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#2179 signed 12-5-95

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In Re:

MICHAEL EUGENE MOORE, SHANNON MARIE MOORE,

DEBTOR(S)

NO. 95-40940-13

CHAPTER 13



MEMORANDUM OF DECISION ON TRUSTEE'S MOTION TO DISMISS

This matter is before the Court on the trustee's motion to dismiss with prejudice. Trustee William H. Griffin appears pro se. The debtors appear by counsel Michael F. Brunton. The Court has considered the relevant pleadings, testimony, and arguments of counsel, and is now ready to rule.

The debtors previously filed a chapter 13 bankruptcy case in June 1993. They paid the trustee the equivalent of about twelve of their proposed monthly payments while the case was open for about twenty-four months. Although no pending claim had been disclosed and no attorney received court approval to represent the debtors in pursuing a claim, the trustee received information that the debtors had settled a claim and used the proceeds to buy a home. He wrote to the debtors' attorney seeking information, but received no response. The case was later dismissed for lack of feasibility, at least in part due to post-petition rent claims that were filed in the case.

The debtors filed the present case in May 1995. They now claim to have an exempt homestead worth $10,000. In June, the trustee wrote to Mr. Brunton, indicating it appeared the debtors had settled a claim during their earlier bankruptcy case and used the proceeds to buy the house, and had another, still-pending claim arising from a 1994 automobile accident which they had not disclosed in their schedules. Receiving no response, the trustee moved for dismissal with prejudice. Mr. Brunton then responded that he had contacted the attorney who represented the debtors in their personal injury case (not specifying which claim he asked about) and was told the case was settled for the equivalent of an unspecified amount of outstanding medical expenses and attorney fees.

On October 24, an evidentiary hearing was held on the trustee's motion. Mr. Moore testified that his mother-in-law bought the home for the debtors, and that they settled the automobile accident claim for $2,500 which all went to pay costs and expenses, netting the debtors nothing. The Court directed the debtors to provide an affidavit from Mrs. Moore's mother showing that she bought the house, and to sign a document authorizing their personal injury attorney to answer the trustee's questions about the lawsuit. Another hearing was held on November 21, and the Court was informed the debtors had not complied with those directions. The Court gave them five more days to supply the trustee with proof the mother bought the house and to authorize the attorney to talk to the trustee, or their case would be dismissed with prejudice, meaning the debts covered by this case could not be discharged in any future bankruptcy case. The trustee has now informed the Court the debtors have not taken advantage of this additional opportunity.

Given the debtors' failure to comply with these directions, the Court must conclude Mrs. Moore's mother did not buy the house and the personal injury attorney would have disclosed to the trustee information contradicting Mr. Moore's testimony about the settlement. Their failure to comply constitutes sufficient cause under 11 U.S.C.A. §1307(c) to dismiss their bankruptcy case. It is also sufficient cause under §349(a) for the Court to bar the discharge in any later case of debts that were dischargeable in this case. In addition, under §109(g), the debtors will be barred from filing another bankruptcy case for 180 days from the time this dismissal becomes final. The Court believes it is likely that in this case, the earlier case, or both, the debtors have tried to hide money that should have been paid to their creditors. Such abuses of the Bankruptcy Code must be punished.

The foregoing constitutes Findings of Fact and Conclusions of Law under Rule 7052 of the Federal Rules of Bankruptcy Procedure and Rule 52(a) of the Federal Rules of Civil Procedure. A judgment based on this ruling will be entered on a separate document as required by FRBP 9021 and FRCP 58.

Dated at Topeka, Kansas, this ____ day of December, 1995.













_________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS





In Re:

MICHAEL EUGENE MOORE, ) NO. 95-40940-13

SHANNON MARIE MOORE, ) CHAPTER 13

DEBTOR(S). )

JUDGMENT ON DECISION DISMISSING CASE WITH PREJUDICE AND

BARRING FUTURE DISCHARGE OF ALL DEBTS COVERED BY THIS CASE

This matter was before the Court on the trustee's motion to dismiss with prejudice. Trustee William H. Griffin appeared pro se. The debtors appeared by counsel Michael F. Brunton. The Court considered the relevant pleadings, testimony, and the arguments of counsel, and issued its Memorandum of Decision.

For the reasons stated in the Memorandum, this bankruptcy case is hereby dismissed with prejudice. The debtors are hereby barred from discharging in any future case any debts that were dischargeable in this case. They are further barred from filing another bankruptcy case for 180 days from the time this judgment becomes final and unappealable.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of December, 1995.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

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