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Mondelli v. Greenberg

December 12, 2007

VICTOR MONDELLI, DEBTOR, APPELLANT,
v.
MARIE ANN GREENBERG, CHAPTER 13 STANDING TRUSTEE, APPELLEE.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

OPINION

Victor Mondelli appeals from an order of the bankruptcy court converting his Chapter 13 bankruptcy case into a Chapter 7 bankruptcy case, which the court issued after determining that Mondelli had failed to fulfill the obligations of his Chapter 13 plan.

Mondelli essentially makes four arguments. First, Mondelli argues that the bankruptcy court denied Mondelli due process by refusing to delay the hearing on this order until Mondelli had time to obtain an attorney and prepare his opposition. Second, Mondelli argues that the bankruptcy court clearly erred by finding that he had failed to fulfill the obligations of his confirmed Chapter 13 plan. Third, Mondelli argues that the bankruptcy court erred by converting Mondelli's case from a Chapter 13 case to a Chapter 7 case, rather than simply dismissing the case. Fourth, Mondelli argues that the bankruptcy court was biased against him. This Court rejects these four arguments and AFFIRMS the order of the bankruptcy court converting Mondelli's Chapter 13 bankruptcy case into a Chapter 7 proceeding.

FACTS AND PROCEEDINGS

In 2004, Victor Mondelli filed a petition for bankruptcy under Chapter 13 of the Bankruptcy Code. (Appellant's Designation of R. Ex. B, Certification of Marie-Ann Greenberg ¶ 2.) For reasons not relevant to this appeal, the bankruptcy court then temporarily converted Mondelli's case to a Chapter 7 proceeding, converting the case back to a Chapter 13 proceeding upon Mondelli's motion. (Greenberg Certification ¶¶ 3, 4; Appellant's Designation of R. Ex. I, Order Recoverting Case to Chapter 13.) In this order reconverting Mondelli's case to a Chapter 13 proceeding, the bankruptcy court included the following provision: "If the debtor fails to comply with any obligations under this Order or the Chapter 13 proceeding . . . the case shall not be dismissed but shall be reconverted to a Chapter 7 proceeding." (Ex. I at 2.)

On February 3, 2006, the bankruptcy court confirmed a Chapter 13 plan for Mondelli. (Appellee's Designation of R. Ex. 1, Confirmation Order.) In the order, the court stated that Mondelli was obligated to pay his estate's trustee in bankruptcy, MarieAnn Greenberg, an up-front sum of $11,422 and a monthly sum of $350 for a period of twelve months to pay for the trustee's commission and expenses. (Confirmation Order.) The order also required Mondelli to refinance a piece of property owned by the estate. (Confirmation Order.) The order threatened that if Mondelli failed to refinance within twelve months of the confirmation hearing, "the case will be dismissed." (Confirmation Order.) This order appears to be in tension with the court's earlier order stating that a failure to comply with any obligations in the Chapter 13 proceeding would result in conversion of the case to Chapter 7-not dismissal.

In February 2007, the Chapter 13 trustee filed a motion to vacate the bankruptcy court's order reconverting Mondelli's case to Chapter 13, thus requesting reversion back to a Chapter 7 proceeding. (Appellant's Designation of R. Exs. A, B.) The trustee, Greenberg, asserted that "[d]ebtor has not refinanced his property in accordance with the Chapter 13 Plan" and "debtor has failed to comply with his obligations under the Confirmation Order and the Chapter 13 proceeding." (Ex. B. ¶¶ 8, 9.) Greenberg also filed an application for an order shortening the time period needed for notice of her hearing on this motion. (Appellee's Designation of R. Ex. 6.) Accordingly, the bankruptcy court initially scheduled a hearing on this motion for February 14, 2007. (Appellant's Designation of R. Ex. E.)

Mondelli intended to oppose this motion but never actually filed a written opposition or appeared at any hearing. On or around February 13, 2007, the court received a call from Mondelli's original counsel, Herbert Levenson, requesting a later hearing date on the grounds that Levenson was sick and there was a winter storm approaching. (Appellant's Designation of R. Ex. J at 3--4.) The court capitulated and rescheduled the hearing for February 21, 2007. (Ex. J. at 3--4.) At the February 21 hearing, however, neither Mondelli nor Levenson appeared. (Ex. J at 3--4.) Rather, Katherine Suplee, another attorney, appeared tentatively on Mondelli's behalf, stating that she had very recently met with him and was unsure whether she would actually be representing him. (Ex. J. at 3--4.) She also made statements to the court indicating that Mondelli's opposition might have little legal merit. (Ex. J. at 3--7.)

Without any opposition, the bankruptcy court accordingly granted Greenberg's motion to reconvert Mondelli's case to a Chapter 7 proceeding. (Appellant's Designation of R. Ex. D.) The court found that Mondelli had failed both to make the required $350 monthly payments to Greenberg and to refinance his property. (Ex. J at 9.)

Mondelli now appeals the bankruptcy court's order reconverting his case to a Chapter 7 proceeding. Mondelli essentially makes four arguments: (1) that the bankruptcy court denied him due process by refusing to postpone the hearing to give Mondelli time to oppose Greenberg's motion, (2) that the bankruptcy court clearly erred by finding that Mondelli had violated his Chapter 13 plan, (3) that the bankruptcy court erred by converting his case to a Chapter 7 proceeding, and (4) that the bankruptcy court failed to give Mondelli a fair and unbiased hearing.*fn1 (Appellant's Br. at 2.) Greenberg opposes these arguments and also argues that Mondelli's appeal is barred by his failure to timely file a designation of the record and statement of issues. (Appellee's Br. at 9.)

STANDARD OF REVIEW

This Court reviews the bankruptcy court's legal conclusions de novo and its factual findings for clear error. In re Connors, 497 F.3d 314, 318 (3d Cir. 2007). Clear error exists only if a finding is completely devoid of a credible evidentiary basis or bears no rational relationship to the supporting data. Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 399 F.3d 248, 254 (3d Cir. 2005). The bankruptcy court's ultimate decision to convert a case from Chapter 13 to Chapter 7 is reviewed for abuse of discretion. Halvajian v. Bank of N.Y., 216 B.R. 502, 513 (D.N.J. 1998).

DISCUSSION

A. Untimely Filing of Mondelli's Designation of Record and Statement ...


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