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CFCU Community Credit Union v. Swimelar

January 18, 2008

CFCU COMMUNITY CREDIT UNION, APPELLANT,
v.
MARK W. SWIMELAR, CHAPTER 13 TRUSTEE, GLEN E. BRICKEY, AND MARY I. BRICKEY, APPELLEES.



MEMORANDUM-DECISION AND ORDER*fn1

Appellant CFCU Community Credit Union ("Appellant" or "CFCU") appeals the Bankruptcy Court's March 1, 2007 Order declining to dismiss Appellee Mary Brickey's ("Appellee" or "Brickey") Chapter 13 Bankruptcy case on the ground that she failed to timely file the necessary payment advices.

I. FACTS

The underlying facts are not in dispute. Appellee Mary Brickey commenced a Chapter 13 proceeding on October 30, 2006.*fn2 Upon filing the Petition, Brickey filed six months of payment advice information covering the period from April 2006 to September 2006. However, Brickey did not file payment advice statements for the period of September 21, 2006 to October 30, 2006. Under 11 U.S.C. § 521(a)(1)(B)(iv), a debtor must file copies of all payment advices received in the sixty (60) days prior to filing a bankruptcy proceeding.

On December 19, 2006, fifty (50) days after the Petition was filed, Appellant moved pursuant to 11 U.S.C. § 521(i)(2), for an order dismissing Brickey's Petition due to her failure to timely file the required payment advices. On December 21, 2006, Brickey and the Chapter 13 Trustee filed a joint Motion, pursuant to 11 U.S.C. § 521(i)(4), requesting that the Bankruptcy Court decline to dismiss the case. The grounds asserted in support of the Motion were that the failure to file the necessary payment advices was inadvertent, that Brickey attempted to file the necessary information in good faith, and that the best interests of the creditors would be served by continuing the case. Also on December 21, 2006, Brickey filed the missing payment advices.

By Order dated March 1, 2007, the Bankruptcy Court granted the joint Motion requesting that the court decline to dismiss the case. The Bankruptcy Court found that the Trustee had timely filed the Motion pursuant to § 521(i)(4), that Brickey had made a good faith attempt to file the payment advices, and that the best interests of the creditors would be served by allowing the case to proceed.

Appellant now appeals the March 1, 2007 Order on the grounds that the Bankruptcy Court erroneously concluded that Brickey made a good faith attempt to file the payment advices and that the Bankruptcy Court erroneously concluded that § 521(i)(4) allows the court to re-open a case upon a motion of the trustee within five days of when an interested party had made a request for automatic dismissal pursuant to § 521(i)(2).

II. STANDARD OF REVIEW

Bankruptcy Rule 8013 provides, inter alia, that a bankruptcy court's findings of fact "shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of witnesses." FED. R. BANKR. P. 8013; see R.M. 18 Corp. v. Aztex Assocs., L.P (In re Malease 14FK Corp.), 351 B.R. 34, 40 (E.D.N.Y. 2006). A finding is clearly erroneous when "although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. Mitchell, 966 F.2d 92, 98 (2d Cir. 1992). A bankruptcy court's legal conclusions are subject to a de novo review. Capital Communications Fed. Credit Union v. Boodrow, 126 F.3d 43, 47 (2d Cir. 1997). Matters left to the discretion of the bankruptcy court are reviewed for an abuse of discretion. Id.

III. DISCUSSION

A. Statutory Interpretation

1. Language of 11 U.S.C. §§ 521(i)(1), (2), & (4)

This case presents an issue of statutory interpretation. Unfortunately, 11 U.S.C. § 521(i) suggests incongruous results.*fn3 Section 521(i) reads as follows:

(i)(1) Subject to paragraphs (2) and (4) and notwithstanding section 707(a), if an individual debtor in a voluntary case under chapter 7 or 13 fails to file all of the information required under subsection (a)(1) within 45 days after the date of the filing of the petition, the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition.

(2) Subject to paragraph (4) and with respect to a case described in paragraph (1), any party in interest may request the court to enter an order dismissing the case. If requested, the court shall enter an order ...


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