                                                          FILED
                                                           NOV 7 2013
 1
                                                       SUSAN M. SPRAUL, CLERK
 2                                                       U.S. BKCY. APP. PANEL
                                                         OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No. EC-13-1072-PaJuKi
                                   )              EC-13-1249-PaJuKi
 6   BOBBY DEAN HARDCASTLE and     )              (related appeals)
     MICHELLE LYNN HARDCASTLE,     )
 7                                 )      Bk. No. 12-34187-RB
                    Debtors.       )
 8   ______________________________)
                                   )
 9   BOBBY DEAN HARDCASTLE;        )
     MICHELLE LYNN HARDCASTLE      )
10                                 )
                    Appellants,    )
11                                 )
     v.                            )      M E M O R A N D U M1
12                                 )
     RUSSELL D. GREER, chapter 13 )
13   trustee,2                     )
                                   )
14                  Appellee.      )
     ______________________________)
15
                    Argued and Submitted on October 18, 2013
16                          at Sacramento, California
17                          Filed - November 7, 2013
18              Appeal from the United States Bankruptcy Court
                    for the Eastern District of California
19
         Honorable Robert S. Bardwil, Bankruptcy Judge, Presiding
20
     Appearances:     Mark J. Hannon argued for appellants Bobby Dean
21                    Hardcastle and Michelle Lynn Hardcastle.
22
     Before: PAPPAS, JURY and KIRSCHER, Bankruptcy Judges.
23
24        1
             This disposition is not appropriate for publication.
25   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
26   See 9th Cir. BAP Rule 8013-1.
27        2
               Appellee Greer did not appear or file a brief in this
28   appeal.
 1        Appellants Bobby Dean Hardcastle and Michelle Lynn
 2   Hardcastle (the “Hardcastles”) appeal the orders of the
 3   bankruptcy court denying confirmation of their chapter 133 plan
 4   (Appeal No. EC-13-1249) and dismissing the bankruptcy case
 5   (Appeal No. EC-13-1072).   We AFFIRM both orders.
 6                                  FACTS
 7        The Hardcastles filed a bankruptcy petition under chapter 13
 8   on August 1, 2012.   At the time, there were two mortgages on
 9   their residence.   Their Schedule D listed a debt they owed to
10   Bank of America for a loan secured by the second mortgage with a
11   balance of $85,741.00 (the “Second Mortgage”).   Their original
12   chapter 13 plan submitted with their petition proposed that they
13   pay the chapter 13 trustee $1,540 per month for sixty months,
14   which would result in a dividend to unsecured creditors of 50.25
15   percent.   That dividend was calculated including the full amount
16   due on the Second Mortgage as an unsecured claim.
17        On August 8, 2012, the Hardcastles filed a motion asking the
18   bankruptcy court to value the Second Mortgage at “$0.0", arguing
19   that, based on the value of their Residence, and the amounts owed
20   on the first mortgage, the Second Mortgage was fully unsecured.
21        On September 21, 2012, chapter 13 trustee Russell D. Greer
22   (“Trustee”) objected to confirmation of the Hardcastles’ plan
23   because it did not propose that they pay all of their disposable
24
25
          3
             Unless otherwise indicated, all chapter and section
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 and
27   "Rule" references are to the Federal Rules of Bankruptcy
     Procedure. The Federal Rules of Civil Procedure are referred to
28   as “Civil Rules.”

                                     -2-
 1   income into the plan.
 2        At some point after filing the petition and original plan,
 3   the Hardcastles entered into a modification agreement with the
 4   holder of the first mortgage, reducing the amount of that
 5   mortgage payment by $652.78 per month.   As a consequence, the
 6   Hardcastles filed an amended plan (the “First Amended Plan”)
 7   providing for payment of $2,192.00 per month for sixty months,
 8   with a corresponding increase in the dividend to unsecured
 9   creditors to 71 percent.    The First Amended Plan dividend also
10   assumed that the full balance due on the Second Mortgage would be
11   unsecured in calculating the expected dividend to unsecured
12   creditors.
13        On September 24, 2012, a hearing was held on the
14   Hardcastles’ motion to value the Second Mortgage.   The bankruptcy
15   court granted the motion and entered an order on October 1, 2012
16   (the “Valuation Order”).    The Valuation Order provided that,
17        This motion is granted as provided in this order. The
          secured claim of Bank of America, whose claim is
18        secured by a junior deed of trust on debtors’
          residence, is set at $0.00. The claim shall be treated
19        as an unsecured claim in any Chapter 13 plan. No
          further relief will be afforded.
20
21   (Emphasis added.)
22        On November 16, 2012, Bank of America filed a secured proof
23   of claim in the bankruptcy case in the amount of $88,970.00 for
24   the Second Mortgage debt.
25        The bankruptcy court denied confirmation of the First
26   Amended Plan on November 27, 2012, because creditors had not
27   received proper notice.    The Hardcastles filed a Second Amended
28   Plan the same day.   The Second Amended Plan provided for payments

                                      -3-
 1   of $1,540.00 per month for sixty months and projected a 100
 2   percent dividend to unsecured creditors.     For the first time, the
 3   calculation of that dividend did not include any amounts owed on
 4   the Second Mortgage.   Trustee objected to confirmation of the
 5   Second Amended Plan because, among other reasons, it did not
 6   provide for payment of the now-unsecured claim arising from the
 7   Second Mortgage.
 8        The bankruptcy court denied confirmation of the Second
 9   Amended Plan on January 22, 2013.      The bankruptcy court expressed
10   concern about whether the Hardcastles had submitted the Second
11   Amended Plan in good faith.   The court noted that, in connection
12   with proposing that plan, they had increased the reported income
13   of Mrs. Hardcastle by $646.00.   They then increased their
14   proposed expenses for food, clothing, laundry, dry cleaning,
15   medical and dental, recreation, auto repairs and maintenance, and
16   added new categories of expenses for savings and a college fund.
17   Indeed, as the court observed, the net increase in expenses over
18   the original and First Amended Plan was $1,298 per month.
19        But of greatest concern to the bankruptcy court was the
20   Second Amended Plan’s elimination of any payments on the Second
21   Mortgage debt, which in turn allowed them to effectively
22   “increase” the dividend to other unsecured creditors to 100
23   percent.   The court denied confirmation of the Second Amended
24   Plan, citing a lack of good faith, on January 22, 2013.
25        The Hardcastles immediately filed a motion for
26   reconsideration concerning the bankruptcy court’s denial of
27   confirmation.   They argued that they were not obligated to
28   include the Second Mortgage unsecured debt in their Second

                                      -4-
 1   Amended Plan because Bank of America had failed to timely file a
 2   claim for the unsecured debt.   Trustee objected to
 3   reconsideration, reminding that the court’s order valuing the
 4   Second Mortgage stated, “the claim shall be treated as an
 5   unsecured claim in any Chapter 13 plan.”   The bankruptcy court
 6   denied reconsideration on February 12, 2013, making two points:
 7        First, the court’s order granting the debtors’ motion
          to value Bank of America’s collateral provides: “The
 8        secured claim of Bank of America, whose claim is
          secured by a junior deed of trust on the debtors’
 9        residence is set at $0.00. The claim shall be treated
          as an unsecured claim in any Chapter 13 plan.” Second,
10        the court’s standard form plan, and thus the debtors’
          proposed [Second Amended Plan] at para. 2.15 provides
11        that Class 7 general unsecured claims include the
          under-collateralized portion of secured claims not
12        entitled to priority.
13        The Hardcastles filed a timely appeal of the order denying
14   confirmation on February 14, 2013.
15        When no further amended plan was filed by the Hardcastles,
16   on March 7, 2013, Trustee filed a motion to dismiss their
17   chapter 13 case for “unreasonable delay by the debtor(s) that is
18   prejudicial to creditors.”   The Hardcastles responded to the
19   dismissal motion order on March 11, 2013, again asserting that
20   Bank of America, the formerly secured creditor, must file an
21   unsecured claim in order to be paid under the chapter 13 plan.
22        The bankruptcy court conducted a hearing on Trustee’s motion
23   on April 23, 2013.   The bankruptcy court granted the motion, it’s
24   dismissal order, entered on April 25, 2013, reciting that
25   “findings of fact and conclusions of law having been stated
26   orally on the record and good cause appearing, IT IS ORDERED that
27   the motion is granted and the case is dismissed.”     The excerpts
28   do not include a transcript of that hearing in the record, nor

                                     -5-
 1   does it appear in the docket of the bankruptcy case.
 2        The Hardcastles filed a timely appeal of the dismissal order
 3   on April 27, 2013.
 4                             JURISDICTION
 5        The bankruptcy court had jurisdiction under 28 U.S.C.
 6   §§ 1334 and 157(b)(2)(A) and (L).       We have jurisdiction under
 7   28 U.S.C. § 158.
 8                                   ISSUES
 9        Whether the bankruptcy court erred in denying confirmation
10   of Hardcastles’ Second Amended chapter 13 plan.
11        Whether the bankruptcy court abused its discretion in
12   dismissing the Hardcastles’ chapter 13 case.
13                          STANDARDS OF REVIEW
14        Whether a chapter 13 plan should be confirmed involves mixed
15   questions of fact and law, where factual determinations are
16   reviewed under the clearly erroneous standard, and determinations
17   of law are reviewed de novo.    Meyer v. Lepe (In re Lepe),
18   470 B.R. 851, 855 (9th Cir. BAP 2012).        Whether a chapter 13 plan
19   has been filed in good faith or lack of good faith is a question
20   of fact reviewed for clear error.       Id.
21        We review the bankruptcy court’s dismissal of a chapter 13
22   case for abuse of discretion.    Ellsworth v. Lifescape Med.
23   Assocs. (In re Ellsworth), 455 B.R. 904, 914 (9th Cir. BAP 2011).
24   A bankruptcy court abuses its discretion if it applies an
25   incorrect legal standard or misapplies the correct legal
26   standard, or its factual findings are illogical, implausible or
27   without support from evidence in the record.       TrafficSchool.com
28   v. Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011) (citing United

                                       -6-
 1   States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)
 2   (en banc)).
 3                                 DISCUSSION
 4                                      I.
            The bankruptcy court did not err in denying confirmation
 5                   of the Hardcastles’ Second Amended Plan.
 6           A.   The Hardcastles’ Second Amended Plan was not submitted
                  in good faith.
 7
 8           To be confirmed, a debtor must prove that its chapter 13
 9   plan is proposed in good faith and not by any means forbidden by
10   law.    § 1325(a)(3).   The debtor, as the chapter 13 proponent, has
11   the burden of proof in establishing good faith (as well as all
12   other elements of plan confirmation in § 1325).    In re Hill,
13   268 B.R. 548, 552 (9th Cir. BAP 2001).     The Panel recently
14   examined application of the good faith standard in cases
15   involving denial of confirmation of chapter 13 plans:
16           One of the requirements for confirmation of a
             chapter 13 plan is that it be proposed in good faith.
17           § 1325(a)(3). "Good faith" is not defined in the
             Bankruptcy Code. The Ninth Circuit has held that "the
18           proper inquiry is whether the [debtors] acted equitably
             in proposing their Chapter 13 plan." Goeb v. Heid
19           (In re Goeb), 675 F.2d 1386, 1390 (9th Cir. 1982). In
             making that inquiry, the court applies a "totality of
20           the circumstances" test, taking into consideration
             (1) whether the debtor misrepresented facts, unfairly
21           manipulated the Bankruptcy Code or otherwise proposed
             the plan in an inequitable manner; (2) the history of
22           the debtor's filings and dismissals; (3) whether the
             debtor intended only to defeat state court litigation;
23           and (4) whether the debtor's behavior was egregious.
             Leavitt, 171 F.3d at 1224 (applying same factors for
24           good faith filing of chapter 13 petition).
25   Drummond v. Welsh (In re Welsh), 465 B.R. 841, 843 (9th Cir. BAP
26   2012), aff'd 713 F.3d 1120, 1129 (9th Cir. 2013).
27           Criteria two and three in Welsh do not appear to apply in
28   this case.    Nor did the bankruptcy court characterize the

                                       -7-
 1   Hardcastles’ behavior as egregious.   However, in denying
 2   confirmation of the Second Amended Plan, the bankruptcy court
 3   found that the Hardcastles had unfairly manipulated the
 4   Bankruptcy Code and acted in an inequitable manner toward their
 5   creditors.   In its order, the bankruptcy court expressed concern
 6   for the manipulative posture taken by the Hardcastles in
 7   proposing the Second Amended Plan:
 8        In the present case, it is clear the debtors made these
          dramatic increases to their living expenses, together
 9        with reduction of their estimated total of unsecured
          claims [by ignoring the Second Mortgage unsecured
10        debt], for the sole purpose of retaining for
          themselves, at the expense of their creditors, all of
11        their previously-unreported income. In these
          circumstances, the court is unable to conclude that the
12        plan has been proposed in good faith.
13        As a result of the modification, the Hardcastles’ first
14   mortgage payment was significantly reduced.   Rather than use the
15   additional monthly income to pay plan payments, they instead
16   increased their living expense budget items, indeed, creating two
17   new expenses.   They presumably sought to justify this approach by
18   suggesting that their new plan would, despite their increase in
19   living costs, pay their unsecured creditors in full.   However, to
20   do so, the Hardcastles’ plan sought to ignore their obligation on
21   the Second Mortgage debt, which the bankruptcy court had declared
22   to be unsecured.   All things considered, we cannot conclude that
23   the bankruptcy court’s finding that the Hardcastles’ lacked good
24   faith in submitting the Second Amended Plan was clearly erroneous
25   based on this record.
26        The bankruptcy court was also concerned that, in proposing
27   the Second Amended Plan, the Hardcastles disregarded the
28   Valuation Order concerning treatment of the Second Mortgage

                                     -8-
 1   claim.   While the Hardcastles prefer to focus our analysis on
 2   later events, a proper review of this issue begins with the
 3   propriety of the Valuation Order itself.
 4        The Valuation Order was entered on motion of the Hardcastles
 5   and granted the precise relief they requested:   that Bank of
 6   America’s collateral be valued at zero, thereby rendering its
 7   claim fully unsecured.   After giving them that relief, in its
 8   order granting the Hardcastles’ motion, the bankruptcy court
 9   added that “[t]he claim shall be treated as an unsecured claim in
10   any Chapter 13 plan.”    In this regard, we note the bankruptcy
11   court’s choice of words – “shall be treated”.    The Hardcastles
12   were given no option by the bankruptcy but to thereafter treat
13   the Second Mortgage claim as an unsecured claim because it was
14   the lawful order of the court.   Devers v. Bank of Sheridan
15   (In re Devers), 759 F.2d 751, 755 (9th Cir. 1985) (explaining
16   that, by seeking protection of the bankruptcy court, debtors
17   assume "a duty to participate in that proceeding by obeying the
18   court's lawful orders.").
19        The bankruptcy court’s order directing that the claim “shall
20   be treated” as an unsecured claim in subsequent chapter 13 plans
21   was grounded in the unambiguous language of § 506(a)(1):
22        An allowed claim of a creditor secured by a lien on
          property in which the estate has an interest, or that
23        is subject to setoff under section 553 of this title,
          is a secured claim to the extent of the value of such
24        creditor's interest in the estate's interest in such
          property, or to the extent of the amount subject to
25        setoff, as the case may be, and is an unsecured claim
          to the extent that the value of such creditor's
26        interest or the amount so subject to set off is less
          than the amount of such allowed claim.
27
28   (Emphasis added.)   Interpreting § 506(a)(1), the Supreme Court

                                      -9-
 1   has ruled that, via this statute, a secured claim is bifurcated
 2   into “secured and unsecured portions, with the secured portion
 3   limited to the value of the collateral.”     Assocs. Commer. Corp.
 4   v. Rash, 520 U.S. 953, 961 (1997).      See also Enewally v. Wash.
 5   Mut. Bank (In re Enewally), 368 F.3d 1165, 1168-69 (9th Cir.
 6   2004) (“Under the Bankruptcy Code, a secured loan may be
 7   separated into two distinct claims:     a secured claim for an
 8   amount equal to the value of the security, and an unsecured claim
 9   for the difference, if any, between the amount of the loan and
10   the value of the security.”).   According to the statute and case
11   law, then, the bankruptcy court’s action in granting the
12   Hardcastles’ motion under § 506(a)(1) effectively rendered the
13   creditor’s claim formerly secured by the Second Mortgage an
14   unsecured claim.    Consistent with the statute, the court directed
15   that the claim “shall be treated as an unsecured claim in any
16   Chapter 13 plan.”
17        The Hardcastles did not appeal the bankruptcy court’s
18   directive in the Valuation Order, and they do not challenge the
19   authority or legitimacy of the bankruptcy court’s Valuation Order
20   in this appeal.    They are thus bound by the terms of that order
21   and were obliged to include the Second Mortgage as an unsecured
22   claim in their Second Amended plan.     Instead, the Hardcastles
23   note that Bank of America filed a secured proof of claim on
24   November 26, 2012, about two months after the bankruptcy court
25   entered its Valuation Order deeming the creditor’s claim fully
26   unsecured.   The Hardcastles insist that, in filing a secured
27   claim, the creditor elected to forego any unsecured claim in the
28   bankruptcy court.

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 1        Unlike the Hardcastles, we do not know, and decline to
 2   speculate about, why Bank of America filed a secured proof of
 3   claim even after entry of the Valuation Order.4   While the
 4   Hardcastles argue to the contrary, we genuinely doubt this act
 5   was the result of Bank of America’s knowing election to file a
 6   fully secured proof of claim notwithstanding that its claim had
 7   been deemed unsecured in the Valuation Order.
 8        In addition, the Hardcastles have cited no authority to
 9   support their argument that a creditor’s submission of a secured
10   proof of claim after the claim has been valued by the bankruptcy
11   court as fully unsecured disqualifies that creditor from
12   thereafter participating in any plan payments to unsecured
13   creditors.   Instead, the Hardcastles rely upon cases in which
14   there had been no valuation of the creditor’s claim under
15   § 506(a).
16        The principal case is In re Harrison, 987 F.2d 677, 681
17   (10th Cir. 1993).   In that case, a creditor had filed a secured
18   claim, which the debtor’s plan proposed to treat as being
19   satisfied in full by surrender of the collateral securing that
20   claim to the creditor.   The creditor appealed the order of the
21
          4
22           A “Request for Special Notice” was filed by Pite
     Duncan, LLP, as attorneys for Bank of America, as the
23   successor-in-interest to the creditor that made the loan to the
     Hardcastles secured by the first mortgage, on August 17, 2012. A
24
     “Notice of Appearance” for Bank of America was filed by attorneys
25   Prober & Raphael on August 21, 2012. There is nothing in the
     record to show that either of these law firms were given notice
26   of the Hardcastles’ motion to value the creditor’s collateral.
27   Pite Duncan filed the proof of claim for the first mortgage.
     Claim No. 6. Prober & Raphael filed the secured proof of claim
28   for the Second Mortgage. Claim No. 7.

                                     -11-
 1   bankruptcy court approving the plan arguing that its claim was
 2   partly unsecured as a result of the surrender.   The Tenth Circuit
 3   held that because the creditor had filed a proof of claim
 4   asserting fully secured status, the claim was properly treated as
 5   such in the plan.   The court noted that, to the extent that the
 6   creditor contended its claim was partly unsecured, it had a duty
 7   to amend its proof of claim, or to file a motion to value the
 8   claim under § 506(a) as partially unsecured.   In short, the court
 9   in In re Harrison required the secured creditor to file an
10   amended proof of claim when its claim was partially unsecured and
11   when there had been no valuation of the collateral under
12   § 506(a).
13        In In re Padgett, 119 B.R. 793, 794 (Bankr. D. Colo. 1990),
14   a creditor filed a proof of claim asserting secured status in a
15   chapter 7 case.    After the court approved the trustee’s proposed
16   distributions to unsecured creditors, the erstwhile secured
17   creditor filed a reconsideration motion, contending his
18   collateral was worthless, and that his claim should be paid as an
19   unsecured claim.    The creditor argued that, “pursuant to
20   11 U.S.C. § 506(a), its claim is, by operation of law, an
21   unsecured claim to the extent that it exceeds the value of the
22   collateral.”   Id. at 794. The Padgett court, however, held:
23        A creditor with an undersecured or unsecured claim, or
          a creditor with a secured claim that devolves into an
24        undersecured or unsecured claim, must timely file an
          amended, or supplemental proof of claim or otherwise
25        provide legally sufficient notice of same to the
          trustee in order to be treated as an unsecured creditor
26        of the estate and receive a pro rata distribution of
          estate proceeds.
27
28   Id. at 795.    Again, like In re Harrison, there was no court

                                      -12-
 1   ordered valuation of collateral under § 506(a).    Put another way,
 2   Padgett stands for the rule that a secured creditor must file an
 3   unsecured claim in the absence of a § 506(a) valuation of its
 4   claim by the bankruptcy court.
 5        Finally, the Hardcastles cite this Panel’s unpublished
 6   decision in Olympic Coast Inv., Inc. v. Crum (In re Wright),
 7   2008 WL 8462954 (9th Cir. BAP Oct. 16, 2008).    This was another
 8   chapter 7 case in which a creditor filed a secured proof of claim
 9   for $4,573,239; the trustee later filed a motion to abandon the
10   creditor’s collateral on the grounds that the debtor had
11   estimated its value at $50,000.     The creditor objected to the
12   trustee’s proposed distribution to creditors on the grounds that
13   trustee had “admitted” that the collateral was only worth
14   $50,000, so it had an unsecured claim for $4,523,239.    The Panel
15   dismissed the appeal as moot.    However, it commented that, if it
16   were to reach the merits, it would agree with the Padgett and
17   Harrison courts that “any undersecured creditor should file a
18   claim for the unsecured portion of its claim (or a valuation
19   motion) in order to participate in any distribution to unsecured
20   creditors.”   Id. at * 6.
21        In short, none of the authorities cited by the Hardcastles
22   stand for the proposition that a secured creditor must file a
23   proof of claim as an unsecured creditor where the bankruptcy
24   court has valued that claim as unsecured in an order entered
25   under § 506(a).   We know of no case law that requires the filing
26   of an unsecured proof of claim after the court determines that
27   claim as unsecured and directs it to be treated as an unsecured
28   claim in any Chapter 13 plan.

                                       -13-
 1        In summary, the Hardcastles manipulated the bankruptcy
 2   system when, in proposing the Second Amended Plan, they
 3   dramatically increased their living expenses, while at the same
 4   time inappropriately reducing payments to unsecured creditors.
 5   In doing so, they ignored a lawful order of the bankruptcy court
 6   directing that they treat Bank of America’s claim as an unsecured
 7   claim in the plan.   The bankruptcy court did not clearly err in
 8   its factual determination that the Hardcastles had not proposed
 9   the Second Amended Plan in good faith, nor in its decision to
10   deny confirmation of the plan.
11        B.   The Second Amended Plan required that the Second
               Mortgage be treated as an unsecured claim.
12
13        In its order denying reconsideration of the order denying
14   plan confirmation, the bankruptcy court cited an alternative
15   reason to deny confirmation:   that the Hardcastles’ proposed
16   Second Amended Plan, paragraph 2.[1]5, provides that the class of
17   general unsecured creditors includes “the under-collateralized
18   portion of secured claims not entitled to priority.”
19        Paragraph 2.15 is derived from the district’s standard form
20   chapter 13 plan, EDC-Form 3-080.        The text of paragraph 2.15 of
21   the Second Amended Plan reads as follows, with the Hardcastles’
22   addition to the form underlined:
23        Class 7 [unsecured claims] consists of all other
          unsecured claims not listed as class 5 or 6 claims.
24        These claims will receive no less than a 100.0 %
          dividend. These claims, including the
25        undercollateralized portion of secured claims not
          entitled to priority, total approximately $71,438.00.
26
27        The Eastern District of California has by local rule adopted
28   a “mandatory” form chapter 13 plan, Form EDC 3-080, which is to

                                      -14-
 1   be used by all chapter 13 debtors.       Bankr. E.D. Cal. Local
 2   R. 3015-1(a).    The practice of prescribing form plans for use in
 3   a district is widespread.    Indeed, over 70 percent of the
 4   bankruptcy courts in the United States have adopted mandatory
 5   chapter 13 plans for use in their districts.      In re Visintainer,
 6   435 B.R. 727, 729-30 (Bankr. M.D. Fla. 2010).      The provision of
 7   the Hardcastles’ Second Amended Plan is based on the district’s
 8   form.    To the extent that the bankruptcy court in this case
 9   interpreted this provision to mean that the class of unsecured
10   claims “includes the under-collateralized portion of secured
11   claims not entitled to priority,” and that the Hardcastles’
12   failure to include the Second Mortgage debt as an unsecured claim
13   in their Second Amended Plan would violate the intent of the
14   local rule and form, we defer to the court’s interpretation of
15   its local form.    Moncur v. Agricredit Acceptance Co.
16   (In re Moncur), 328 B.R. 183, 191 (9th Cir. BAP 2005).
17           Moreover, we note that the Second Amended Plan also provides
18   at paragraph 2.04 that,
19           [A] proof of claim, not this plan or the schedules,
             shall determine the amount and classification of a
20           claim unless the court’s disposition of a claim
             objection, valuation motion, or lien avoidance motion
21           affects the amount or classification of the claim.
22   (Emphasis added.)    In other words, as we read it, the
23   Hardcastles’ own Second Amended Plan effectively provides that
24   the Valuation Order, and not Bank of America’s proof of claim,
25   would control the classification of the creditor’s claim.
26                                     II.
               The bankruptcy court did not abuse its discretion
27               in dismissing the Hardcastles’ chapter 13 case.
28           The Hardcastles’ brief in the appeal from the dismissal of

                                       -15-
 1   their case is substantially the same as their brief concerning
 2   denial of confirmation.   They argue that the bankruptcy court
 3   erred in denying the confirmation of their Second Amended Plan,
 4   and it was therefore a corresponding error for the bankruptcy
 5   court to dismiss the case.
 6        The hearing on Trustee’s dismissal motion occurred after two
 7   continuances.   The only document relevant to this event appearing
 8   in the appellate record, or in the bankruptcy court’s docket of
 9   the case, is the order which recites that the bankruptcy case was
10   dismissed because the Hardcastles had engaged in unreasonable
11   delay that was prejudicial to creditors.   Such is one of the
12   causes set forth in the Code which may justify dismissal.     See
13   § 1307(c)(1) (providing that a bankruptcy court may dismiss a
14   chapter 13 case “for cause, including – (1) unreasonable delay by
15   the debtor that is prejudicial to creditors . . . .”); Nelson v.
16   Meyer (In re Nelson), 343 B.R. 671, 676 (9th Cir. BAP 2006) (“A
17   debtor who declines to revise a plan after denial of confirmation
18   becomes vulnerable to § 1307(c)(1) ‘cause’ for unreasonable delay
19   by the debtor that is prejudicial to creditors.”).
20        The dismissal order states that "findings of fact and
21   conclusions of law having been stated orally on the record and
22   good cause appearing, IT IS ORDERED that the motion is granted
23   and the case is dismissed."   We have been provided with no
24   transcript of that hearing to detail those findings and
25   conclusions.    In addition, the Hardcastles’ brief offers no
26   insight beyond the order as to the bankruptcy court’s findings,
27   conclusions or reasoning in support of its decision, simply
28   arguing that the bankruptcy court was wrong to have denied

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 1   confirmation and thus was wrong to dismiss the case.
 2        This approach on appeal is regrettable; we simply have no
 3   way to review the bankruptcy court’s decision nor to examine the
 4   court’s reasoning.   The Ninth Circuit has instructed that, where
 5   a transcript of the hearing at which the bankruptcy court made
 6   findings and conclusions is unavailable, we should employ our
 7   best efforts to determine the court’s reasons from all sources.
 8   Ehrenberg v. Cal. State Fullerton (In re Beachport Enters.,
 9   Inc.), 396 F.3d 1083, 1086-88 (9th Cir 2005).       Where we cannot
10   determine the bankruptcy court’s reasoning from all available
11   sources, we may summarily affirm the bankruptcy court.      Id.   The
12   Hardcastles, as appellants, bear the burden of providing an
13   adequate record to evaluate their arguments and must equally bear
14   the consequences of failing to provide that record.      Cashco Fin.
15   Sec. Servs., Inc. v. McGee (In re McGee), 359 B.R. 764, 765 (9th
16   Cir. BAP 2006).
17        We know that the bankruptcy court denied confirmation of the
18   Hardcastles’ Second Amended Plan.       We are unaware of whether the
19   Hardcastles filed a further plan to conform to the bankruptcy
20   court’s ruling.   And, above, we cite the case law holding that,
21   if they did not file such a plan, it may constitute unreasonable
22   delay justifying dismissal.   At bottom, the Hardcastles have not
23   provided an adequate record to allow us to review the bankruptcy
24   court’s dismissal order.   We therefore decline to disturb that
25   order and summarily affirm it.    Where there is a clearly
26   inadequate record on appeal, we have “little choice” but to
27   affirm.   Morrissey v. Stuteville (In re Morrissey), 349 F.3d
28   1187, 1191 (9th Cir. 2003); In re Friedman, 126 B.R. 63, 68 (9th

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 1   Cir. BAP. 1991).
 2                              CONCLUSION
 3        The orders of the bankruptcy court are AFFIRMED.
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