544 B.R. 751
Bankr. D.P.R.2015Background
- Debtor filed a Chapter 13 petition on July 24, 2015 and proposed a plan stating the $310 filing fee would be paid through the plan by the Chapter 13 Trustee as an administrative expense.
- Debtor filed Official Form B 3A (application to pay filing fee in installments), indicating payment "on or before 11/21/15" through the Trustee; the form was electronically signed.
- Court initially denied the application on July 27, 2015 for noncompliance with local rule P.R. LBR 1006-1 and Fed. R. Bankr. P. 1006; Debtor moved for reconsideration.
- On July 30, 2015 the court granted reconsideration and ordered the filing fee paid in full within 120 days of the petition either by the Trustee from available funds or directly by the Debtor, with dismissal possible under § 1307(c)(2) for noncompliance.
- Trustee filed a Rule 59(e) motion to alter or amend the July 30 order, arguing (1) the B 3A form was unsigned/wrongly modified, (2) the Debtor’s schedules showed she could pay sooner by cutting discretionary expenses, and (3) the order was unclear about how the Trustee should make payments through the plan.
- Debtor later paid the $310 fee on October 23, 2015; the court nonetheless addressed the Trustee’s challenge to its legal ruling on permitting payment through the plan within 120 days.
Issues
| Issue | Plaintiff's Argument (Trustee) | Defendant's Argument (Debtor) | Held |
|---|---|---|---|
| Whether the court erred in permitting payment of the filing fee through the Chapter 13 plan within 120 days | B3A was improperly modified/unsigned; schedules show sufficient discretionary income to pay earlier; order ambiguous about Trustee’s payment duties | Rule 1006 permits payment through the plan; B3A may state “payment through plan”; electronic signature is valid; unforeseen vehicle repairs justify delay | Denied motion to alter/amend. Court held payment through a Chapter 13 plan within 120 days is permitted under Fed. R. Bankr. P. 1006(b) and the order complied with that rule. |
| Whether Trustee’s Rule 59(e) motion showed manifest error or new evidence warranting reversal | The order misapplied Rule 1006 and 28 U.S.C. § 1930; Trustee identified legal and factual errors | Trustee’s contentions do not demonstrate manifest error nor present newly discovered evidence; the court’s ruling accords with Rule 1006 and §1325(a)(2) | Motion under Rule 59(e) denied for failure to meet the narrow standard (no clear error or new evidence). |
| Whether debtor’s electronic signature satisfied signature requirements for the B3A application | B3A lacked a wet signature and thus noncompliant | Electronic signature complies with Fed. R. Bankr. P. 5005(a)(2) and local rule P.R. LBR 5005-4(j) | Electronic signature held valid; form considered properly signed. |
| Whether local rule P.R. LBR 1006-1 required denial despite federal rule | Local rule demands a $50 payment at filing inconsistent with FRBP 1006(b) | Fed. R. Bankr. P. 1006 controls; local rule cannot be enforced to frustrate federal rule; local rule ambiguous as applied to Chapter 13 | Court granted reconsideration because local rule conflicted with federal Rule 1006(b); federal rule governs. |
Key Cases Cited
- Van Skiver v. United States, 952 F.2d 1241 (10th Cir. 1991) (distinguishes Rule 59(e) and Rule 60(b) timing and effect)
- In re Pabon Rodriguez, 233 B.R. 212 (Bankr. D. P.R. 1999) (discusses standards and narrow scope for reconsideration motions)
- Aybar v. Crispin-Reyes, 118 F.3d 10 (1st Cir. 1997) (Rule 59(e) relief limited to correcting manifest error or newly discovered evidence)
- BBVA v. Vazquez (In re Vazquez), 471 B.R. 752 (1st Cir. BAP 2012) (motions to alter/amend are narrowly construed and often denied)