598 B.R. 459
Bankr. E.D. Wis.2019Background
- Debtor Kevin Wulff (chapter 12) listed CNH on his creditor matrix and Schedule D but his counsel provided an invalid address, so CNH did not receive notice of the case before the claims bar date.
- Non-governmental proofs-of-claim were due Feb 26, 2018; CNH filed two secured proofs of claim on March 15, 2018 (17 days late).
- Wulff filed a plan four days after CNH’s claims were docketed; the plan (and subsequent amendments) expressly provided for payments to CNH through the trustee.
- The chapter 12 trustee reviewed the plan, recommended confirmation, and the court confirmed the Third Amended Plan on July 23, 2018; no party appealed confirmation.
- The trustee later (Aug. 24, 2018) objected to CNH’s late claims; CNH and Wulff moved to enlarge claim deadlines (CNH under Rule 3002(c), Wulff under Rule 3004/Rule 9006).
- The court declined to grant statutory extensions on the merits but held the confirmation order’s res judicata effect bound the trustee and allowed CNH’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CNH’s late proofs of claim must be disallowed for untimeliness under Rule 3002/§502(b)(9) | Trustee: Late claims must be disallowed; failure to meet Rule 3002(c) bar date mandates denial | CNH/Wulff: Claims should be allowed because plan provides for CNH and extensions should be granted | Court: Although claims were untimely, confirmation order binds parties; trustee's objection overruled and claims allowed |
| Whether Rule 3002(c) deadline can be extended under Rule 9006(b)/3002(c)(6) for insufficient notice | CNH: Insufficient notice due to invalid address justifies extension under 3002(c)(6) | Trustee: Rule 3002(c)(6) applies only where debtor failed to timely file creditor list or notice was mailed to foreign address; neither is present | Court: CNH cannot satisfy the narrow 3002(c)(6) conditions (matrix was filed timely; address was domestic); no extension under Rule 3002(c)(6) |
| Whether debtor’s late filing of proofs for CNH under Rule 3004 can be excused as "excusable neglect" under Rule 9006(b)(1) | Wulff: Excusable neglect—lack of prejudice and goal of preserving confirmed plan justify extension | Trustee: Delay was within debtor’s control; debtor failed to act within Rule 3004 window and waited months before seeking relief | Court: Equitable factors cut against excusable neglect (delay, debtor control); Wulff’s Rule 3004 enlargement doubtful and unnecessary given confirmation ruling |
| Whether confirmation order bars collateral relitigation of claim treatment (res judicata/preclusive effect) | CNH/Wulff: Confirmed plan providing for CNH’s payment should be binding; trustee cannot undo plan post-confirmation | Trustee: Objected post-confirmation to enforce Rule 3002 timeliness | Court: Confirmation has res judicata effect (Espinosa/Harvey); trustee is bound and cannot relitigate — plan treatment controls |
Key Cases Cited
- In re Pajian, 785 F.3d 1161 (7th Cir.) (secured and unsecured creditors must file proofs of claim to participate in plan distributions)
- In re Harvey, 213 F.3d 318 (7th Cir.) (confirmed chapter 13 plan has res judicata effect against parties with notice who failed to object or appeal)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (confirmation orders are res judicata even if based on legal error when parties had opportunity to object)
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (standard for "excusable neglect"—equitable, multi-factor inquiry)