Microf LLC v. Paul L. Cumbess, 960 F.3d 1325

Background

Debtor Paul Cumbess leased an HVAC unit from Microf and filed Chapter 13 in Aug. 2017; his confirmed plan stated he would "assume" the lease and personally make future lease payments while pre-petition arrears would be paid pro rata by the Chapter 13 trustee.
The Chapter 13 trustee did not separately assume the Microf lease before plan confirmation.
Cumbess defaulted on post-petition payments; Microf sought administrative-expense priority for those missed payments under 11 U.S.C. § 503(b)(1)(A) and priority under § 507(a)(2).
The bankruptcy court denied Microf’s motion, concluding § 365(p)(1) means an unexpired personal-property lease not timely assumed by the trustee is no longer property of the estate, and Microf failed to show the lease conferred an actual benefit on the estate.
The district court affirmed; the Eleventh Circuit likewise affirmed, holding the word "trustee" in § 365(p)(1) means the Chapter 13 trustee (not the debtor) and that Microf’s administrative-expense claim failed.

Issues

Issue	Plaintiff's Argument (Microf)	Defendant's Argument (Trustee/Cumbess)	Held
Whether "trustee" in 11 U.S.C. § 365(p)(1) should be read to mean the debtor such that a debtor's plan assumption keeps a lease in the estate	"Trustee" should be read to mean the Chapter 13 debtor/plan so debtor's assumption binds the estate	"Trustee" means the Chapter 13 trustee; only the trustee can timely assume on behalf of the estate; if trustee doesn't assume, the lease exits the estate	The court held "trustee" means trustee; if trustee does not timely assume, the lease drops out of the estate under § 365(p)(1)
Whether § 365(p)(3) (deeming rejection when debtor does not assume in plan) implies the inverse (that debtor assumption alone keeps lease in estate)	§ 365(p)(3) shows Congress intended plan assumption to prevent rejection; so plan assumption keeps lease in estate	§ 365(p)(3) does not logically imply the inverse; that is a fallacy of denying the antecedent and ignores § 365(p)(1)'s separate role for trustee assumption	Rejected Microf's inference; § 365(p)(3) addresses debtor-plan rejection consequences, but § 365(p)(1) governs trustee assumption on behalf of the estate
Whether textual canons or congressional intent require treating "trustee" as "debtor" despite plain text	Prior Chapter 13 practice and commentary support debtor assumption binding estate; changing that upends practice	Statutory text is clear; other Code provisions distinguish debtor and trustee (e.g., § 1303); courts must follow enacted text	Court relied on plain text and whole-text canons; Congress used distinct words intentionally; § 365(p)(1) controls
Whether Microf established the alternative basis for administrative expense (actual, necessary benefit to the estate) even if lease left the estate	Assumed lease remained in estate, so post-petition payments are administrative expenses	Even if lease left estate, Microf failed to prove payments conferred an actual, necessary benefit to the estate	Microf failed to show an actual, concrete benefit to the estate; administrative-expense claim therefore fails

Key Cases Cited

Dean v. United States, 556 U.S. 568 (U.S. 2009) (courts should not supply words omitted by Congress)
Hall v. United States, 566 U.S. 506 (U.S. 2012) (identical words in a statute should normally be given the same meaning)
Barnhart v. Peabody Coal Co., 537 U.S. 149 (U.S. 2003) (expressio unius canon supports inference that omitted items were excluded)
Puerto Rico v. Franklin California Tax-Free Trust, 136 S. Ct. 1938 (U.S. 2016) (plain text of Bankruptcy Code governs statutory interpretation)
In re Int’l Pharm. & Disc. II, Inc., 443 F.3d 767 (11th Cir. 2005) (standard of review for bankruptcy appeals)
In re Parmenter, 527 F.3d 606 (6th Cir. 2008) (contrasting view on whether Chapter 13 debtors can obligate estate by assuming a lease)
Regions Bank v. Legal Outsource PA, 936 F.3d 1184 (11th Cir. 2019) (apply whole-text canon; consider statute as an integrated text)