Beverly A. Dawson

1 As noted below, Dawson has significant real estate tax obligations to the City of
Philadelphia (“City”) which were not identified in her proposed schedules. 	The City was not
served with the Motion.
UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: 	Chapter 13
:
BEVERLY A. DAWSON, 	: 	Bankruptcy No. 07-15741DWS
aka Beverly A. Dawson-Hall, 	:
:
Debtor. 	:
MEMORANDUM OPINION
BY: 	DIANE WEISS SIGMUND, Chief Bankruptcy Judge
Before the Court is the Expedited Motion of Debtor Requesting Leave to File a New
Bankruptcy Case (the “Motion”). The Motion is filed under the conditions of my Order dated
October 29, 2007, i.e., that any such request be made so as to allow a hearing at least twenty
days before any scheduled sheriff sale that Debtor will seek to enjoin by filing an eighth
bankruptcy petition; and that the Motion shall be accompanied by all documents required
to be filed under Bankruptcy Rule 1007(b) as well as a proposed Chapter 13 plan, if
applicable which will be served on the Chapter 13 trustee (“Trustee”), mortgagee and
any taxing authorities. Exhibit D-1. These conditions have in the main been fulfilled,1 and
a hearing at which Beverly Dawson (“Dawson”) testified was held on November 13, 2007.
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2 Dawson objects to this document to the extent it contains information that she did not
supply. However, Dawson authorized the release of this mortgage credit information to and use by
the PHFA in making its decision on her application, and she appears to have seen the data inputted
and adopted it. In any event, by her own testimony she made only a limited number of payments
in the ten years she has held the mortgage.
-2-
The Motion is opposed by Direct Financial Group, Dawson’s mortgagee (“Direct”) and
the Trustee. For the reasons that follow, the Motion shall be denied.
BACKGROUND
Dawson is a veteran having served stateside in the United States Army. She retired
twenty years ago with a medical disability which is her sole source of income. In 1986 or
1987, shortly after her retirement, she purchased her residence at 20 N. Dewey Street,
Philadelphia, PA (the “Property”) for $1 and a commitment to rehabilitate it. She moved in
six months to one year later with her children.
In 1997 or 1998 she was approached by a contractor to perform home improvements
on the Property, and she was receptive since she needed the work done. 	She entered a
contract for $33,000 of home improvements, and took a mortgage loan from Equicredit
to finance the work. 	She states that she made some payments to Equicredit but was
uncertain as to how many were made. She did, however, apply to the Pennsylvania Housing
Finance Agency (“PHFA”) for a Homeowners’s Emergency Mortgage Assistance Program
in late October 2006, and the Mortgage Credit Information Sheet which she signed to
authorize the release of her credit information, shows a loan origination date of December 17,
1997 and the date of the last full mortgage payment as October 1, 1998. 	Exhibit C-2.2
While the chronology is not precise, it appears that Equicredit obtained a judgment in
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3 I shall take judicial notice of the docket entries in this case as well as Debtor’s prior cases.
Fed.R.Evid. 201, incorporated in these proceedings by Fed.R.Bankr.P. 9017. See Maritime Elec.
Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1200 n.3 (3d Cir. 1991); Levine v. Egidi, 1993
WL 69146, at *2 (N.D. Ill. 1993); 	In re Paolino, 1991 WL 284107, at *12 n. 19 (Bankr. E.D.
Pa. 1991); see generally In re Indian Palms Associates, Ltd., 61 F.3d 197 (3d Cir. 1995).
4 It is not uncommon for some debtors’ counsel to advise their clients not to make trustee
payments to elicit a trustee’s motion to dismiss (i.e., an involuntary dismissal). The debtors are
then poised to file a new case (and counsel to collect a new fee) on the eve of the rescheduled
foreclosure sale, usually some three or four months later.
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mortgage foreclosure and thereafter sold the loan to Direct which has scheduled a sheriff’s
sale of the Property for December 4, 2007.
Dawson’s first Chapter 13 bankruptcy petition was filed on March 6, 2000 and was
dismissed shortly thereafter on April 28, 2000 when no documents were filed. Dawson was
represented by Robert Blackmon, Esquire. Three short- lived Chapter 13 cases were then
filed by James O’Connell, Esquire and apparently handled by Thomas Turner who according
to Dawson, never prepared her documents and told her she did not have to appear at her
§ 341 meeting. 	While this Court’s familiarity with Mr. Turner lends credence to this
explanation for her failed cases, a review of the docket provides a more complete picture.3
To the contrary, bankruptcy case #2 was filed on February 5, 2001 with all the required
documents, and the § 341 meeting was held. However, on June 21, 2001 Equicredit was
granted relief from stay and a Trustee’s motion for lack of payment which soon followed,
was granted on August 13, 2001. 4 The two succeeding cases, however, were dismissed:
one for documents or one for non-appearance at the § 341 meeting. Case #3 was filed on
November 29, 2001 but was dismissed on January 17, 2002 for failure to file the required
documents. 	Case #4 was filed on February 27, 2003 with all required documents but
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5 A perusal of the schedules (hand written and sloppy) in that case suggests a questionable
benefit to this filing given her problems with non-dischargeable obligations. 	A disclosure of
attorney compensation indicates that for this Dawson paid Weisman $1,850.
6 As is the particular practice of this attorney, the application proposes to pay the fee in
30 days. This allows the quick filing to stop a sheriff sale without a filing fee and/or retainer for
counsel. In this case, Dawson stated that she paid Reusing $600 which is contrary to the attorney
disclosure form that he filed. By separate order, I will address this matter as well.
7 Both Dawson and Ward appeared in response to a show cause order why they should not
be sanctioned for violating my Order. Dawson, in what was her characteristic response to failures
in her bankruptcy cases, claimed not to understand the restriction. The Order could not be clearer,
and I did not find her explanation to be credible. 	Notwithstanding that conclusion, I still held
open the possibility that she could file again with leave of court. Ward claimed not to have noticed
the restriction. Since the petition he prepared listed five prior cases, including the one in which
the Order was entered and set forth in full on the docket, I find that explanation unpersuasive.
I have previously stated that attorneys in serial cases are charged with notice of filing restrictions
(continued...)
-4-
dismissed on May 1, 2003 for failure to appear at the § 341 meeting. For case #5, Dawson
turned to Daniel L. Weisman, Esq. who successfully shepherded Dawson through a
Chapter 7 case filed on April 21, 2005 for which she received a discharge on August 17,
2005.5 Case #6 was filed by Matthew Reusing Jr. on March 5, 2007 with all documents and
an application for “installment payment” of the filing fee.6 In response and to provide notice,
rather than grant the request since it was the sixth case, I ordered that the fee be paid in
two weeks. When it was not, I dismissed the case but ordered that any future filing would
be accompanied by the full fee and all the required documents or the case would be
dismissed without further notice or hearing. Case no. 07-11357, Doc. No. 12.
In violation of my Order, Dawson filed case #7 on October 1, 2007 without the
requisite documents through the efforts of Michael Ward, Esquire. Debtor testified that she
had visited Direct’s offices and learned that a sheriff sale would be conducted the following
day, necessitating the quick filing.7 The case was dismissed on October 29, 2007 with a bar
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(...continued)
in prior cases. 	In re Bailey, 321 B.R. 169 (Bankr. E.D. Pa. 2005). 	To the extent an attorney
concludes that the pleas of a desperate debtor (i.e., one with an imminent sheriff’s sale) take
precedence over an Order of this court, he/she gravely misunderstands an attorney’s professional
responsibilities. By a companion Order, Ward will be required to disgorge to the Clerk of the Court
any funds paid to him by Dawson accompanied by an affidavit acknowledging his responsibility to
review the docket (and underlying orders) of any prior case of any debtor requesting a petition be
filed.
8 She has two children at college who have financial aid. However, her 27 year old son is
dependent on her as he is and has been unemployed.
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on the filing of a further petition without leave of court and the conditions that any request
for relief from the bar be satisfied as explained above.
Contemporaneously 	with 	this 	activity 	in 	case 	#7, 	Dawson 	applied 	for 	the
aforementioned PFHA Homeowner’s Emergency Mortgage Assistance, the procedures
as set forth in Pennsylvania’s Act 91, P.S. §§ 1680.401c - 1680.410c, having been triggered
after Direct had sent the Act 91 notice on September 15, 2006. Dawson testified that after
going to credit counseling, she learned that her application was denied. Accordingly, armed
with new counsel, she returned to the bankruptcy court.
In support of the filing of case #8, Dawson proposes a Chapter 13 plan that will
pay the Trustee $450 for 50 months. 	The payment is supported on paper by disposable
income of $451, i.e., monthly veterans’ disability benefits of $2,711 less expenses of $2,260.
When questioned about her proposed Schedule J, she acknowledged her budgeted
expenses were not actual but aspirational. 	She indicated that her food costs were higher
because she had no kitchen and had to purchase all meals for herself and her two children
living with her, i.e., a daughter, age 15 and a son, age 27.8 She indicated that would change
when she secured money to finish the rehabilitation of her house. 	The proposed plan is
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9 While the record does not reflect the mortgage arrears, Dawson’s proposed Schedule A
identifies a secured claim of $72,000 on a property valued at $40,000.
10 She indicated alternatively that her request to the VA required her to go to a non-local VA
office and/or to contact Senator Specter’s office. She did the latter but there was no follow-up.
As to family assistance, she felt they would be burdened to help her and she prefers to handle
this without their involvement.
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not apparently funded to satisfy the arrears on a mortgage that has not been paid since 1999
but rather to raise $25,000 which is the amount that Direct said it would accept on a short
sale if paid before the December 4 sheriff sale. 	Exhibit D- 2. 9 Debtor testified that she
could raise those funds through a Veteran’s Administration (“VA”) grant or family support.
When asked what action she had taken to explore these options, her responses were
inconsistent but it is clear that she has taken no step to this end.10 She has no savings.
Her latest counsel claims something new and overlooked by her prior attorneys.
She now avers that the mortgage was the outcome of an improper home improvement loan
and thus she has significant recoupment claims against Direct. When questioned why she
had not filed suit in the ten years since the contract was made, she indicated that when
she showed the contract to another contractor, he ripped it up and without the original
contract, she could not bring suit. 	However, without regard to her expectations from the
recoupment claim, her plan is still funded at $450 per month.
DISCUSSION
The Third Circuit Court of Appeals has held that a chapter 13 case shall be filed in
good faith, and that consequently a bad faith filing is cause for dismissal under § 1307(c).
In re Lilley, 91 F.3d 491, 496 (3d Cir. 1996). A debtor's history of filings and dismissals is
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11 To assist the bankruptcy court in its review, the following factors were found to be among
those relevant to the inquiry:
(continued...)
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probative of bad faith. In re Oglesby, 158 B.R. 602 (E.D. Pa. ). In appropriate circumstances
where the facts evidence an abuse of the provisions, purposes and spirit of Chapter 13,
more than dismissal may be warranted. In re Dami, 172 B.R. 6, 11 (Bankr. E.D. Pa. 1994).
In such a case, Bankruptcy Rule 9011, incorporating Fed.R.Civ.P.11 provides the authority
for a bar on future filings to the break the cycle of bankruptcy recidivism. Id; In re Jones,
117 B.R. 415, 420 (Bankr. N.D. Ind. 1990). These cases recognize that where a debtor files
a petition in bankruptcy with no intention of obtaining the benefits or the goals for which
the proceeding was designed or with no intention of pursuing the to its natural conclusion,
the Bankruptcy Code is being abused and Bankruptcy Rule 9011 is being violated.
Dami, supra. Debtor was subjected to such bar.
It stands to reason that where a debtor seeks relief from a bar order entered because
the court has found, as I did with respect to Dawson, that the prior petitions were not filed
with the intention of fulfilling fiduciary duties under the code, rules and orders of this court,
the threshold inquiry is whether a new filing will be any different, i.e., contain the requisite
good faith. Because the term “good faith” is “incapable of precise definition,” the good faith
inquiry is a fact intensive determination that is left to the discretion of the bankruptcy court.
Lilley, 91 F3d at 496. The good faith of Chapter 13 filings is “assessed on a case-by-case
in light of the totality of the circumstances.” Id.11
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(...continued)
the nature of the debt ...; the timing of the petition; how the debt arose; the debtor's
motive in filing the petition; how the debtor's actions affected creditors; the debtor's
treatment of creditors both before and after the petition was filed; and whether the
debtor has been forthcoming with the bankruptcy court and the creditors.
Id. quoting In re Love, 957 F.2d 1350, 1357 (7th Cir. 1992). See also Eisen v. Curry (In re Eisen),
14 F.3d 469, 470 (9th Cir. 1994) (quoting In re Goeb), 675 F.2d 1386, 1391 (9th Cir. 1982))
(whether the debtor ‘“misrepresented facts in his [petition or] plan, unfairly manipulated the
Bankruptcy Code or otherwise [filed] his Chapter 13 [petition or] plan in an inequitable manner.”’)
12 While a certain amount of delay is attendant to the bankruptcy process, the law’s tolerance
for it diminishes with repeat filings.
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In the context of serial chapter 13 cases, the focus is on whether the debtor has a
likelihood of reorganizing since the prosecution of another fruitless case has no function
other than to delay action by creditors under state law.12 As my colleague Bankruptcy Judge
Bruce Fox noted in In re Lee, 2006 WL 3859134, at *5-6 (Bankr. E.D. Pa. Nov. 8, 2006):
many courts have recognized that it is inappropriate for a debtor to file another
bankruptcy reorganization case ...after dismissal of an earlier one, unless there
has been a material change of circumstances which demonstrates that the
second (or later) reorganization attempt now has a possibility of success after
the first had failed.
Therefore, when there are successive reorganization bankruptcy filings
without any material changes in circumstances, the repeat filing is generally
viewed to be in “bad faith.” [citations omitted]
It might be concluded based on Dawson’s bankruptcy history, i.e., eight cases running
almost continually for seven years, that she would have exhausted her opportunity to enjoy
the privilege of Chapter 13 relief. Indeed this case is a textbook example of the misuse of
the bankruptcy laws by not only Dawson who has never made a bona fide effort to reorganize
her affairs in bankruptcy, but a series of lawyers that were motivated by the misguided notion
that delaying the inevitable provides an actual service for which they merit compensation.
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-9-
Dawson, who was unable to pay her mortgage for all but a short period of time in 1998,
has managed to retain the Property through a combination of creditor inaction and well timed
bankruptcy filings. 	She has been lured by the success of her failed cases in preventing
foreclosure to take little to no responsibility for understanding the process, reviewing her
documents for accuracy or complying with orders of this court. 	However, because this
conduct has been facilitated by members of the bar, I am giving her the benefit of the
doubt while still adhering to the applicable principal that when an individual has filed
many failed reorganization cases, the evidence needed to demonstrate a material change
in circumstances supporting a reasonable possibility of reorganization grows heavier.
Id. at 6. (citing In re LeGree, 285 B.R. 615, 620 (Bankr. E.D. Pa. 2002)).
“The kind of ‘changed circumstances’ required to justify a successive filing must be
positive changes” reflecting on the debtor's ability to successfully reorganize under
chapter 13.” Id. (quoting In re Huerta, 137 B.R. 356, 368 (Bankr. C.D. Cal. 1992)). I find
none evidenced on this record. Rather this latest proposed case offers more of the same.
While purporting to demonstrate the resources to fund a confirmable plan, the schedules are
belied by the reality of Dawson’s situation. She claims to be able to make a $450 payment
to the Trustee and a $490 mortgage payment to Direct each month, neither of which amounts
has she been paying for the 7-1/2 years she has been in and out of the bankruptcy system.
She acknowledges having failed to pay real estate taxes but has not either scheduled the
claim nor provided for it in the proposed plan, and real estate taxes are a lien on the Property.
Her income has been essentially the same with small increases presumably for cost of living
for the last three years, Exhibit D-3 (proposed Statement of Financial Affairs), and
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13 Indeed her testimony was inconsistent as she stated at one point that she would be
seeking VA funding to conclude the repairs on her home and at another point that the funds could
be secured to pay Direct.
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notwithstanding the fact she has not paid a mortgage, the real estate taxes or the Trustee,
she has no savings. Where is she supposed to find an additional $900 per month to perform
a Chapter 13 case, other than on a piece of paper drafted by her attorney to reach that bottom
line. Questioning her as to the past disposition of this alleged excess income provided no
clue. Her response to what happened to the money, was that she spent it. This is but one
example of testimony that refuted her contention that she was now able to propose a
confirmable plan. 	Nor did I find her attempted justification for past breaches credible.
Indeed while disclaiming her own abilities to grasp the intricacies of the bankruptcy process,
her responses seemed more evasive than unintelligent.
Because I find no basis to conclude that Debtor will have the money she proposes to
pay her mortgage and the Trustee, the contemplated consumer action is not dispositive of this
contested matter. Without regard to Dawson’s explanation of why she has taken no steps to
date to pursue that action, I am sympathetic to the alleged circumstances which gave rise to
the mortgage obligation. It is regrettable if valid claims were lost with the passage of time
and recoupment is her only potential remedy at this point. However, the claims without more
are a weak hook on which to hang a new case.
In short, I find no change of circumstance but merely an imminent sheriff sale
animating this Motion. 	Her income and expenses are essentially static. 	The additional
resources she claims would be available to her, i.e., a VA grant13 and/or family assistance,
have never been explored and are thus totally speculative. Her proposed Schedules which
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In re Beverly A. Dawson - Bankruptcy No. 07-15741DWS
-11-
were required as a condition to pursuing the Motion are materially inaccurate, failing to
disclose and to provide for real estate taxes not paid for many years and admittedly
misrepresenting her expenses. 	Finally the sincerity of this proposed bankruptcy case is
undermined by its illogical economic premise. 	Even assuming Debtor’s unwarranted
assumption that she has only to pay $25,000 to reinstate her mortgage, she would be
paying $900 per month to retain a house that is in such bad condition that she is forced
to eat out every meal with her family and as to which she has no equity. 	See n.9 supra.
Query why she would not take the $900 per month to rent habitable housing? The answer
is that she does not have the funds.
For the foregoing reasons, the Motion is denied. 	An Order consistent with this
Memorandum Opinion shall be entered.
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
Dated: 	November 20, 2007
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UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: 	Chapter 13
:
BEVERLY A. DAWSON, 	: 	Bankruptcy No. 07-15741DWS
aka Beverly A. Dawson-Hall, 	:
:
Debtor. 	:
ORDER
AND NOW, this 20th day of November 2007, upon consideration of the Expedited
Motion of the Debtor, Beverly A. Dawson (“Dawson”) Requesting Leave to File a New
Bankruptcy Case (the “Motion”), after notice and hearing, and for the reasons stated in the
accompanying Memorandum Opinion;
It is hereby ORDERED and DECREED that the Motion is DENIED;
And it is Further ORDERED that on or before December 10, 2007, Michael Ward,
Esquire shall file an affidavit (1) acknowledging his duty under Bankruptcy Rule 9011 to
review the docket and underlying orders in serial cases and (2) stating the amount, if any, of
the fees paid to him by Dawson for filing this case; any fees so paid shall be disgorged to the
Clerk;
And it is also Further ORDERED that Matthew J. Reusing, Jr., Esquire shall appear
at a hearing to be held on December 10, 2007 at 9:30 a.m. in the Robert N.C. Nix, Sr.
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In re Beverly A. Dawson - Bankruptcy No. 07-15741DWS
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Federal Courthouse, 2nd floor, 900 Market Street, Courtroom #3, Philadelphia, PA to
respond to Dawson’s contention that he was paid $600 by Dawson which amount was not
applied to filing fees or disclosed as an attorneys’ fee for case 07-11357. Debtor and the
United States trustee are invited to appear at the hearing.
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
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