Opinion
Case No. 99-16767-CJK.
August 24, 2004
MEMORANDUM
I. INTRODUCTION
The matter before the Court is the "Debtor's Motion for Order Directing Trustee to Return Overpayment, File Final Account, and for Entry of Discharge" (the "Motion"). The Chapter 13 Trustee filed an Opposition to the Motion. Former Bankruptcy Judge Carol J. Kenner heard the Motion and Opposition on June 3, 2004 and took the matter under advisement. The parties represented at the hearing that the material facts necessary to resolve the Debtor's Motion are not in dispute. Accordingly, the Motion is ripe for determination. The issue presented is whether the Debtor is entitled to a refund of monies paid to the Chapter 13 Trustee in excess of the amount required to cure prepetition arrearages to her secured creditors and to make a 10% distribution to the sole creditor who filed a proof of claim.
In accordance with Fed.R.Civ.P. 63, made applicable to this contested matter by Fed.R.Bankr.P. 9028, I certify familiarity with the record and determine that the proceedings in the case may be completed without prejudice to the parties.
II. FACTS
The Debtor filed a Chapter 13 petition on August 12, 1999, just over five years ago. She filed Schedules, a Statement of Financial Affairs and a Chapter 13 plan approximately two weeks later. At the time she filed her Chapter 13 petition and obtained confirmation of her Chapter 13 plan she was represented by Richard J. Boudreau, Esq. On May 9, 2004, David M. Nickless, Esq. filed a Notice of Appearance as Successor Counsel.
The Debtor proposed a straightforward Chapter 13 plan. Specifically, she proposed to cure arrearages to the holders of mortgages on her real property located in Medford, Massachusetts and to pay a dividend of 10% to the holders of unsecured nonpriority claims which totaled $64,763.18. To satisfy the proposed treatment of her secured and unsecured creditors, the Debtor agreed to pay her excess income of $272 per month for sixty months. She explained the need for the sixty month period rather than the three year period provided in 11 U.S.C. § 1325(b)(1)(B) as follows: "Debtor states that `cause' exists under 11 U.S.C. Section 1322(d) to extend payments over a 60 month period. Debtor has incurred a hardship, and provides all net disposable income toward his [sic] 100% [sic] repayment plan."
The deadline for filing proofs of claim in the Debtor's Chapter 13 case was December 28, 1999. Only one creditor, Gulf State Credit, L.L.C. ("Gulf State Credit"), filed a proof of claim. The Debtor did not object to Gulf State Credit's unsecured, nonpriority claim in the amount of $12,262.65. Gulf State Credit assigned its claim to Resurgent Acquisition L.L.C., and, on January 18, 2000, a Notice to that effect was filed with the Court pursuant to Fed.R.Bankr.P. 3001(e)(2).
The Court confirmed the Debtor's Chapter 13 plan on August 10, 2000. The order confirming the plan specifically provided that "[t]he debtor(s) shall pay to the Chapter 13 Trustee the sum of$272.00 per month commencing October 1, 1999, which payments shall continue through completion of the Plan. . . ." The order also provided that "[t]he disbursements to be made by the Chapter 13 Trustee pursuant to the confirmed plan are set forth on the attached summary which is incorporated by reference." The Summary of Disbursements to be Made under the Plan set forth the following:
1. Modified Secured Claims
NONE
2. Unmodified Secured Claims
All holders of secured claims shall retain their liens(s) on their respective collateral. The debtor(s) shall continue to make regular monthly payments in accordance with the contract with the secured claims holder.Creditor Amount Description Term
Norwest Mortgage $1,261.00 Arrears 60 mos. Nationwide Mortgage $6,900.00 Arrears 60 mos.3. Administrative Claims
NONE4. Priority Claims
NONE
5. Unsecured Claims
The holders of unsecured claims total [sic] $64,763.18 shall receive a dividend [of] no less than 10%.6. Other Pertinent Provisions
NONE
(Emphasis Supplied).
III. POSITIONS OF THE PARTIES
The Debtor attempts to distinguish cases such as In re Martin, 232 B.R. 29 (Bankr. D. Mass. 1999), and In re Barbosa, 236 B.R. 540 (Bankr. D. Mass. 1999), aff'd, 235 F.3d 31 (1st Cir. 2000). She states the following in support of her contention that the Chapter 13 Trustee should refund her $4,814 stemming from overpayments:
The instant matter is distinguishable from Martin [sic]. The Plan proposed by DeVellis provides for payments over a 60 month period, not three years. DeVellis completed making payments of all her disposable income as required by the Bankruptcy Code over 18 months ago. Contrary to the situation in Barbosa [sic], even at this late date DeVellis' creditors still would receive no funds upon liquidation. The only creditor to have filed a claim in the proceeding has received the full amount it expected and has subsequently assigned its claim to a third party. DeVellis has made all payments she should be required to make.
As was recently stated by the 1st [sic] Circuit, bankruptcy law must strike an equitable balance between the debtor's rights, especially the right to a fresh start, and those rights enjoyed by creditors. In re Carvalho 355 F.3d 45, 51 (1st Cir. 2003) [sic]. Any exceptions to ensuring the fresh start should be narrowly construed. Id [sic] at 52, citing In re Pelkowsi 990 F.2d 737 (3rd Cir. 1993 [sic].
DeVellis is entitled to her fresh start now. Having been given no guidance by any person she has continued to make payments to the Chapter 13 Trustee well beyond the required three year period set forth in Section 1325(b)(1)(B). To the extent that the Barbosa [sic] decision states that all Chapter 13 plans are "pot plans" DeVellis urges this court to reject the statement.
The Chapter 13 Trustee objected to the Debtor's position on procedural and substantive grounds. Citing Martin, Barbosa, and In re Stamm, 265 B.R. 10 (Bankr. D. Mass. 2001), she states that the Debtor's plan is a pot plan and that the Debtor is obligated to make payments in accordance with its terms so long as there remain creditors who have not been paid in full.
IV. DISCUSSION
The Court finds that the Debtor's Chapter 13 plan and the confirmation order are unambiguous and susceptible to only one meaning. The Debtor proposed and obtained confirmation of a Chapter 13 plan requiring her to make monthly payments of $272 for sixty months. The confirmation order expressly provides that unsecured creditors are to receive a dividend of no less than 10%. The Debtor's interpretation of her plan and the confirmation order, and the relief she seeks, are devoid of merit and contrary to the plain language of the confirmation order and to established precedent in this district.
The Debtor's suggestion that her plan should be shortened and a refund made because only a single creditor filed a proof of claim, which was assigned to a third party prior to the entry of the confirmation order, is without legal support. Her plan is a pot plan because she proposed a pot plan and the Court confirmed a pot plan. There are no equities that would entitle her to modify her plan and obtain from the Chapter 13 Trustee a refund of monies paid in excess of a 10% dividend to the assignee of Gulf State Credit. Gulf State Credit and its assignee relied upon the plan she proposed and the order of confirmation which provided that there would be a dividend of no less than 10%, not a maximum dividend of 10%. Moreover, the Debtor sought and obtained Court approval to make payments over a sixty month term. She cannot now be heard to complain that the very period she requested is too long.
The Debtor appears to be mistaken as to when the claim was assigned. She implies that the claim was assigned after confirmation, but, in fact, it was assigned before the entry of the confirmation order.
The Debtor's Motion also is procedurally defective. In effect, the Debtor is proposing to modify her plan. She wants to shorten the term and reduce the dividend. The Debtor, however, failed to serve Gulf State Credit's assignee with a copy of her Motion. Additionally, she did not state that the continuation of the payments in accordance with the confirmation order would impose an undue hardship upon her.
Although the Debtor attempts to distinguish cases such as In re Martin, and In re Barbosa, the Debtor's case is factually indistinguishable from In re Stamm, a case in which the court relied upon those decisions in ruling on the joint debtors' motion to modify their Chapter 13 plan. In Stamm, the Court, citing Martin, Barbosa, and In re Witkowski, 16 F.3d 739 (7th Cir. 1994), determined that the debtors' plan, which contained the same general terms as the Debtor's plan in the instant case, was a pot plan. This Court adopts the reasoning set forth in Stamm. V. CONCLUSION
For the reasons set forth above, the Court shall enter an order denying the Debtor's Motion.