In re: Michael W. Gilliland v. Fifth Third Mortgage Company

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted May 13, 2016 *
Decided May 16, 2016
Before
MICHAEL S. KANNE, Circuit Judge
DIANE S. SYKES, Circuit Judge
DAVID F. HAMILTON, Circuit Judge
No. 15‐3271
IN RE: MICHAEL W. GILLILAND,
Debtor.
MICHAEL W. GILLILAND,
Debtor‐Appellant,
v.
FIFTH THIRD MORTGAGE
COMPANY, et al.,
Creditors‐Appellees.
Appeal from the
United States District Court for the
Southern District of Indiana,
Indianapolis Division.
No. 1:14‐cv‐02054‐SEB‐DKL
Sarah Evans Barker,
Judge.
O R D E R
Michael Gilliland lost his home in Liberty, Indiana, after defaulting on his
mortgage loan from Fifth Third Mortgage Company. In July 2013 an Indiana state trial
court entered a judgment of foreclosure, which the state appellate court affirmed in
March 2014. A sheriff’s sale of the property was scheduled for August 2014, but just days
* After examining the briefs and the record, we have concluded that oral
argument is unnecessary. Thus the appeal is submitted on the briefs and the record.
See FED. R. A PP. P. 34(a)(2)(C).
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

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No. 15‐3271 Page 2
before Gilliland filed for bankruptcy under Chapter 13. He also filed two related
adversary proceedings seeking removal of the foreclosure case from state court to the
bankruptcy court and claiming that Fifth Third and its attorneys had committed
state‐law torts. Both Fifth Third and the bankruptcy trustee moved to dismiss the
Chapter 13 case on the grounds that Gilliland had no regular income and could not
maintain proposed plan payments. See 11 U.S.C. § 109(e). The day before a scheduled
hearing on these motions, Gilliland filed a motion asking the district court to withdraw
its reference to the bankruptcy court. Without acknowledging Gilliland’s motion, the
bankruptcy court granted the motions to dismiss the Chapter 13 case and two days later
dismissed the adversary proceedings. Gilliland then moved for relief from judgment,
arguing that the bankruptcy court should not have ruled on the bank’s and trustee’s
motions while his own motion to withdraw reference was pending. The bankruptcy
court denied Gilliland’s postjudgment motion, and the district court affirmed the
dismissal of the bankruptcy case and adversary proceedings.
On appeal Gilliland maintains that the bankruptcy court abused its discretion in
dismissing the case while his motion to withdraw the reference remained pending. He
says that the bankruptcy court should have stayed the proceedings until after the district
court had the opportunity to rule on the motion. But even assuming that the district
court would have been inclined to grant his motion, Gilliland cannot show that a
withdrawal of the reference would have affected the outcome: Both the bankruptcy
court and the district court would have been compelled to dismiss the case because
Gilliland did not have regular income and thus was not eligible for relief under
Chapter 13. See id.; In re Blendheim, 803 F.3d 477, 485 (9th Cir. 2015); see also In re Brooks,
784 F.3d 380, 381 (7th Cir. 2015) (comparing Chapter 13 proceedings for debtors with
income to the more commonly used liquidation proceedings under Chapter 7). The
bankruptcy court, therefore, did not abuse its discretion in dismissing the Chapter 13
case. Moreover, neither did the bankruptcy court abuse its discretion in dismissing the
adversary proceedings without prejudice after the Chapter 13 case had been properly
dismissed. See Chapman v. Currie Motors, Inc., 65 F.3d 78, 80–82 (7th Cir. 1995) (explaining
that bankruptcy courts have discretion to relinquish jurisdiction over adversary claims
after bankruptcy case has been resolved); In re Statistical Tabulating Corp., 60 F.3d 1286,
1289 (7th Cir. 1995) (“Dismissal of a bankruptcy proceeding normally results in
dismissal of related proceedings because federal jurisdiction is premised upon the nexus
between the underlying bankruptcy case and the related proceedings … .”); In re Johnson,
575 F.3d 1079, 1083 (10th Cir. 2009) (explaining that after dismissal of underlying
bankruptcy case, dismissal of noncore related proceedings is ordinarily proper).

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No. 15‐3271 Page 3
Gilliland’s remaining arguments have no merit. First, he says that the bankruptcy
court failed to state findings of fact or conclusions of law in dismissing his case. Without
a transcript of the hearing we cannot discern the extent of the bankruptcy court’s
findings, but the corresponding docket entry states that Gilliland was “down in plan
payments” and “currently unemployed.” No further findings were necessary to
determine that he was not eligible for relief under Chapter 13. Second, Gilliland provides
no support for his assertion that the bankruptcy court relied on only the trustee’s motion
to dismiss and not Fifth Third’s motion. Nor would it matter which motion the court
relied on because dismissal was proper based on either motion.
AFFIRMED.

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