In re: Robert G. Dale, Jr. and Kathy Ann Dale
Put another way, each exception to discharge represents Congress’ attempt to balance the debtor‘s entitlement to a fresh start against strong competing policy concerns. See Bullock, 133 S.Ct. at 1761; see also Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir.2010); In re Chang, 163 F.3d at 1140. To the extent Congress has not adequately balanced the competing policies, Congress will need to amend the discharge exceptions. It is not up to the courts to expand the сoverage of the exceptions under the guise of an improper and unwarranted liberal construction of the exceptions.
CONCLUSION
For the reasons set forth above, we AFFIRM the bankruptcy court‘s summary judgment in favor of Patricia.
Argued and Submitted Jan. 23, 2014.
Before: DUNN, PAPPAS, and KURTZ, Bankruptcy Judges.
OPINION
DUNN, Bankruptcy Judge.
Debtors Robert and Kathy Dale appeal the bankruptcy court‘s determination that an inheritance Mr. Dale received from his mother more than 180 days following the petition date but prior to confirmation of a plan in the Dales’ chapter 132 case was an asset of their bankruptcy estate. We AFFIRM.
FACTUAL BACKGROUND
The relevant facts in this appeal are straightforward and undisputed.
The Dales filed their chapter 13 petition on October 31, 2011. To date, no plan has been confirmed in their chapter 13 case. On August 11, 2012, more than 180 days following the petition date, Mr. Dale‘s mother passed away, entitling him to an inheritance of approximately $30,000 (“Inheritance“). On December 13, 2012, the Dales filed a declaration with the bankruptcy court disclosing the Inheritance.
The chapter 13 trustee Edward J. Maney (“Trustee“) demanded that the Dales turn over the Inheritance funds to the Trustee fоr distribution to their creditors. On January 9, 2013, the Trustee filed a motion to dismiss the Dales’ chapter 13 case, as payments under their proposed plan were delinquent. The Dales responded on January 14, 2013, with an “Amended Motion for Moratorium,” prоposing that they would make the remaining payments under their plan using $10,000 in unspent funds from the Inheritance. On the same
After hearing argument on the Amended Motion, the bankruptcy court announced its findings and conclusions orally, deciding that an inheritance received by a chapter 13 debtor before the case is closed, dismissed or converted is property of the bankruptcy estate under
JURISDICTION
The bankruptcy court had jurisdiction under
ISSUE
Did the bankruptcy court err as a matter of law in determining that an inheritance received by a chapter 13 debtor more than 180 days after the petition date, but before a plan was confirmed and before the chapter 13 case was closed, dismissed or converted was an asset of the bankruptcy estate?
STANDARDS OF REVIEW
We review a bankruptcy court‘s legal conclusions, including its interpretation of provisions of the Bankruptcy Code, de novo. Roberts v. Erhard (In re Roberts), 331 B.R. 876, 880 (9th Cir. BAP 2005), aff‘d, 241 Fed.Appx. 420 (9th Cir.2007). De novо review requires that we consider a matter anew, as if no decision had been rendered previously. United States v. Silverman, 861 F.2d 571, 576 (9th Cir.1988); B-Real, LLC v. Chaussee (In re Chaussee), 399 B.R. 225, 229 (9th Cir. BAP 2008).
DISCUSSION
This appeal concerns the interpretation of two subsections of the Bankruptcy Code,
Lamie v. U.S. Tr., 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004) (citations omitted).
(a) The commencement of a case under this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:
....
(5) Any interest in property that would have been property оf the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date—
(A) by bequest, devise, or inheritance;
....
(Emphasis added.)
(a) Property of the estate includеs, in addition to the property specified in section 541 of this title
(1) all property of the kind specified in such section that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 11, or 12 of this title, whichever occurs first[.]
(Emphasis added.)
The Dales argue that in spite of the fact that
Congress has harmonized [
§§ 541(a)(5) and1306(a) ] for us. With Section 541, Congress established a general definition for bankruptcy estates. With Section 1306, it then expanded on that definition specifically for purposes of Chapter 13 cases. Thus, “Section 1306 broadens the definition of property of the estate for chapter 13 purposes to include all property acquired and all earnings from services performed by the debtor after the commencement of the case.” S.Rep. No. 95-989, at 140-41 (1978), 1978 U.S.C.C.A.N. 5787, 5926-27.The statutes’ plain language manifests Congress‘s intent to expand the estаte for Chapter 13 purposes by capturing the types, or “kind,” of property described in Section 541 (such as bequests, devises, and inheritances), but not the 180-day temporal restriction.
11 U.S.C. § 1306(a) . This is because “[t]he kind of property is a distinct concеpt from the time at which the debtor‘s interest in the property was acquired.” In re Tinney,07-42020-JJR13, 2012 WL 2742457, at *2 (Bankr.N.D.Ala. July 9, 2012). And on its face, Section 1306(a) incorporates only the kind of property described in Section 541 into its expanded temporal framework.
Carroll v. Logan, 735 F.3d 147, 150 (4th Cir.2013).
The Fourth Circuit‘s decision in Carroll v. Logan is cоnsistent with the great weight of authority interpreting the application of
The Fourth Circuit explicitly considered and rejected in Carroll v. Logan two of the statutory construction arguments made by the Dales in this appeal: 1) that courts “must give effect to every word of a statute,” and 2) that “specific language in a statute governs general language.” 735 F.3d at 152. While recognizing that “courts should give effect to every word of a statute whenever possible,” id., the Fourth Circuit concluded that application of that principle requirеd that inheritances received by chapter 13 debtors more than 180 days after the petition date but before the chapter 13 case was closed, dismissed or converted be included as estate property.
[I]f Section 541‘s 180-day rule restricts what is included in a Chapter 13 estate, then Section 1306(a), which expands the temporal restriction for Chapter 13 purposes, loses all meaning. By contrast, neither statute is rendered superfluous, and both are given effect, if Section 1306(a)‘s extended timing applies to Chapter 13 estates and supplements Section 541 with property acquired before the Chapter 13 case is closed, dismissed, or converted.
The Fourth Circuit further concluded that the canоn of construction that the specific controls the general did not help the chapter 13 debtor appellants before them. Specifically, they rejected the contention that
The Dales cite primarily threе bankruptcy court decisions from the Eleventh Cir-
Ultimаtely, we agree with the analysis of the Fourth Circuit in Carroll v. Logan, and we conclude that the bankruptcy court did not err in determining that an inheritance received by chapter 13 debtors more than 180 days following the petition date but before confirmation of a chapter 13 plan and before the case is closed, dismissed or converted is property of the debtors’ bankruptcy estate.
CONCLUSION
For the foregoing reasons, we AFFIRM.
RANDALL L. DUNN
UNITED STATES BANKRUPTCY JUDGE