544 B.R. 245
Bankr. D.C.2015Background
- Debtor filed Chapter 13 on Sept. 2, 2009. An $80,000 promissory note (interest-only) secured by debtor real property required only principal due on petition date if interest payments were current. Claimants Djourabchi and Welt filed a proof of claim listing $80,000 (no arrears); later they asserted prepetition arrears after the plan payments were completed and trustee’s final report filed.
- Debtor’s confirmed plan treated the note as a direct-pay §1322(b)(5) claim (paragraph C): the debtor would pay the creditor directly rather than the trustee curing arrears through plan distributions.
- Debtor moved to (1) determine final cure/payment and (2) bar claimants from asserting any prepetition arrears (and recover fees) based on Rule 3001(c)(2)(B)/(D) and judicial estoppel, arguing he would have planned differently had arrears been listed.
- Claimants’ proof of claim omitted a statement of the amount needed to cure defaults as required by Rule 3001(c)(2)(B). Debtor sought remedies under Rule 3001(c)(2)(D) (preclusion or fees) and judicial estoppel.
- Court concluded the chapter 13 plan had been fully administered; there is no pending contested matter in this bankruptcy to adjudicate the amount of arrears, and therefore the court lacks jurisdiction to determine the arrears now. The motion was denied (fees requested denied with prejudice; other relief denied without prejudice as to later, properly shown fee claims).
Issues
| Issue | Debtor's Argument | Djourabchi & Welt's Argument | Held |
|---|---|---|---|
| Whether failure to state cure amount on proof of claim permits disallowance or preclusion of asserting arrears now | Rule 3001(c)(2)(D)(i) authorizes preclusion of omitted information and thus should bar assertion of arrears | Rule 3001 remedies are evidentiary/sanctioning and do not authorize disallowance of claims; disallowance is governed by §502(b) | Court: Rule 3001(c)(2)(D) does not authorize disallowance; preclusion remedy applies only in a merits contest where evidence would be offered, which is not available here because case administration is complete |
| Whether bankruptcy court has jurisdiction to determine amount of alleged prepetition arrears post-plan completion | Court should decide the legal effect of omission and bar collection; debtor seeks determination of amounts | Claim amount determination would not affect estate administration because plan completed; therefore no "related to" or "arising in" jurisdiction remains | Court: No subject-matter jurisdiction under 28 U.S.C. §1334(b) to determine arrears now; proceeding would not be related to or arise in the case |
| Whether debtor may recover attorneys’ fees under Rule 3001(c)(2)(D)(ii) for pursuing this motion | Fees were caused by creditor’s failure to include required info; debtor seeks fees and an order to compel amended proof of claim | Fees may be recoverable only if reasonably incurred and causally connected to the omission; court lacks present jurisdiction to compel amended claim | Court: Fee request denied with prejudice because motion lacked merit; court will not order amended proof of claim now; debtor may reassert a properly supported fee claim later (without relief on current motion) |
| Whether judicial estoppel prevents claimants from asserting arrears | Judicial estoppel should bar inconsistent assertion of arrears now given prior proof of claim omission | Judicial estoppel is a defense that requires an existing proceeding or later inconsistent litigation; no present bankruptcy proceeding to apply it | Court: Judicial estoppel not applicable in this case; debtor may raise it in future litigation if appropriate |
Key Cases Cited
- In re Reynolds, 470 B.R. 138 (Bankr. D. Colo. 2012) (Rule 3001(c) remedies are evidentiary; rule does not permit disallowance of claims)
- In re Brunson, 486 B.R. 759 (Bankr. N.D. Tex. 2013) (2011 amendments to Rule 3001 clarified and streamlined existing discovery and sanction remedies; the rule is procedural)
- In re Critten, 528 B.R. 835 (Bankr. M.D. Ala. 2015) (failure to supply Rule 3001(c) info does not permit an independent cause of action for disallowance)
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) ("related to" jurisdiction test: proceeding is related if outcome could conceivably affect estate)
- In re Matteson, 535 B.R. 156 (6th Cir. BAP 2015) (creditor's failure to file proof of claim under a plan providing for cure may waive right to distributions but does not void lien or alter amount owed)
- In re Johnston, 484 B.R. 698 (Bankr. S.D. Ohio 2012) (§157 does not create jurisdiction where §1334 jurisdiction is lacking)