United States District Court, N.D. Illinois, Eastern Division
November 8, 2004.
ORAL SEKENDUR, Appellant,
ANOTO AB, Appellee.
The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
Appellant Oral Sekendur has appealed a bankruptcy court's
dismissal of his Chapter 13 bankruptcy case on June 22, 2004,
and, desiring to proceed in forma pauperis, he has filed a
financial affidavit in this court. Appellee now moves to dismiss
that appeal under 28 U.S.C. § 1915(e)(2)(A) on the grounds that
appellant's allegation of poverty is untrue. For the following
reasons, appellee's motion to dismiss is granted.
Section 1915(e)(2) requires dismissal of an in forma pauperis
case if it fits in one of two categories. Cases must be dismissed
when allegations of poverty are false. 28 U.S.C. § 1915(e)(2)(A);
Thomas v. GMAC, 288 F.3d 305, 306 (7th Cir. 2002).
Alternatively, they must also must be dismissed when either
frivolous or malicious, they fail to state a claim upon which
relief may be granted, or they seek damages from defendants who
are immune from such relief. 28 U.S.C. § 1915(c)(2)(B)(i)-(iii);
Alston v. Debruyn, 13 F.3d 1036, 1039 (7th Cir. 1994). In
the typical in forma pauperis case we evaluate the plaintiff's
complaint and apply the standard used in a motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6), taking
petitioner's allegations as true. Zimmerman v. Tribble,
226 F.3d 568, 571 (7th Cir. 2000). That analysis generally
focuses on § 1915(e)(2)(B)(i)-(iii). But, this is not the typical
case appellee here moves to dismiss the appeal under subsection
(A) and not (B). Thus, the central issue is whether appellant's disclosures in his financial
affidavit sufficiently and truthfully show financial need.
Appellee contends that appellant fails to disclose assets and
property that would preclude such a showing and that appellant's
untruthful allegation of poverty requires dismissal. Appellee
further asserts that appellant's nondisclosure is not an isolated
occurrence, and a survey of appellant's litigation in bankruptcy
court supports that position.
The bankruptcy court dismissed appellant's case under
11 U.S.C. § 1307(c)(1), which enables the court to dismiss a case when the
debtor causes unreasonable delay that prejudices creditors. The
court also invoked 11 U.S.C. § 109(g) to bar appellant from
filing any additional bankruptcy petition within 180 days from
the date of its order. In re Sekendur, No. 04-18834 (Bankr.
N.D. Ill. June 22, 2004). When the court so held, appellant was
not a stranger to dismissal of a bankruptcy filing. On February
19, 2004, in a case involving a different creditor, another
bankruptcy court dismissed appellant's filing as a bad faith
filing and cited several reasons, including appellant's failure
to disclose both household income and patents worth millions of
dollars. In re Sekendur, No. 04-02173 (Bankr. N.D. Ill. Feb 19,
2004). Appellant appealed that dismissal, but not in a timely
manner, and Judge Andersen dismissed the appeal for lack of
jurisdiction, without reaching the appellee's motion to dismiss
appellant's in forma pauperis petition. Sekendur v.
Dent-A-Med, Inc., No. 04-5030 (N.D. Ill. Sept. 13, 2004). That
petition is exactly the same as the one before us now. These
cases show appellant's proclivity for less than full disclosure
on court documents that require full disclosure, such as the
financial affidavit in this case.
In the financial affidavit, question 3 asks if the applicant
"or anyone else living at the same address" with the applicant
received more than $200 from a number of sources, including
salary, self-employment, dividends, interest, life insurance,
inheritances, gifts and "any other sources." Appellant answered "No" for all these
categories. He disclosed a checking account with $2,000, but
failed to note who holds that account. He also disclosed that he
holds a retirement account valued at $150,000, but in response to
questions 6 and 7 stated that neither he nor anyone living at his
address owns any real estate, vehicles, or other items of
personal property worth more than $1,000. His answers to many of
these questions are not true.
During a hearing before Judge Cox, who presided over and
dismissed appellant's second Chapter 13 filing, appellant
acknowledged that his wife, with whom he lives, owns significant
assets and property, but when asked in unequivocal terms on the
financial affidavit to disclose any assets that he or anyone in
his house owns, he ignores his wife's assets. However, we need
not rely on the hearing before Judge Cox to find that appellant's
allegations of poverty are untrue. In his response to appellee's
motion, appellant never denies that his wife possesses assets and
property that went unreported in his financial affidavit.
Instead, he cites authority and raises several arguments that he
believes support his nondisclosure of those assets and property.
He first states that property acquired by gift, legacy or descent
is non-marital property and references 750 ILCS 5/503(a)(1),
which is part of the Illinois Marriage and Dissolution of
Marriage Act. That section is inapposite for the purposes of
properly completing an in forma pauperis application. Appellant
then cites Lee v. McDonald's Corp., 231 F.3d 456 (8th
Cir.), which he believes stands for the blanket proposition that
an in forma pauperis applicant is not required to report his
wife's assets when the wife denies the applicant access to those
assets. Even if we grant appellant's reading of that case, he has
not alleged that his wife denies him access to her assets and all
facts indicate to the contrary, particularly the fact that he
lives with his wife in her home, which is located in a
prestigious Chicago neighborhood. Further, in Lee the
applicant's wife refused to take "out a loan to enable him to proceed in this lawsuit." Id. at 458. But in his response,
appellant admits that his wife has paid, as a loan, "various fees
including expert witness fees."
Not only did appellant fail to disclose his wife's assets and
property, he also omitted reference to his own property
specifically over $50,000 worth of dental equipment. Appellant
argues that he actually did disclose those assets in his
bankruptcy filings on May 28, 2004. But disclosure in the
bankruptcy documents is not tantamount to disclosure in the in
forma pauperis application. Similarly, appellant alleges that he
has "clearly disclosed" his patent assets and again references
documents filed in bankruptcy court. In those documents appellant
noted several cases in which he is a party, including a dispute
with appellee regarding a patent.*fn1 First, we do not see
how that reference could amount to a disclosure of the patent
assets in the bankruptcy proceeding. And second, the mere mention
of the litigation in the bankruptcy documents does not qualify as
disclosure of the patent assets on the in forma pauperis
application. Further, the fact that appellee challenges the value
of the patent in that litigation does not discharge appellant's
duty to report the patent in his application.
Appellant did not merely miscalculate the value of his
household's assets, nor fudge the numbers and forget to disclose
some property, his categorical denial of having any income or
assets is untrue. See Mathis v. New York Life Ins. Co.,
133 F.3d 546 (7th Cir. 1998).
For the foregoing reasons, appellant's case is dismissed with
prejudice. JUDGMENT IN A CIVIL CASE
? Jury Verdict. This action came before the Court for a trial
by jury. The issues have been tried and the jury rendered its
? Decision by Court. This action came to trial or hearing
before the Court. The issues have been tried or heard and a
decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED that appellee's motion to
dismiss the appeal is granted. Appellant's case is dismissed with