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534 B.R. 354
8th Cir. BAP
2015
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Background

  • Jessica Robb filed Chapter 7 on March 6, 2014; Janice Harder was appointed trustee and discovered a defect in the deed of trust on the debtor's home.
  • Robb moved to convert to Chapter 13; the court granted the motion and the case converted on June 24, 2014.
  • Robb filed a Chapter 13 plan using the model "liquidation analysis pot" treatment, requiring $590/month to the trustee for plan duration.
  • Trustee Harder filed a $450 unsecured priority proof of claim for time spent investigating avoidance of lien, exemption issues, and related work; Robb objected, arguing trustee compensation must follow 11 U.S.C. § 326 and that no money was disbursed pre-conversion.
  • The bankruptcy court overruled the objection, reasoning § 326(a) is not the exclusive source of trustee compensation and that allowing the claim promotes diligence and discourages concealment of assets.
  • The debtor appealed; the panel concluded Robb lacked appellate standing because she failed to show she was "aggrieved"—the trustee's claim did not diminish her property, increase her burdens, or impair her rights under the plan.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Robb has standing to appeal allowance of trustee's claim Robb argued trustee's claim is improper under § 326 and should be disallowed; she appealed the allowance Trustee maintained the claim is permissible despite § 326 and was properly allowed Robb lacked appellate standing; appeal dismissed for lack of jurisdiction
Whether § 326(a) is the exclusive basis for trustee compensation Robb contended § 326 governs trustee compensation and applies only to disbursements, so no compensation was due pre-conversion Court and trustee argued § 326 is not exclusive and a trustee may be compensated for services even if no moneys were disbursed Bankruptcy court held § 326(a) is not the only compensation method and allowed the claim (substantive ruling upheld but not reached on appeal due to lack of standing)

Key Cases Cited

  • Nebraska v. Strong (In re Strong), 305 B.R. 292 (8th Cir. BAP) (discussing the panel's duty to examine jurisdiction)
  • Sears v. Badami (In re AFY), 734 F.3d 810 (8th Cir.) (person-aggrieved appellate-standing standard in bankruptcy)
  • Weihs v. Kenkel (In re Weihs), 229 B.R. 187 (8th Cir. BAP) (jurisdictional review principles)
  • LaBarge v. Benda (In re Merrifield), 214 B.R. 362 (8th Cir. BAP) (appellant's burden to show they are aggrieved)
  • Williams v. Marlar (In re Marlar), 267 F.3d 749 (8th Cir.) (defining "person aggrieved" as those pecuniarily and directly affected)
  • Kieffer v. Riske (In re Kieffer-Mickes), 226 B.R. 204 (8th Cir. BAP) (debtor generally lacks standing to object to claims absent a surplus)
Read the full case

Case Details

Case Name: Robb v. Harder (In re Robb)
Court Name: United States Bankruptcy Appellate Panel for the Eighth Circuit
Date Published: Jul 16, 2015
Citations: 534 B.R. 354; 2015 WL 4287950; BAP No. 15-6003
Docket Number: BAP No. 15-6003
Court Abbreviation: 8th Cir. BAP
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