In re: Nancy Adinolfi
EC-15-1091-JuFD
9th Cir. BAPJan 19, 2016Background
- Debtor Nancy Adinolfi receives $1,422/month in Adoption Assistance paid by Merced County under California law; federal Title IV‑E funds (the FMAP) contribute roughly 50% of program funding.
- Adinolfi filed Chapter 13 proposing a $935/month plan that would pay 0% to unsecured nonpriority creditors; she excluded Adoption Assistance from "current monthly income."
- Chapter 13 trustee Michael Meyer objected, arguing the Adoption Assistance must be included in the means‑test calculation.
- Bankruptcy Court sustained the trustee’s objection and denied confirmation; debtor appealed.
- The Ninth Circuit BAP majority held Adoption Assistance are "benefits received under the Social Security Act" and therefore excluded from current monthly income under 11 U.S.C. § 101(10A)(B); decision reversed and remanded to include that exclusion.
Issues
| Issue | Plaintiff's Argument (Adinolfi) | Defendant's Argument (Trustee) | Held |
|---|---|---|---|
| Whether Adoption Assistance payments are "benefits received under the Social Security Act" within § 101(10A)(B) | The payments are governed by federal SSA Title IV‑E requirements and federal funds are part of the payments, so they are SSA benefits and excluded from current monthly income | Because checks come from the county/state (not the SSA or federal government directly) and states administer the program, the payments are state benefits and must be included in income | Held: Payments qualify as "benefits received under the Social Security Act" and are excluded from current monthly income; bankruptcy court’s contrary ruling reversed. |
Key Cases Cited
- Lamie v. U.S. Trustee, 540 U.S. 526 (statutory‑text focus in interpretation)
- Bullard v. Blue Hills Bank, 135 S. Ct. 1686 (leave required for interlocutory appeals of plan confirmation denials)
- Quintana v. Comm’r, 915 F.2d 513 (de novo review of statutory interpretation; clear error for facts)
- Blausey v. U.S. Trustee, 552 F.3d 1124 (interpretation of current monthly income exclusions)
- Drummond v. Welsh (In re Welsh), 711 F.3d 1120 (payments made by SSA excluded from current monthly income based on source/administration)
- United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., 484 U.S. 365 (holistic statutory construction)