Petition for Writ of Certiorari — Paul Francis, Petitioner v. John O. Desmond, United States Trustee

No. _________

IN THE

Supreme Court of the United States

_________

PAUL FRANCIS,

v.

Petitioner,

JOHN O. DESMOND, UNITED STATES TRUSTEE

Respondent.

_________

On Petition for a Writ of Certiorari to

the United States Court of Appeals

for the First Circuit

_________

PETITION FOR A WRIT OF CERTIORARI

_________

PEREZ-KUDZMA LAW OFFICE, P.C.

CARMENELISA PEREZ-KUDZMA

Counsel of Record

35 MAIN STREET, SUITE #1, WAYLAND, MA 01778

978-505-3333

CARMENELISA@PKLAW.LAW

I)

QUESTIONS PRESENTED

Whether the First Circuit Court of Appeals

committed error when affirming judgment

from the Bankruptcy Court Appellate

Panel refusing to reverse the Bankruptcy

Court order regarding Appellant’s failure to

Comply with Court Order To Update since

it was error of law and/or abuse of

discretion of the Bankruptcy Court, sua

sponte and pursuant to 11 U.S.C Section

727(a)(6)(A), to deny Appelant a discharge

in lieu of automatic dismissal per 11 U.S.C

Section 521(i)?

i

II)

TABLE OF CONTENTS

I.

QUESTIONS PRESENTED .............

i

II.

TABLE OF CONTENTS...................

ii

III.

TABLE OF AUTHORITIES .............

iii

IV.

OPINIONS BELOW .........................

1

V.

JURISDICTION ...............................

1

VI.

STATEMENT OF THE CASE..........

1

VII.

REASONS FOR GRANTING THE

APPEAL ............................................

9

1) To prevent the use of sua sponte orders in order

to rule in contravention of clear, unambiguous, and

explicit stautues and set local rules; and to preserve

due process and statutory intent by applyuing and

enforcing those stautes as written into law and not

as envisioned by the courts tasked to interpret and

apply the same.

VII. CONCLUSION ...................................

ii

30

III)

TABLE OF AUTHORITIES

Cases

Pages

Ameriquest Mortg. Co. v. Nosek (In re Nosek),

544 F.3d 34 (1st Cir.2008)……………………….........25

In re Acosta-Rivera 557 F.3d 8 (2009)…10, 11, 18, 19

In re Araujo, 292 B.R.19 (Bankr. D.Conn.2003)...6, 7,

28

Bostock v. Clayton County, 590 U.S.___(2020)..13, 22

Briggs v. Johns (In re Briggs) No. 17-1080 (W.D. La.

September 28, 2018………………………………….…23

In re Francis, 604 BR 101 (2019)…………….………..1

In re Jones, 490F.2d 452 (5th Cir.197……….............27

In re Harmon, 324 B.R. 383 (Bankr. M.D. Fla. 2005)

…………………………………………………………..…27

In Re Henderson, 423 B.R. 621 (Bankr. N.D.N.Y.

2010) ……………………………………………………..27

Matter of Lugo, 592 B.R. 843 (Bankr. N.D.Ind. 2018)

.,,………………………………………………………20, 21

In re Korte, 262 B.R. 464 (2001) ……..………….23, 24

Korte v. U.S. Internal Revenue Serv. (In re Korte),

262 B.R. 464 (B.A.P. 8th Cir. 2001…….…………… 24

In re Ott, 343 B.R. 264 (Bankr. D.Colo. 2006) …….20

Robbins v. Haynes (In re Haynes), 549 B.R. 677

(Bankr. D.S.C.2016…………………………………..…24

Segarra-Miranda v. Acosta-Rivera (In re AcostaRivera) 557 F.3d 8 (1st Cir. 2009…………………….11

In re Soto, 491 B.R. 307 (2013)…………………..19, 20

In re Tougas, 354 B.R. 572 (Bankr.D.Mass. 2006)…6,

28, 29

United States v. Lanier, 520 U.S. 259 (1997) ……...12

United Student Aid Funds, Inc. v. Espinoza……….29

Western Auto Supply Co. v. Savage Arms, Inc. (In re

Savage Indus., Inc.), 43 F.3d 714 (1st Cir.1994) …15

iii

Statues

11U.S.C. § 101(5)………………………………………23

11U.S.C. § 101(10)(a)...………………………………..23

11 U.S.C§105(a)(5)…………………………………25, 26

11 U.S.C §109(e)……………………………………….. 1

11 U.S.C. §727……………………….……….......Passim

11 U.S.C. §1112(b)……………………………………….3

11 U.S.C. §1112(b)(1)…………………………………2, 3

11 U.S.C. §1112(b)(c)…………………………………….4

11 U.S.C. §1112(b)(4)(h)…………………………………4

11 U.S.C. §1112(b)(4)k)………………………………….4

11 U.S.C. §1112(b)(4)(e)…………………………………4

28 U.S.C. §1254(1)…....................................................1

11 U.S.C §521…………………………………..10, 18, 19

11 U.S.C §521(i)…..............................................Passim

Fed R. Bankr.P Rule 7001(4)…………………………23

Fed. R. Bankr.P Rule 9023………………..................20

Fed. R. Bankr.P.4004(a)..…………………………23, 24

Fed R. Civ. P. Rule 59 …………………………………20

Fed R. Civ. P. Rule 60(b)………………………………20

Constitutional Provisions

U.S. Const. Amend. V………………………........Passim

iv

IV) OPINIONS BELOW

Judgment from the First Circuit Bankruptcy Court

Appellate Panel (hereinafter “BAP”) on September

10, 2019 regarding Case #18-53 affirming an order of

the Bankruptcy Court deying discharge in lieu of

conversion to a Chapter 7 Debtor.

In re Francis, 604 BR 101 (2019)

Judgment from the First Cirtcuit Court of Appeals

on April 27, 2021 regarding Case #19-9011 affirming

a decision of the Bankruptcy Court Appellate Panel

denying discharge in lieu of conversion.

V) JURISDICTION

The First Circuit Court of Appeals entered judgment

on April 27, 2020. The Court has jurisdiction under

28 U.S.C. §1254(1).

VI) STATEMENT OF THE CASE

Petitioner filed a voluntary Chapter 13 petition on

July 21, 2017. Then he filed a motion to extend the

automatic stay as he had a previous case which got

dismissed within a year. The Bankruptcy Court

ruled on the motion in part as follows:

“BASED ON THE DEBTOR'S SCHEDULES, IT

APPEARS THE DEBTOR IS INELIGIBLE TO BE A

CHAPTER 13 DEBTOR BECAUSE HIS SECURED

DEBT EXCEEDS THE DEBT LIMITS SET FORTH

IN 11 U.S.C. SEC. 109(E)…”

1

As a result, Petitioner filed a motion to convert

to Chapter 11, which was allowed on September 26,

2017. Then, on October 5, 2017, the bankruptcy court

granted the motion to extend the automatic stay as it

ruled that the motion to extend the automatic stay

was filed in good faith. Also, on October 5, 2017 the

Bankruptcy Court set deadlines for Petitioner to file

a disclosure statement and Chapter 11 plan.

A status conference was set on January 29, 2018

as Debtor had not filed the required documents. The

Bankruptcy Court extended the deadline to February

12, 2018. On January 30, 2018, the U.S. Trustee’s

office filed a motion to convert Debtor’s case to one

under Chapter 7.

Then on February 13, 2018, the bankruptcy court

filed an order to show cause as follows:

“THE DEBTOR HAVING BEEN ORDER TO FILE A

PLAN AND DISCLOSURE STATEMENT ON OR

BEFORE FEBRUARY 12, 2018, AND THE DEBTOR

HAVING FAILED TO DO SO, THE DEBTOR IS

HEREBY ORDERED TO SHOW CAUSE IN

WRITING WHY THIS CASE SHOULD NOT BE

DISMISSED UNDER 11 U.S.C. 1112(B)(1) AND

(B)(4)(J). THE DEBTOR'S RESPONSE TO THIS

ORDER SHALL BE FILED ON OR BEFORE

MARCH 7, 2018; A HEARING ON THIS ORDER

WILL BE HELD ON MARCH 20, 2018, AT 11:00

A.M., BUT IF NO OBJECTION IS FILED, THE

2

COURT MAY DISMISS THE CASE WITHOUT A

HEARING.”

The Debtor responded to the motion to convert

and the order to show cause on March 8, 2018. The

U.S Trustee’s Office filed a supplemental document

to the motion to convert on March 6, 2018.On March

20, 2018, after holding a hearing on the motion to

convert and order to show cause, the Bankruptcy

Court issued an order allowing conversion as follows:

“Order dated 3/20/2018 Re: 73 Motion filed by

Assistant U.S. Trustee John Fitzgerald to Convert

Case to Chapter 7.

HEARING HELD. FOR THE REASONS SET

FORTH ON THE RECORD AND IT BEING IN THE

BEST INTEREST OF CREDITORS AND THE

ESTATE, THE MOTION TO CONVERT CASE TO A

CASE

UNDER

CHAPTER

7

[#73],

AS

SUPPLEMENTED BY THE ADDITIONAL MOTION

[#83], IS ALLOWED. TO AVOID ANY DOUBT, THE

UNITED STATES TRUSTEE MADE AN OFFER OF

PROOF THAT CAUSE FOR CONVERSION UNDER

11 U.S.C. SECT. 1112(B) EXISTS AND COUNSEL

FOR THE DEBTOR COULD NOT CONTEST

THOSE ASSERTIONS. AMONG OTHER THINGS,

THE DEBTOR COULD NOT ESTABLISH THAT HE

HAS MAINTAINED SUFFICIENT INSURANCE

ON THE MILTON PROPERTY [11 U.S.C. SECT.

3

1112(B)(4)(C)], HAS FAILED TO TIMELY PROVIDE

INFORMATION REASONABLY REQUESTED BY

THE US TRUSTEE [SECT 1112(B)(4)(H)], HAS

FAILED TO PAY REASONABLE FEES REQUIRED

UNDER THE CODE [SECT. 1112(B)(4)(K)], AND

HAS FAILED TO ABIDE BY ORDERS OF THE

COURT, NAMELY HAS FAILED TO FILE A PLAN

AND DISCLOSURE STATEMENT BY THE DATE

SET BY THE COURT [SECT.

1112(B)(4)(E)].”

As to the Order to Show Cause, the Bankruptcy

Court stated:

“Order dated 3/20/2018 Re: 77 Order to Show Cause

dated 2/13/2018. HEARING HELD. SEE ORDER OF

SAME DATE CONVERTING CASE TO CHAPTER

7.”

The Debtor filed a Notice of Appeal on April 3,

2018 to the Bankruptcy Court Appellate Panel

(“BAP”). The BAP affirmed the conversion to Chapter

7.

On May 20, 2018 the Bankruptcy Court issued an

Order to Update (hereiafter referred to as “OTU”).

On August 13, 2018 the Bankruptcy Court issued an

Order to Show Cause as to why Debtor had not

complied with the OTU related to Chapter 7 needed

documentation. On August 27, 2018 the Debtor filed

a Response to the Order to Show Cause and the

Bankruptcy Court set the matter for a hearing on

August 30, 2018. On September 21, 2018 the Debtor

4

satisfied the OUT. Nevertheless, the Bankruptcy

Court issued an Order To Show Cause and ruled as

follows:

ORDER TO SHOW CAUSE: THE DEBTOR, PAUL

FRANCIS, HAVING TWICE BEEN ORDERED TO

FILE A STATEMENT OF HIS INTENT AND

EITHER A STATEMENT OF HIS POSTPETITION

CREDITORS OR A STATEMENT THAT HE HAS

NONE [DOC. NOS.

91 AND 144]; IT APPEARING FROM THE

COURT'S RECORDS THAT BOTH ORDERS WERE

TRANSMITTED

ELECTRONICALLY

TO

DEBTOR'S COUNSEL AND MAILED TO THE

DEBTOR HIMSELF; AND THE DEBTOR HAVING

FAILED TO FILE TIMELY (OR AT ALL) THE

REQUIRED DOCUMENTS; UNDER 11 U.S.C. §

727(A)(6)(A), REFUSAL TO OBEY A LAWFUL

ORDER OF THE COURT BEING REASON TO

DENY THE DEBTOR A DISCHARGE IN CHAPTER

7; AND IT APPEARING THAT THE DEBTOR HAS

REFUSED TO OBEY THE ABOVE ORDERS OF

THE COURT; THE DEBTOR IS HEREBY

ORDERED TO SHOW CAUSE IN WRITING, WITH

SUPPORTING AFFIDAVIT(S), WHY HE SHOULD

NOT BE DENIED A DISCHARGE FOR REFUSAL

TO OBEY A LAWFUL ORDER OF THE COURT.

THE DEBTOR'S RESPONSE TO THIS ORDER

SHALL BE FILED ON OR BEFORE

AUGUST 27, 2018. (ek, usbc)

5

A hearing was held on September 25, 2018 regarding the OTU. The Court issued the written order

on the Order to Show Cause on September 26, 2018

as follows:

HEARING HELD. UPON CONSIDERATION OF

THE ORDER TO SHOW CAUSE, THE DEBTOR

BEING PRESENT AND TESTIFYING AT THIS

HEARING, AND THE UNDERTAKINGS OF

COUNSEL, THE COURT FINDS THAT THE

DEBTOR REPEATEDLY IGNORED LAWFUL

ORDERS OF THE COURT, AND THEREFORE

DENIES THE DEBTOR A DISCHARGE. TITLE 11

U.S.C. § 727(A)(6)(A) STATES THAT A COURT

MAY DENY A

DISCHARGE IF A DEBTOR HAS REFUSED "TO

OBEY ANY LAWFUL ORDER OF THE COURT . . .

." IN THIS DISTRICT, "SOME DEGREE OF

VOLITION OR WILLFULNESS ON THE PART OF

THE DEBTOR" IS NECESSARY TO SHOW A

REFUSAL. IN RE TOUGAS,

354 B.R. 572, 578 (BANKR. D. MASS. 2006). A

DEBTOR WILLFULLY REFUSES TO OBEY A

COURT ORDER WHEN HE AVOIDS COURT

MAILINGS. SEE IN RE ARAUJO, 292 B.R.19, 24

(BANKR. D. CONN. 2003) (DENYING DISCHARGE

AFTER DEBTOR FAILED TO

MAINTAIN A CURRENT MAILING ADDRESS

WITH THE COURT). HERE, THE DEBTOR WAS

ORDERED TO SUBMIT STATEMENTS OF

INTENT AND OF POST-PETITION CREDITORS

6

ON MARCH 20, 2018, JULY 5, 2018, AND AUGUST

13, 2018. THE DEBTOR FAILED AND REFUSED

TO TIMELY COMPLY WITH EACH OF THESE

LAWFUL ORDERS OF THE COURT. FINALLY,

THE DEBTOR COMPLIED, BUT ONLY ON

SEPTEMBER 21 AND 23, 2018, RESPECTIVELY,

JUST BEFORE THE HEARING ON SEPTEMBER

26, 2018. HIS COUNSEL STATED IN THE

RESPONSE TO THE ORDER TO SHOW CAUSE

THAT "DEBTOR HAS NOT PROVIDED COUNSEL

WITH THE STATEMENT OF POST-PETITION

CREDITORS OR INTENT," PLACING THE BLAME

SQUARELY ON THE DEBTOR. I HAVE TO

ASSUME THAT THE BLAME IS PROPERLY

PLACED. AT THE PRESENT HEARING, THE

DEBTOR TESTIFIED THAT HE INTENDED TO

COMPLY WITH ALL ORDERS, BUT THAT HE

DOES NOT LOOK AT HIS MAIL. HOWEVER, THE

DEBTOR CANNOT CLAIM THAT THESE WERE

INNOCENT OMISSIONS IN LIGHT OF THIS

COURT'S REPEATED WARNINGS TO DEBTOR

AND HIS COUNSEL. THIS DEBTOR, AFTER

VOLUNTARILY FILING A PETITION FOR

RELIEF, MAY NOT SEEK THE BENEFITS OF

BANKRUPTCY WHILE IGNORING HIS DUTY TO

RESPOND TIMELY TO LAWFUL ORDERS OF

THE COURT. AS ARAUJO MAKES CLEAR,

AVOIDANCE

OF

COURT

MAILINGS

CONSTITUTES A WILLFUL REFUSAL TO

COMPLY. 292 B.R. AT 24. THE COURT FINDS

THAT THE DEBTOR'S CONSCIOUS PRACTICE

7

OF IGNORING MAIL, ADDRESSED TO THE

DEBTOR AND MARKED WITH THE SEAL OF

THIS COURT, WARRANTS A DENIAL OF

DISCHARGE UNDER SECTION 727(A)(6)(A). FOR

THE

AFOREMENTIONED

REASONS,

THE

DEBTOR'S DISCHARGE IS HEREBY DENIED.

(jreg).

The Debtor appealed the above Order on October

9, 2018 to the Bankruptcy Court of Appeals (“BAP”).

The BAP afirmed the Bankruptcy Court ruling.

Appellant then appealed the BAP judgment to this

First Circuit of Appeals. Neither the Chapter 7

Trustee, John O. Desmond, or any party filed an

appelle’s brief in the 18-53 BAP appeal.

The Debtor filed an appeal to the First Circuit

Court of Appeals but the appeals court re-affirmed

the BAP ruling while making a factual mistake. The

factual mistake may have caused the error in the

ruling. The Chapter 7 Trustee filed an opposing Brief

at the First Circuit Court of Appeals level.

The above factual error in its ruling was stating in

its opinion (Page 2, Paragraph 2) that “…the bankruptcy court found that the debtor, Paul Francis,

defaulted on this obligation and the court refused his

discharge and dismiss the bankruptcy. Debtor’s

bankruptcy petition was never dismissed. Such

bankruptcy is still active after liquidating his assets

after denying the discharge.

8

VII) REASONS FOR GRANTING THE WRIT

To prevent the use of sua sponte orders in order to

rule in contravention of clear, unambiguous, and

explicit stautues and set local rules; and to preserve

due process and statutory intent by applyuing and

enforcing those stautes as written into law and not

as envisioned by the courts tasked to interpret and

apply the same.

The decisions below have dangerously allowed and open the doors for anu statute,

code or regulation which was written to be strictly

applied to be liberally applied at the discretion and

whim of the courts.

This writ centers on erroneous staturory construction and application; and due process and fair notice

violations. The judgments below have become published opinions. Thus, to allow the rulings to remain

as good caselaw will not just erode and disregard

statutory laws, codes, local rules and regulations; but

will also undermine Congressional intent. The mentioned published opinions will ill serve as conduits

allowing for judicial activism and unfettered discretion by allowing courts to disregard of the clear

meaning of the text in statutes.

This writ shall be granted in order to prevent the

use of sua sponte orders and unfettered use of judicial discreation in order to rule in contravention of

9

clear, unambiguous, and explicit stautues and set

local rules; and to preserve due process and statutory

intent by applyuing and enforcing those stautes as

written into law and not as envisioned by the courts

tasked to interpret and apply them.

As stated above, this writ centers in statutory

construction and interpretation and due process.

However, it esteems from the First Circuit Court of

Appelas decision to affirm the BAP’s affirmation of

the Bankruptcy Court sua sponte order denying

Debtor a discharge pursuant to 11 U.S.C Section

727(a)(6)(A) for failure to comply with an OTU (to

wit: to file a Statement of Intentions and a Statement of Post Petition Creditors) per 11 U.S.C Section

521(i). The failure to comply with such court order

should have resulted in dismissal of the case as

warned; and not in denial of discharge with a subsequent liquidation of assets without even an accounting as to creditor’s distributions.

This writ shall also be granted since the bankruptcy courts are divided regarding the reading and

implementation of Section 521.

a)

The

Bankruptcy

Court

Miscronstruction, Misnterpretation and Misapplication of 11 U.S.C Section 521(i) will lead to a

liberal interpretation when such statute, on its

face, calls for strict application and other statutes similary strictly construed and due process

violations.

10

The First Circuit erroneounly affirmed the BAP’s

ruling which relied on Segarra-Miranda v. AcostaRivera (In re Acosta-Rivera), 557 F.3d 8, 10 (1st Cir.

2009) (citing 11 U.S.C. § 521(i)(2) and In re Spencer,

388 B.R. 418, 421 (Bankr. D.D.C. 2008)). The BAP

stated that in “…other words, the First Circuit has

rejected a mechanical reading of § 521(i). See id at

14…” The facts in Acosta-Rivera are not similar to

the case at hand as the Acosta-Rivera case centered

on whether the bankruptcy court may enter an order

excusing non-disclosure after the time for filing the

required information has expired.

In Acosta-Rivera the court stated that “…it is

possible to give effect to all of section 521, preserving

the bankruptcy court discretion to forgive compliance

with disclosure requirements after the fact while at

the same time preserving the authentic value of

automatic dismissal.” This statement was made in

relation to a court’s authority to act on a motion to

dismiss the petition for failure to comply with 521(i).

That is, Acosta-Rivera stands for the proposition that

Congress has “…entrusted the bankruptcy court with

discretion to modify disclosure requirements…” Id

Although Petitioner does not agree with the

Acosta-Rivera proposition that Congress did not

mean to make 521(i) mechanical in nature, the

Acosta-Rivera case is different from that of Petitioner

since in Acosta-Rivera granted rights to the debtor by

not allowing dismissal upon motion by a creditor

seeking dismissal for failure to comply with 521(i). In

11

the case at hand, the Bankruptcy Court did not

automatically dismiss the case per local rules but

rather denied Debtor’s discharge and allowed the

liquidation of assets.

The OUT which referenced 11 U.S.C. §521(i) was a

clear and unequvical directive to the Debtor notifying

him of certain Chapter 7 duties and the consequences should he fail to abide by the OUT. In a way, this

OTU operated like a criminal statute by giving the

Petitioner a clear and unequivocal notice of the

consequences (to wit: punishment) of his actions

and/or inactions (to wit: dismissal of the case).

There is a ‘fair warning’ requirement embedded in

the due process clause. Although usually used in

criminal cases, the ‘fair warning’ noticed to the

Petitioner should have been the same as the one

applied. That is, the ‘fair warning’ warned of dismissal but not denial of discharge sua sponte. “…Justice

Holmes spoke of as "fair warning . . . in language

that the common world will understand, of what the

law intends to do if a certain line is passed. To make

the warning fair, so far as possible the line should be

clear." McBoyle v. United States, 283 U. S. 25, 27

(1931)…” United States v. Lanier, 520 U.S. 259, 265

(1997).

In the case at bar, Petitioner was not afforded ‘fair

warning’ before the 45 day expiration of Section

521(i) requirement informing him that failure to

comply with such requirements was going to have

different consequences (denial of discharge instead of

automatic dismissal). In addition, the Bankruptcy

12

Court’s modification of the punitive consequences for

the Petitioner operated like ex post fact laws which

retroactively changed the legal consequences of

actions.

In a recent landmark case this United States

Supreme Court stated that the Supreme Court

“…normally interprets a statute in accord with the

ordinary public meaning of its terms at the time of

its enactment. After all, only the words on the page

constitute the law adopted by Congress and approved

by the President. If judges could add to, remodel,

update, or detract from old statutory terms inspired

only by extratextual sources and our own imaginations, we would risk amending statutes outside the

legislative process reserved for the people’s representatives.” Bostock v. Clayton County, 590 U.S._____

(2020).

Although the Supreme Court in Bostock analyzed

the application of Title VII of the Civil Rights Act,

the statutory construction used: “…From the ordinary public meaning of the statute’s language at the

time of the law’s adoption, a straightforward rule

emerges: An employer violates Title VII when it

intentionally fires an individual employee based in

part on sex” applies to this case. Id

Using the formulation and statutory construction

that ‘from the ordinary public meaning of the statute’s language at the time of the law’s adoption, a

straightforward rule emerges,’ the language in the

OTU stating that the case MUST be automatically

dismissed under 11 U.S.C. §521(i) if certain docu-

13

ments are not filed within 45 days of the date of the

filing of the petition shall mean just what it stated.

The words must and automatic in the statute used by

Congress were clear, unequivocal and not subject to

alternative interpretations or discretion.

Due process and fairness dictates that a debtor

should not have to guess as to whether a bankruptcy

court -or any other court- is going to give an alternative meaning to unequivocal language and directives

of statutes and orders of the court.

The Bankruptcy Court issued the OTU postconversion from Chapter 11 to Chapter 7. This OTU

required the Debtor to submit documentation as to

the statement of his intentions and whether he had

any post-petition creditors5. The OTU contained a

notice and/or warming, as stated above in the facts,

regarding the consequence of failure to comply with

the Order to Update which is dismissal and that “…if

not dismissed earlier, the case MUST be automatically dismissed under 11 U.S.C. §521(i) if certain documents are not filed within 45 days of the date of the

filing of the petition. If you file another bankruptcy

petition within 12 months of the dismissal, the automatic stay may be limited or may not take effect

depending upon your circumstances.”

The Petitioner did not comply with the OUT within

the prescribed time as notified to him in such order.

Thus, Petitioner’s consequences for failure to comply

with such OTU should have been limited to what the

OTU stated (to wit: automatic dismissal of his case);

and the consequences should have never amounted

14

to a denial of discharge –a consequence worst than

what was noticed or warned in the OTU. Thus, the

sua sponte order denying discharge, after the hearing

to show cause for failure to abide by the 11 U.S.C

521(i) OUT, was a clear violation of long standing

principles of due process of law.

A debtor is entitled to basic and common sense

procedural due process rights while in bankruptcy

proceedings. The Fifth Amendment of the United

States Constitution guarantees that an individual

will not be deprived “of life, liberty, or property

without due process of law.” Given that the rights of

an individual can be altered in a bankruptcy proceeding, the adequacy of notice of the bankruptcy proceeding is of great importance. This requirement of

notice affords parties "due process" that comports

with the U.S. Constitution and is "the cornerstone

underpinning Bankruptcy Code procedure." Western

Auto Supply Co. v. Savage Arms, Inc. (In re Savage

Indus., Inc.), 43 F.3d 714, 720 (1st Cir. 1994)).

A denial of discharge requires due process since a

denial of discharge deprives a debtor of property

rights. That is, if a debt is not discharged, the debt

survives and the debtor then needs to repay the same

by using his money and/or property to pay for such

debts. A debtor should be afforded with adequate

notice by the bankruptcy courts when a debtor’s

property rights are at stake.

When a bankruptcy court issues a notice informing

a debtor, creditor, or any interested parties of the

consequences of their actions or inactions, such

15

notice needs to apprise the recipient with the correct

information. In the case at bar, the Bankruptcy

Court issued an OTU with notice post-confirmation

containing information regarding the consequences

of failing to comply with the OTU and with a Notice

as to the procedure to object to the Debtor’s discharge. Nevertheless, the Bankruptcy Court did not

impose the “punishment” (dismissal and limitations

on the automatic stay if a further case was filed

within 12 months) Debtor was noticed to face for

failure to comply with the Court Order to Update1.

Instead, the Court denied Debtor a discharge sua

sponte and without following the requirements of the

statute as stated in the OTU regarding objections to

discharge2.

There are already harsh measures enacted by

Congress to assure compliance with the Bankruptcy

Code’s filing requirements. In terms of due process,

the harshest provision could certainly be 11 U.S.C §

521(i)(1), which states in relevant part:

[I]f an individual debtor in a voluntary case under

chapter 7 or 13 fails to file all of the information

required by subsection (a)(1) within 45 days after the

filing of the petition, the case shall be automatically

dismissed effective on the 46th day after the date of

the filing of the

1 Bankruptcy Code § 521(i)(1)

2 “You must file a complaint: if you assert that the debtor is not

entitled to receive a discharge of any debts under any of the

subdivisions of 11 U.S.C. § 727(a)(2) through (7).”

16

petition3.

The operative language in Section 521(i) is ‘shall

be automatically dismissed4. A reading of the statute

shows that Congress has given the bankruptcy courts

almost no authority or discretion to avoid the automatic dismissal of cases. There are only two very

narrow statutory exceptions to the automatic dismissal rule. First, if a debtor is fortunate enough to be

aware of the filing deficiency, the debtor may file a

motion requesting up to an additional forty-five days

to comply with the filing requirement. Second, the

court may deny dismissal if the trustee is aware of

the deficiency and files a motion within the forty-five

day period to relieve the debtor of the filing obligation for cause.5 The statutory exceptions by the

terms of the text allow no relief for debtors/trustees

who are aware of the filing deficiency within the

forty-five day period but fail to act to seek an extension.

Congress has gotten rid of the requirement for

notice and a hearing before dismissal—the dismissal

is to be “automatic” upon the mere lapse of time and

an order reflecting the dismissal must be entered

within seven days after a creditor or other party in

interest requests one6.

3 Id. at § 521(i)(1) (emphasis added)

4 11 U.S.C. § 521(i)(3) (2010).

5 Id. at § 521(i)(4)

6 11 U.S.C. § 521(i)(2)

17

Petitioner acknowledges that bankruptcy courts

are divided regarding the reading and implementation of Section 521.The First Circuit adopted an

approach to automatic dismissal which gives the

bankruptcy court limited discretion in certain circumstances:

“In all events, we believe that it is possible to give

effect to all of section 521, preserving the bankruptcy

court's discretion to forgive compliance with disclosure requirements after the fact while at the same

time preserving the authentic value of automatic

dismissal. When a party moves under [§] 521(i)(2) for

the entry of an order dismissing an incomplete

petition, the court can do one of three things: dismiss

the case, decline to dismiss the case if the good-faith

exception for payment advices applies ...; or determine, in its discretion, that the missing information

is not "required under subsection (a)(1)." 11 U.S.C. §

521(i)(1). In the last mentioned event, the court can

deny the motion to dismiss. Some courts in "strict"

jurisdictions seem to assume that the second and

third of these options cover the same ground. That

thinking underlies the opinions construing the fortyfive-day deadline for automatic dismissal as an

implicit temporal limitation upon the court's authority to order otherwise. We find that mechanical

reading unwise. While it may be textually plausible,

it fails to harmonize the letter and purpose of the

state.”

In re Acosta-Rivera 557 F.3d 8, 13 (2009)

18

In re Soto, 491 B.R. 307 (2013), another case out

of this First Circuit, explored and applied AcostaRivera. Soto dealt with a Debtor who, confronted

with the Chapter 7 trustee’s move for authority to

settle a lawsuit of the Debtor, decided to move to

dismiss his case based on his own failure to file

required financial statements. The bankruptcy court

denied the motion and this Debtor appealed, the

district court reversed and the trustee further appealed to this Court.

Certainly, the Soto decision stated that “…§ 521(i)

does not compel dismissal of the case in limited

circumstances, where "the missing information has

become irrelevant or extraneous." Acosta at 14.

However, in the case at bar, no party asked for an

extension to comply with the OTU –not even the

Chapter 7 trustee who was aware of the deficiencybefore the deadline lapsed. In addition, the Bankruptcy Court did not make a determination waiving

the OTU requirement stating it was no longer necessary or relvant. Taking into consideration that the

Bankruptcy Court “sentenced” the Debtor by denying

a discharge -for failure to abide by the OTU- and

then to liquidate his assets, one must conclude that

such requirement was considered relevant by the

Bankruptcy Court for the Chapter 7 case administration. However, instead of dismissal as required by

Section 521, the Bankruptcy Court, arbitrarily and

without due notice, changed the “punishment” to a

denial of discharge and subsequent liquidation.

19

In Soto, the court stated that “…In the absence of

a request to extend the 45-day deadline, the court

could have dismissed the case at any time after April

1, 2012. The fact that it did so in response to Doral's

oral motion changes nothing. As aptly stated by one

court, in the absence of an extension, "[a]fter the

expiration of the specified period set forth in §

521(i)(1), there are no exceptions, no excuses, only

dismissal and the consequences that flow therefrom."

In re Soto at 315 quoting In re Ott, 343 B.R. 264, 268

(Bankr. D.Colo. 2006).

The Bankruptcy Appellate Panel for the Northern

District of Indiana in Matter of Lugo, 592 B.R. 843

(Bankr. N.D.Ind. 2018) the court stated that:

“…Section 521(i)(l) does not require any action by the

court or anyone else. Much like Cinderella's pumpkin

at midnight, if the required information has not been

filed by the statutory

deadline the magic ends and the case is automatically

dismissed by operation of law on day 46… It does not

require any warning or notice or depend upon an

order of the court. Since the dismissal is not an act or

a decision of the court, there is nothing to "reconsider"

or, in the language of Rule 59, nothing to alter or

amend. Similarly, there is no order or judgment that

the court can give relief from, due to some kind of

mistake, surprise, or excusable neglect, see, Fed. R.

Bankr. P. Rule 9023; Fed R. Civ. P. Rule 60(b), so

that the debtor can have a second chance to do things

right. The language of the statute is clear and simple,

"the case shall be dismissed on the 46th day" and the

20

court has no discretion to do otherwise… At best, the

only argument that can be advanced is that there has

been some kind of clerical mistake in the record and

the supposedly missing information was actually

timely filed…The debtor makes no such argument,

but, instead, acknowledges the required information

has not been filed and wants additional time to

provide it. That is something the court cannot do…

After the expiration of the time periods set forth in §

521(i), there are no exceptions and no excuses; only

dismissal and the consequences that flow therefrom…”

Lugo is on point and reflects the clear language of

the statute. Thus, Petitioner’s case should have been

dismissed automatically on May 4, 2018, 45 days

from March 20, 2018 (the conversion date). The

operative provision in the statute gave the Bankruptcy Courts no discretion. Thus, since the case

should have been automatically dismissed on May 4,

2018, no other action or order in the case should have

entered.

a) The

Bankruptcy

Court

Misconstruction,

Misnterpretation and Misapplication of 11

U.S.C. Section 727(a)(6)(A) will lead to a liberal

interpretation when such statute, on its face,

calls for strict application and other statutes

similary strictly construed and due process violations.

21

Pursuant to 11 U.S.C. Section 727(a)(6)(A) the

“…court shall grant the debtor a discharge, unless…

the debtor has refused, in the case… to obey any

lawful order of the court, other than an order to

respond to a material question or to testify…” However, pursuant to 11 U.S.C. Section 727(c)(1) the

“…trustee, a creditor, or the United States trustee

may object to the granting of a discharge under

subsection (a) of this section.”

As stated above in Bostock, “This Court normally

interprets a statute in accord with the ordinary

public meaning of its terms at the time of its enactment. After all, only the words on the page constitute

the law adopted by Congress and approved by the

President. If judges could add to, remodel, update, or

detract from old statutory terms inspired only by

extratextual sources and our own imaginations, we

would risk amending statutes outside the legislative

process reserved for the people’s representatives.”

Statutory construction dictates that Congress did

not intend for the “bankruptcy court” to be included

in Section 727(a)(1) as an envisioned plaintiff or

party in interest to pursue a denial or discharge

action against the Debtor. If Congress would have

envisioned the bankruptcy court as a party in interest it would have included such language. Thus, it

was an error and abuse of discretion to deny Debtor a

discharge under 727(a)(6)(A) sua sponte and without

affording the Debtor/Appellant of the process required under Section 727.

22

Likewise, a bankruptcy court may not deny confirmation of a debtor’s chapter 13 plan in the absence

of objection by the trustee or unsecured creditor,

based on its belief that the debtor miscalculated

disposable income. Briggs v. Johns (In re Briggs), No.

17-1080 (W.D. La. Sept. 28, 2018). Similarly, the

Bankruptcy Court did not have standing to object to

Debtor’s discharge pursuant to Section 727. In the

case of In re Korte, 262 B.R. 464 (2001), the court

examined standing to object to a discharge and the

proper actions to take in order to accomplish such

purpose.

“Section 727 governs discharges in bankruptcy

generally. Subsection (c)(1) of that provision specifically provides that "[t]he trustee, a creditor, or the

United States trustee may object to the granting of a

discharge under subsection (a) of this section." 11

U.S.C. §727(c)(1) (1994). A "creditor," in turn, is

defined as an "entity that has a claim against the

debtor that arose at the time of or before the order for

relief concerning the debtor." 11U.S.C. § 101(10)(A)

(1994). A "claim" is a "right to payment, whether or

not such right is reduced to judgment, liquidated,

unliquidated, fixed, contingent, matured, unmatured,

disputed, undisputed, legal, equitable, secured, or

unsecured." 11 U.S.C. § 101(5)(A)(1994). Rule 7001(4)

of the Federal Rules of Bankruptcy Procedure states

that "aproceeding to object to or revoke a discharge" is

an adversary proceeding. Fed. R. Bankr.P. 7001(4)

(1994). As stated in Rule 4004(a), an adversary

proceeding objecting to a debtor's discharge must be

23

commenced within certain time limits. See Fed. R.

Bankr.P.4004(a) (1994).

Id at 471.

The proper procedure to deny a debtor of a discharge is to compel the proper moving party, not the

Bankruptcy Court, under Section 727(c)(1) to prove

each element of § 727(a)(6)(1) by a preponderance of

the evidence in order to prevail upon its objection to

the debtor's discharge.

Because the denial of a discharge is a "harsh and

drastic penalty," the statute's provisions are "strictly

construed in favor of the debtor." Korte v. U.S. Internal Revenue Serv. (In re Korte), 262 B.R. 464, 471

(B.A.P. 8th Cir. 2001) (internal citations omitted).

Once a party objecting to a debtor's discharge

"establishes a prima facie case, the burden then

shifts to the debtor defendant to offer credible evidence to explain [her] conduct." Robbins v. Haynes

(In re Haynes), 549 B.R. 677, 685 (Bankr. D.S.C.

2016). However, the objecting party bears the ultimate burden of proving by a preponderance of the

evidence that a debtor is not entitled to a discharge.

In re Korte, 262 B.R. at 471. In this case, the court

stated that a party under Section 727(c)(1) must

prove each element of §727(a)(6)(1) by a preponderance of the evidence in order to prevail upon its

objection to the debtor's discharge.

The above case illustrates that only the trustee, a

creditor, or the United States trustee may object to

the granting of a discharge under section (a) of

24

Section 727; and that if such proceeding is undertaken, the matter was going to be considered an adversary proceeding under Rule 7001(4). Thus, in this

case Debtor’s denial of discharge was moved by an

entity (the Bankruptcy Court) without standing per

Section 727 and without affording him of due process

and proper procedure.

The Appellant acknowledges that bankruptcy

courts have been granting discretion under 11 U.S.C.

Section 105(a) to undertake certain actions. “The

court may issue any order, process, or judgment that

is necessary or appropriate to carry out the provisions of this title. No provision of this title providing

for the raising of an issue by a party in interest shall

be construed to preclude the court from, sua

sponte13, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of

process.” 11 U.S.C. Section 105(a).

However, Petitioner states that the “…essence of

the boundary of § 105(a) equity power is that the

provision cannot provide the basis for requested

relief that would either (1) create a new substantive

right or (2) conflict with another provision of the

Bankruptcy Code.”).” Ameriquest Mortg. Co. v. Nosek

(In re Nosek), 544 F.3d 34, 44 (1st Cir. 2008). That is,

although the Bankruptcy Court has Section 105(a)

equity powers to act sua sponte, it cannot do so if

such action conflicts with another provision of the

Bankruptcy Code.

25

The Bankruptcy Court sua sponte order denying

Debtor a discharge conflicted and contravened with

provisions of the Bankruptcy Code. First, in the case

at hand, the Bankruptcy Court cannot be considered

a trustee, a creditor, or a United States Trustee for

purposes of Section 11 U.S.C. Section 727(c)(1) which

states that the “…trustee, a creditor, or the United

States trustee may object to thegranting of a discharge under subsection (a) of this section.” Thus, by

acting as the moving party, the Bankruptcy Court

Section 105(a) powers and actions conflicted with

Section 727(c)(1). Second, a proceeding to deny or

revoke a discharge is an adversary proceeding pursuant to Rule 7001(4)”…a proceeding to object to or

revoke a discharge, other than an objection to discharge under §§727(a)(8), (a)(9), or 1328(f)…” In this

case, the Bankruptcy Court denied the discharge sua

sponte and was not prompted by any adversary

proceeding filed against the Debtor. Thus, the summary hearing on the Order to Show Cause does not

constitute an adversary proceeding to object to

discharge pursuant to Section 727(a)(6) and conflicts

with such provision of the Bankruptcy Code.

Discharge objections are determined through

adversary proceedings. No party filed an adversary

proceeding against the Debtor and the hearing to

show cause cannot constitute the equivalent of a

hearing to determine justification for the denial of

the discharge under Section 727.

Debtor did not receive procedural and substantive

due process for the reasons stated above. Again, no

26

party filed an objection to Debtor’s discharge and no

party was required and/or met the burden of demonstrating the required elements to justify denial of the

discharge under Section 727.

“Section 727(a)(6)(A) provides that "the court shall

grant the debtor a discharge, unless the debtor has

refused to obey any lawful order of the court, other

than an order to respond to a material question or to

testify." Given the plain language of the statute that

debtor "refuse" to obey a court order, "mere failure" is

insufficient to justify the harsh sanction of denial of a

discharge imposed by § 727. In re Harmon, 324 B.R.

383, 388 (Bankr. M.D.Fla.2005).

Consequently, discharge should only be denied

where the debtor's noncompliance with a court order

was a result of willful, intentional disobedience or

dereliction rather than mere inadvertence or mistake. In re Jones, 490 F.2d 452, 456 (5th

Cir.1974)…Plaintiffs therefore cannot prove any set

of facts in support of their claim which would entitle

them to relief under §727(a)(6)(A). Accordingly,

Plaintiffs' have failed to sufficiently plead a cause of

action under §727(a)(6)(A).”

In Re Henderson, 423 B.R. 598, 621 (Bankr.

N.D.N.Y. 2010)

In the case at hand, there was no plaintiff moving

for Debtor’s denial of a discharge; and the Bankruptcy Court could not have been a proper plaintiff under

the statute. Also, the Bankruptcy Court never heard

a sufficiently pleaded claim against the Debtor to

27

deny him a discharge pursuant to 727(a)(6)(A) because no adversary proceeding was filed, and the

court cannot possible wear two hats: the plaintiff

with the burden of proof and the judge determining if

the plaintiff met the burden of proof.

The Bankruptcy Court in this matter issued

findings of fact and conclusions of law; however, the

Bankruptcy Court use of authority and precedent (to

wit: In re Araujo, 292 B.R. 19 (Bankr.D.Conn. 2003)

and In re Tougas, 354 B.R. 572 (Bankr.D.Mass.

2006)) was misused and not applicable authority

justifying the sua sponte order denying Debtor of a

discharge pursuant to Section 727(a)(6)(A).

The misuse and misapplication of In re Araujo by

the Bankruptcy Court was an error of law and abuse

of discretion because in that case it was the Chapter

7 trustee who had moved to object to a debtor’s

discharge via an adversary proceeding. In the Araujo

case the Chapter 7 trustee made a prima facie case

on Debtor’s refusal to follow court orders. Also, the

misuse and misapplication of the In re Tougas case

by the Bankruptcy Court was an error of law and

abuse of discretion because in that case, as well as in

Araujo, the objection to the debtor’s discharge was

brought by a Chapter 7 trustee through an adversary

proceeding, among other things, pursuant to Section

727(a)(6)(A) for a debtor’s refusal to obey a court

order. Nevertheless, in both cases, brought by a

Chapter 7 trustee, the court had to determine if

whether failure to obey constituted a "refusal" for

purposes of §727(a)(6).

28

“The import of this definition is that § 727(a)(6)(A)

requires a plaintiff to show more than a mere failure

to obey a lawful court order. The plaintiff must show

some degree of volition or wilfulness on the part of

the debtor in failing to comply with the order...”

Tougas at 578.

The Tougas court also stated that under “...the

circumstances, the Court concludes that the Debtor's

failure to produce the missing bank records and tax

return was the result of inattention and dilatoriness.

The Debtor did not act willfully or intentionally in

failing to produce the records sought by the Trustee.

Accordingly, the Court finds that the Trustee failed

to sustain her burden under 11 U.S.C. §

727(a)(6)(A).” Id.

Under the logic of United Student Aid Funds, Inc.

v. Espinoza 559 U.S. 260 (2010) the Supreme Court

ruled that a sua sponte objection is only appropriate

to bankruptcy statutes that are self-executing. However, Section 727(c)(1) is not self-executing as only

“…the “trustee, a creditor, or the United States

trustee may object to the granting of a discharge

under subsection (a) of this section.”

In the case at hand, no proper or improper party

met the burden under Section 727 regarding refusal

to grant a discharge. Thus, Debtor should have never

been denied a discharge by the Bankruptcy Court

sua sponte for the reasons stated above.

29

IV)

CONCLUSION

This Court should grant certiorari.

Dated this 28th of January 2022

Respectfully Submitted by

Petitioner, Paul Francis, Through Counsel,

Carmenelisa Perez-Kudzma (BBO MA #633520)

Perez-Kudzma Law Office, P.C

35 Main Street, Suite #1

Wayland, MA 01778

carmenelisa@pklaw.law

978-505-3333

30