495 B.R. 839
Bankr. N.D. Ill.2013Background
- Hijjawi filed a voluntary Chapter 11 petition for relief and later converted to Chapter 7 with a discharge of debts.
- During the Chapter 11 period, Hijjawi incurred condo assessments and fees assessed by Five North Wabash Condominium Association.
- Five North moved to lift the automatic stay; the bankruptcy court extended stay and addressed dischargeability in the context of the stay extension.
- The bankruptcy court held that Chapter 11 period assessments and fees were non-dischargeable under 11 U.S.C. § 523(a)(16) and § 727.
- Hijjawi appealed after discharge; the district court determined it had jurisdiction and affirmed the bankruptcy court’s decision.
- The central issue is whether post-petition, pre-conversion condominium assessments survive the Chapter 7 discharge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court had jurisdiction to review dischargeability | Hijjawi asserts due process and waiver arguments about adjudicating dischargeability in a stay context. | Five North contends waiver and adequate notice render the appeal proper and jurisdiction proper. | Jurisdiction proper; waiver and adjudication occurred. |
| Whether Chapter 11 period assessments are dischargeable under § 523(a)(16) | Hijjawi argues § 348(b) and § 523(a)(16) should allow discharge of pre-conversion post-petition debts. | Five North argues § 523(a)(16) excludes post-petition condominium fees, despite § 348(b) treatment of pre-petition status. | Chapter 11 period assessments are non-dischargeable under § 523(a)(16). |
| What is the effect of 11 U.S.C. § 348(b) on the date of relief for dischargeability analysis | Hijjawi contends § 348(b) alters the 'order for relief' date for dischargeability. | Five North argues § 348(b) only modifies certain sections and does not alter § 523(a)(16) discharge. | § 348(b) does not modify the 'order for relief' for § 523(a)(16); date remains initial filing. |
| Whether legislative history supports dischargeability of post-petition condo fees | Hijjawi relies on legislative history to argue for a broader fresh-start. | Five North emphasizes amendments to § 523(a)(16) to protect associationss, supporting non-dischargeability. | Legislative history supports non-dischargeability under § 523(a)(16). |
Key Cases Cited
- U.S. Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (adversary-proceeding requirement may be waived with notice and opportunity to be heard)
- Pence, 905 F.2d 1107 (7th Cir. 1990) (waiver of adversary proceeding allowed when protections exist)
- Vitreous Steel Products Co., 911 F.2d 1223 (7th Cir. 1990) (adversary proceedings can be waived; differs from this case)
- Fickling, 361 F.3d 172 (2d Cir. 2004) (post-petition pre-conversion debts largely dischargeable absent § 523 exemptions)
- Cross, 119 B.R. 652 (W.D. Wis. 1990) (section 348(b) does not apply to section 523; dischargeability interplay)
- Pavlovich, 952 F.2d 114 (5th Cir. 1992) (section 348(d) priorities; distinguish administrative vs. non-admin claims)