Ronald M. Poole

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 10-45303 TG
Chapter 13
RONALD M. POOLE,
Debtor.
________________________________/
MEMORANDUM OF DECISION
The debtor Ronald M. Poole (the “Debtor”) seeks an extension of
the automatic stay pursuant to 11 U.S.C. § 362(c)(3), this being his
second 	bankruptcy 	case 	pending 	within 	a 	single 	year. 	Secured
creditor 	Contractors 	Capital 	Corp. 	(“Contractors”) 	objects 	to 	the
extension 	on 	the 	ground 	that 	the 	case 	was 	filed 	in 	bad 	faith. 	The
Court 	held 	an 	evidentiary 	hearing 	on 	the 	motion 	on 	June 	30, 	2010.
At 	the 	conclusion 	of 	the 	hearing, 	the 	Court 	took 	the 	matter 	under
submission.
Also 	pending 	are 	the 	Debtor’s 	motion 	to 	convert 	the 	case 	to
chapter 	11 	and 	Contractors’ 	oral 	motion 	to 	quash 	a 	subpoena 	issued
by the Debtor. 	For the reasons stated below, the Court will deny the
Debtor’s 	motion 	to 	extend 	the 	automatic 	stay, 	deny 	the 	Debtor’s
motion to convert the case to chapter 11, and grant Contractors’ oral
Signed: July 14, 2010
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
July 14, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-45303 Doc# 41 Filed: 07/14/10 Entered: 07/14/10 18:32:17 Page 1 of 8

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motion to quash the subpoena. 	The Court’s findings and conclusions
are set forth below.
BACKGROUND
The 	Debtor 	filed 	a 	prior 	chapter 	13 	petition 	on 	September 	8,
2009 	(the 	“Prior 	Case”). 	In 	the 	Prior 	Case, 	as 	in 	this 	one, 	the
Debtor 	scheduled 	as 	his 	principal 	asset 	real 	property 	located 	at
2415-2421 Market Street, Oakland, California (the “Real Property”).
The 	Real 	Property 	is 	described 	as 	consisting 	of 	six 	units. 	The
Debtor lives in one of the units.
On 	September 	15, 	2009, 	Contractors 	filed 	a 	motion 	for 	relief
from 	the 	automatic 	stay 	in 	the 	Prior 	Case. 	In 	the 	motion,
Contractors 	represented 	that 	the 	Debtor 	had 	acquired 	the 	Real
Property from Brian Fabian II (“Fabian”) on October 5, 2007 while the
Real 	Property 	was 	encumbered 	by 	Contractors’ 	security 	interest.
Contractors did not consent to the transfer. 	Thus, pursuant to its
note 	and 	deed 	of 	trust, 	its 	claim 	became 	fully 	due 	prior 	to 	the
filing of the Prior Case. 	Contractors represented that the balance
on its secured claim was approximately $500,000.
Contractors’ 	motion 	came 	on 	for 	hearing 	on 	October 	23, 	2009.
At 	the 	hearing, 	it 	appearing 	that 	the 	Debtor 	was 	delinquent 	post-
petition, the Court ordered the Debtor to make a regular payment plus
one-twelfth of the post-petition arrearages until caught up.
The 	Debtor 	filed 	a 	chapter 	13 	plan 	(the 	“Prior 	Case 	Plan”) 	on
September 17, 2009. 	Contractors filed an objection to confirmation
of 	the 	Prior 	Case 	Plan 	on 	October 	27, 	2009. 	The 	objection 	stated
that the Prior Case Plan could not be confirmed because Contractors’
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1The Debtor filed a motion to extend the time to file a notice
of appeal from the order denying the motion for reconsideration,
which was granted, and filed a notice of appeal within the extended
period. 	To the Court’s knowledge, there has been no ruling on the
appeal to date.
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secured claim was fully due and because the Prior Case Plan did not
provide sufficient funds for its payment in full during the term of
the Plan.
On 	November 	4, 	2009, 	after 	the 	hearing 	on 	Contractors’ 	motion
for relief from stay but before the written order was entered placing
conditions 	on 	the 	continuation 	of 	the 	stay, 	the 	Debtor 	filed 	an
objection 	to 	the 	Court’s 	order. 	The 	objection 	was 	noticed 	for
hearing 	on 	November 	19, 	2009. 	The 	objection 	was 	overruled 	at 	that
time 	without 	prejudice 	to 	the 	Debtor’s 	filing 	a 	motion 	for
reconsideration. 	A motion for reconsideration was filed on November
25, 	2009 	and 	was 	denied 	pursuant 	to 	an 	order 	entered 	December 	1,
2009.1
In 	its 	Memorandum 	stating 	the 	basis 	for 	the 	denial, 	the 	Court
stated 	that 	the 	Debtor’s 	assertion 	was 	incorrect 	that 	the 	monthly
payments required by the order conditioning the continuation of the
automatic 	stay 	were 	overstated. 	The 	Court 	also 	agreed 	with
Contractors that Contractors’ secured debt was fully due so that the
Prior 	Case 	Plan 	was 	required 	to 	provide 	for 	payment 	in 	full 	of
Contractors’ secured debt over its term. 	To do so, the payments made
to 	the 	chapter 	13 	trustee 	would 	have 	to 	be 	substantially 	more 	than
proposed in the Prior Case Plan.
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The Debtor filed an amended plan (the “Amended Prior Case Plan”)
on November 30, 2009. 	The Amended Plan did not change the proposed
amount 	of 	the 	monthly 	payments 	to 	the 	chapter 	13 	trustee 	which 	the
Court 	had 	found 	to 	be 	inadequate 	to 	satisfy 	Contractors’ 	fully 	due
secured 	claim. 	The 	Debtor 	appeared 	at 	a 	meeting 	of 	creditors 	on
December 	1, 	2009. 	The 	minutes 	from 	the 	meeting 	on 	the 	case 	docket
indicate that the chapter 13 trustee informed the Debtor that he was
delinquent in his plan payments in the amount of $1,400 and, if this
amount 	were 	not 	paid 	by 	December 	3, 	2009, 	the 	case 	would 	be
dismissed. 	A 	contested 	confirmation 	hearing 	was 	scheduled 	for
February 8, 2010.
The Debtor apparently failed to bring the plan payments current
by December 3, 2009. 	On January 12, 2010, the Court issued an order
dismissing the case. 	On January 22, 2010, the Debtor filed a motion
for relief from the order dismissing the case. 	On January 26, 2010,
the 	dismissal 	order 	was 	vacated. 	The 	confirmation 	hearing 	was
rescheduled for March 8, 2010.
On 	February 	26, 	2010, 	the 	Debtor 	filed 	a 	second 	amended 	plan.
The plan doubled the amount of the monthly payments. 	However, this
increase was insufficient to satisfy Contractors’ claim over the term
of 	the 	plan. 	On 	March 	2, 	2010, 	the 	Debtor 	filed 	a 	third 	amended
plan, increasing the monthly payments by $200 a month. 	This amount
was 	still 	insufficient 	to 	satisfy 	Contractors’ 	claim 	over 	the 	term
of the plan. 	The case was ordered dismissed with a 10 day stay at
the March 8, 2010 confirmation hearing. 	On March 17, 2010, the stay
was extended by an additional 30 days, to April 16, 2010, to permit
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2The Court also finds that the Debtor is ineligible to be a
debtor in this case due to his failure to obtain credit counseling
until three days after he filed his petition and the inadequacy of
his statement of exigent circumstances filed on May 27, 2010 and
amended statement of exigent circumstances filed on June 8, 2010.
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the 	Court 	to 	review 	the 	Debtor’s 	third 	amended 	plan. 	The 	case 	was
effectively dismissed on April 17, 2010.
As 	stated 	above, 	the 	above-captioned 	case 	was 	filed 	on 	May 	7,
2010. 2 	On May 12, 2010, the Debtor filed a motion to extend the stay
pursuant to 11 U.S.C. § 362(c)(3). 	On May 21, 2010, the Debtor filed
a plan (the “Plan”). 	The Plan did not list Contractors as a secured
creditor 	and 	did 	not 	propose 	monthly 	payments 	to 	the 	chapter 	13
trustee 	sufficient 	to 	pay 	Contractors’ 	claim 	in 	full 	over 	the 	term
of the Plan.
On 	May 	18, 	2010, 	Contractors 	filed 	an 	objection 	to 	the 	motion
to extend the stay. 	On May 26, 2010, the Debtor filed a response to
Contractors’ 	objection. 	The 	motion 	to 	extend 	came 	on 	for 	a
nonevidentiary hearing on May 28, 2010 and was set for an evidentiary
hearing on June 30, 2010.
On June 28, 2010, the Debtor filed a motion to convert the case
to chapter 11. 	The Debtor contended that the chapter 13 trustee had
advised 	him 	that 	his 	debts 	exceeded 	the 	limits 	for 	chapter 	13
debtors. 	On 	June 	28, 	2010, 	the 	Debtor 	also 	filed 	a 	copy 	of 	a
subpoena 	directed 	to 	Contractors, 	directing 	Contractors 	to 	produce
a 	large 	number 	of 	documents 	on 	the 	day 	of 	the 	evidentiary 	hearing.
The subpoena was issued by the Court on June 9, 2010 and was served
on 	Contractors 	on 	June 	14, 	2010. 	Contractors 	did 	not 	produce 	the
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documents at trial and did not file a motion to quash the subpoena.
DISCUSSION
Section 	362(c)(3) 	provides 	that, 	if 	a 	debtor 	has 	had 	two
bankruptcy 	cases 	pending 	within 	a 	single 	year, 	the 	automatic 	stay
terminates 30 days after the petition date unless the Court extends
its effectiveness. 	The Court may only do so if the Court finds that
the 	later 	case 	was 	filed 	in 	good 	faith 	as 	to 	the 	creditors 	to 	be
stayed. 	Given the procedural history outlined above and the evidence
presented at the hearing, the Court is unable to find that this case
was filed in good faith.
The 	Debtor 	continues 	to 	ignore 	the 	fact 	that, 	due 	to 	his
acquisition 	of 	the 	Real 	Property 	without 	Contractors’ 	consent,
Contractors’ 	debt 	has 	become 	fully 	due. 	He 	continues 	to 	fail 	to
propose 	payments 	to 	the 	chapter 	13 	trustee 	sufficient 	to 	pay
Contractors’ 	secured 	claim 	in 	full 	over 	the 	term 	of 	the 	plan. 	The
Debtor has been advised of this problem repeatedly, both in the Prior
Case 	and 	this 	one. 	Yet, 	he 	has 	made 	no 	attempt 	to 	address 	the
problem. 	Under 	the 	circumstances, 	the 	Court 	is 	compelled 	to 	find
that the present case was filed in bad faith.
If the case were converted to chapter 11, the Debtor would have
more 	time 	to 	pay 	Contractors’ 	claim 	in 	full. 	However, 	the 	Court
cannot 	in 	good 	conscience 	grant 	the 	Debtor’s 	motion 	to 	convert 	the
case 	to 	chapter 	11. 	Based 	on 	the 	Court’s 	assessment 	of 	the 	Debtor
at 	trial-–i.e., 	both 	his 	abilities 	and 	state 	of 	mind--and 	based 	on
the procedural history of the Prior Case, the Court does not believe
that 	the 	Debtor 	is 	qualified 	to 	act 	as 	a 	chapter 	11 	debtor-in-
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possession. 	Moreover, 	the 	Debtor 	cannot 	avoid 	the 	effect 	of 	11
U.S.C. 	§ 	362(c)(3) 	by 	converting 	to 	chapter 	11. 	Since 	the 	Court
concludes that the present case was filed in bad faith, the stay will
not be extended, and the chapter 11 case would serve no purpose.
The 	Court 	does 	not 	approve 	of 	Contractors’ 	failure 	to 	file 	a
motion 	to 	quash 	the 	subpoena 	rather 	than 	simply 	ignoring 	it.
However, 	given 	the 	Court’s 	ruling 	on 	the 	motion 	to 	extend, 	there
would be no purpose in denying Contractors’ oral motion to quash.
CONCLUSION
The Debtor’s motion to extend the automatic stay will be denied.
The 	Debtor’s 	motion 	to 	convert 	the 	case 	to 	chapter 	11 	will 	also 	be
denied. 	Contractor’s oral motion to quash the Debtor’s subpoena will
be granted. 	Counsel for Contractors is directed to submit a proposed
form of order in accordance with this decision.
END OF DOCUMENT
Case: 10-45303 Doc# 41 Filed: 07/14/10 Entered: 07/14/10 18:32:17 Page 7 of 8

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COURT SERVICE LIST
Ronald M. Poole
855 44th St.
Oakland, CA 94607
Adam C. Kent
605 Middlefield Rd.
Redwood City, CA94063
Trustee
Martha G. Bronitsky
P.O. Box 5004
Hayward, CA 94540-5004
Case: 10-45303 Doc# 41 Filed: 07/14/10 Entered: 07/14/10 18:32:17 Page 8 of 8