State of Florida Department of Revenue v. Irain Lazaro Gonzalez
832 F.3d 1251
11th Cir.2016Background
- Irain Gonzalez filed Chapter 13 and confirmed a First Amended Plan that provided for full payment of a domestic support obligation (DSO) arrearage and direct child-support payments to the obligee.
- After confirmation, the Florida Department of Revenue (DOR) filed a proof of claim for DSO arrears and later intercepted Gonzalez’s $4,700 work-related travel reimbursement.
- Gonzalez moved to hold the DOR in contempt; the DOR released the funds but disputed that its conduct violated the automatic stay or the confirmed plan.
- The bankruptcy court held the DOR in contempt for violating the confirmed plan and awarded attorney’s fees; the district court affirmed.
- On appeal, the question presented was whether the § 362(b)(2)(C) exception to the automatic stay (allowing DSO collection post-petition) authorizes DSO collection after confirmation despite the binding effect of a confirmed Chapter 13 plan under § 1327(a).
Issues
| Issue | Plaintiff's Argument (Gonzalez) | Defendant's Argument (DOR) | Held |
|---|---|---|---|
| Whether § 362(b)(2)(C) permits a DSO creditor to collect from estate/debtor property after plan confirmation | § 1327(a) binds creditors to the confirmed plan; post-confirmation collection that contradicts plan terms violates the plan and may be sanctioned | § 362(b)(2)(C) (and BAPCPA intent) allows DSO collection post-petition and Congress did not intend confirmation to abrogate that exception | The DOR did not violate the automatic stay but did violate the confirmed plan; § 1327(a)’s binding effect prevents post-confirmation collection inconsistent with the plan |
Key Cases Cited
- Carver v. Carver, 954 F.2d 1573 (11th Cir. 1992) (pre-BAPCPA decision recognizing limited effect of pre-BAPCPA § 362 exception in Chapter 13)
- In re Rodriguez, [citation="367 F. App'x 25"] (11th Cir. 2010) (post-confirmation DSO collection violated confirmed plan; attorney’s fees awarded)
- In re Gellington, 363 B.R. 497 (Bankr. N.D. Tex. 2007) (after BAPCPA, § 362(b)(2)(C) does not negate § 1327(a); confirmed plan binds creditor despite statutory stay exception)
- In re McGrahan, 459 B.R. 869 (B.A.P. 1st Cir. 2011) (concluding a confirmed plan must explicitly address interceptions to preclude certain post-petition DSO collections)
- In re Enewally, 368 F.3d 1165 (9th Cir. 2004) (confirmed plan has no preclusive effect where plan did not provide adequate notice to creditor)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (confirmed plan’s finality and res judicata effect upon becoming final)