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Cilwa v. Fort

United States District Court, D. South Carolina, Spartanburg Division

January 26, 2018

Anthony Cilwa, Appellant, [1]
v.
John K. Fort, U.S. Trustee, Appellee.

          REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE

          JACQUELYN D. AUSTIN, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on an appeal of the order of the United States Bankruptcy Court for the District of South Carolina (“the Bankruptcy Court”), dated February 6, 2017, denying Debtor Anthony Cilwa's second motion to withdraw bankruptcy petition [Doc. 6-2]. [Doc. 1.] Pursuant to the provisions of 28 U.S.C. § 636 (b)(1)(A) and Local Civil Rule 73.02(B)(2)(e), D.S.C., all pretrial proceedings involving litigation by individuals proceeding pro se are referred to a United States Magistrate Judge for consideration.

         Appellant Anthony Cilwa (“Debtor” or “Appellant”) filed a notice of appeal in the Bankruptcy Court on February 14, 2017[2] [Doc. 1-1], and the instant appellate case was opened in this Court on February 15, 2017. By Order of this Court, dated March 6, 2017, the parties were directed to file briefs. [Doc. 7; see also Doc. 9.] Appellant filed his brief on April 27, 2017 [Doc. 11], Appellee John K. Fort (“Trustee”) filed his brief on May 19, 2017[3][Doc. 12], and Appellant filed a reply brief on May 30, 2017 [Doc. 13]. Accordingly, the matter is ripe for review.

         BACKGROUND

         This is Appellant's fourth case filed in this Court related to his proceedings in the Bankruptcy Court. [See Cilwa v. Fort, No. 8:16-mc-00074-TMC (requesting leave to appeal an interlocutory order of the Bankruptcy Court); In re: Cilwa, No. 7:16-cv-01301-TMC (appealing the Bankruptcy Court's April 15, 2016, orders granting a motion for summary judgment as to Debtor and Christopher Cilwa (“Debtor's Son”)); In re: Cilwa, No. 7:16-cv-03690-TMC (seeking to withdraw the reference to the Bankruptcy Court)[4]; see also Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (courts “may properly take judicial notice of matters of public record”); Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239 (4th Cir. 1989) (“We note that ‘the most frequent use of judicial notice is in noticing the content of court records.'”). The undersigned has previously summarized Plaintiff's bankruptcy proceedings as follows:

Debtor filed a Chapter 7 bankruptcy case, No. 15-00263-hb, on January 18, 2015. In May 2015, Bruce P. Kriegman (“Kriegman”) filed an unsecured claim in the bankruptcy case in the amount of $376, 781.02, arising from a lawsuit concerning Debtor's alleged involvement in a Ponzi scheme. On December 1, 2015, the Bankruptcy Court overruled Debtor's objection to Kriegman's claim and allowed the claim as filed.
Trustee initiated an adversary proceeding against Debtor and Debtor's Son, No. 15-80172-hb, for the benefit of creditors on September 14, 2015. In the adversary proceeding, Trustee alleged that, after Debtor filed his bankruptcy case and without court authorization, Debtor sold property of the estate located in South Carolina and used proceeds from the sale to purchase another property in Florida, which Debtor subsequently transferred to Debtor's Son. Trustee sought avoidance of the transfer and turnover of property.
Trustee filed a motion for summary judgment on January 15, 2016, and the Bankruptcy Court granted the motion as to Debtor and Debtor's Son on April 15, 2016. The Bankruptcy Court ordered that (a) Debtor's post-petition transfer of his interest in the real property located at 1229 Sunset Lane, Anderson County, South Carolina 29624 (“the South Carolina Property”) was an unauthorized post-petition transfer as described in 11 U.S.C. § 549 and Trustee is entitled to the turnover of the proceeds from the sale of Debtor's interest in the South Carolina Property; (b) pursuant to 11 U.S.C. § 549, the transfer of the real property located at 4920 Long Meadow Drive, Leesburg, Florida 24784 (“the Florida Property”) from Debtor to Debtor's Son is avoided and Trustee is entitled to the turnover of any interest in the Florida Property that was transferred to Debtor's Son pursuant to 11 U.S.C. §§ 542 and 551; and (c) Trustee is entitled to the turnover of any interest Debtor holds in the Florida Property pursuant to 11 U.S.C. §§ 542 and 551.

[In re: Cilwa, No. 7:16-cv-01301-TMC, Doc. 25 at 2-3 (footnote and citations omitted).] This Court affirmed the April 15, 2016, final orders entered by the Bankruptcy Court in the adversary proceeding. [In re: Cilwa, No. 7:16-cv-01301-TMC, Doc. 37.]

         On January 30, 2017, Debtor filed a motion to withdraw application for Chapter 7.

         [See Doc. 6-2 at 1.] The Bankruptcy Court construed the motion as one seeking voluntary dismissal of the Chapter 7 case pursuant to 11 U.S.C. § 707(a) and noted this was the second such motion filed in the Bankruptcy Court. [Id.] On February 6, 2017, the Bankruptcy Court denied Debtor's motion to withdraw. [Doc. 6-2.] In the instant proceeding, Appellant appeals the Bankruptcy Court's February 6, 2017, order.[5] [Docs. 1; 6-7.]

         APPLICABLE LAW

         Liberal Construction of Pro Se Pleadings

         Appellant brought this action pro se, which requires the Court to liberally construe his pleadings. Erickson v. Pardus, 551 U.S. 89 (2007); Estelle v. Gamble, 429 U.S. 97, 106 (1976). Pro se pleadings are held to a less stringent standard than those drafted by attorneys. Haines v. Kerner, 404 U.S. 519, 520 (1972) (per curiam); Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). The mandated liberal construction means only that if the court can reasonably read the pleadings to state a valid claim on which an appellant could prevail, it should do so. Barnett v. Hargett, 174 F.3d 1128, 1133 (10th Cir. 1999). A court may not construct the appellant's legal arguments for him. Small v. Endicott, ...


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