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M.P.I. Ltd. Trust v. Hu

United States District Court, D. Hawaii

September 19, 2017

M.P.I. LTD. TRUST; DAVID DOUGLAS KROMER, TRUSTEE, Appellants,
v.
HOWARD M.S. HU, TRUSTEE, et al., Appellees. Bankr. No. 17-00245

          ORDER DENYING APPLICATION TO PROCEED IN FORMA PAUPERIS

          Derrick K. Watson, United States District Judge.

         On September 13, 2017, one of the Appellants in this bankruptcy appeal, David Douglas Kromer, Trustee, purportedly on behalf of Appellant M.P.I. Ltd. Trust, filed in United States Bankruptcy Court, District of Hawaii: (1) a Notice of Appeal And Statement Of Election, and (2) an Application To Proceed In District Court Without Prepaying Fees Or Costs, seeking to proceed in forma pauperis on appeal (“IFP Application”).[1] Federal courts can authorize the commencement of any suit without prepayment of fees or security by a person who submits an affidavit that demonstrates he or she is unable to pay. See 28 U.S.C. § 1915(a)(1). “An affidavit in support of an IFP application is sufficient where it alleges that the affiant cannot pay the court costs and still afford the necessities of life.” Escobedo v. Applebees, 787 F.3d 1226, 1234 (9th Cir. 2015) (citing Adkins v. E.I. Du Pont de Nemours & Co., 335 U.S. 331, 339 (1948)); see also United States v. McQuade, 647 F.2d 938, 940 (9th Cir. 1981) (The affidavit must “state the facts as to affiant's poverty with some particularity, definiteness and certainty.”) (internal quotation omitted).

         When reviewing an application filed pursuant to Section 1915(a), “[t]he only determination to be made by the court . . . is whether the statements in the affidavit satisfy the requirement of poverty.” Martinez v. Kristi Kleaners, Inc., 364 F.3d 1305, 1307 (11th Cir. 2004). While Section 1915(a) does not require a litigant to demonstrate absolute destitution, Adkins, 335 U.S. at 339, the applicant must nonetheless show that he or she is “unable to pay such fees or give security therefor.” 28 U.S.C. § 1915(a).

         Here, Kromer states in the IFP Application only that “fee waiver under Rules for waiver of fees for a Trust state that has no money [sic], ” and, that Kromer is “applying in the capa[c]ity of the Trustee, not as an individual.” Although Kromer did not complete the portions of the IFP Application indicating whether (1) he, individually, (2) the Trust itself, or (3) any other applicant has any wages, other income, or assets in support of his request, he does declare: “This is a Trust[.] [T]he Trust Estate has no money and because land lord did not check box as a residence with guilty knowledge it was my home I got evicted with only the shirt on my back and threat of arrest if I did not leave immediately.”

         First, to the extent the IFP Application seeks to “waive fees for a Trust . . . that has no money, ” the request is denied. The statutory text of Section 1915(a) provides that a court may authorize court proceedings without prepayment by a “person” who is unable to pay the fees. 28 U.S.C. § 1915(a). The Supreme Court has held that Section 1915 applies only to “natural persons, ” and declined to extend in forma pauperis status to other legal entities. Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 198-201 (1993) (observing that the relevant congressional history lacked any indication Congress contemplated the term “person” to include legal entities).[2]

         Second, to the extent Kromer seeks to proceed without paying the costs of this appeal, he fails to establish that he individually cannot pay the court costs and still afford the necessities of life. See, e.g., 2017 HHS Poverty Guidelines, https://www.federalregister.gov/documents/2017/01/31/2017-02076/annual-update -of-the-hhs-poverty-guidelines (indicating that the poverty threshold for a one-person household in Hawaii is $13, 860).

         Although Kromer makes vague allegations that the Trust is without assets and that he has been evicted, the IFP Application is incomplete with respect to his individual assets and liabilities. His declaration regarding Trust assets also appears to be contradicted by his filings in the bankruptcy court.[3] In sum, Kromer fails to establish that he cannot both pay the costs of litigating this case “and still be able to provide himself . . . with the necessities of life.” See Adkins, 335 U.S. at 339 (internal quotation marks omitted). Accordingly, the Court finds that Kromer has not made the required showing under Section 1915 to proceed without prepayment of fees, and DENIES his IFP Application. If Kromer wishes to proceed with this appeal, he must either (1) re-submit a fully executed IFP Application or (2) remit the appropriate filing fee by October 16, 2017. Failure to do so will result in the automatic dismissal of this action.

         1. The Clerk of Court is DIRECTED to send Kromer a copy of this Order and the Court's Application to Proceed in forma pauperis with the accompanying information sheet.

         2. Kromer is GRANTED until October 16, 2017 to (a) pay the filing fee; or to (b) submit a completed and executed application to proceed in forma pauperis on the form provided by the court with this Order.

         3. Failure to timely file an in forma pauperis application or to pay the applicable filing fee by October 16, 2017 will result in AUTOMATIC DISMISSAL of this action.

         IT IS SO ORDERED.

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Notes:

[1]The Notice of Appeal and IFP Application were transmitted to this district court on September 14, 2017, and the instant civil action was opened on September 15, 2017. See Dkt. No. 1-1 (IFP Application) and Dkt. No. 1-2 (Notice of Appeal). The IFP Application is properly before the district court, rather than the bankruptcy court. See In re Perroton, 958 F.2d 889, 896 ...


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