Montgomery v. Ryan (In re Montgomery)

George Montgomery (debtor) filed for Chapter 13 bankruptcy in March 1992. After Montgomery failed to attend a creditors’ meeting, the bankruptcy court dismissed Montgomery’s case in June 1992. In August 1992, Montgomery again filed for Chapter 13 bankruptcy. One of Montgomery’s creditors, Norah Ryan (creditor), moved to dismiss Montgomery’s second bankruptcy petition, asserting under 11 U.S.C. § 109 that Montgomery was not an eligible debtor. Under § 109(g)(1), a person was ineligible to be a debtor if the person had been a debtor within the preceding 180 days and the previous bankruptcy case had been dismissed for willful failure to obey court orders, including failure to attend a creditors’ meeting. After holding a hearing, the bankruptcy court found that Montgomery had willfully failed to comply with a court order in the first bankruptcy case and granted Ryan’s motion to dismiss. The district court affirmed, holding that Montgomery bore the burden of showing that his failure to attend the creditors’ meeting was not willful and that Montgomery had not met that burden. Montgomery appealed to the Eighth Circuit, asserting that dismissal of his second bankruptcy case was improper because (1) the bankruptcy court in the first case had did not specifically find found that Montgomery had willfully failed to comply with a court order when it dismissed Montgomery’s first petition, and (2) the burden of establishing a willful failure should have been placed on Ryan, rather than Montgomery, and Ryan had failed to meet the burden. The record contained no evidence regarding why Montgomery had failed to attend the creditors’ meeting. After holding that the bankruptcy court did not need to make a specific finding of willfulness in dismissing the first petition, the Eighth Circuit considered which party bore the burden of proof on the willful-failure issue.