Cofield v. Desmond

October 4, 1996
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-1339

JUAN M. COFIELD,
Appellant,

v.

JOHN O. DESMOND, TRUSTEE AND
FEDERAL DEPOSIT INSURANCE CORPORATION,
Appellees.

ERRATA SHEET

The opinion of this Court issued on September 26, 1996 is amended
as follows:

On page 2, 3rd line from the bottom, change "11" to "7"

October 1, 1996 [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-1339

JUAN M. COFIELD,

Appellant,

v.

JOHN O. DESMOND, TRUSTEE AND
FEDERAL DEPOSIT INSURANCE CORPORATION,

Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. George A. O'Toole, Jr., U.S. District Judge]

Before

Selya, Cyr and Boudin,
Circuit Judges.

Juan M. Cofield on brief pro se.

John O. Desmond on brief pro se.

Kathryn R. Norcross, Ann S. Duross and Thomas L. Hindes on brief

for appellee Federal Deposit Insurance Corporation.

Per Curiam. Appellant Juan M. Cofield appeals from

the district court's affirmance of a bankruptcy court order

which permitted appellant to convert his chapter 7 bankruptcy

case to a case under chapter 11, but then immediately

reconverted the case back to chapter 7. After carefully

reviewing the briefs and the record, we affirm the district

court's judgment for essentially the reasons stated in its

Memorandum and Order, dated January 26, 1996. We add only

the following comments.

1. A notice of conversion, filed pursuant to 11

U.S.C. 706(a), is not effective on filing. Bankruptcy Rule

1017(d) provides that conversion under 706(a) "shall be on

motion filed and served as required by Rule 9013." Rule

9013, in turn, states that "[a] request for an order . . .

shall be by written motion." Thus, "[t]hese provisions

indicate that a motion to convert pursuant to 706(a) is not

effective in and of itself, but rather is a request for a

court order of conversion." In re Calder, 973 F.2d 862, 867

(10th Cir. 1992). As a result, the bankruptcy court was

correct in treating appellant's "notice" as a motion and the

conversion was not effective on January 13, 1995, when it was

filed.

2. Even assuming that "cause" for reconversion to

chapter 7 must exist at the time a 706(a) motion is filed,

such "cause" existed here. The bankruptcy court's cause

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determination rested primarily on the futility of

reorganization. The court based the futility finding on the

speculative nature of the Fannie Mae lawsuit. Although the

court entered these findings three months after appellant

filed his 706(a) notice, it plainly was determining that

futility had existed as long as the Fannie Mae action had

been pending. That is, if funding for reorganization was

dependent on the success of the lawsuit and the lawsuit had

little chance of succeeding, the reorganization was futile

when appellant filed the conversion notice.

3. Appellant's procedural due process arguments

also fail. He first maintains that the bankruptcy court made

a determination prior to holding the hearings that it would

deny conversion. There is simply no support in the record

for this description of what happened. Second, appellant

asserts that although the bankruptcy court noticed the two

hearings as non-evidentiary, it took evidence at them. A

reading of the transcripts from these hearings shows

otherwise. The court only ordered appellant to produce

certain documents at a future time.

4. Appellant's arguments that the bankruptcy

court's actions constituted a "taking" in violation of the

Constitution and that the bankruptcy court violated the

substantive due process clause were not raised below. As

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such, they are waived. See McCoy v. Massachusetts Inst. of

Technology, 950

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F.2d 13, 22 (1st Cir. 1991), cert. denied, 504 U.S. 910

(1992). Affirmed.

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