# Opposition Brief — Brooks v. American General Financial Services Services, Inc. (No. 06-25)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2006

## Text

(2) FILED

AUG 7 - 2006
No. 06-25 =
IN THE
Supreme Court of the United States
JACKIE BROOKS,
Petitioner,

AMERICAN GENERAL FINANCIAL SERVICES, INC.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE E1GHTH CIRCUIT

Cae ene nem —
Seeaanemeee

BRIEF IN OPPOSITION

ne

BENJAMIN C. ACKERLY
Counsel of Record

TYLER P. BROWN

Hunton & WIiLuiams, LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
(804) 788-8200

Attorneys for Respondent

202658 ce

COUNSEL PRESS
(800) 274-3321 + (800) 359-6859

l

QUESTION PRESENTED

Whether Petitioner has presented compelling reasons for
this Court to review the decision of the U.S. Court of Appeals
for the Eighth Circuit, which affirmed the discretionary denial
by the bankruptcy court of Petitioner’s motions to reopen
his bankruptcy case?

il

CORPORATE DISCLOSURE STATEMENT
PURSUANT TO SUPREME COURT RULE 29.6

No publicly held company directly owns 10% or more
of the stock of Respondent, American General Financial
Services, Inc., formerly known as American General Finance,
Inc. However, Respondent is wholly owned by American
General Finance Corporation, which is wholly owned by
American General Finance, Inc., which is wholly owned by
American General Corporation, which is wholly owned by
American International Group, Inc., a publicly held company.

ill

TABLE OF CONTENTS

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Corporate Disclosure Statement Pursuant to Supreme
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Table of Cited Authorities . «2... 5c cccccccccces
DI ra oer eas See eye cueing ae
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Reasons for Denying the Petition ...............
ee Nenlieioy Court’s Denial of a Motion to
Reopen a Bankruptcy Case is Reviewed for

a ie ng 6

Il. The Bankruptcy Court Properly Denied the
8 ee re er re

A. Petitioner Has Not Complied with His
Bankruptcy Obligations ............

B. Reopening Petitioner’s Case Would
Have Been a Futile Exercise .........

NESEY ot Gee nt eae See ieweRe PTA EEC

iv
TABLE OF CITEDAUTHORITIES

Cases:

Arleaux v. Arleaux, 210 B.R. 148 (B.A.P. 8th Cir.
COPED. Noes ees KOKO ew eae CRE eee

Beezley v. California Land Title Co. (In re Beezley),
BUe 0.28 1493 COO IFES) ek eee ies

In re Bianucci, 4 F.3d 526 (7th Cir. 1993) ........

In re Carberry, 186 B.R. 401 (Bankr. E.D. Va. 1995)

ao. 2 SP BRS 8. o OOP DP BOSE OLA OO R CEES AS YS. Oe: Oe C8 Oe OR Se Se

Dworsky v. Canal Street Ltd. P’Ship (In re Canal
Street Ltd. P'ship), 269 B.R. 375 (B.A.P. 8th Cir.
EE a EER CLE

o- 62 8 £8 £8 8-4 6 4 6422 C9 Ot CO 6. e 6.84 86 478: CS O68 eo 8-8 Ee

In re Hardy, 209 B.R. 371 (Bankr. E.D. Va. 1997) ...

Internal Revenue Serv. v. Germaine (In re Germaine),
SZ BR. GIS BAP. SRC. 1993) Co eee

Menk v. Lapaglia (In re Menk), 241 B.R. 896 (B.A.P.
SE ooo a ae hee ee eer ee

In re Patterson, 297 B.R. 110 (Bankr. E.D. Tenn.
(| re prety ope rr h here ery eh parrot

10

Vv

Cited Authorities
Page
In re Phillips, 288 B.R. 585 (Bankr. M.D. Ga. 2002)
BRAND BS NPIS Sn EPS eo pele aw ee Yona 8
In re Potes, 336 B.R. 731 (Bankr. E.D. Va. 2005) ... 8
Price v. Haker (In re Haker), 411 F.2d 568 (5th Cir.
SN otcd ee bd eee haxdan aie aM web 6
Rockland Trust Co. v. Sheerin (In re Sheerin), 21
Uk. Soe CAT. TOE BPRS) nh ch vccvevecss 7,8
In re Schicke, 290 B.R. 792 (B.A.P. 10th Cir. 2003)
cia Wen De Gath dis be kteee shew eae een 8
State Bank of India v. Chalasani (In re Chalasani),
Ee Be gr fe ae, | nee 6, 7,8
Systems & Servs. Technologies, Inc. v. Davis (In re
Davis), 314 F.3d 567 (11th Cir. 2002) ......... 6
Thompson v. Virginia (In re Thompson), 16 F.3d 576
(4th Cir. 1994), cert. denied, 512 U.S. 1221, 114
S. Ct. 2709, 129 L. Ed. 2d 836 (1994) ........ 6

Wragg v. Federal Land Bank of New Orleans, 317
Sa EE oka asiehees F640 wet aaBaecaeR 5, 6

vi

Cited Authorities
Page
Statutes: ‘
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Oe Sra, OEE bodes wb s oe crea eae 2
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Rules:

Oe ee ee 1,5

I
INTRODUCTION

Petitioner has not presented compelling reasons to grant
his Petition for a Writ of Certiorari. See Sup. Ct. R. 10. The
subject of the Petition is the Order of the U.S. Court of
Appeals for the Eighth Circuit (the “Eighth Circuit”)
affirming a bankruptcy court’s denial of Petitioner’s motions
to reopen his bankruptcy case. Denial of such a motion is
reviewed under an abuse of discretion standard. The Eighth
Circuit’s decision is not in conflict with a decision of this
Court or another Court of Appeals. Nor does this appeal
involve an important federal question that- has not been
resolved by this Court. Accordingly, the Petition should be
denied.

STATEMENT OF THE CASE

Petitioner has been a debtor in three Chapter 13
bankruptcy cases in the U.S. Bankruptcy Court for the Eastern
District of Missouri (the “Bankruptcy Court”). The first was
filed in 1995, the second in 2000, and the third in 2001. See
Motion for Relief from Stay and to Ratify Foreclosure Sale
(“Motion for Relief”), June 5, 2001, Bankr. E.D. Mo., Case
Number 01-43603, Docket Number 36. Each case was
dismissed prior to Petitioner obtaining a discharge due to
his failure to make all payments required by his Chapter 13
plan. See id.; Order, August 20, 2003, Bankr. E.D. Mo., Case
Number 01-43603, Docket Number 97.

Following dismissal of the 1995 bankruptcy, Respondent
sought to foreclose on real property on which it maintained
a mortgage lien to secure the loan provided to Petitioner and
his wife. Petitioner, however, filed two additional bankruptcy
petitions on the eve of scheduled foreclosure sales, which
stayed the foreclosure sales. See Motion for Relief.

2

In the third bankruptcy, Case No. 01-43603-399,
Respondent sought and obtained relief from the automatic
stay of 11 U.S.C. § 362(a) to conduct a foreclosure sale.
Order, April 19, 2001, Bankr. E.D. Mo., Case Number 01-
43603, Docket Number 18. Following an ex parte hearing
on the motion for relief from stay, the Bankruptcy Court
granted relief to Respondent, which then conducted the
foreclosure sale that day. /d.; see Order, July 9, 2002, U.S.
Dist. Ct. E.D. Mo., Case Number 4:01CV1435, Docket
Number 34 (“July 9 Order”). Respondent purchased the
property at the foreclosure sale. Jd. The Bankruptcy Court
later vacated the ex parte relief from stay order, conducted
an evidentiary hearing on the motion, granted relief from
stay and ratified the foreclosure sale (the “Relief from Stay
Order”). See Order, July 17, 2001, Bankr. E.D. Mo., Case
Number 01-43603, Docket Number 45; Transcript of
Hearing, October 18, 2001, Bankr. E.D. Mo., Case Number
01-43603, Docket Number 60.

Petitioner appealed the Relief from Stay Order, and the
U.S. District Court for the Eastern District of Missouri (the
“District Court”) affirmed. July 9, 2002 Order. Petitioner then
appealed to the Eighth Circuit, which remanded the case to
the Bankruptcy Court to report on two factual issues, namely
(1) whether Petitioner 5 ad paid Respondent in full, or in part,
and received a discharge in the first bankruptcy, and (2) if
Petitioner was indebted to Respondent, the rate of interest,
if any, applicable to the debt. Opinion, March 24, 2003,
Eighth Circuit, Case Number 02-3041.

On remand, the Bankruptcy Court determined that the
bankruptcy case in which the appeal was taken, the third
bankruptcy case, had been dismissed on March 14, 2002,
while the Relief from Stay Order was on appeal. Order,

3

August 20, 2003, Bankr. E.D. Mo., Case Number 01-43603,
Docket Number 97. The Bankruptcy Court concluded that,
because the automatic stay no longer was applicable due to
the dismissal of the bankruptcy, Respondent’s motion for
relief from the automatic stay was moot. /d. As a result, the
Bankruptcy Court denied the relief from stay motion by Order
entered August 20, 2003 (the “Relief Denial Order’’). Jd.

Upon receipt of the Relief Denial Order from the
Bankruptcy Court, the Eighth Circuit dismissed the appeal
as moot. Order, January 8, 2004, Eighth Circuit, Case
Number 02-3041.

Petitioner subsequently filed motions to reopen the third
bankruptcy case, pursuant to 11 U.S.C. § 350(b)', on March
30, 2004, and March 31, 2004 (the “Motions to Reopen”).
Motions to Reopen, Bankr. E.D. Mo., Case Number 01-43603,
Docket Numbers 103, 104. The Motions to Reopen state that
Petitioner “wants to bring an action for clarification of
whether [Respondent’s] motion . . . for relief from stay was
denied because there was no stay in the Bankruptcy Case
No. 95-42416-399 and that an order be issued to convey the
property back to [Petitioner].” Jd. The Bankruptcy Court
summarily denied the Motions to Reopen. Order, April 7,
2004, Bankr. E.D. Mo., Case Number 01-43503, Docket
Number 105.

' Section 350 of the Bankruptcy Code provides as follows:

(a) After an estate is fully administered and the court
has discharged the trustee, the court shall close the case.

(b) A case may be reopened in the court in which
such case was closed to administer assets, to accord
relief to the debtor, or for other cause.

4

On appeal, the District Court affirmed the denial of the
Motions to Reopen. Order, March 28, 2005, U.S. Dist. Ct.
E.D. Mo., Case Number 4:04CV526, Docket Number | 2. The
District Court also denied Petitioner’s motion for
reconsideration. Order, April 8, 2005, U.S. Dist. Ct. E.D.
Mo., Case Number 4:04CV526, Docket Number 14. The
Eighth Circuit summarily affirmed. Order, August 17, 2005,
Eighth Circuit, Case Number 05-2330. Petitioner’s petition
for rehearing and for a rehearing en banc in the Eighth Circuit
both were denied. Order, October 21, 2005, Eighth Circuit,
Case Number 05-2330. The Petition for a Writ of Certiorari
concerns the Eighth Circuit’s decision affirming the denial
of the Motions to Reopen.

Petitioner incorrectly asserts that his Petition challenges
the jurisdiction of the Bankruptcy Court and the propriety of
that court’s entry of the Relief from Stay Order and the Relief
Denial Order in light of the dismissal of his 1995 bankruptcy
case. Those issues are not involved in this appeal. The Relief
from Stay Order was appealed by Petitioner, but that appeal
was dismissed as moot by the Eighth Circuit following receipt
of the Relief Denial Order. Petitioner did not timely appeal
the entry of the Relief Denial Order or the Eighth Circuit’s
dismissal of his prior appeal as moot. Instead of appealing
those orders, he sought to reopen his bankruptcy, and when
that effort failed through appeals to the Eighth Circuit, he
lodged the present Petition. Accordingly, the Petition properiy
should address only the denial of the Motions to Reopen,
not the issues that he might have raised in appeals he never
timely pursued. Also, contrary to Petitioner’s assertion,
neither his Petition, the Relief from Stay Order nor the Relief
Denial Order concern his 1995 bankruptcy case; they concern
only the 2001 bankruptcy case.

5

REASONS FOR DENYING THE PETITION

The decisions below do not conflict with a decision of
this Court or any Court of Appeals. Courts uniformly have
held that the denial of a motion to reopen a bankruptcy case
is reviewed for an abuse of discretion. Moreover, the decision
of the Bankruptcy Court in this case was not an abuse of its
discretion. Accordingly, Petitioner has not established
compelling reasons for this Court to grant his Petition.
See Sup. Ct. R. 10.

I. A Bankruptcy Court’s Denial of a Motion to Reopen a
Bankruptcy Case is Reviewed for Abuse of Discretion

Pursuant to 11 U.S.C. § 350(b), “a [bankruptcy] case
may be reopened in the court in which such case was closed
to administer assets, to accord relief to the debtor, or for
other relief.” The appellate courts below properly reviewed
the Bankruptcy Court’s decision not to reopen the bankruptcy
case under an abuse of discretion standard. Dworsky v. Canal
Street Ltd. P'ship (In re Canal Street Ltd. P ship), 269 B.R.
375, 379 (B.A.P. 8th Cir. 2001). Under this standard, a
bankruptcy court’s denial of a motion to reopen should not
be reversed unless the appellate court has a definite and firm
conviction that the bankruptcy court committed a clear error
of judgment in the conclusion it reached. /d.

In a case decided prior to enactment of the modern US.
Bankruptcy Code, this Court addressed the standard for
reviewing the denial of a motion to reopen a bankruptcy
proceeding. In Wragg v. Federal Land Bank of New Orleans,
317 U.S. 325, 327 (1943), the Court held that “[w]Je do not
differ with the conclusion of both courts below that it was
within the sound discretion of the bankruptcy court to decline

6

to reopen the original order of dismissal.” Courts have
applied the decision in Wragg in considering a motion to
reopen under § 350(b) of the Bankruptcy Code. See, e.g.,
In re Edmonds, 27 B.R. 468, 469 (Bankr. E.D. Tenn. 1983)
(citing Wragg for its holding that “it is within the sound
discretion of the bankruptcy judge to either reopen a case or
refuse to do so”).

Application of an abuse of discretion standard in the
Eighth Circuit was consistent with the standard uniformly
applied by other Circuits in reviewing the denial of a motion
to reopen a bankruptcy case. See, e.g., Jn re Systems & Servs.
Technoloxies, Inc. v. Davis (In re Davis), 314 F.3d 567, 570
(11th Cir. 2002) (review of bankruptcy court’s order refusing
to reopen is governed by abuse of discretion standard); State
Bank of India v. Cha!asani (In re Chalasani), 92 F.3d 1300,
1307 (2d Cir. 1996) (bankruptcy court did not abuse its
discretion denying motion to reopen adversary proceeding
because debtor had failed to comply with discovery and
reopening would prejudice creditor); Thompson y. Virginia
(In re Thompson), 16 F.3d 576, 581-82 (4th Cir. 1994), cert.
denied, 512 U.S. 1221, 114 S. Ct. 2709, 129 L. Ed. 2d 836
(1994) (decision to reopen a bankruptcy case rests with
discretion of bankruptcy court); /n re Bianucci, 4 F.3d 526,
528 (7th Cir. 1993) (bankruptcy court did not abuse its
discretion denying debtor’s motion to reopen bankruptcy to
avoid lien two years after case was closed); Beezley v.
California Land Title Co. (In re Beezley), 994 F.2d 1433,
1435 (9th Cir. 1993) (per curiam) (oankruptcy court did not
abuse its discretion denying debtor’s motion to reopen to
add creditor because reopening would not have resulted in
any effective relief because bankruptcy was a no asset, no
bar date case); Price v. Haker (In re Haker), 411 F.2d 568,
569 (Sth Cir. 1969) (per curiam) (denial of motion to reopen

7

to pursue newly discovered asset was not abuse of discretion
because chance of recovery to creditors from asset was too
remote); Dworsky, 269 B.R. at 379 (bankruptcy court’s denial
of creditor’s motion to reopen case five years after confirmation
was not abuse of discretion); Rockland Trust Co. v. Sheerin (In
re Sheerin), 21 B.R. 438, 440 (B.A.P. 1st Cir. 1982) (bankruptcy
court did not abuse its discretion by refusing to reopen case to
pursue untimely complaint to determine non-dischargeability
of debt).

Il. The Bankruptcy Court Properly Denied the Motions
to Reopen

A. Petitioner Has Not Complied with His Bankruptcy
Obligations

In affirming the Bankruptcy Court’s denial of Petitioner’s
Motions to Reopen, the District Court held that “(b]ecause of
{Petitioner’s] failure to comply with the rules and requirements
of a debtor in a Chapter 13, I cannot conclude that the bankruptcy
court’s decisions denying [Petitioner’s] motions to reopen his
bankruptcy case were an abuse of discretion.” The Eighth Circuit
summarily affirmed the District Court’s decision.

A failure by a debtor to comply with the rules and
requirements of bankruptcy is adequate grounds to deny the
debtor’s motion to reopen his bankruptcy case. See State Bank
of India, 92 F.3d at 1307 (affirming denial of motion to reopen
adversary proceeding because debtor had failed to comply with
discovery). In this case, Petitioner has had three bankruptcy cases
dismissed prior to making all payments required by his Chapter
13 plan. In the latter two cases, the filings were made on the eve
of foreclosure sales scheduled by Respondent. In these
circumstances, the denial of Petitioner’s Motions to Reopen was
not an abuse of discretion.

8

B. Reopening Petitioner’s Case Would Have Been a
Futile Exercise

The reopening of a bankruptcy case does not alone grant
substantive relief to the movant. The reopening merely grants
the opportunity to seek relief in a bankruptcy case that previously
was closed. See State Bank of India, 92 F.3d at 1307-08; Internal
Revenue Serv. v. Germaine (In re Germaine), 152 B.R. 619
(B.A.P. 9th Cir. 1993).

If the relief sought to be obtained upon the reopening of
the case is not available to the movant, it is not an abuse of
discretion for a bankruptcy court to deny the reopening to avoid
a futile exercise. See Beezley, 994 F.2d at 1435 (reopening would
not have resulted in effective relief because bankruptcy was no
asset, no bar date case); Rockland Trust Co., 21 B.R. at 440
(reopening inappropriate to pursue untimely complaint); Jn re
Schicke, 290 B.R. 792, 798 (B.A.P. 10th Cir. 2003) (“A
bankruptcy court that refuses to reopen a Chapter 7 case that
has been closed will not abuse its discretion if it cannot afford
the moving party any relief in the reopened case.”); Arieaux v.
Arleaux, 210 B.R. 148, (B.A.P. 8th Cir. 1997) (upholding
decision denying debtor’s motion to reopen bankruptcy when
to do so would provide no relief to debtor); Jn re Potes, 336
B.R. 731, 732 (Bankr. E.D. Va. 2005) (motion to reopen should
be denied if “‘no useful purpose can be served by reopening...
.””) (citing In re Carberry, 186 B.R. 401 (Bankr. E.D. Va. 1995));
In re Patterson, 297 B.R. 110, 114 (Bankr, E.D. Tenn. 2003)
(“the court will not reopen a case if doing so would be futile’’)
(quoting In re Phillips, 288 B.R. 585, 587 (Bankr. M.D. Ga.
2002)); In re Hardy, 209 B.R. 371, 379-80 (Bankr. E.D. Va.
1997) (denying debtor’s motion to reopen when doing so would
be futile because underlying claim lacked merit).

9

Petitioner’s 2001 bankruptcy case was dismissed in 2002
on motion of the Chapter 13 Trustee due to the failure of
Petitioner to comply with his Chapter 13 Plan. Upon the
dismissal, the property of the estate revested in the debtor,
pursuant to 11 U.S.C § 349(b)(3),? and the automatic stay
of 11 U.S.C. § 362 terminated,’ pursuant to 11 U.S.C.

§ 362(c)(1).4

? Section 349(b)(3) provides as follows:

(b) Unless the court, for cause, orders otherwise, a
dismissal of a case other than under section 742 of this
title —

(3) revests the property of the estate in the entity
in which such property was vested immediately before
the commencement of the case under this title.

> Similarly, the automatic stay terminated upon the dismissal of
the 1995 bankruptcy. Thus, Respondent was not stayed from
collecting the debt Petitioner owed Respondent, and Petitioner had
no obligation to seek to reopen the 1995 bankruptcy to seek relief
from stay in the 2001 case to continue with the scheduled foreclosure

sale.
* Section 362(c)(1) provides as follows:

(c) Except as provided in subsections (d), (e), (f) and
(h) of this section —

(1) the stay of an act against property of the
estate under subsection (a) of this section continues until
such property is no longer property of the estate; ....

10

The reopening of a bankruptcy case does not reinstate
the automatic stay. Menk v. Lapaglia (In re Menk), 241 B.R.
896 (B.A.P. 9th Cir. 1999). Thus, even if Petitioner’s
bankruptcy case had been reopened, the relief from stay issue
would have remained a moot issue. Accordingly, reopening
would have been a futile exercise.

CONCLUSION

Petitioner has not established compelling reasons for this
Court to grant his Petition for a Writ of Certiorari.
Accordingly, Respondent respectfully requests that the Court
deny the Petition.

Respectfully submitted,

BENJAMIN C. ACKERLY

Counsel of Record

TYLER P. BROWN

HunTON & WILLiams, LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
(804) 788-8200

Attorneys for Respondent

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1137%3A2. Public record. Not legal advice.