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Woodroffe v. Waage

United States District Court, M.D. Florida, Tampa Division

September 24, 2019

GARY LEE WOODROFFE, Appellant,
v.
JON WAAGE and STATE OF FLORIDA, DEPARTMENT OF REVENUE, Appellees.

          OPINION

          Charlene Edwards Honeywell, United States District Judge

         This cause comes before the Court upon Appellant Gary Lee Woodroffe’s Notice of Appeal (Doc. 1-1) of the United States Bankruptcy Court’s Denying Confirmation of Chapter 13 Plan and Dismissing Case (“Dismissal Order”) (Doc. 16-2). In the Dismissal Order, the Bankruptcy Court concluded that Appellant’s Chapter 13 plan did not meet the requirements for confirmation and it was, therefore, denied. Doc. 16-2. The Bankruptcy Court dismissed the case without prejudice. Id. Upon due consideration of the record, the parties’ submissions, and otherwise being fully advised in the premises, the Court concludes that the Dismissal Order of the Bankruptcy Court should be affirmed.

         I BACKGROUND

         Appellant filed a voluntary petition under Chapter 13 of the Bankruptcy Code on October 6, 2017. Doc. 16-5 at 2. The State of Florida – Child Support Enforcement filed a Proof of Claim for $114, 754 owed in child support. Doc. 16-10. The Proof of Claim indicated that payments should be made to the Florida Department of Revenue, Bankruptcy (“DOR”). Id. at 1. The State indicated that the claim was based on arrearage payments owed by Appellant and $918.50 was to be paid monthly towards the arrearage. Id. at 4. During the proceedings, Appellant advised the Bankruptcy Court that he had a case pending before the Second District Court of Appeal in Florida that related to the state court’s jurisdiction, parental kidnapping, and the propriety of the amount of the domestic support obligation. Doc. 16-48. Additionally, Federal National Mortgage Association (“Fannie Mae”) filed a claim in the amount of $187, 365.37 for an unpaid mortgage that was secured by real property. Doc. 16-11.

         During the bankruptcy proceeding, the DOR filed a Motion to Dismiss. Doc. 20-59. The DOR explained that prior to this bankruptcy, Appellant had filed two prior Chapter 13 petitions within the past 11 months.[1] Id. ¶ 2. The DOR also stated that the minimum payment plan for its claim alone would be approximately $2, 000 per month. Id. ¶ 6. Based on its calculations, the DOR argued that Appellant’s income was not sufficient to support payments required for confirmation of a Chapter 13 plan and that dismissal was warranted on the basis that Appellant would not be able to propose a plan that met the requirements of Chapter 13. Id. ¶¶ 7-9.

         The Bankruptcy Court held a hearing on November 9, 2017. Doc. 16-46. During that hearing, Fannie Mae requested that the Bankruptcy Court permit the Chapter 13 Trustee to disburse adequate protection payments to it, and the Bankruptcy Court granted the motion. Id. Also during the November 7 hearing, the Bankruptcy Court continued the hearing on the DOR’s Motion to Dismiss until March 15, 2018. Doc. 16-47.

         Subsequently, on December 20, the Bankruptcy Court held an initial confirmation hearing. Doc. 16-5 at 8. However, the hearing was continued to May 9. Id. The Bankruptcy Court entered an order on the docket that stated “CONT TO 5/9/2018 AT 1:35 PM; ANNOUNCED IN OPEN COURT NO FURTHER NOTICE TO BE GIVEN.Id.

         During the March hearing on the Motion to Dismiss, the DOR orally withdrew its motion, without prejudice. Doc. 16-51. Also during the hearing, Fannie Mae orally moved to compel Appellant to file an amended plan, which the Bankruptcy Court granted by written order “[f]or the reasons stated orally and recorded in open court . . . .” Doc. 16-50. Appellant was given fourteen days to file an amended plan. Id. No amended plan appears on the docket.[2] Doc. 16-5 at 9-10.

         While this was ongoing, an adversary proceeding related to the bankruptcy was also pending. More specifically, on December 4, 2017, Appellant filed an adversary proceeding against the DOR related to the bankruptcy case. Doc. 16-7 at 2. The DOR filed a motion to dismiss the proceeding, which was heard on March 15, 2018, and granted on March 22, 2018. Id. at 3.

         The continued initial confirmation hearing proceeded on May 9. Neither Appellant nor his counsel appeared. Doc. 16-54 at 1-2. The Bankruptcy Court “considered the Chapter 13 Trustee’s Unfavorable Recommendation and Objection Concerning Confirmation[3] . . . and the record, ” denied confirmation, and dismissed the case for failure to file a Chapter 13 plan that met the requirements for confirmation. Id. at 3; see also Doc. 16-53.

         Appellant filed an Emergency Motion to Dismiss Ex Parte Hearing due to Insufficient Process, Motion for Status Conference, Request to Take Judicial Notice (“Motion for Reconsideration”). Doc. 16-52. In the Motion for Reconsideration, Appellant argued that any decision resulting from the hearing should be considered null and void because he did not receive notice of the hearing and, therefore, was denied due process. Id. ¶¶ 3-4. Additionally, Appellant indicated that the adversarial proceeding in which he challenged the DOR’s claim remained pending, and no payment plan could be made until that proceeding was resolved and the DOR’s improper claim and garnishment was removed. Id. ¶ 8.

         The Bankruptcy Court denied Appellant’s Motion for Reconsideration, doc. 16-54, explaining that Appellant’s counsel had notice of the hearing, which was sufficient to meet the requirements of due process. Id. at 2. Additionally, the Bankruptcy Court noted that Appellant did not address the deficiencies of his plan that were described in the Trustee’s Objection to Confirmation. Id. The Bankruptcy Court indicated that Appellant’s plan proposed to deal with Fannie Mae’s claim by seeking a modification in mediation with Fannie Mae. Id. at 2-3. However, such a mediation had already occurred and was not successful. Id. at 3. Consequently, the Bankruptcy Court stated, Appellant was “unable to present the Court with a plan that c[ould] be implemented and confirmed” and “even if [Appellant] had attended the May 9th hearing, there [wa]s no argument he could have made to change the outcome because no grounds exist[ed] to vacate the dismissal order and reinstate the case.” Id. This appeal followed. Doc. 1-1.

         II. ANALYSIS

         A. ...


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