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Robles Decision on 707(b)(3)=20
Outstanding....Congrats!
To: cdcbaa@yahoogroups.com
Sent: Tuesday, March 10, 2009 10:38:42 PM GMT -08:00 US/Canada Pacific
Subject: [cdcbaa] Robles Decision on 707(b)(3)
Its not often I get to post a significant victory on here, and I wanted to wait until this was final before doing so, but I am now proud to say I was victorious on behalf of the debtors in the Jensen case.
A copy of Judge Robles opinion on the initial Motion to Dismiss is attached. (There was a subsequent, equally involved, Motion for Reconsideration filed by the OUST, which denied a couple of weeks ago, and the time for appeal has passed without anything being filed.).
In a nutshell, this was a case where my clients, debtors Kirk and Linda Jensen, were above-median debtors who owned a house, as well as a boat and motorhome, and other vehicles. They passed the means test (i.e. presumption did not arise), but it was due in part to the secured debt deductions they were taking for their boat and motorhome). The OUST filed a Motion to Dismiss under 707(b)(3) arguing that the totality of the circumstances, and specifically the fact that the debtors were using non-essential, luxury item expenses to pass the means test, justified dismissal of the case for abuse.
There were numerous briefs filed, including a surreply to a reply (yes, the Judge allowed it).
At the hearing on the initial motion to dismiss, the Judge had no tentative ruling, and spent the first few minutes addressing Alvin Mar and myself, explaining why he was going to rule in favor of the OUST. I then argued him out of his position (which doesnt happen all that frequently) by either rigorous statutory analysis, policy arguments, and sleight of hand (more the last one I think). He took the matter under submission, and then issued the attached opinion (from which the OUST filed a lengthy motion for reconsideration).
I recommend reading the opinion for its analysis, as well as the holding.
It should be noted that subsequent to this decision (which was NOT published to my knowledge) there were two California trial court decisions published on this precise issue (i.e. whether secured debt expenses allowed in the means test must be allowed in a determination of a debtors ability to pay under 707(b)(3)) . One, In re Johnson , from San Diego, held squarely on all points with Judge Robles. The other, I believe In re Wells (from Fresnono jokes please), held the exact opposite, so this is still very much unsettled. Im not sure why the OUST didnt appeal, except that perhaps they simply didnt want an adverse appellate ruling.
I would again like to thank Jonathan Hayes for his input and support throughout the nearly 9 months of briefing on this case, as well as my parents and members of the Academy.
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Mark J. Markus
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