United States District Court, M.D. Florida, Fort Myers Division
IN RE: WILLIAM JOSEPH KLISIVITCH aka William J Klisivitch aka Bill Klisivitch aka William Klisivitch Debtor.
COLETTE PANEBIANCO, Appellee. WILLIAM JOSEPH KLISIVITCH, Appellant,
OPINION AND ORDER
E. STEELE SENIOR UNITED STATES DISTRICT JUDGE.
matter comes before the Court on appeal from the Bankruptcy
Court's Order Denying Debtor's Amended Motion for
Reconsideration of Order Granting Motion to Dismiss (Doc.
#6-2). Appellant filed an Initial Brief (Doc.
#15), appellee filed a Brief of Appellee (Doc. #17), and
appellant filed a Reply Brief (Doc. #20). For the reasons set
forth below, the Order of the Bankruptcy Court is affirmed.
United States District Court functions as an appellate court
in reviewing decisions of the United States Bankruptcy Court.
28 U.S.C. § 158(a); In re Colortex Indus.,
Inc., 19 F.3d 1371, 1374 (11th Cir. 1994). The legal
conclusions of the bankruptcy court are reviewed de
novo, while findings of fact are reviewed for clear
error. In re Globe Mfg. Corp., 567 F.3d 1291, 1296
(11th Cir. 2009). A finding of fact is clearly erroneous
when, “although there is evidence to support it, the
reviewing court on the entire record is left with a definite
and firm conviction that a mistake has been committed.”
Crawford v. W. Electric Co., Inc., 745 F.2d 1373,
1378 (11th Cir. 1984)(citing United States v. U.S. Gypsum
Co., 333 U.S. 364, 395 (1948)); In re Walker,
515 F.3d 1204, 1212 (11th Cir. 2008). The Court's
jurisdiction over the appeal from the dismissal of
debtor's Chapter 13 case is undisputed.
18, 2019, William Joseph Klisivitch (debtor) filed a
voluntary petition under Chapter 13 of the Bankruptcy Code
along with a Chapter 13 Plan proposing payments of $722 per
month to the Trustee. (Docs. ## 6-6; 6-7.) Under Schedule
A/B, debtor listed as property a 2012 Mercedes E350 and an
Ericson E38 Sailboat worth $27, 500. (Doc. #6-6, p. 10.)
Debtor also listed a retirement account with a $206, 036.10
balance. (Id., p. 13.) The attached Schedule E/F
lists unsecured claims, including two for Colette
Trotto-Klisivitch, debtor's ex-wife and primary creditor.
These debts are for $218, 527.91 and $6, 500, and represent
the majority of the debts. (Id., p. 20.) Both amounts
arise from a Divorce Judgment in a case pending appeal from
the New York City Supreme Court. (Id., p. 33.) Under
debtor's proposed plan, his ex-wife creditor would
receive virtually nothing.
11, 2018, the Trustee issued an Unfavorable Recommendation
and Objection to Confirmation of the Plan (Doc. #6-9) because
the debtor had not dedicated all disposable income to the
proposed Plan and the Plan did not pay unsecured creditors
the value they would receive in a Chapter 7 case. On August
10, 2018, creditor Colette Panebianco filed a Motion to
Dismiss or Convert Case Pursuant to 11 U.S.C. § 1307(c)
(Doc. #6-14). On August 23, 2018, Creditor Panebianco filed
an Objection to Confirmation of the Debtor's Chapter 13
Plan (Doc. #6-28), and on August 29, 2018, creditor filed a
Motion to Take Judicial Notice (Doc. #6-29) of the dockets
from the previous divorce and bankruptcy cases. A Notice of
Hearing (Doc. #6-27) was issued and a hearing scheduled for
August 30, 2018. On August 29, 2018, debtor filed an Omnibus
Objection in response to the creditor's Motion to Dismiss
or Convert Case Pursuant to 11 U.S.C. § 1307(c),
Objection to Confirmation of the Debtor's Chapter 13
Plan, and Motion to Take Judicial Notice (Doc. #6-30).
scheduled hearing the U.S. Trustee testified that he was
still waiting for an accounting of all the property debtor
listed as sold in the two years prior to filing for
bankruptcy protection. As a result, the Bankruptcy Court
continued the hearing. (Doc. #7, pp. 19-20.)
September 18, 2018, the Trustee issued an Amended Unfavorable
Recommendation and Objections to Confirmation of the Plan
(Doc. #6-32). On September 27, 2018, the hearing took place
on the pending motions and on the issue of confirmation.
(Doc. #6-34.) On October 1, 2018, the Bankruptcy Court issued
an Order Granting Creditor, Collette Panebianco's Motion
to Dismiss or Convert Case Pursuant to 11 U.S.C. §
1307(c) (Doc. #6-33) for the reasons stated on the record at
moved for reconsideration, arguing that he was not granted an
evidentiary hearing and therefore the Bankruptcy Court made a
decision without the necessary testimonial evidence. (Doc.
#6-35.) Debtor then filed an Amended Motion (Doc. #6-36) to
specifically argue that an evidentiary hearing should have
been granted before dismissing his case for bad faith. The
creditor filed a response in opposition, Doc. #6-38, and on
December 11, 2018, an Order denying Debtor's Amended
Motion for Reconsideration of Order Granting Motion to
Dismiss (Doc. #6-2). Debtor filed a Notice of Appeal (Doc.
#1) from this Order.
argues that the Bankruptcy Court erred in granting the motion
to dismiss after determining that debtor's Chapter 13
bankruptcy case was filed in bad faith but without conducting
an evidentiary hearing on disputed facts. Appellant also
raises two sub-issues: Assuming an evidentiary hearing was
not required, (1) whether the Bankruptcy Court
inappropriately drew inferences in favor of the creditor when
the legal standard required inferences to be drawn in
debtor's favor; and (2) whether the Bankruptcy
Court's “totality of the circumstances”
analysis was flawed and/or incomplete.
Underlying Basis For Motion to Dismiss
ex-wife filed a Motion to Dismiss or Convert Case Pursuant to
11 U.S.C. § 1307(c) (Doc. #6-14) alleging that debtor
“has misrepresented his income and undervalued assets
on his schedules.” (Doc. #6-14, p. 2.) The Motion
stated that this was not debtor's first filing of a
bankruptcy to avoid a judgment from an ex-wife. The Motion
stated that creditor and debtor were married on February 3,
2006, and that in December of 2011, debtor commenced divorce
proceedings in New York. The Motion further recited that
debtor asserted a claim for maintenance in the divorce
proceeding because he said he was poor, essentially
unemployed, working as a retired consultant, and living off
of social security. (Doc. #6-14, p. 4.) The divorce case was
heard by a Special Referee, who issued a report rejecting
debtor's claim for maintenance and finding that debtor
was less than forthcoming about his income. (Id.)
The Special Referee noted that debtor had a luxury apartment,
luxury car, a sailboat, and belonged to a yacht club.
(Id.) Based on the report, the presiding judge
issued a Divorce Order adopting the findings of the Special
Referee, and a Judgment was issued on August 28, 2017.
(Id., p. 5.) The Motion further points out that
while debtor claimed to be retired and receiving only $1,
521.00 in social security benefits and $620.00 in a Canadian
pension, he pays $1, 900 per month in rent, and does so by
taking one distribution a year from his IRA to cover the
response to the motion to dismiss, debtor objected to any
material from the divorce cases being used against him in the
bankruptcy case, and sought to strike such factual
allegations from the record. (Doc. #6-30.)
Bankruptcy Court's Findings
confirmation hearing, the Bankruptcy Court made the following
factual findings in concluding that the debtor did not file
the bankruptcy petition in good faith:
First, this is a two-party dispute. The parties' divorce
has been pending since 2011. Second, the debt to Ms.
Panebianco would be dischargeable only in a Chapter 13.
Third, there are minimal, if any, other debts.
Fourth, the parties have been litigating for years over the
true amount of the Debtor's income and it would prejudice
the ex-wife to have to relitigate that issue before this
Court in the context of an objection to confirmation.
Fifth, Debtor's Plan is for him to keep a luxury sailboat
while he has failed to disclose the expenditures necessary to
maintain that boat, which means that he has the funds
necessary to pay the alleged value of the boat into the Plan
and the cost of upkeep of the boat, but is otherwise
unwilling to give up the boat and pay those same amounts to
(Doc. #8, pp. 6-7.) The Court issued an Order (Doc. #6-33)
finding that the case had not been filed in good faith, and
the bankruptcy case was dismissed without prejudice to
seeking to convert the case to a Chapter 7 proceeding.
motion for reconsideration, the Bankruptcy Court found that
an evidentiary on the motion to dismiss was not warranted.
(Doc. #6-2.) The Bankruptcy Court granted the request for
judicial notice, but only to the extent that the Court took
judicial notice of the existence of the filings in the prior
Bankruptcy and Divorce cases. The Bankruptcy Court noted her
findings as follows:
A. Debtor filed his Chapter 13 case in May 2018, while
litigation with Creditor, that included Debtor's appeal
of a ruling against him, had been pending in New York since
B. Debtor listed only a handful of creditors: Creditor,
Creditor's attorney, Debtor's brother, two American
Express accounts, and one H.H. Gregg account. Debtor listed
American Express and H.H. Gregg as being “last
active” in April and May 2018. These creditors did not
file proofs of claim. Debtor's brother filed a proof of
claim, and then an amended claim, but both were filed after
the claims bar date. Another creditor, PYOD, LLC, filed a
proof of claim for $918.00, to which Debtor objected as
barred by statute of limitations. Debtor did not list any
amounts owed to the attorney representing him in the Divorce
C. The Plan proposed monthly plan payments of $722.00 per
month for 60 months, that the Court calculated would result
in the distribution to unsecured creditors of about $33,
588.00. The plan payments were based on the liquidation value
of Debtor's assets, ...