Susan H. Mello v. Paul M. Wojciechowski
16-6037
| 8th Cir. | Jun 15, 2017Background
- Debtors Paul and Mary Wojciechowski filed Chapter 13 in April 2016 and listed attorney Susan H. Mello as an unsecured creditor for prepetition divorce fees.
- Mello filed multiple motions, objections, and an adversary proceeding; key filings here were her amended motion to dismiss the bankruptcy and her amended objection to confirmation of Debtors’ second amended Chapter 13 plan.
- Mello alleged bad faith, errors/omissions in schedules and testimony, failure to apply disposable income to plan payments, infeasibility, and unpaid domestic support obligations (DSOs).
- At a hearing the bankruptcy court denied Mello’s amended motion to dismiss, overruled her objections to confirmation, and confirmed the second amended plan (order entered Oct. 21, 2016); denial of a motion to amend followed and Mello timely appealed.
- The bankruptcy court declined to hold an evidentiary hearing, explaining the record and parties’ submissions were adequate and Mello did not identify what additional evidence she would present.
- The bankruptcy appellate panel affirmed, finding no abuse of discretion in denying an evidentiary hearing and no clear error in overruling Mello’s objections.
Issues
| Issue | Plaintiff's Argument (Mello) | Defendant's Argument (Debtors/Trustee) | Held |
|---|---|---|---|
| Whether bankruptcy court erred by refusing an evidentiary hearing on confirmation | Mello argued an evidentiary hearing was required to resolve alleged errors/omissions and good-faith concerns | Court and trustee argued the record and oral argument sufficed and Mello never specified additional evidence she would proffer | Denied—no abuse of discretion; hearing not required given record and Mello’s failure to specify additional evidence |
| Whether trustee’s failure to join Mello’s objections meant court didn’t consider them | Mello claimed court relied on trustee’s silence and thus ignored her objections | Debtors/trustee noted trustee has statutory investigatory role; silence does not negate consideration of objections | Denied—court considered objections; comments about trustee were context, not a refusal to consider objections |
| Whether plan was proposed in good faith | Mello asserted schedule errors/omissions and testimony showed lack of good faith | Debtors argued amendments and changing circumstances are common; trustee reviewed filings and raised no dispositive objection | Overruled Mello’s objection—court had a permissible view of facts; not clearly erroneous |
| Whether Debtors failed to pay required post-petition domestic support obligations (DSOs) | Mello alleged DSOs were unpaid and plan thus nonconfirmable | Debtors/trustee noted no specific unpaid amounts identified and ex-spouse (most knowledgeable party) did not object | Overruled—Mello offered only vague/hypothetical claims; no factual showing of unpaid post-petition DSO |
Key Cases Cited
- In re Ungar, 633 F.3d 675 (8th Cir.) (standard of review for bankruptcy factual findings and legal conclusions)
- Noreen v. Slattengren, 974 F.2d 75 (8th Cir.) (discretion of bankruptcy court to decide when evidentiary hearing on good faith is necessary)
- In re Netal, Inc., 498 B.R. 225 (B.A.P. 8th Cir.) (abuse-of-discretion review for denial of evidentiary hearings)
- In re Yehud-Monosson USA, Inc., 458 B.R. 750 (B.A.P. 8th Cir.) (party seeking hearing must identify additional evidence to be offered)
- Fonder v. United States, 974 F.2d 996 (8th Cir.) (liberal construction of oral findings supportive of judgment)
- Anderson v. City of Bessemer City, 470 U.S. 564 (U.S. 1985) (appellate deference where two permissible views of the evidence exist)
- Reuter v. Cutcliff, 686 F.3d 511 (8th Cir.) (issues not meaningfully argued in opening brief are waived)