*1 allow Debtor to cludes that lien position impairs cord’s the Concord However, the lien of Portfolio and completely exemption. only avoid Debtor’s partially portion judicial the lien of Concord. that impairs avoid lien See, exemption may be avoided. In re reading Bankruptcy plain A (1st Silveira, Cir.1998). position. supports Concord’s judicial lien, The sum of Concord’s 522(f)(1)(A) language author of Subsection $16,305.00, (Homecomings), all other liens judicial izes the avoidance of one lien at a $76,405.00, exemption, and the Debtor’s 522(f)(2)(B) time, expressly and Subsection $100,710.00. $8,000.00, agreed val- prior avoided liens the cal excludes $100,000.00. property ue of the Under in the formula in culations Sub formula, statutory judicial Concord’s 522(f)(2)(A). Therefore, impairs exemption lien Debtor’s 522(f)(1), judicial Section that is to lien may extent The Debtor avoid $710.00. in multiple first lien considered judicial in lien of Concord the amount judicial is the that is process avoidance lien the lien in and remains $710.00 positioned priority among at the lowest $15,595.00. Therefore, amount of judicial In the matter being liens. consid here, positioned ered Portfolio as the IT IS ORDERED Debtor’s mo- judicial priority holder lowest judicial lien. tion to liens avoid the of Concord part; Portfolio is agreed the amounts Based Parties, applying and after the statuto- That judicial lien of Portfolio is ry judicial formula to the least senior lien entirety; avoided its in this judicial the Court finds that judicial That lien of Concord is lien of Portfolio is be avoided its avoided to the extent of and re- $710.00 entirety. The sum of the liens and the judicial mains as a lien that secures exemption Debtor’s is as follows: $15,595.00; amount of all other 76,405.00 Homecomings First Deed of Trust $ requests in matter are denied. 16,305.00 Concord Judicial Lien $ 14,156.00 Portfolio Judicial Lien !! 8,000.00 $ Exemption Homestead $114,866.00 TOTAL agreed value of the Debtor’s inter- est the absence of Anthony TRAN, In re T. Debtor. $100,000.00.
liens is
The above total ex-
ceeds the value of the Debtor’s
interest
Cohen, Chapter
Amrane
$14,866.00.
amount of
Trustee, Appellant,
The amount of the debt owed to Portfolio
v.
judicial
($14,-
is secured
its
lien
Anthony
Tran, Appellee.
156.00)
T.
$14,866.00.
than
is less
The Port-
folio
impairs
lien therefore
the Debtor’s
BAP No. CC-03-1521-BMAJ.
Kolich,
exemption. See
would be used
motion,
granted the
creditors. The court
had been remitted
and after the
*3
he could distrib-
the trustee but before
his
debtor dismissed
proceeds,
ute the
money?
gets the
case. Who
court held that
bankruptcy
The
upon
in debtor
funds revested
to turn over the
and ordered the Trustee
him, in accordance with In re
proceeds to
Cir.1985).
We
I. FACTS
chapter
Tran
his
Anthony
Debtor
filed
for 42
petition
and
which called
provided
for a 16%
monthly payments
to unsecured creditors.
dividend
years
after his
Approximately two
confirmed,
permission
Tran moved for
mortgage.
home
The
to refinance his
motion, filed under
Trustee received the
approv-
l(p),
LBR
and recommended
3015—
al,
used to:
proceeds
...
pay only the liens
and usual
customary
charges.
fees and
escrow
Isaacson,
Perry
Dreyfuss, Ryan &
Misty
Motion,
percentage to
Pursuant
Weifenbach,
Ana, CA, for Amrane
Santa
creditors increases to 100%.
unsecured
Cohen, Chapter 13 Trustee.
trustee will make de-
Chapter
The
BRANDT, MARLAR,
Before:
to be dis-
proceeds
mand for all net
JAROSLOVSKY,1
Judges.
Bankruptcy
Debtor(s)’
pursuant
bursed to
Debtor(s)’
Upon the
confirmed
OPINION
case, all
final audit of Debtor’s
Trustee’s
BRANDT,
Judge.
Bankruptcy
funds,
any,
will be refunded
remaining
Debtor(s).
Chapter
13 trus-
rep
this case the
132 debtor
addi-
to demand
motion to
tee reserves
post-confirmation
resented
indication,
contrary
all
Jaroslovsky, Bankruptcy Judge
2. Absent
1. Hon. Alan
Bankruptcy
California,
references are to the
sitting
for the Northern District of
Code,
§§
U.S.C.
101-1330. References
by designation.
Bankruptcy Rules for
are to the Local
"LBR”
the Central District of California.
necessary
funds as
review of
tional
III.ISSUES
with
Register
Claims
on file
A.
bankruptcy
Did the
in rul-
err
of the
Clerk
Court.
ing that debtor was
re-
entitled to
proceeds
ceive
of the refinance
the motion
bankruptcy
349(b)(3)?
modified
comments”
“as
the Trustee’s
(“Refinance Order”).
B.
Did
court abuse its
closed,
not “ordering
the Trustee received
discretion
other-
$26,057.83,
respect
revesting
but before he made
dis
wise”
tributions,
debtor
case under
dismissed his
refinance?
1307(b).3
*4
OF
IV.STANDARD
REVIEW
Trustee then
motion to
The
noticed his
statutory
We review issues of
con
rata to
pro
distribute
funds
hand
law, including
struction and conclusions of
creditors,
pay-
after
debtor’s unsecured
Code,
interpretation
of the
de
ment
Trustee’s administrative fee
(9th
Staffer,
80,
novo. In re
262 B.R.
82
claims,
contemplated
and secured
as
(9th
2001), aff'd,
Cir. BAP
II.JURISDICTION
proceedings,
dismissal
certain
reinstates
liens,
transfers,
bankruptcy
jurisdiction
court had
voided
avoided
and vacates
157(b)(1)
§
via
U.S.C.
1334
28
various orders. Dismissal also revests es
(b)(2)(A)
(O),
entity
under 28 tate
was
property
we do
which it
158(c).
immediately prior
filing.4
U.S.C.
vested
provides
pertinent part:
3. That sub-section
(3)
time,
request
revests
of the estate in
On
debtor at
...,
entity
has not
case
been converted
court
in which such
chapter.
shall dismiss a case under
immediately
before
vested
the commence-
(empha-
the case
ment of
under this title
349(b) provides,
part:
4. Section
in relevant
added).
sis
court,
cause,
Unless the
orders other-
wise, a dismissal of a
than under
case other
of this title—
A.
Refund to
the Code Mandate
has discretion to “order
Does
bankruptcy court
Debtor?
for cause.
otherwise”
349(b)(3)
1. Section
349(b)’s
purpose
basic
Section
that dismissal did
case,
far
prac-
as
bankruptcy
“undo the
as
the Refinance
vacate either
Order
ticable,
property rights
and to
all
restore
order,
type
the confirmation
as neither
at
position
they
were found
va-
order
included
list of orders
the case.”
the commencement of
349(b),
cated
by a dismissal under
95-989,
(citing S.Rep.
F.2d at 1414
No.
other-
not “order
49, reprinted in 1978 U.S.C.C.A.N.
at
wise.” But “the omission of an order
5835).
The debtors
Nash dis-
349(b)
ordinarily
the list in
means
confirmed chapter
their
as
missed
affect
or-
dismissal does not
the omitted
time,
At the
allows.
Pavelich,
der.” In re
$900,
roughly
which he
held
1999) (citations omitted).
Cir. BAP
to an
creditor in accor-
paid
unsecured
time,
implicitly
At the
re-
same
dismissal
dance with
confirmed
The bank-
vokes,
modifies,
at least
some orders
challenge
debtors’
ruptcy
overruled
349(b).
§in
not enumerated
As Nash
*5
distribution,
Ninth
to the
but the
Circuit
teaches,
effectively
dismissal
vacates a
reversed,
holding
trustee should
chapter
plan confirmation order. 765
13
the
have
the funds to
debtors.
distributed
F.2d at 1413.
Witte,
(1)
In
279
that
The Nash
that
court reasoned
dis
(Bankr.E.D.Cal.2002),
supports
585
effectively
of the chapter
missal
vacated
his
that
the
contention
Refinance Order
(2)
by
plan;
the confirmed
the funds held
should
effect
given
despite
dismissal.
the trustee at
time of
the
dismissal were
Witte,
unconfirmed
debtor dismissed his
(3)
estate;
of
property
the
dismissal
shortly
chapter
court-ap-
13 case
after a
in
property
revested
the estate
of
debtors.
proved
property
sale of
real
1327(b)5
court also
under
noted that
provided
property
that
liens on the real
,
ownership of property
confirmation vests
proceeds,
and were to
attach
in
(perhaps
of the estate
the debtors
re
by
be held
the
until lien
dundantly, given
revesting provision
priorities were determined. After dismiss-
349). Nash,
F.2d at
In our
al,
IRS,
and the
which had
debtor
plan
form chapter
by
used
funds,
in
rights
levied
claimed
provided
property
debtor
estate
by
funds
trustee.
held
would not
in the debtor until dis
revest
court
funds to be
Witte
ordered the
charge or dismissal.
in accordance
or-
distributed
with
sale
Nash,
Following
der,
first,
reasons:
the lienhold-
three
concluded
the funds held
the Trus-
ers as
interests
well as the debtor had held
upon
tee revested
the debtor
dismissal
prior
filing.
in the
Sec-
property
real
and should be turned over to him. The
ond, §
gave the
court discretion
court also found that the Trustee had not
how
the estate
determine
shown cause for
should
ordering otherwise.
be distributed
provides:
plan
5. Which
mation of a
vests all of the
in the debtor.
estate
Except
provided
plan
as otherwise
confirming
the order
the confir-
expressly
jurisdic-
retained
relieve
13 trustee
his statu-
Fi-
over
funds in
sale order.
tory duty
tion
to distribute funds in accordance
nally,
the sale order
lienholders
1326(a)(2).
with a
confirmed
under
protection in the
of a
adequate
with
form
Id. at 426. The Parrish court went on to
lien,
replacement
which was not affected
hold:
Accordingly,
dismissal.
distribution
title,
349(b)(3)’s
debtor’s
[A]
re-
priorities
should be made
the order that
vesting provisions, to
funds
were
proceeds,
attached to the
and a distribu-
pre-dismissal
paid
to a trustee under a
only
tion made
debtor
there were
confirmed
is irrelevant: unless dis-
concluded,
surplus.
The court
“[t]he
missal vacates the
a con-
effectiveness of
abrogate
dismissal of the case did not
(and
nothing in the Bank-
firmed
sale order or
lien holders
1326(a)(2)
ruptcy
says
does),
Witte,
in the account.”
have been
there
paid,
(emphasis
reservation
Id. at
According to
jurisdiction,
only
court,
and the debtor is the
interpreting
these statutes oth-
party
pre-petition
interest
erwise would lead to an
and inequi-
absurd
proceeds,
proposes
while the
table result that a debtor could “take the
proceeds only
distribute the
to unsecured money that was earmarked for creditors
creditors.
tying
and run after
creditors’ hands
plan having
reason
the confirmed
been
1326(a)(2)
2. Section
place.”
Id.
*6
'
The
next
that
The Parrish court discounted
as
1326(a)(2)requires
§
him to
distribute
been
prior
decided under the
ver-
refinancing proceeds in accordance with
§
rejected
sion of
1326. It also
the Ninth
plan, despite
dismissal. That section
Circuit’s
that a
conclusion
dismissal order
provides,
part,
in relevant
plan
“[if] a
is
effectively
vacates
confirmation order
confirmed,
any
the trustee shall distribute
payments already
as to
to
made
the trus-
payment
such
plan
accordance with the
tee,
extending
reasoning
because
that
practicable....”
as soon as
The Trustee
require
theoretically
could
to re-
creditors
first,
out,
points
section
contains
turn to debtor all payments received under
exception
no
for funds held at
Parrish,
We,
plan.
433.
at
second, argues
longer
that Nash is no
course,
reject
are not free to
Nash if it
law,
good
it was
pre-
as
decided under the
no
applies,
attempting
still
one is
to
§
version
con
not
payments from
recover
creditors.
language.6
tain this
Parrish,
think
applies.
The
re
We
Nash still
In our
Trustee cites In
1326(a)(2)
(Bankr.D.D.C.2002),
view, §
B.R. 424
was not
which held
intended to ad-
upon
disposition
dismissal
a
dress
funds received
a
349(b)(3)’s
revesting language
not
does
trustee after confirmation:
1326(b)
6. The Nash court construed former
payments
plan."
to creditors under
(now 1326(c)),
provides:
"Except
provision
simply
as
concluded
plan
designated
disbursing agent.
otherwise
or in the order
the trustee as the
confirming the
the trustee shall make
payments within 30 confirmed, no plan funds the event is, pre-confirmation. handle funds. and who to 1326(a)(2) terms, “By per does not its a trustee tain funds received after Chapter plan.” confirmation of credi- appear cases to hold that [T]he (Bankr. 408, 410
Boggs, 137 B.R.
payments
are vested
tors’
W.D.Wash.1992)
original).
(emphasis in
Chapter
13 Trustee’s disbursement
Henry
Alan
Resnick &
J.
See also 8
N.
to them.
Sommer,
Collier
(citations
ours; paid here the amount to be to credi- tors, aspect equitable estoppel, fundamental For the Trustee change. prove must four elements: or not Whether the Refinance Order (1) party estopped to be must know modification, reject was a plan we (2) facts; he must intend 1326(a) conclusion that distri- mandates shall conduct be acted on or must so act bution of Tran’s party asserting estoppel has nothing creditors: in Parrish or Redick intended; (3) believe it is so justifies disregarding our the Ninth Cir- ignorant must latter be of the true holding cuit’s in Nash. (4) facts; rely he must on con- first, points: Two other itself injury. duct to his provides that estate revests (9th 698, Kelley, Cir. debtor on dismissal. The has not 1996); BAP see also Lehman v. United even argued provision that that some- (9th States, 1010, 154 F.3d Cir. how excised the Refinance Order —it is 1998). proffered But the has referenced, not indirectly even —and anyone evidence that he or else relied on only aspects necessarily affect- representation, thereby debtor’s suf ed the Refinance are the source Order fered injury. plan’s funding percentage paid to unsecured creditors. Although explicitly invoking
Finally, adopt doctrine, were we to the Trustee’s also 1326(a)(2), construction of we would nec- judicially debtor should be from estopped essarily language read “such” out of the receiving proceeds. the refinance Judicial by Congress, directly chosen for it refers estoppel equitable doctrine which the preceding back to the regarding clause discretion, may invoke at its Yanez v. payments received States, Trustee before 323, United 989 F.2d Cir. (or confirmation). confirmation denial of 1993), precludes party taking is not our prerogative: “give Such we must positions litiga inconsistent same effect, if possible, every tion, clause word where the court has relied of a statute.” v. Taylor, Williams 529 party’s previously inconsistent statement. 404, U.S. 120 S.Ct. 146 L.Ed.2d Interstate Fire & Co. v. Cas. Underwriters (2000). London, at Lloyd’s,
(9th Cir.1998). In deciding if the doctrine B. Did Trustee Show Cause for Order- applies, may the court whether consider *8 ing Otherwise? doing prevent party asserting so will position
The Trustee that he showed the from an gaining inconsistent otherwise,” advantage. cause to unfair Hampshire substantial “order be New v. cause, Maine, 742, motion, 750-51, in approving the he and U.S. 121 S.Ct. (2001). 1808, representation creditors relied on debtor’s 149 L.Ed.2d See also In (9th 448, that off re pay Cheng, he intended to his unsecured 308 B.R. 451-54 Cir. 2004) (elaborating judicial estop the refi BAP on proceeds with Cas., pel); nance. & He asserts that debtor’s dismissal Hamilton v. State Farm Fire (9th 778, Cir.2001) only days (judicial three after the received against proceeds inequitable, estoppel “protect invoked on with the relied debtor’s refinanc and loose tors somehow litigant playing fast ing prejudiced or it.8 The courts.”). motion were only responded. that none record discloses is not judicial estoppel Application ability pur creditors’ Dismissal restored became entitled here. Debtor warranted collection, time significant albeit after sue by invoking his proceeds to the refinance delay That not caused passed. 1307(b), under right to dismiss absolute rather, motion: refinancing resulted inequitable. The is not real and the result then petition from debtor’s the confir homestead, and the property was debtor’s Notwithstanding of his plan. mation over to the Trustee proceeds net turned (in 1307) those, on Congress reliance exemp- debtor’s homestead were within (in Nash) permit and the Ninth Circuit tion. dismissal. challenges The Trustee debtor’s citing exemption, Cal.Civ.Proc.Code VI. CONCLUSION 704.720, exempts proceeds a sale homestead but does not authority the continued Given But refinance. address to show reliance Trustee’s failure equity Tran committed never damages on representa- debtor’s plan, nor could he have house to the been motion, bankrupt- tion in the refinance 1322(a) only requires required to: cy court did not abuse discretion its earnings commitment of future income declining to “order otherwise.” which excludes the refinance court erred Nor 406, Burgie, 239 proceeds. See In re concluding entitled to debtor was 1999). (9th Moreover, BAP Cir. of the refinance dis- role of misconstrues the ex- We AFFIRM. missal. they are emptions in determining significant primarily wheth- JAROSLOVSKY, Bankruptcy Judge, meets the interests test of er best concurring. Winchester, 1325(a)(4). 1984). also 1 Cir. BAP See & my agree completely I brethren Lundin, Chapter Bankrupt- IS Keith M. good In re Nash is still and is law (2000 §§ cy, and 161.1 & 3rd Ed. 49.1 controlling in this case. I write separately argument Trustee’s Supp.2002). The express my over Trus- only to concern only the case had would make sense argument that Tran’s conduct tee’s rather than dismissed. been converted to a fraud the court. The amounted And, course, were this record reflects Tran’s exemption. debtor would be entitled considerably Code were § 522. curtailed set forth procedures rules, local and that what the Trus- advantage, Debtor no unfair court’s obtained (or nothing calls “fraud” was more than evidentiary logical) tee there procedures theory working within those to exer- basis for the Trustee’s credi (and essary perhaps other Nothing suggests the Trustee to make the Trustee record See, else) (or significant expense parties) analogy, In re anyone whole. for an incurred *9 Arnold, considering commenting BAP on the refi- Cir. in 2000) (conditioning of ex- allowance amended nance motion. Were the request emption payment trustee's certainly appropriate to the of fees have been action). pursuing exempted in cause of court to "order otherwise" to the extent nec- costs the rights mandatory plan cise that were Tran’s under does not give debtor begin any to with. regarding revesting, Code other choice even though Bankruptcy of the Code out pointed during argu As the Trustee provides may that a plan “provide for the ment, of plan the form used Tran was estate, vesting of of on confir- mandatory to local In pursuant rules. time, or at mation a later in the debtor or deed, of page each states: “This in any entity....” other mandatory by form is of Order the United The Trustee that Tran could Bankruptcy for Court States Central sought have from variance the terms of the Setting District of ques California.” aside mandatory plan and did not so. do How- legitimacy any tions as to the of court- ever, given practical realities of form,9 mandated the form this case confirmation Tran had except little choice facilitating crossed over line to adopt language dictated of the man- Chapter dictating 13 administration to datory plan though even under the Bank- Chapter 13 terms. ruptcy Code he had provide to mandatory Part plan pro- VIII his home revested him on confirmation. vides: Had he been to completely free exercise rights Bankruptcy under Code REVESTMENT OF PROPERTY beginning, from the he would not have Property the estate shall not revest of needed the consent the Trustee or the the debtor until such time as a dis- home, court to refinance his nor would the charge granted or case is dis- rights any proceeds. Trustee have subject missed. to Revestment shall all liens and encumbrances existence I believe that the bankruptcy filed, when the case was except those this case understood that Tran little liens avoided court order or extin- practical ability to deviate from the lan- guished by operation of law. In the mandatory guage and therefore event the ease is converted to a case did not commit fraud when he dismissed 7, 11, or obtaining the Bank- his case after refinancing Code, ruptcy the property merely working of the estate order. Tran was as best shall applicable system vest in accordance with he could within a restrictive to law. those After confirmation obtain were to by Congress Bankruptcy him 13 trustee shall have no Code. further fully affirming I therefore authority fiduciary duty concur regarding sale, use, decision of the court that Tran of property refinance is entitled to estate, his refinance. except respond use, sale, motion proposed or refi- required
nance Chapter as
General Order of court. Prior
any discharge or the debtor approval
must seek pur- chase, sell, or real property. added) (Emphasis 1325(a) court-approved 9. Section on a form is one of provides Chap- that the court shall confirm conditions. Being ter 13 six conditions are met.