereto. An evidentiary hearing was held on October 7, 2004. Based on the record made, the Motion shall be denied.
BACKGROUND
Kevin and Laurie Robinson have filed a total of five prior Chapter 13 cases. The Debtors' bankruptcy history dates to June 30, 2000 when case no. 00-18202 was filed. It was dismissed on February 8, 2001 on the Trustee's motion for lack of payment. Case no. 01-12436 was filed two weeks later on February 22, 2001 and was dismissed on October 1, 2001, also on a Trustee's motion. The very next day case no. 01-34032 was filed, only to be dismissed on August 1, 2002 on a Trustee's motion. Plan confirmation was not achieved in any case. Less than a month later, on September 4, 2002, case no. 02-32287 was filed. The Trustee filed a motion to dismiss with a bar on March 17, 2003. On May 22, 2003 hearings were held on confirmation and the Trustee's motion. Confirmation was denied, and the case was dismissed with a 180 day bar on filing. On June 4, 2003 Debtors sought reconsideration of the dismissal but never appeared on July 31, 2003 to prosecute the motion which was accordingly denied. The reason for their absence became apparent when I reviewed the docket of their next case filed on June 9, 2003 while the motion in the prior case was pending. That case, no. 03-18809, was dismissed on June 10, 2004, again on a trustee's motion. As with every prior case, no Chapter 13 plan was confirmed.
They were represented by John Maioriello, Esquire in all cases.
In the last case, however, two creditors expressed their frustration with the Debtors' serial filings by seeking and obtaining orders that provide that no further cases would be filed by Debtors. On February 2, 2004 I approved a stipulation entered into by the Debtors with Chase Manhattan Mortgage ("Chase"), the holder of their home mortgage, in connection with the latter's motion for relief from stay. Doc. No. 32. Among other remedies, the Debtors agreed that they would not be eligible for bankruptcy relief under any chapter for a period of 180 days from the order dismissing the case, i.e., until 12/14/04. Doc. No. 19. It is this court-approved agreement that presents the impediment to the Debtor's desired sixth foray into Chapter 13.
A bar against refiling without leave of court for 180 days from the date of the Order was also contained in an order entered on October 1, 2003 in favor of Transouth Financial Corp. ("Transouth"), the holder of their car loan, which was granted relief from stay by default.
The Motion incorrectly states that the Trustee's motion to dismiss included a 180 day bar for refiling. I have reviewed that motion and no such request was made although I can understand why Debtor's counsel would think such relief would have been granted. Rather it is the Debtors' agreement to the bar that they now seek to disavow and overcome. In the four years between the filing of the first case and dismissal of the last, Debtors have been under bankruptcy protection for all but eleven months. There have been innumerable motions for relief and stipulations that have been breached. Presumably with their last stipulation having included a consensual bar on refiling, one would have thought the saga would come to an end.
In support of a new case, debtor Laurie Robinson ("Mrs. Robinson") testified. She explained that the Debtors ceased making payments in the last case because they believed they would be successful in their effort to refinance their mortgage. They applied in February 2004 and made no payments to the mortgagee or the Trustee after March 2004. Contrary to their expectation, their application for refinancing was turned down and around the same time the latest case was dismissed. However, the Debtors did not appear to contest the dismissal.
The Debtors assert that there is a change in their financial circumstance that would support a new case. Mrs. Robinson has a new job and has received $15,000 from an inheritance of which she has retained $11,000 to be dedicated to her bankruptcy plan. Additionally the Debtors have given up their vehicle and their budgeted expenses are reduced by some unstated amount.
Debtors also are now willing to enter into a wage order to secure their payments. I do not view this as a change of circumstance but rather a condition that helps to ensure the success of a case.
No doubt this is a result of the relief granted to Transouth in the last case.
The Trustee objects to the filing of a new case pointing out that Mrs. Robinson's new job was secured in her last case and thus is not a change of circumstance. Rather she had income that supported her plan payments but she chose not to pay the Trustee because she believed she no longer needed a bankruptcy case. Moreover rather than pay the mortgage and reserve the funds not being paid to the Trustee, the Debtors spent them. When the refinancing was rejected in June 2004, they took no steps to address the accrued arrears or to resume payments. Rather they simply ignored the mortgage obligation until the mortgagee was ready to foreclose. They are now back, again seeking the protection of this Court which the Trustee believes should be withheld given the shirking of their obligations in the past.
DISCUSSION
I begin with the bar order entered in this case which is on a different footing than those orders from which relief can be granted with leave of court upon showing a change of circumstances. In this case Debtors agreed with Chase to a order bar order to settle the motion for relief it filed. In the Stipulation, the Debtors stipulated that they would not be eligible for bankruptcy relief for 180 days from the date of an order dismissing the case. Moreover, they agreed that any filing during the 180 day ineligibility period would not stay Chase from the commencement or continuation of any foreclosure or enforcement action in connection with the home mortgage.
It is well settled that stipulations between the parties and settlement of litigation are favored by the law and should not be lightly set aside, Waldorf v. Shuta, 142 F.3d 601, 616 (3rd Cir. 1998); Martin v. North Penn Savings Loan, 253 B.R. 346, 350 (M.D. Pa. 2000). Enforcing a stipulated agreement also is supported by policy considerations such as the avoidance of costly and time-consuming litigation, In re Buzzworm, Inc., 178 B.R. 503, 512 (Bankr. D. Co. 1994). Indeed refusing to enforce a stipulated agreement undermines the willingness of parties to enter into future agreements which promote the prompt and efficient administration of bankruptcy cases. Therefore, unless a stipulation has not been entered into voluntarily, or its terms violate public policy, or other extenuating circumstances exist, a court will enforce the clear terms of a stipulation of the parties previously approved by the court at the request of the parties. Sellersville Savings and Loan Association v. Kelly, 29 B.R. 1016, 1018 (E.D. Pa. 1983). Debtors do not contend that the stipulation was not voluntary or that its terms violate public policy. Nor are there any extenuating circumstances alleged. Having received the Stipulation's benefit, the Debtors simply want to be excused from its burden.
Debtors seek to refile for the purpose of attempting to once again stay a sheriff sale of their residence and presumably attempt to cure their mortgage. However, Debtors have not recognized the term of the Stipulation that forecloses the relief that is the purpose of the filing. Since the filing would not stay the foreclosure, granting the Motion would not accomplish any purpose. The automatic stay of a new case which is the raison d'etre of the desire to return to this forum does not offer new protection and accordingly a new refiling would be an exercise in futility.
This is not surprising since Debtor's counsel neither had a copy of the Stipulation upon request by the Court nor appeared to be familiar with its terms although he had represented Debtors in its negotiation and execution. As it had not been produced by the Debtor, neither I nor the Trustee were able to review the agreement. Upon examination of the court records, I take judicial notice of that document. While a court may not take judicial notice sua sponte of facts contained in the debtor's file that are disputed, In re Augenbaugh, 125 F.2d 887 (3d Cir. 1942), it may take judicial notice of adjudicative facts "not subject to reasonable dispute . . . [and] so long as it is not unfair to a party to do so and does not undermine the trial court's factfinding authority." In re Indian Palms Assoc., 61 F.3d 197, 205 (3d Cir. 1995) ( citing Fed.R.Evid. 201(f) advisory committee note (1972 proposed rules).
Chase did not appear with respect to this Motion. As Debtor's counsel's certificate evidences service on Chase, presumably it was aware of the Motion. Chase's ignorance of the Motion may be attributed to its irrelevance to Chase's course of action. As noted, the Debtors have agreed that the imminent sheriff sale which prompted the Motion cannot be stayed by the case they wish to file before sale.
Because Debtors have forfeited the opportunity for a sixth attempt to cure mortgage arrears which is the object of their intended filing, I will enforce their agreement. While I concur with the Trustee that the Debtors, having chosen not to maintain their obligations in bankruptcy when they had the financial resources to do so, should held to their choice, I do not need to decide the Motion on such grounds. Simply stated, the Debtors have exhausted their bankruptcy options. Further bankruptcy relief will not be allowed.
An Order consistent with this Opinion shall be entered.
ORDER
AND NOW, this 18th day of October 2004, upon consideration the Motion of Kevin and Laurie Robinson for Leave to File a Bankruptcy Case (the "Motion") and the Objection of the Chapter 13 Trustee thereto, after notice and an evidentiary hearing, and for the reasons set forth in the accompanying Memorandum Opinion;
It is hereby ORDERED and DECREED that the Motion is DENIED.