If You Can’t Beat ‘Em, Join ‘Em: That’s the View of Pro Se George Dale Wigington

Pending before the court is Appellant George Dale Wigington’s (“Wigington”) appeal from the bankruptcy court’s Memorandum opinion entered August 10, 2020; Amended Judgment entered September 14, 2020;

Order on Nationstar Mortgage LLC d/b/a Mr. Cooper’s (“Nationstar”) Motion for Partial Dismissal Under Rule 12(b)(6), Nationstar’s Motion for More Definite Statement, and Select Portfolio Servicing, Inc.’s (“SPS”), Motion to Dismiss All Causes of Action Under Rule 12(b)(6) entered December 11, 2020 (“December 11, 2020, Order”); Order Regarding SPS’s Motion to Dismiss entered April 5, 2021 (“April 5, 2021, Order”); Order Dismissing Adversary Proceeding entered May 27, 2021 (“May 27, 2021, Order”); and Order Denying Motion to Reconsider entered August 20, 2021 (“August 20, 2021, Order”). Ultimately, the bankruptcy court dismissed the Adversary Proceeding in light of the dismissal of Wigington’s underlying Chapter 13 bankruptcy.

Having reviewed the bankruptcy court’s orders, the record, the submissions of the parties, and the applicable law, the court is of the opinion that the bankruptcy court’s orders should be affirmed.

I. Background

On December 29, 2004, George and Teresa Wigington executed a deed of trust granting ABN AMRO Mortgage Group, Inc. (“ABN AMRO”), a lien against their residence located at 2451 Elm Grove Road in Wylie, Texas.

The deed of trust secures a note in the original principal amount of $216,000.00. ABN AMRO later merged with CitiMortgage, Inc. (“CitiMortgage”).

On April 4, 2011, Wigington filed for bankruptcy, Case No. 11-41092.

Subsequently, on June 4, 2013, the bankruptcy court entered an order confirming Wigington’s plan, and the case was closed.

In August 2016, CitiMortgage assigned the deed of trust to Nationstar.

In the case below, the bankruptcy court observed that Wigington had notice of the transfer, yet he still continued to send monthly checks payable to CitiMortgage at the wrong address.

In total, eighteen checks and two electronic payments were incorrectly submitted to CitiMortgage, totaling $107,916.38.

It returned all of the checks uncashed and refunded both electronic payments.

Soon after the transfer of his mortgage to Nationstar, Wigington began receiving notices of default from Nationstar.

On or about June 12, 2017, Wigington received notice that a foreclosure sale would occur on July 4, 2017.

Less than a year after the discharge of Wigington’s first bankruptcy action, he filed a subsequent Chapter 13 bankruptcy proceeding, Case No. 18-42230.

He chose to proceed pro se with this bankruptcy, filing his Chapter 13 plan on November 5, 2018.

Two days later, Nationstar filed its Proof of Claim No. 4-1 in the amount of $134,203.89.

During the early stages of pleading, on October 1, 2019, Nationstar transferred servicing of the mortgage loan to SPS.

On March 27, 2020, the Chapter 13 bankruptcy trustee filed a motion to dismiss the bankruptcy action for lack of funds to support the original plan.

On April 7, 2021, Wigington failed to appear at a hearing to determine whether his plan was sufficient to support Nationstar’s Proof of Claim No. 4-1.

After the hearing, the bankruptcy court swiftly dismissed his Chapter 13 bankruptcy action.

Wigington filed a Motion to Alter or Amend, which the court denied.

He then filed a Notice of Appeal, but he voluntarily dismissed the appeal on October 7, 2021

(#4 in Case No. 4:21-CV-696).

Wigington attended law school during his first bankruptcy case and received his license to practice law in Texas in January 2018.

During the pendency of the underlying bankruptcy case, Wigington initiated Adversary Proceeding Case No. 19-04074.

He filed his Objection to Nationstar’s Proof of Claim and Complaint on August 23, 2019.

In response to Wigington’s initial Complaint, Nationstar filed a Motion for a More Definite Statement.

This started a cycle in which the bankruptcy court repeatedly admonished Wigington for failing to articulate a clear and plain statement of his claims and for submitting pleadings that were lengthy and difficult to decipher.

In total, Wigington filed four amendments to his initial Complaint.

Regarding his Third Amended Complaint, the bankruptcy court concluded in its April 5, 2021, Order that Wigington’s complaint, “like its prior versions, is difficult to decipher and does not clearly or logically delineate his claims.”

In his Fourth Amended Complaint, filed on February 23, 2021, Wigington appears to assert causes of action for breach of contract, negligence, violation of the Texas Deceptive Practices Act, and violation of the Texas Fair Debt Collection Practices Act.

After Wigington filed the fourth submission, the bankruptcy court scheduled a Case Management Conference via telephone for May 13, 2021.

Wigington again failed to appear, prompting the bankruptcy court to dismiss the Adversary Proceeding.

In the dismissal order, the bankruptcy court relied primarily on the  dismissal of the underlying Chapter 13 case.

In response, Wigington filed a Notice of Appeal on September 8, 2021.

II. Analysis

Wigington raises six allegations of error in his Brief (#28).

He challenges the bankruptcy court’s (1) rejection of his assertions of collateral estoppel and res judicata that he argues should prevent adjudication of Nationstar’s Proof of Claim, (2) determination regarding Nationstar’s authority to enforce the note, (3) finding that he failed to tender payments on the note, (4) validation of the assignment from CitiMortgage to Nationstar, (5) application of Bankruptcy Rule 3001(e)(2), and (6) Rule 12(b)(6) dismissal.

Notably, Wigington does not address the bankruptcy court’s dismissal of his Adversary Proceeding on the grounds stated in the bankruptcy court’s May 27, 2021, Order.

District courts have jurisdiction to hear appeals from “final judgments, orders, and decrees” and, with leave of the court, “other interlocutory orders and decrees” of bankruptcy judges. 28 U.S.C. § 158(a).

Pursuant to 28 U.S.C. § 158(c)(2), an appeal from the bankruptcy court to the district court “shall be taken in the same manner as appeals in civil proceedings generally are taken to the courts of appeals from the district courts.”

Id.

Therefore, “when reviewing a bankruptcy court’s decision in a ‘core proceeding,’ a district court functions as a[n] appellate court.” First Nat’l Bank v. Crescent Elec. Supply Co. (In re Renaissance Hosp. Grand Prairie Inc.), 713 F.3d 285, 293 (5th Cir. 2013) (quoting Webb v. Reserve Life Ins. Co. (In re Webb), 954 F.2d 1102, 1103-04 (5th Cir. 1992)); accord Perry v. Dearing (In re Perry), 345 F.3d 303, 308-09 (5th Cir. 2003); RSL Funding, LLC v. Date (In re Date), No. AP 15-03185, 2020 WL 7059872, at *5 (S.D. Tex. Dec. 1, 2020).

When reviewing a decision of the bankruptcy court, the court must accept the bankruptcy court’s findings of fact unless clearly erroneous and examine the bankruptcy court’s conclusions of law de novo.

Galaz v. Galaz (In re Galaz), 850 F.3d 800, 804 (5th Cir. 2017); Monge v. Rojas (In re Monge), 826 F.3d 250, 254 (5th Cir. 2016); In re Renaissance Hosp. Grand Prairie Inc., 713 F.3d at 293-94; Halo Wireless, Inc. v. Alenco Commc’ns, Inc. (In re Halo Wireless, Inc.), 684 F.3d 581, 586 (5th Cir. 2012).

The court may affirm the bankruptcy court on any grounds raised below and supported by the record.

See Edwards v. Mesquite Indep. Sch. Dist., No. 20-10158, 2021 WL 3716637, at *2 (5th Cir. Aug. 20, 2021)

(“[W]e may affirm on any grounds raised in the district court below and supported by the record, even if not relied upon by the district court.”), cert. denied, 142 S.Ct. 823 (2022); Harris Cnty. v. MERSCORP Inc., 791 F.3d 545, 551 (5th Cir. 2015) (applying the rule to a district court’s Rule12(b)(6) dismissal or grant of summary judgment); LLEH, Inc. v. Wichita Cnty., 289 F.3d 358, 364 (5th Cir. 2002) (applying the rule to a bench trial); accord Underwood v. Ocwen Loan Serv., 829 Fed.Appx. 678, 680 (5th Cir. 2020); Lauren C. by & through Tracey K. v. Lewisville Indep. Sch. Dist., 904 F.3d 363, 374 (5th Cir. 2018).

Several of the orders from which Wigington’s appeal arises deal with the dismissal of his causes of action for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6)-namely, the bankruptcy court’s August 20, 2020, Memorandum Opinion; September 14, 2020, Amended Judgment; December 11, 2020, Order; and April 5, 2021, Order.

Nevertheless, the bankruptcy court ultimately dismissed Wigington’s Adversary Proceeding in its May 27, 2021, Order, as confirmed in its August 20, 2021, Order, due to the dismissal of the underlying bankruptcy case and Wigington’s failure to appear at the hearing regarding the  dismissal.

In his brief submitted in the present appeal, Wigington fails to address these orders.

A party forfeits an argument “by failing to adequately brief [it] on appeal.”

Rollins v. Home Depot USA, Inc., 8 F.4th 393, 397 (5th Cir. 2021); accord Thomas v. Hughes, 27 F.4th 995, 1011 (5th Cir. 2022); Norris v. Causey, 869 F.3d 360, 373 n.10 (5th Cir. 2017).

Wigington does not delineate any error with respect to the bankruptcy court’s dismissal of the Adversary Proceeding on the grounds that the underlying bankruptcy case had been dismissed.

Accordingly, he forfeits any argument as to this issue.

Thus, the court will not disturb the bankruptcy court’s dismissal of the Adversary Proceeding.

In the table of contents of his brief, Wigington lists the following as sections in his brief:

ISSUE 9 By dismissing the adversary proceeding due to the dismissal of Appellant’s bankruptcy case

ISSUE 10 – By denying Appellant’s Motion for Reconsideration

Wigington, however, does not list the corresponding page number for either issue and does not explain either of these conclusory statements in the body of his brief.

On October 7, 2021, Wigington filed a voluntary Motion to Dismiss (#4 in Case No. 4:21-CV-696) the appeal of his bankruptcy case.

His motion stated that “he no longer wishes to appeal the dismissal of his bankruptcy case [No. 18-42230].” See FED. R. APP. P. R 42(b)

(“An appeal may be dismissed on the appellant’s motion on terms agreed to by the parties or fixed by the court.”).

The court granted the dismissal shortly thereafter, on October 12, 2021

(#5 in Case No. 4:21-CV-696).

Months later, on February 1, 2022, Wigington submitted his 68-page brief in the present appeal.

Because Wigington dismissed the appeal of his bankruptcy case, the court has jurisdiction to review only the Adversary Proceeding that is the subject of his present appeal.

Nonetheless, even if Wigington had adequately briefed the dismissal of the Adversary Proceeding, his appeal would still be unavailing.

“The decision to retain jurisdiction over related proceedings rests within the sound discretion of the bankruptcy court.”

Querner v. Querner (In re Querner), 7 F.3d 1199, 1202 (5th Cir. 1993);

accord  Stirlings, LLC v. Vinson, No. CV 185512, 2019 WL 1778679, at *2 (E.D. La. Apr. 23, 2019).

“The Supreme Court has held that a  federal district court must consider four factors in deciding whether to retain jurisdiction over pendent state claims after the dismissal of federal claims: economy, convenience, fairness, and comity.”

Querner, 7 F.3d at 1201

(citing Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 353 (1988));

see Stirlings, LLC, 2019 WL 1778679, at *2.

Nevertheless, the general rule is that “the dismissal or closing of a bankruptcy case should result in dismissal of related proceedings.”

Querner, 7 F.3d at 1201;

accord Stirlings, LLC, 2019 WL 1778679, at *2.

Accordingly, Wigington has the burden of showing that the bankruptcy court erroneously relinquished jurisdiction.

Here, the bankruptcy court justified the dismissal of the Adversary Proceeding because the case was still in early-pleading stages and neither party would have been prejudiced by continuing the litigation in a more appropriate forum.

Cf. Stirlings, LLC, 2019 WL 1778679, at *2

(approving a bankruptcy court’s maintaining jurisdiction over an adversary proceeding when dismissal of a Chapter 11 bankruptcy occurred after completion of a two-day trial and it would have been costly to the parties and the court to re-adjudicate in a different forum).

Wigington does not provide any reason that a bankruptcy forum is needed, or even suitable, to resolve his claims.

In fact, neither party has argued that it cannot afford to change forums, would be substantially inconvenienced, would face an unfair burden in a different forum, or would suffer in any other way from dismissal.

Thus, the general preference towards dismissal should prevail.

Moreover, the principles of economy, convenience, fairness, and comity would support dismissal to provide a pro se litigant, like Wigington, an opportunity to revise his argument and file a petition that is straightforward and not convoluted by bankruptcy matters.

In its May 27, 2021, Order, the bankruptcy court noted:

[Wigington] brought this adversary proceeding seeking to disallow [Appellees Nationstar’s and SPS’s (collectively, “Appellees”)] claim against his bankruptcy estate and to establish affirmative claims for non-bankruptcy relief against [Appellees].

Due to the dismissal of the underlying bankruptcy case, the bankruptcy estate no longer exists and, therefore, there is no need to determine whether to sustain [Wigington’s] objections to [Appellees’] claim against the estate.

The bankruptcy court correctly concluded that Wigington’s remaining claims against Appellees “appear to be governed by state law,” and, thus, he “may bring his claims against [Appellees] in an appropriate non-bankruptcy forum.”

Indeed, the causes of action are exclusively rooted in Texas law and would be more appropriate for a state court to resolve.

Requiring a specialized bankruptcy court to preside over a lengthy state lawsuit with no relation to the United States Bankruptcy Code would promote inefficiency by putting unnecessary stress on the busy docket of the Eastern District of Texas Bankruptcy Court, especially considering the extensive time commitment required to resolve Wigington’s complex allegations.

The bankruptcy court correctly recognized that the Adversary Proceeding was too removed from the dismissed Chapter 13 bankruptcy case to justify retaining jurisdiction.

Accordingly, the bankruptcy court did not err by dismissing Wigington’s Adversary Proceeding.

Because the court concludes that the bankruptcy court permissibly dismissed Wigington’s Adversary Proceeding due to the fact that the underlying bankruptcy case had been dismissed, the court need not address Wigington’s remaining points of error that deal with the bankruptcy court’s Rule 12(b)(6) dismissal.

See Edwards, 2021 WL 3716637, at *2; LLEH, Inc., 289 F.3d at 364; Underwood, 829 Fed.Appx. at 680; Lewisville Indep. Sch. Dist., 904 F.3d at 374; Harris Cnty., 791 F.3d at 551 (5th Cir. 2015).

III. Conclusion

Having considered the heavy burden on the bankruptcy court and the lack of prejudice to the parties in the event of dismissal, the court finds that the bankruptcy court did not abuse its discretion in dismissing the Adversary Proceeding.

Consistent with the foregoing analysis, the bankruptcy court’s dismissal of Wigington’s Adversary Proceeding is AFFIRMED.

HONORABLE BRENDA T. RHOADES, CHIEF UNITED STATES BANKRUPTCY JUDGE (Chapter 13)

This case is before the Court on a motion by George Dale Wigington (the “Debtor”) seeking to vacate the order dismissing his case.

The Court entered the dismissal order on April 7, 2021, and the Debtor filed a motion to vacate 21 days later (on April 28, 2021).

The Court conducted a hearing on the Debtor’s motion on May 12, 2021 and, at the conclusion of the hearing, denied the Debtor’s motion to vacate for the following reasons.

I.  FACTS

1. This is the second bankruptcy case filed by the Debtor.

The Court’s records reflect that previously, on June 4, 2011, George and Teresa Wigington filed a pro se petition for relief under Chapter 13 of the Bankruptcy Code, which this Court assigned case number 11-41092.

The Wigingtons moved to convert their case to Chapter 11, and the Court granted their motion on April 12, 2012.

The Wigingtons retained counsel and obtained an order confirming a plan of reorganization on June 4, 2013.

2.  Their confirmed Chapter 11 plan provided that the Wigingtons would continue making payments to CitiMortgage, which serviced the mortgage on their home, pursuant to the terms of the Promissory Note and Deed of Trust.

However, after receiving a Notice of Servicing Transfer explaining that the servicing of their mortgage loan had been transferred from CitiMortgage to Nationstar Mortgage LLC dba Mr. Cooper (“Nationstar”) with a new payment address, the Wigingtons continued to make payments to CitiMortgage, month after month, at the old payment address.

All of their payments were returned as undeliverable and the funds were never debited from the Wigingtons’ account.

3.  The Wigingtons began receiving notices of default from Nationstar.

On or about June 12, 2017, the Wigingtons received notice that a foreclosure sale would occur on July 4, 2017.

Mr. Wigington filed a pro se suit against Nationstar in Texas state court on June 29, 2017, claiming that he had fully paid his mortgage and seeking to enjoin Nationstar from foreclosing on his home, among other things.

The Debtor disclosed the pending lawsuit and described his claims against Nationstar in the Statement of Financial Affairs filed in his present bankruptcy case.

4.  George Wigington filed the present pro se petition for relief under Chapter 13 of the Bankruptcy Code on October 2, 2018, on the eve of another scheduled foreclosure.

He disclosed a secured debt owed to Nationstar in the amount $136,129.71 in his bankruptcy schedules, and he marked the debt as disputed.

5.  On November 5, 2018, the Debtor filed a proposed Chapter 13 plan, which was confirmed by order entered on April 22, 2019.

6.  On November 7, 2018, Nationstar timely filed Proof of Claim No. 4-1 asserting a total secured claim of $134,203.89 with a pre-petition arrearage of $50,289.16 (the “Claim”).

Nationstar subsequently transferred the Claim to Select Portfolio Servicing (“SPS”) as set forth on the Notice of Transfer of Claim filed on October 23, 2019.

7.  Other than several claims by taxing authorities secured by the Debtor’s home, SPS is the only creditor in the

3         Debtor’s case.

8.  The Claim is based on a mortgage loan which arose from a Promissory Note dated December 29, 2004 executed by the Debtor and his wife, Teresa Lynn Wigington, in the original principal amount of $216,000.00 in favor of ABN AMRO MORTGAGE GROUP, INC., A DELAWARE CORPORATION and secured by a duly recorded Deed of Trust of even date.

This mortgage lien encumbers the Debtor’s residence located at 2451 Elm Grove Rd, Wylie, TX 75098.

9.  On August 2, 2019, the Chapter 13 trustee filed the Trustee’s Reconciliation Concerning Claims (“TRCC”) based on the filed claims in the case.

Section II.C. states, among other things, that the TRCC does not serve as an objection to claim under 11 U.S.C. § 502 and cannot cure an underfunding issue with the terms of the confirmed plan.

10.  On August 23, 2019, the Debtor filed an Original Objection to Proof of Claim 4-1 of Nationstar Mortgage LLC d/b/a Mr. Cooper; Action to Determine the Validity, Priority, and Extent of Lien; and Complaint (the “Original Complaint”) thereby initiating Adversary Proceeding No. 19-04074 (the “Adversary Proceeding”) against Nationstar.

11.  On March 27, 2020, the Chapter 13 trustee filed a Motion to Dismiss and Setting Hearing (the “Motion to Dismiss Case”) in this chapter 13 case.

The Chapter 13 trustee’s Motion to Dismiss Case is based on the underfunding of the Debtor’s chapter 13 plan; specifically, the trustee asserts that an additional $123,000.00 is needed to fund the plan within the original term.

No modification has been proposed to include such amount in the event the Debtor’s objection to the Claim is unsuccessful.

12.  The Court first set the Chapter 13 trustee’s Motion to Dismiss Case for hearing on June 10, 2020.

The Court continued the hearing to November 4, 2020, then to January 6, 2021, then to February 18, 2021, then to March  3, 2021, and finally to April 7, 2021.

13.  On April 7, 2021 (after conducting a hearing on the Motion to Dismiss Case at which Debtor failed to appear), this Court entered an order dismissing the Debtor’s Chapter 13 case.

14.  Meanwhile, in the Adversary Proceeding, the Debtor has received numerous opportunities to amend his complaint to name SPS as an additional defendant and to narrow and clarify any alleged claims against both SPS and Nationstar.

The Debtor is currently on his Fourth Amended Objection to Proof of Claim 4-1 and Complaint filed on February 23, 2021 (the “Debtor’s Fourth Amended Complaint”).

15.  The Debtor appeared for a hearing on April 21, 2021 on motions by SPS and Nationstar to dismiss the Adversary Proceeding.

The April 7th dismissal of the underlying bankruptcy case was discussed at the hearing.

During the hearing, the Debtor stated that he intended to file a motion to vacate the dismissal order.

16.  A continued hearing on SPS’s and Nationstar’s motions to dismiss the Debtor’s Fourth Amended Complaint was scheduled for May 25, 2021.

17.  On April 28, 2021, Debtor filed his motion to vacate the April 7th dismissal order and reinstate his bankruptcy case.

The motion cites to “mistake, inadvertence, surprise, or excusable neglect” for Debtor’s failure to appear at the April 7th hearing on the Chapter 13 trustee’s Motion to Dismiss Case and good cause as the “motion is not filed for the purposes of delay, and no creditor will suffer any prejudice” should the motion be granted.

18.  SPS and Nationstar objected to the Debtor’s motion to vacate the order dismissing his case.

The Court scheduled a telephonic hearing on the Debtor’s motion on May 12, 2021.

SPS and Nationstar appeared through  counsel.

The Debtor, who is licensed as an attorney by the State  of Texas, appeared pro se.

The Debtor admitted at the hearing that he has not made any mortgage payments since filing for bankruptcy.

II.  DISCUSSION

The Debtor brings his motion to vacate the April 7th dismissal order and reinstate his bankruptcy case pursuant to Federal Rule of Civil Procedure 60(b)(1), which is adopted and applied to this case by Federal Rule of Bankruptcy Procedure 9024.

In his motion, the Debtor states that he “immediately calendared the reset hearing” for April 7, 2021 and “added the time for the hearing after reviewing the email notice of the reset hearing from the Court.”

The Debtor then states that he did not attend the hearing on April 7, 2021 because he “could not find an entry for the hearing at all” and believes he somehow deleted it.

“[R]elief under Rule 60(b) is circumscribed by public policy favoring finality of judgments and termination of litigation.” Blue Diamond Coal Co. v. Trs. of UMWA Combined Benefit Fund, 249 F.3d 519, 524 (6th Cir. 2001).

In contrast to a timely motion under Rule 59, which permits relief from a non-final judgment for a number of reasons, a Rule 60(b) motion for relief from a final judgment may be granted only for certain specified reasons:

(1)  mistake, inadvertence, surprise, or excusable neglect;

(2)  newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);

(3)  fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

(4)  the judgment is void;

(5)  the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or

(6)  any other reason justifying relief from the operation of the judgment.

FED. R. CIV. P. 60(b).

Under Federal Rule 60(b)(1), a party may obtain relief from judgment based upon “mistake, inadvertence,  surprise, or excusable neglect.” Whether a particular instance of neglect is “excusable” is an equitable determination.1

The Court enjoys considerable discretion in determining whether a party has established excusable neglect under Rule 60(b)(1).

Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir.1990).

It is well-established, however, that “‘inadvertent mistake'[,] . . . [g]ross carelessness, ignorance of the rules, or ignorance of the law are insufficient bases for 60(b)(1) relief………………… ‘”

Pettle v. Bickham (In re Pettle), 410 F.3d 189, 192 (5th Cir. 2005) (quoting Edward H. Bohlin Co. v. Banning, 6 F.3d 350, 356-57 (5th Cir. 1993)).

1 In the context of Bankruptcy Rule 9006(b)(1), which relates to enlargements of time, the U.S. Supreme Court has opined that “excusable neglect” encompasses negligence and carelessness. See Pioneer Inv. Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 388 (1993) (word carries its ordinary, contemporary, common meaning). The Fifth Circuit, however, has rejected the use of a Pioneer analysis in the context of Rule 60(b)(1) motions:

While Pioneer guides an analysis of “excusable neglect” within the context of Bankruptcy Rule 9006(b)(1), nothing in the Supreme Court’s opinion changes the well-established rule that ” ‘inadvertent mistake'[,] ··· [g]ross carelessness, ignorance of the rules, or ignorance of the law are insufficient bases for 60(b)(1) relief…. In fact, a court would abuse its discretion if it were to reopen a case under Rule 60(b)(1) when the reason asserted as justifying relief is one attributable solely to counsel’s carelessness with or misapprehension of the law or the applicable rules of court.”

In the context of default judgments, the Fifth Circuit has interpreted Rule 60(b)(1) as incorporating the Rule 55 “good cause” standard applicable to entries of default.

In re OCA, Inc., 551 F.3d 359, 369 (5th Cir. 2008)).

In determining whether good cause exists to set aside a default judgment under Rule 60(b)(1), the Fifth Circuit examines the following factors: whether the defendant willfully defaulted, whether a meritorious defense is presented, and whether setting aside the default judgment would prejudice the plaintiff.

Jenkens & Gilchrist v. Groia & Co., 542 F.3d 114, 119 (5th Cir. 2008).

The Fifth Circuit has held that two of these factors can be determinative: a court may refuse to set aside a default judgment if it finds either that the default was willful or that the defendant failed to present a meritorious defense.

See Jenkens & Gilchrist, 542 F.3d at 119-20 (citation omitted).

In this case, the Debtor was aware of the dismissal of his present bankruptcy case within the 14 days in which he could have sought relief from the dismissal order under the more lenient standards of Rule 59(e), which is adopted and applied by bankruptcy cases, as modified, by Bankruptcy Rule 9023.

The Debtor acknowledged the dismissal of his case at a hearing in the adversary proceeding 14 days after the entry of the dismissal order.

Nonetheless, the Debtor waited another week and filed the present motion to vacate the dismissal order after it became final.

The present case is a two-party dispute between the Debtor and his mortgage holder.

The Debtor has been litigating with Nationstar (and now SPS) over his mortgage since 2017.

The present bankruptcy case has been pending for nearly three years.

The Debtor has not made any mortgage payments during the pendency of the case.

Instead, the Debtor brought an adversary proceeding seeking to disallow SPS’s Claim and assert affirmative claims against SPS and Nationstar relating to noticing.

The Debtor has not sought to modify his confirmed plan in response to the Chapter 13 trustee’s Motion to Dismiss Case by addressing the funding gap.

Further, the Debtor has failed to present a concrete or viable plan for paying his mortgage debt in the event his objection to SPS’s Claim is unsuccessful.

Finally, the Debtor will not be prejudiced by dismissal as he can continue his litigation against SPS and Nationstar in an appropriate non-bankruptcy forum.

For all these reasons, the Court finds and concludes that the Debtor has shown neglect in his failure to appear for the hearing on the Chapter 13 trustee’s motion to dismiss, but he has not shown excusable neglect.

As the Fifth Circuit recognizes, “excusable neglect” in responding to a dispositive motion is regularly found “only in circumstances where, through inadvertence, the party or its attorney did not receive notice.”

McKenzie v. Principi, 83 Fed.Appx. 642, 644 (5th Cir. 2003) (per curiam) (collecting cases).

It is therefore ORDERED that the Debtor’s Motion to Vacate Order and Reinstate Case is DENIED.

Signed on5/25/2021

HONORABLE BRENDA T. RHOADES,
CHIEF UNITED STATES BANKRUPTCY JUDGE

In re Pettle, 410 F.3d at 192 (quoting Edward H. Bohlin Co. v. Banning, 6 F.3d 350, 356-57 (5th Cir. 1993)).