511 B.R. 556
Bankr. W.D. Wis.2014Background
- Debtors Earl and Denise Oliver filed a Chapter 7 petition on January 24, 2013.
- Oliver owns a one-third undivided interest in eighty acres of real estate on which they reside; at one time they rented 66 acres.
- Debtors initially claimed exemption in the property under 11 U.S.C. § 522(d)(1) and later amended to Wis. Stat. § 815.20; Trustee objected to the amended exemptions.
- Parties disputed the amount of acreage reasonably necessary for a home site; minimum township requirement determined to be 1.5 acres.
- Settlement was reached: Debtors would pay $40,000 to the Trustee within ten days of court approval, with no exemption in the settlement funds; Trustee would withdraw objections and abandon estate’s interest; settlement approved January 7, 2014; payment made around January 29, 2014.
- To fund the settlement, Debtors sold approximately 20 acres for $45,000; Debtors filed Claim 6-11 on February 24, 2014 seeking $15,006.03 related to the sale (taxes, attorney’s fees, and judgment liens).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of the proof of claim | Oliver | Oliver | Late claims disallowed; no extension sought |
| Real estate taxes as priority under 507(a)(8) | Oliver sought priority as government unit equivalent | Trustee objected; tax claim not a governmental unit or unsecured priority | Real estate taxes denied priority; not a governmental unit and not unsecured under 507(a)(8) |
| Treatment of judgments within the claim | Oliver | Trustee | Portion overstated; remaining portions disallowed due to lack of timely filing and other defects |
| Attorney’s fees as estate professional compensation | Ritland fees relate to settlement | No proper trustee employment or approval; not compensable from estate | No entitlement to attorney’s fees; not employed under §327/§330 |
| Debtors’ eligibility to file a claim | Debtors may file on their own behalf | Debtors cannot file against themselves or be creditors | Debtors cannot be creditors; claim disallowed in its entirety |
Key Cases Cited
- In re Simpkins, 448 B.R. 84 (Bankr.N.D.Ga.2011) (untimely claims disallowed absent extensions)
- In re Feldman, 261 B.R. 568 (Bankr.E.D.N.Y.2001) (timeliness and extensions discussed)
- In re Lettieri, 506 B.R. 210 (Bankr.W.D.N.Y.2014) (priority for governmental tax claims and subrogation limits)
- In re Sarnovsky, 436 B.R. 461 (Bankr.N.D.Ohio 2010) (definition of creditor and eligibility to file proofs of claim)
- In re Daniel, 2012 WL 4849965 (Bankr.M.D.Ala.2012) (limitations on priority and assignment of tax claims)
- In re Barnes, 304 B.R. 491 (Bankr.N.D.Ala.2004) (subordination and priority considerations for tax claims)
- In re Waite, 698 F.2d 1177 (11th Cir. 1983) (subrogation does not grant priority rights)
- In re Griffin, 313 B.R. 757 (Bankr.N.D.Ill.2004) (trustee employment prerequisites and §330 compensation)
- In re Elmont Elec. Co., 206 B.R. 41 (Bankr.E.D.N.Y.1997) (rules on extensions and bar dates (preference context))