            ELECTRONIC CITATION: 2000 FED App. 0002P (6th Cir.)
                         File Name: 00b0002p.06

          BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: RONALD E. BOOTH and            )
       DIANA E. BOOTH,                )
                                      )
                Debtors.              )
_____________________________________ )
                                      )
RONALD E. BOOTH and DIANA E. BOOTH, )
                                      )
                Appellants,           )
                                      )
       v.                             )               No. 99-8034
                                      )
NATIONAL CITY BANK,                   )
                                      )
                Appellee.             )
_____________________________________ )

                   Appeal from the United States Bankruptcy Court
          for the Southern District of Ohio, Western Division, at Cincinnati.
                                    No. 96-16475.

                           Submitted: December 7, 1999

                       Decided and Filed: January 10, 2000

          Before: BROWN, MORGENSTERN-CLARREN, and RHODES,
                     Bankruptcy Appellate Panel Judges.

                              ____________________

                                     COUNSEL

ON BRIEF: Rebecca K. Kaye, Cincinnati, Ohio, for Appellants.          John L. Day, Jr.,
WELTMAN, WEINBERT & REIS, Cincinnati, Ohio, for Appellee.
                                   ____________________

                                         OPINION
                                   ____________________

         The bankruptcy court denied the debtors’ motion to reopen their bankruptcy case
after determining that they had executed a valid reaffirmation agreement with National City
Bank and had not effectively rescinded the agreement.             The Panel holds that the
bankruptcy court did not abuse its discretion in refusing to reopen the case. Accordingly,
the order denying the motion to reopen the case is AFFIRMED.


                                    I. ISSUE ON APPEAL
         The issue on appeal is whether the bankruptcy court abused its discretion in
refusing to reopen the debtors’ bankruptcy case.


                     II. JURISDICTION AND STANDARD OF REVIEW
         The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this
appeal. The United States District Court for the Southern District of Ohio has authorized
appeals to the BAP. A “final order” of a bankruptcy court may be appealed by right under
28 U.S.C. §158(a)(1). For purposes of appeal, an order is final if it “ends the litigation on
the merits and leaves nothing for the court to do but execute the judgment.” Midland
Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1494, 1497, 103 L. Ed.2d
879 (1989) (citations omitted).
         A bankruptcy court’s decision regarding whether to reopen a case is reviewed for
abuse of discretion. Rosinski v. Boyd (In re Rosinski), 759 F.2d 539, 540-41 (6th Cir.
1985).
         “A court has abused its discretion if the reviewing court has a definite and
         firm conviction that the trial court committed a clear error in judgment in the
         conclusion that it reached based on all the appropriate factors.” Belfance v.
         Black River Petroleum, Inc. (In re Hess), 209 B.R. 79, 80 (B.A.P. 6th Cir.
         1997). The bankruptcy court’s findings of fact, “whether based on oral or
         documentary evidence, shall not be set aside unless clearly erroneous, and
         due regard shall be given to the opportunity of the bankruptcy court to judge
         the credibility of the witnesses.” FED. R. BANKR. P. 8013. A finding of fact
         is clearly erroneous “when although there is evidence to support it, the
         reviewing court on the entire evidence is left with the definite and firm

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       conviction that a mistake has been committed.” Anderson v. City of
       Bessemer City, 470 U.S. 564, 573, 105 S. Ct. 1504, 1511, 84 L. Ed.2d 518
       (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364,
       395, 68 S. Ct. 525, 542, 92 L. Ed. 746 (1948)).

R.D.F. Devs., Inc. v. Sysco Corp. (In re R.D.F. Devs., Inc.), 239 B.R. 336, 338-39 (B.A.P.
6th Cir. 1999).


                                        III. FACTS
       Ronald and Diana Booth filed a chapter 7 bankruptcy petition on December 12,
1996. Following their meeting of creditors on January 14, 1997, the Booths and their
attorney signed a reaffirmation agreement with National City Bank. This reaffirmation
agreement requires the Booths to pay $8,386.51 on National City’s second mortgage on
their home and contains a provision that rescission shall be in writing.
       The Booths assert that they were reluctant to enter into this reaffirmation agreement
because they did not know whether they would be able to come to an agreement regarding
an arrearage with the first mortgage holder, Washtenaw Mortgage Co. Later, when an
agreement could not be reached with Washtenaw Mortgage, the Booths did not make the
payments required by the National City reaffirmation agreement. The Booths assert that
they understood that they had 60 days to cancel the reaffirmation agreement and that they
orally rescinded the reaffirmation agreement on March 2, 1997, when an agent of National
City contacted them about the missed payments. The Booths never sent a written
rescission to National City Bank. On March 12, 1997, National City Bank filed the
reaffirmation agreement. The Booths received a copy of the filed reaffirmation agreement,
but took no further action.
       Washtenaw Mortgage eventually obtained relief from the automatic stay and
foreclosed on the property. If the Booths had not signed the reaffirmation agreement with
National City Bank, or if the Booths had effectively rescinded the reaffirmation agreement,
then the combination of the first mortgage foreclosure and their bankruptcy discharge
would have excused them from any further obligation to National City.
       On November 23, 1998, the Booths filed a motion to reopen the bankruptcy case,
to reinstate the automatic stay, and to extend the time to rescind the reaffirmation
agreement or to set aside the reaffirmation agreement. The Booths asserted in their


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motion that they entered into the reaffirmation under duress and that they orally rescinded
the reaffirmation agreement.
        The bankruptcy court held that there were no grounds to reopen the case, because
the Booths did not comply with the plain language of the reaffirmation agreement requiring
that a rescission be in writing.1 Accordingly, the bankruptcy court denied the motion. The
Booths filed this timely appeal.


                                            IV. DISCUSSION
        Under 28 U.S.C. § 1334(b), bankruptcy courts and state courts have concurrent
jurisdiction to determine the validity of reaffirmation agreements. Michigan Employment
Sec. Comm’n v. Wolverine Radio Co., Inc. (In re Wolverine Radio Co.), 930 F.2d 1132,
1141, n. 14 (6th Cir. 1991) (“Although the Bankruptcy Reform Act of 1984 altered the 1978
legislation in several respects, guidance in interpretation is still furnished by the
congressional history of the 1978 legislation . . . . Very often, issues will arise after the case
is closed, such as over the validity of a purported reaffirmation agreement, . . . . The
bankruptcy courts will be able to hear these proceedings because they arise under title 11.”
(citing H.R. Rep. N. 95-595, 95th Cong., 2nd Sess. 445 (1978)). See also In re Grabinski,
150 B.R. 427, 432 (Bankr. N.D. Ill. 1993).
        The Panel concludes that the bankruptcy court did not abuse its discretion in
denying the motion to reopen the bankruptcy case. A bankruptcy court need not reopen
a bankruptcy case where reopening would not result in a “sensible allocation of judicial
resources,” In re The Yoder Co., 158 B.R. 99, 101 (Bankr. N.D. Ohio 1993), or where
reopening would have no effect. Zirnhelt v. Madaj (In re Madaj), 149 F.3d 467, 472 (6th
Cir. 1998). If a bankruptcy court determines that no relief would be accorded to a debtor
once the case is reopened, the court does not abuse its discretion in deciding not to
reopen the case. In re Adams, No. 99-8020, slip. op. (B.A.P. 6th Cir. Aug. 17, 1999).
        In this case, after fully considering the asserted grounds for voiding the reaffirmation
agreement, the bankruptcy court determined that the reaffirmation agreement was valid
and had not been properly rescinded. Specifically, because the reaffirmation agreement



    1
        The bankruptcy court’s order denying the motion contains some language suggesting that the court lacked
jurisdiction. However, the thrust of the decision is on the merits of the motion.

                                                      -4-
required written rescission, the court rejected the Booths’ argument that their oral
rescission of the reaffirmation agreement was effective. In re Booth, No. 96-16475, slip.
op. at 3 (May 20, 1999).
       The Panel agrees. Certainly 11 U.S.C. § 524(c) does not require that the notice of
rescission be in writing; it simply requires “giving notice of rescission” to the creditor.
Nevertheless, the Sixth Circuit has emphasized that this section envisions consent by the
creditor to any reaffirmation agreement. General Motors Acceptance Corp. v. Bell (In re
Bell), 700 F.2d 1053, 1056 (6th Cir. 1983). Accordingly, a creditor can negotiate for any
legal terms in a reaffirmation agreement.           A negotiated provision that the debtor’s
rescission must be tendered in writing is entirely legal because it does not unduly or
impermissibly limit or restrict the debtor’s statutory right to rescind. See In re Ireland, 241
B.R. 539, 540 (Bankr. E.D. Mich. 1999); In re Nidiver, 217 B.R. 581, 584 (Bankr. D. Neb.
1998) (citing In re Perez, 177 B.R. 319 (Bankr. D. Neb. 1995)). Such a provision serves
only to specify the means of rescission under § 524(c)(4). In re Roberts, 154 B.R. 967,
970 (Bankr. D. Neb. 1993). Indeed, such a provision protects both the creditor and the
debtor from any potential misunderstanding that might arise regarding the debtor’s alleged
verbal rescission and is therefore to be encouraged.


                                     V. CONCLUSION
       The bankruptcy court order denying the motion to reopen is AFFIRMED.




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