In re: Dale R. Brookover; Montgomery Farms; Jack Giulitto

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0451P (6th Cir.)
File Name: 03a0451p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
In re: DALE R. BROOKOVER;
MONTGOMERY FARMS; JACK
GIULITTO,
Debtors.
________________________
IRA BODENSTEIN, United
States Trustee,
Appellant.
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No. 02-3237
Appeal from the United States District Court
for the Northern District of Ohio at Akron.
Nos. 01-01129; 01-01130; 01-01131—
Marilyn Shea-Stonum, Bankruptcy Judge;
David D. Dowd, Jr., District Judge.
Argued: October 21, 2003
Decided and Filed: December 19, 2003
Before: KEITH, DAUGHTREY, and GILMAN, Circuit
Judges.
2 In re Brookover, et al. No. 02-3237
_________________
COUNSEL
ARGUED: William Kanter, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellant. ON BRIEF: William Kanter, Wendy Keats,
UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellant.
_________________
OPINION
_________________
DAMON J. KEITH, Circuit Judge. This appeal arises from
three cases filed under Chapter 12 of the Bankruptcy Code,
11 U.S.C. § 1201 et seq., in the bankruptcy court of the
Northern District of Ohio, Eastern Division. The United States
Trustee (“UST”) appeals the district court’s order affirming the
bankruptcy court’s order refusing to accept resignation of the
standing Chapter 12 trustee and setting forth procedures for
such resignation. For the reasons set forth below, we
REVERSE the district court’s order.
I. BACKGROUND
The trustee for each case was Michael V. Demczyk
(“Demczyk”), the standing Chapter 12 trustee appointed by the
UST pursuant to 28 U.S.C. § 586(b) and 11 U.S.C. § 1202. In
October 2000, Demczyk tendered his resignation as standing
trustee in these cases to the UST, who accepted it and notified
the bankruptcy court that a successor trustee would be
appointed. In accord with the UST’s standard practice to
provide prompt notice to the courts and all interested parties
regarding the resignation of a trustee and the assignment of a
successor, on November 7, 2000, the UST sent a letter to
Demczyk, with copies to the bankruptcy judges, clerk and
deputy clerks in charge of the four court locations for the

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No. 02-3237 In re Brookover, et al. 3
Northern District of Ohio, Eastern Division, and certain
individuals in the UST's office in Cleveland. In the letter, the
UST accepted the resignation of Demczyk. The letter read, in
part:
I have received your letter of resignation as Chapter 12
Standing Trustee dated October 31, 2000, which indicates
that the resignation will be effective November 30, 2000.
I accept your resignation and thank you for your years of
service as the Chapter 12 Standing Trustee for the Eastern
Division of the Northern District of Ohio. There have
been insufficient Chapter 12 case filings over the past few
years to support a Standing Trustee operation, and we
appreciate your willingness to administer these cases for
minimal compensation.
Notice will be filed with the Bankruptcy Court in each
case of your resignation and my appointment as Chapter
12 interim trustee. My staff will be in contact with you
regarding the transition of funds and files to our office.
We anticipate your full cooperation in this regard and in
the filing of your final annual report.
J.A. at 12. On the same date, November 7, 2000, the UST sent
a letter to the bankruptcy judge, with a copy sent to Joyce
Garner, Deputy Clerk in Charge in Akron. The letter read, in
part:
Enclosed for your information is a copy of my letter
accepting the resignation of Michael Demczyk as Chapter
12 Standing Trustee for the Eastern Division of the
Northern District of Ohio. There are no longer sufficient
Chapter 12 cases to justify a Standing Trustee under 28
U.S.C. § 586(b). On the active Chapter 12 cases, we
anticipate appointing successor individual case trustees
under 11 U.S.C. § 1202(a). These will be administered in
a similar manner as Chapter 7 cases.
4 In re Brookover, et al. No. 02-3237
J.A. at 13. Although the UST did not “file” the letters with the
court, the court itself made the letters part of the court record.
Information on the UST’s plan to name a successor trustee was
given to the court.
On November 28, 2000, the bankruptcy court, sua sponte,
issued an identical Order in each of the cases, which was
served on Demczyk, the UST, and the attorneys for the
Chapter 12 debtors, stating, in pertinent part:
Michael V. Demczyk is the Standing Chapter 12 Trustee
in this case. The Court recently received correspondence
from Donald M. Robiner, United States Trustee,
Ohio/Michigan Region 9, which consists of two letters
dated November 7, 2000 (the "Letters") . . . The Letters
raise a question about whether Mr. Demczyk wishes to
continue to serve as the Chapter 12 Trustee. If a change
is requested, the Court will await a motion filed and
served on all parties in interest. See 11 U.S.C. § 324. Mr.
Demczyk is to continue to carry out his responsibilities in
this case, absent a Court Order to the contrary.
J.A. at 14.
On December 7, 2000, the UST filed his motion to
reconsider, and on January 23, 2001, he filed a memorandum
in support of the motion to reconsider. A hearing on the
motion to reconsider was held on February 16, 2001. At the
hearing, the court was shown Demczyk’s resignation letter of
October 31, 2000. The letter read, in part:
Please accept my resignation as the standing Chapter 12
trustee for the Northern District of Ohio, Eastern Division,
effective November 30, 2000. I have previously discussed
this matter with your staff regarding an orderly transition
of accounts, files, and other assets which might pertain to
this trusteeship.

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No. 02-3237 In re Brookover, et al. 5
Therefore, whatever I can do to assist this transition
and make it as efficient as possible, please do not
hesitate to contact me at your earliest convenience.
J.A. at 35.
Following the hearing, and with leave of court, on March 2,
2001, the UST filed a supplemental memorandum in support
of the motion to reconsider. The bankruptcy court denied the
UST’s motion to reconsider in a published opinion. In re Dale
R. Brookover, et al., 259 B.R. 884 (Bankr. N.D. Ohio 2001).
The UST appealed the orders to the district court pursuant to
28 U.S.C. § 158(a). The district court considered the three
appeals, and issued an order affirming the bankruptcy court’s
decision for the reasons set forth therein. Robiner v. Demczyk
269 B.R. 167, 171 (N.D. Ohio 2001).
II. ANALYSIS
A. Standard of Review
This is an appeal in a bankruptcy case raising questions of
law only. “In a case which comes to us from the bankruptcy
court by way of an appeal from a decision of a district court,
we review directly the decision of the bankruptcy court. We
accord no deference to the district court's decision . . . [and]
review de novo the bankruptcy court's conclusions of law.” In
re Hurtado, 342 F.3d 528, 531 (6th Cir. 2003) (citing
Brady-Morris v. Schilling (In re Kenneth Allen Knight Trust),
303 F.3d 671, 676 (6th Cir.2002)).
B. Absent an Express Statutory Provision to the
Contrary
The direct task before this court is to determine where the
power to accept the voluntary resignation of a trustee in
6 In re Brookover, et al. No. 02-3237
1There is a case that touches on some of the constituent parts running
through the instant case, see, e.g., Richman v. Straley, 48 F.3d 1139,
1143-44 (10th Cir. 19 95), but no case squarely addresses the core
question before this court.
bankruptcy lies. This issue has not been extensively litigated.1
The pivotal query in this case, however, is directed at the
relationship between the common law and statutory authority
as it relates to the process of voluntary resignation and
acceptance of that resignation. On this issue, the law provides
adequate guidance.
Generally, “where a common-law principle is well-
established . . . the courts may take it as given that Congress
has legislated with an expectation that the principle will apply
except ‘when a statutory purpose to the contrary is evident.’”
Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108
(1991) (citing Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783
(1952)). Specifically, the UST argues that, under the common
law, absent an express statutory provision to the contrary, a
public officer has the right to resign, and the authority to
accept the resignation resides with the person or body having
authority to appoint the successor. See Rockingham County v.
Luten Bridge Co., 35 F.2d 301, 306 (4th Cir. 1929). The
bankruptcy court, however, found that “the UST, a creature of
statute, cannot[, as he is now attempting,] simply arrogate to
himself the power to accept a trustee’s resignation, without
Congress so providing.” In re Dale R. Brookover, 259 B.R. at
890 (citing Louisiana Pub. Serv. Comm'n v. F.C.C., 476 U.S.
355, 374-76 (1986) (a federal agency may not confer power
upon itself or expand its power)). The foundation of the
bankruptcy court’s position is, therefore, that a Congressional
grant of authority must be the sole source of the UST’s power
to accept a trustee’s voluntary resignation. Such a proposition,
however, provides ample space for the expression of that
invested power to be explicit or implicit. Implicit or incidental
power can be found in the absence of a “specific provision to
the contrary.” Carlucci v. Doe, 488 U.S. 93, 99 (1988)

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No. 02-3237 In re Brookover, et al. 7
2Notice and hearing are required where involuntary “for cause”
removal pursuant to 11 U.S.C. § 324 is invoked, see, e.g., In the Matter
of Chapter 13, Pending and Future Cases, 19 B.R . 713, 714-17 (B ankr.
W.D. W ash.198 2) (stating that notice and hearing is required and cause
for removal must be shown when a standing trustee for Chapter 13 case
is remo ved for cause (citing 1 1 U.S.C. § 324)), but there is no indication
anywhere that such measures are necessary for acceptance of a voluntary
resignation.
(“[A]bsent a ‘specific provision to the contrary, the power of
removal from office is incident to the power of
appointment.’”) (citation omitted)). Thus, the threshold
question is whether there is a relevant statutory provision that
limits, expressly or impliedly, the alleged common law
authority of the UST to accept the voluntary resignation of a
trustee, where that UST has the express authority to replace the
trustee without judicial or other oversight.
C. Application of 11 U.S.C. § 324
In the present case, the bankruptcy court rejected the
common law rule because it concluded that the Bankruptcy
Code specifies a role for the court in accepting or refusing the
voluntary resignation of a trustee. Specifically, the bankruptcy
court stated that “[r]esort to common law is not proper in the
face of a [Bankruptcy] Code section clearly setting forth the
statutory procedure to be used when either a trustee seeks, or
other officer of the court or the Court seeks, the trustee’s
removal from a pending case.” In re Dale R. Brookover, 259
B.R. at 889 (emphasis added). Importantly, the bankruptcy
court uses the word “removal;” removal is a separate and
distinct process from resignation.2
“[W]here Congress uses terms that have accumulated settled
meaning under . . . the common law, a court must infer, unless
the statute otherwise dictates, that Congress means to
incorporate the established meaning of these terms.” Field v.
Mans, 516 U.S. 59, 69 (1995); Nationwide Mut. Ins. Co. v.
Darden, 503 U.S. 318, 322 (1992). Under the common law,
8 In re Brookover, et al. No. 02-3237
“removal” means “the dismissal from office,” whereas
“resignation” means “renouncement or relinquishment of an
office.” BLACK’S LAW DICTIONARY 1295, 1310 (6th ed.1990).
Under the terms of this discussion, it is conceded that the
resignation at issue is “voluntary” and, therefore, distinct from
removal, to the extent that the latter, implicitly, if not
explicitly, contains an element of involuntariness. Consistent
with these understandings, Congress has consistently treated
resignation and removal as distinct events, both under the
Bankruptcy Code, see 11 U.S.C. §§ 703(a) and 1104(d), and
under Bankruptcy Rule 2012(b).
Scrutiny of the specific provision governing involuntary
removal, 11 U.S.C. § 324, reveals that it does not control the
administration of a trustee’s voluntary resignation. 11 U.S.C.
§ 324 states:
(a) The Court, after notice and a hearing, may remove a
trustee, other than the United States trustee, or an
examiner, for cause.
(b) Whenever the court removes a trustee or examiner
under subsection (a) in a case under this title, such trustee
or examiner shall thereby be removed in all other cases
under this title in which such trustee or examiner is then
serving unless the court orders otherwise.
11 U.S.C. § 324 (emphasis added). 11 U.S.C. § 324 governs
“for cause” removal, which implies involuntary termination
based on some fault or shortcoming of the person being
removed. The phrase “for cause” is not defined in the
Bankruptcy Code. According to Black’s Law Dictionary:
With respect to removal from office, “for cause” means
for reasons which law and public policy recognize as
sufficient warrant for removal and such cause is “legal
cause” and not merely a cause which the appointing
power in the exercise of discretion may deem sufficient .
. . The cause must be one in which the law and sound

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No. 02-3237 In re Brookover, et al. 9
3The bankruptcy court may be correct when it states: “By definition
‘for cause’ contemplates considerations of public policy and law, which
considerations would not, and could not, be addressed if a trustee were
simply perm itted to resign without notice to interested parties and without
the opp ortunity for a hearing, which by necessity involves the Court.” In
re Dale Brookover, 259 B.R at 891. The considerations of public policy
and law, however, are directly connected to the “cause” for the rem oval,
and not the effect of the removal. The rationale underlying the necessity
for due process-like procedures in a removal “for cause” is, therefore,
inapp licable to a voluntary resignation where the “because” is not an
issue. At the hearing in this case, no suggestion was made by any
participant that Demczyk had done anything other than commendable
work. See J.A. at 35.
public policy will recognize as a cause for official [sic] no
longer occupying his office.
BLACK’S LAW DICTIONARY 644 (6th ed.1990) (citations
omitted).
It is possible that some fault or shortcoming of a trustee
could lie at the heart of her decision to voluntarily resign. That
fault or shortcoming may, therefore, be the moving force
behind the trustee’s private policy. Nonetheless, such a
coincidence would not vitiate the understanding that the cause
of such a voluntary resignation and, more importantly, the
force behind the decision to resign, lies in the trustee’s own
reasons.3 In this way, public policy is neither the cause nor the
because of underlying the resignation.
For these reasons, 11 U.S.C. § 324, the “for cause” removal
provision, does not limit the authority of the UST, whether that
authority is derived from a statutory scheme or the common
law, to the extent that that authority governs the administration
of a trustee’s voluntary resignation.
D. Application of 28 U.S.C. § 586(b)
Having determined that 11 U.S.C. § 324 does not negate, or
even act upon, the authority of a UST to accept the voluntary
10 In re Brookover, et al. No. 02-3237
4Chap ters 7 and 11 of the Code expressly refer to the U ST ’s role in
appointing a successor trustee who “dies,” or “resigns,” or “is remo ved,”
whereas Chapters 12 and 13 d o not. It was necessary to specify the US T’s
role in appointing individual successor trustees under Chapters 7 and 11
because that role, unlike its Chapters 12 and 13 parallel, is contingent –
in Chapter 7, on whether the creditors have exercised their right to elect
a trustee, see 11 U.S.C. § 70 3, and in Chapter 11, on whether the court
ordered appointment of a trustee in the first instance. See 11 U .S.C.
§ 1104 (d). The absence of an express provision, designed to deal with a
specific contingency in different Chapters, does not impact Chapter 12,
where that specific contingency is not at issue. “[It is] hornbook teaching
that ‘the provisions of chapters 7, 9, 11, and 13 do not apply in chapter 12
resignation of a trustee, our attention shifts to the examination
of 28 U.S.C. § 586(b) as a potential positive source of that
authority. Section 586(b) states, in part: “The [UST] . . . shall
supervise any such individual appointed as standing trustee in
the performance of the duties of the standing trustee.” 11
U.S.C. § 586(b). Some of the additional enumerated duties of
the UST include: monitoring plans filed under Chapter 12,
appointing a standing trustee under Chapter 12, and
monitoring such trustee. 28 U.S.C. § 586. The bankruptcy
court reasoned that, because acceptance of trustee resignations
is not one of the UST’s enumerated duties under 28 U.S.C. §
586, the UST is barred from such a function under the maxim
expressio unius est exclusio alterius, meaning that the
expression of one thing is the exclusion of the other. In re
Dale R. Brookover, 259 B.R. at 893-94. This reasoning is
flawed.
First, as the UST rightly avers, the enumerated duty of the
UST to “supervise” is, arguably, broad enough to encompass
the administrative authority to accept a trustee’s voluntary
resignation, particularly when that authority is not expressly
withheld. See Carlucci, 488 U.S. at 99.
Second, the Bankruptcy Code requires the UST to appoint
a qualified successor trustee who is automatically substituted
in the case, with no abatement of any pending action or
proceeding. 11 U.S.C. § 325.4 Where there is no Bankruptcy

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No. 02-3237 In re Brookover, et al. 11
cases unless specifically incorporated by a particular section of chapter
12.’” In re Dale R. Brookover, 259 B.R. at 890, n. 9 (quoting 8 COLLIER
O N BANKRUPTCY § 1200 .02[2] (15th ed.)). At the same time, the
contention that the UST wields the sole authority to appo int and supervise
successor Chapter 12 trustees is undisputed.
Code provision or Bankruptcy Rule assigning the duty to
accept the prior trustee’s resignation to the court, it is entirely
consistent with congressional intent to find that the authority
to accept the resignation lies in common with the authority to
fill the vacancy left by that resignation.
Third, the acceptance of trustee resignations is entirely
consistent with the UST’s other statutorily assigned duties for
the appointment, supervision, and general administrative
management of trustees. Richman, 48 F.3d at 1143-44
(“Allowing the same nonjudicial body to both appoint and
terminate the appointment of standing trustees was consistent
with the legislative intent for the statutory scheme for the
appointment and removal of standing trustees; the cronyism
and appearance of impropriety that the legislature sought to
remedy was the old system which had standing trustees
appearing before the judges who appointed them. 11 U.S.C.A.
§ 324(a, b); 28 U.S.C.A. § 586(b)”). Moreover, imputing such
a role to the courts is contrary to the common law rule and
defeats the dominant purpose of Congress in creating the office
of the United States Trustee – that is, to take over the
administration of bankruptcy cases, including the management
of case trustees, from the courts. Likewise, the congressional
intent to “to strip bankruptcy courts of their administrative role
so that they could better perform their judicial tasks,”
Richman, 48 F.3d at 1144, militates against the bankruptcy
court’s intervention to the extent that the intervention sprang
from its presumed authority to regulate the trustee as an
“officer of the court.”
Judicial intervention in a trustee’s voluntary resignation,
based on the premise that a trustee is an “officer of the court,”
is unsound for several additional reasons. As an initial matter,
12 In re Brookover, et al. No. 02-3237
a bankruptcy trustee is not appointed by the court, is not a
court employee or official, and is specifically not required to
be a lawyer. See 28 U.S.C. § 586(d); 28 C.F.R. §§ 58.3(b) &
58.4(b). Rather, the trustee is a private individual appointed
by the Executive Branch to perform a public office under the
Bankruptcy Code.
Furthermore, a court’s inherent power to manage
proceedings is limited. In this case, Congress has deliberately
taken administrative responsibility for trustees away from
courts and placed it with the UST. 28 U.S.C. § 586. The
Bankruptcy Code already requires the UST to appoint a
qualified successor trustee who is automatically substituted in
the case, with no abatement of any pending action or
proceeding. 11 U.S.C. § 325. Finally, although Demczyk is an
attorney, he is not acting as an attorney in this case, and,
therefore, Ohio disciplinary rule DR 2-110 and Ohio Local
Civil Rule 83.9, which were cited by the bankruptcy court and
require court permission for an attorney to withdraw from
representation of a client in a pending proceeding, are not
applicable.
Accordingly, if any provision, explicitly or implicitly,
governs the acceptance of a voluntary resignation, it is 28
U.S.C. § 586(b).
E. Under the Common Law, the Authority to Accept the
Resignation Resides with the Person or Body Having
Authority to Appoint a Successor
The Bankruptcy Code and Bankruptcy Rules explicitly
mandate how a trustee may be removed but not how a trustee
may voluntarily resign. The absence of an express mandate in
the Bankruptcy Code and Bankruptcy Rules on the issue of
voluntary resignation may indicate that, as discussed above,
the power to accept the voluntary resignation of a trustee is
contained in the UST’s supervisory authority pursuant to
28 U.S.C. § 586(b). Alternatively, the power to appoint a
successor without an abatement in the proceedings, or any

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No. 02-3237 In re Brookover, et al. 13
5Even where courts are vested with the power to remove a trustee,
that power has been held not to be exclusive. See Richman, 48 F.3d at
1143 (explaining the Bankruptcy Cod e section providing that court may
remove trustee for cause and that the rem oval for cause . . . did not
preclude the United S tates Trustee, as the party with the power of
app ointment, from removing standing Chapter 12 and Chapter 13 trustee.
11 U .S.C.A . § 32 4(a, b ); 28 U .S.C.A . § 58 6(b)).
judicial oversight, may subsume the power to accept the
voluntary resignation of the predecessor. 11 U.S.C. § 325;
Bankr. Rule 2012(b) (“[w]hen a trustee dies, resigns, is
removed, or otherwise ceases to hold office during the
pendency of a case under the [Bankruptcy] Code . . . the
successor is automatically substituted.”). Under either
proposition, the trustee’s choice to resign is, to the eyes of the
court, a black box.
If the authority to terminate, which is by definition an
involuntary process, is implicit in the power of appointment,
then there is no logical or statutory barrier to a finding that the
authority to accept a resignation, which is by implication
voluntary or at least less involuntary than removal, is likewise
implicit in the power to appoint the successor trustee.
Richman, 48 F.3d at 1143-44 (10th Cir. 1995) (“[T]ermination
authority was implicit in the statutory power of appointment.”
28 U.S.C. § 586(b) (citations omitted)). Moreover, if the
statutory authority to remove can be contained within the
power to appoint, it would be unsound to say that, where the
UST holds the authority to appoint the successor, and the
power to appoint the successor is not judicially supervised, the
UST does not have the power to accept the voluntary
resignation of the predecessor. Carlucci v. Doe, 488 U.S. at 99
(statutory power to appoint implicitly encompasses power to
remove, unless the statute specifically denies such power).5
The common law, recognizing this verity, has long held that,
absent an express statutory provision to the contrary, a public
officer has the right to resign and the authority to accept the
resignation resides with the person or body having authority to
14 In re Brookover, et al. No. 02-3237
appoint the successor. See Rockingham County, 35 F.2d at
306.
Whether viewed directly through 28 U.S.C. § 586(b) or the
prism of the common law, the light of the law falls squarely
upon a single conclusion: the authority to accept the voluntary
resignation of a bankruptcy trustee is vested entirely within the
purview of the UST’s congressionally conferred authority.
Where, as is the case here, a common law principle is well-
established, the courts may take it as given that Congress has
legislated with an expectation that the principle will apply
except “when a statutory purpose to the contrary is evident.”
Solimino, 501 U.S. at 108. No statutory purpose to the
contrary is present in this case. Accordingly, the UST has the
authority to accept the voluntary resignation of a bankruptcy
trustee in a pending case, and the law does not require the
decision to be submitted to the bankruptcy court for approval.
Thus, the bankruptcy court’s ruling requiring a motion,
evidentiary hearing, and a judicial determination to decide
whether a bankruptcy trustee who wishes to resign voluntarily
is justified in so doing is not supported by law.
III. CONCLUSION
For the reasons stated above, the judgment of the district
court affirming the bankruptcy court’s ruling is REVERSED,
and the case is REMANDED for further proceedings
consistent with this opinion.

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