Case Information
*3 R. NELSON, Circuit Judge:
At the end of bankruptcy proceedings, property that has not been otherwise administered can generally be abandoned to the debtor only if it has been “scheduled.” 11 U.S.C. § 554(c). A neighboring provision, § 521(a), requires debtors to file several schedules, as well as other statements. In this case, we must decide whether “scheduled” requires that property be listed on one of the literal schedules, or if listing it on one of the other statements can suffice. We hold that § 554(c) requires property to be disclosed on a literal schedule, and thus that, absent Trustee or court action, property disclosed only on a statement (e.g., the Statement of Financial Affairs) cannot be abandoned under § 554(c).
I
The property in question is the Debtors’ interest in a state lawsuit that they filed against their mortgage servicing company. The lawsuit arose out of a conflict over the Debtors’ mortgage and their efforts to refinance it. While their case was ongoing, the Debtors voluntarily filed for bankruptcy.
The issue here arose because the Debtors identified the state lawsuit in some of their filings but not in others. On a schedule that asked about claims against third parties, they stated that they had none, even though the lawsuit was still pending. 11 U.S.C. § 521(a)(1)(B)(i); Official Form 106A/B, Schedule A/B: Property. And elsewhere on the *4 same schedule, they also said that they had no other contingent or unliquidated claims.
On the other hand, the Debtors disclosed their mortgage itself: they listed the mortgage servicing company as a non- priority creditor. And they even disclosed the state lawsuit, although, importantly, only in the Statement of Financial Affairs (“SOFA,” the filing under § 521(a)(1)(B)(iii)), and not in any of the schedules (separate filings under § 521(a)(1)(B)(i) and (ii)).
The Debtors also discussed the state lawsuit with the bankruptcy Trustee. He requested the litigation documents, which the Debtors sent him. After reviewing these documents, the Trustee certified that the estate “ha[d] been fully administered” and contained “no property available for distribution.” The Trustee also determined “that there were no scheduled assets which would benefit [the] estate” and confirmed that he “made a diligent inquiry into the financial affairs of the debtor(s).” The bankruptcy court then discharged the Trustee and closed the case.
A couple of years later, after the Debtors had continued actively litigating their state lawsuit, the opposing party in that suit—the mortgage servicing company—contacted the bankruptcy Trustee directly. The company offered to settle the Debtors’ claims for about ten times less money than the Debtors sought. The company asked the Trustee to reopen the bankruptcy case so that he could be reappointed, take over the state lawsuit, and settle it quickly. The Trustee was reappointed by the bankruptcy court, took over the state lawsuit, settled it, and got the settlement approved by both the state court and the bankruptcy court. Because the state lawsuit had not been abandoned (according to the bankruptcy court), the bankruptcy estate got the proceeds from the settlement, not the Debtors.
The Debtors appealed the bankruptcy court’s approval of the settlement to the Bankruptcy Appellate Panel (“BAP”). *5 6 I N RE S TEVENS It affirmed. In re Stevens , 617 B.R. 328 (B.A.P. 9th Cir. 2020). The BAP held that the word “scheduled” in § 554(c) “refers only to assets listed in a debtor’s Schedules” (defined as “the schedule of assets and liabilities” under 11 U.S.C. § 521(a)(1)(B)(i)), that the state lawsuit had not been listed on a schedule, and thus that the Debtors’ interest in the state lawsuit had not been abandoned under § 554(c). Id . at 332– 34. The BAP observed that “the majority of courts considering the issue have taken the strict approach,” and it followed “the majority’s plain language reading of § 554(c).” Id . at 331–32. It also reasoned that its “narrow reading of § 554(c) is consistent with sound bankruptcy policies and reasonable expectations for a debtor’s performance of statutory duties.” Id . at 333.
II
We have jurisdiction to consider appeals from final
decisions of the BAP under 28 U.S.C. § 158(d)(1). We
review the BAP’s statutory interpretation de novo.
In re
Boyajian
,
III
In bankruptcy, “[a]bandonment is a term of art with
special meaning.”
Catalano v. C.I.R.
,
Absent circumstances not relevant here, [1] before it can be abandoned under § 554(c), property must be “scheduled under section 521(a)(1).” So the issue here is whether the state lawsuit was scheduled under that section.
Section 521(a)(1) mandates that debtors file several documents. As relevant here, it requires multiple schedules (in § 521(a)(1)(B)(i)–(ii)), as well as several other kinds of statements (in § 521(a)(1)(B)(iii), (v)–(vi)).
Courts have interpreted “scheduled” in two ways.
Several bankruptcy courts and a district court have held that
to be scheduled, property needs to be included on the
“schedule of assets and
liabilities.”
[2]
11 U.S.C.
§ 521(a)(1)(B)(i).
[3]
Others have held that to be scheduled,
property just needs to be included on any one of the statutory
filings from § 521(a), whether that filing is called a schedule
or something else.
[4]
But, so far, no federal court of appeals
has taken a side in a published opinion.
See, e.g.
,
Ashmore
v. CGI Grp., Inc.
,
[2]
See, e.g.
,
In re Winburn
, 167 B.R. 673, 676 (Bankr. N.D. Fla.
1993);
In re McCoy
,
[3] Income would be scheduled on a different schedule, under § 521(a)(1)(B)(ii), but this case concerns property, not income.
[4]
Bird v. Hart
,
asset disclosed to the bankruptcy court orally and on a SOFA, but not on a Schedule B, is abandoned to the debtor.”); but see id. at 282 n.16 (noting that the Second Circuit, in an unpublished summary order, found that disclosure orally and on a SOFA “would not lead to abandonment by operation of law” under § 554(c)).
We reject the Debtors’ “any filing” reading. Instead, we hold that, absent Trustee or court action, to be abandoned under § 554(c), property must be scheduled on a schedule, not just listed on the SOFA.
A
Because “our inquiry begins with the statutory text, and
ends there as well if the text is unambiguous,” we start with
the text of the Bankruptcy Code.
BedRoc Ltd., LLC v.
United States
,
The Bankruptcy Code does not define “scheduled.”
See
11 U.S.C. § 101 (definitions). “When terms used in a statute
are undefined, we give them their ordinary meaning.”
Asgrow Seed Co. v. Winterboer
,
Congress enacted § 554(c) in 1978, Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, § 554, 92 Stat. 2549, 2603 (1978), and dictionaries from that time offered consistent definitions of “scheduled.” Webster’s defined “scheduled” as “to place or include in a schedule” or “to make a schedule of.” Webster’s New World Dictionary 1272 (1972). And the Oxford Compact defined the verb “schedule” to mean “[t]o enter in a schedule or list.” Oxford Compact Dictionary 203 (1971). These dictionary definitions show that the ordinary meaning of “scheduled” was to include something on a literal schedule. That ordinary meaning, taken with § 554(c)’s explicit cross-reference to § 521(a)(1), which itself also uses the noun “schedule,” compels us to construe “scheduled” narrowly.
Our interpretation is bolstered by the “established canon
of construction that similar language contained within the
same section of a statute must be accorded a consistent
meaning.”
Nat’l Credit Union Admin. v. First Nat’l Bank &
Tr. Co.
,
When we read a statute as a whole and see that it uses
nearly identical terms in different places, we give those
terms similar meanings. “Scheduled” is a verb, and
“schedule” is a noun (as used in § 521(a)(1), anyway), but
they share the same root. And the Supreme Court has noted
that different grammatical forms of the same word “typically
reflect the meaning of” one another.
Cf. FCC v. AT&T Inc.
562 U.S. 397, 402 (2011) (construing “person” and
“personal”). “Where . . . Congress uses similar statutory
language . . . in two adjoining provisions, it normally intends
similar interpretations.”
Nijhawan v. Holder
,
10 I N RE S TEVENS Thus, given the ordinary meaning of “scheduled” and the statutory context, we must give “schedule” and “scheduled” similar meanings: scheduled means included on a schedule.
A neighboring provision further bolsters our reading.
Section 523(a)(3) also uses the word “scheduled” and, just
like § 554(c), cross-references § 521(a)(1). And, usefully
for our purposes, § 523(a)(3) distinguishes between
“list[ing]” and “schedul[ing].” “Undoubtedly, there is a
natural presumption that identical words used in different
parts of the same act are intended to have the same
meaning.”
Atl. Cleaners & Dyers, Inc. v. United States
286 U.S. 427, 433 (1932). If we adopted the Debtors’
reading, then “scheduled” would either mean something
different in § 554(c) than it does in § 523(a)(3), violating the
canon that identical words are presumed to have the same
meaning,
see Atl. Cleaners & Dyers, Inc.
,
Our reading also finds support in the broader Bankruptcy Code scheme. The Federal Rules of Bankruptcy Procedure routinely distinguish between the bankruptcy petition itself, bankruptcy schedules, the SOFA, and other documents. See, e.g. , Fed. R. Bankr. P. 1007. The Debtors’ reading fails to account for the Rules’ use of these different terms.
B
The Debtors argue that we should rely on the common
law understanding of abandonment to conclude that property
is not abandoned when the Trustee knows about it.
See, e.g.
,
In re Webb
, 54 F.2d 1065, 1067 (4th Cir. 1932). But
Congress enacted the Bankruptcy Code, and we cannot
*9
disregard its plain language.
See Connecticut Nat’l Bank v.
Germain
, 503 U.S. 249, 253–54 (1992). We hold that
abandonment under § 554(c) requires listing on a schedule,
as we have defined it here, and that anything else (e.g., actual
knowledge of the trustee, ad hoc oral disclosures, discussion
at the § 341 meeting of creditors) is not enough. “The law
is abundantly clear that the burden is on the debtors to list
the asset and/or amend their schedules, and that in order for
property to be abandoned . . . the debtor must formally
schedule” it.
Jeffrey v. Desmond
,
IV
We conclude that property listed only on the SOFA,
§ 521(a)(1)(B)(iii), is not “scheduled,” and thus without
Trustee or court action, cannot be abandoned under § 554(c).
We acknowledge that the Debtors’ failure to list the state
lawsuit on a schedule may have been an inadvertent
oversight, but given the statute’s plain text, we cannot
consider equitable arguments. The Debtors could have
amended their schedules “as a matter of course at any time
before the case . . . closed.” Fed. R. Bankr. P. 1009(a). But
they didn’t. Our task is to interpret the Bankruptcy Code,
“not to balance the equities.”
Zachary v. California Bank &
Tr.
,
AFFIRMED.