Camille Hope v. Acorn Financial Inc., 731 F.3d 1189

Debtor Ricky Fluellen bought a car financed by Acorn Financial, which obtained a security interest but perfected title six days after Fluellen filed Chapter 13 bankruptcy.
Acorn filed a proof of claim listing a secured interest; the Chapter 13 trustee Camille Hope learned before confirmation that Acorn’s lien may have been unperfected at filing.
Fluellen proposed a Chapter 13 plan that treated Acorn as a secured creditor; the trustee reviewed the plan and recommended confirmation despite her knowledge of the perfection defect.
The bankruptcy court confirmed the plan, vesting estate property in the debtor under 11 U.S.C. § 1327(b).
About a week after confirmation the trustee filed an adversary action to avoid Acorn’s lien as preferential and to reclassify the claim as unsecured.
The bankruptcy court and the district court held the trustee was bound by the confirmed plan and granted summary judgment to Acorn; the Eleventh Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a Chapter 13 trustee is bound by a confirmed plan when the trustee knew before confirmation of defects in a creditor’s security interest but did not object and recommended confirmation	Hope: § 1327(a) text omits trustees, so trustees are not bound and may bring post-confirmation avoidance actions within § 546(a) limitations	Acorn: Confirmation and res judicata bind the trustee when she had pre-confirmation knowledge and failed to object and recommended confirmation	The trustee is bound under these facts; pre-confirmation knowledge plus affirmative recommendation and failure to object precludes post-confirmation avoidance action
Whether the Russello presumption (silence implies exclusion) requires excluding trustees from § 1327(a)	Hope: Omission of trustee from § 1327(a) is intentional; courts should not add language	Acorn: Other Chapter 13 provisions (e.g., duties to distribute, ability to move to modify) and practical finality weigh against treating trustee as excluded	The court rejects a rigid Russello reading here; contextual statutory interpretation and precedent show confirmation can bind trustees in these circumstances

Litton v. Wachovia Bank (In re Litton), 330 F.3d 636 (4th Cir. 2003) (describing Chapter 13 participants and trustee role)
Universal Mortg. Co. v. Bateman (In re Bateman), 331 F.3d 821 (11th Cir. 2003) (confirmed Chapter 13 plan has res judicata effect)
Wallis v. Justice Oaks II, Ltd. (In re Justice Oaks II, Ltd.), 898 F.2d 1544 (11th Cir. 1990) (failure to object before confirmation waives post-confirmation challenge)
Simmons v. Savell (In re Simmons), 765 F.2d 547 (5th Cir. 1985) (claims must be allowed or disallowed before confirmation or are deemed allowed for plan purposes)
Celli v. First Nat. Bank of N. Y. (In re Layo), 460 F.3d 289 (2d Cir. 2006) (trustee aware of defect who fails to object is precluded from post-confirmation avoidance)
Russello v. United States, 464 U.S. 16 (1983) (canon that expression of one thing implies exclusion of others)
United States Sav. Ass'n v. Timbers of Inwood Forest Assocs., 484 U.S. 365 (1988) (statutory interpretation is holistic)