OPINION
A Chapter 13 debtor appeals the bankruptcy court’s summary order denying confirmation of his Chapter 13 plan.
I. FACTS
The debtor, Preston Neil Nicholes, is the president, director, and sole shareholder of Boss Fruit & Vegetable, Inc. (“Boss Fruit”). Boss Fruit is an Idaho corporation and a licensee under the Perishable Agricultural Commodities Act (“PACA”) codified at 7 U.S.C. §§ 499a et seq.
On September 28,1993, the debtor filed his petition for Chapter 13 relief, listing himself in the caption as “dba Boss Fruit & Vegetable, Inc.” His schedule of unsecured nonpri-ority claims consisted of 13 pages of debts which totalled $4,103,290.80. All of the claims, with the exception of the first one fisted for trucking in the amount of $8,400.10, were fisted as contingent debts. 2 Other than the trucking claim, seven (7) claims which totalled $81,506.50 denominated as being for “freight,” and a claim for legal fees in the amount of $26.40, the debtor did not fist the consideration for any of the claims. The debtor contended that the debts were contingent because they were incurred by Boss Fruit and were not owed by the debtor.
The debtor’s plan provided that he would pay $143 per month to the Chapter 13 trustee for 36 months. In the first year of the plan, $135.32 of the $143 payment would be paid on administrative (primarily debtor’s attorney’s fees) and priority claims. The debt- or’s plan proposed to pay holders of secured claims directly.
Appellee, Metropolitan Life Insurance Company dba Johnny Appleseed of Washington (“Johnny Appleseed”), timely filed a proof of claim in the debtor’s case in the amount of $475,667.27. Johnny Appleseed also objected to confirmation of debtor’s plan on three grounds: 1) the debtor was ineligible for Chapter 13 relief because his noncon-tingent, liquidated unsecured debts exceeded the $100,000 limit for Chapter 13 relief
3
then
The bankruptcy court held a hearing on confirmation of the plan at which counsel for the debtor and Johnny Appleseed argued their respective positions. No testimony was taken during the hearing.
Thereafter the bankruptcy court entered a summary order denying confirmation of the debtor’s plan. The court found that the listing of every debt as contingent was not credible and that claims for freight already incurred were not contingent because they were not obligations dependent upon the occurrence of a future event. The court then found that the remaining unsecured debts fell into the same noncontingent category. The debtor filed a timely notice of appeal.
II.ISSUES PRESENTED
1. Is the order denying confirmation of a Chapter 13 plan appealable?
2. Did the bankruptcy court err in denying confirmation of the debtor’s plan on the grounds that the debtor was ineligible to be a Chapter 13 debtor under 11 U.S.C. § 109(e)? To reach this issue, the court must consider the effect of disputes on the distinction between contingent and noneontingent debts and liquidated and unliquidated debts in the context of Chapter 13 eligibility determinations.
III.STANDARDS OF REVIEW
The question of whether a debt is contingent or liquidated is an issue involving interpretation of the Bankruptcy Code and, thus, is a question of law subject to
de novo
review.
See In re Goralnick,
IV.DISCUSSION
A. Leave to Appeal Summary Order is Granted
A preliminary issue is whether the summary order of the bankruptcy court denying confirmation of the debtor’s Chapter 13 plan is a final order for purposes of appeal. Jurisdiction over an appeal from a bankruptcy court order is governed by 28 U.S.C. § 158. Section 158 authorizes district courts and bankruptcy appellate panels to hear appeals from final judgments, orders and decrees. 28 U.S.C. § 158(a), (b). This is often referred to as the “final judgment rule.” Ordinarily, interlocutory orders are not appealable without leave of court. 28 U.S.C. § 158(a)(3). Courts have held that orders denying plan confirmation are interlocutory when the petition itself has not been dismissed.
In re Simons,
In the present case, the bankruptcy court denied confirmation of the debtor’s plan after it found that the debtor was ineligible for Chapter 13 relief. The crux of the court’s order was the ineligibility determination. While it is true that the debtor then could have converted his ease to chapter 7 or even perhaps to chapter 11, it is clear from the pursuit of this appeal that the debtor desires to deal with his creditors in the context of a Chapter 13 plan.
See In re Wenberg,
Although appellant did not file a motion for leave to appeal, we may treat the notice of appeal as a motion for leave to file an interlocutory appeal, if the standards set forth in 28 U.S.C. S 1292(b) are met. Fed.R.Bankr.P. 8003(c);
In re Sperna,
We therefore grant leave to appeal the denial of confirmation.
B. Eligibility for Chapter 13 Treatment
1. Need for Expeditious Determination of Eligibility
Under Chapter 13, a debtor must complete plan payments within 36 months or, with leave of court, not later than 60 months. 11 U.S.C. § 1322(c). This time period begins running from the date at which the Chapter 13 debtor is first obligated to begin making payments to the trustee under the unconfirmed plan — i.e. within 45 days after the petition is filed
5
— as opposed to the date at which the first payment becomes due under the confirmed plan.
In re Duckett,
When a party challenges a debtor’s eligibility for Chapter 13 relief, the bankruptcy court needs to make a prompt and effective determination of a debtor’s eligibility. Failure to promptly and effectively determine the debtor’s eligibility results in a waste of judicial resources and inefficient administration of a case — contravening the legislative intent for expedient resolution of Chapter 13 cases.
When considering whether or not to confirm a Chapter 13 plan, a bankruptcy court must find that the plan complies with the provisions of Chapter 13 and with other applicable provisions of the Bankruptcy Code. 11 U.S.C. § 1325(a)(1). Thus, in the present case, the bankruptcy court properly considered the issue of the debtor’s eligibility for Chapter 13 when raised by appellees at the plan confirmation stage.
2. Eligibility Requirements
Section 109(e) of the Bankruptcy Code sets forth the eligibility requirements for Chapter 13 relief. It provides in pertinent part:
Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $100,000 and non-contingent, liquidated, secured debts of less than $350,000 ... may be a debtor under Chapter 13 of this title.
§ 109(e) (emphasis added). The Code defines a “debt” as a liability ,on a claim. § 101(12). A “claim” is defined as a “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.”
§ 101(5)(A). The terms “debt” and “claim” are coextensive.
In re Quintana,
When filing a petition for bankruptcy, a debtor must file a list of creditors and a schedule of assets and liabilities. § 521(1). A debtor must include in the schedule of liabilities all claims that fall within the defi
3. Problems of Debt Characterization
Unfortunately, the Bankruptcy Code fails to define the terms contingent, unliquidated, and disputed. Moreover, the courts have rendered confusing and sometimes overlapping interpretations of these terms — particularly where, as here, the debtor questions liability for a debt. Nevertheless, it is settled in this Circuit that the terms disputed, contingent, and liquidated have different meanings.
In re Sylvester,
a. Distinguishing Contingent Debts
It is also settled that a debt is noneontingent if all events giving rise to liability occurred prior to the filing of the bankruptcy petition.
In re Fostvedt,
[T]he rule is clear that a contingent debt is “one which the debtor will be called upon to pay only upon the occurrence or happening of an extrinsic event which will trigger the liability of the debtor to the alleged creditor.”
Id.
(quoting
Brockenbrough v. Commissioner,
In the instant matter, the bankruptcy court correctly held that the debts for freight were noncontingent because “[c]laims for freight already incurred ordinarily are not obligations dependent on the occurrence of a future event.” However, the court did not analyze the nature of the remaining debts. Instead, perhaps out of frustration, the court stated that “[a]bsent any showing to the contrary, and given the debtor’s lack of credibility in this regard, it is assumed the remainder of the unsecured debts fall into the [noncontingent] category.”
The issue of whether or not a debt is contingent is a question of law and, thus, subject to de novo review. None of the debts listed on debtor’s schedules as “contingent” rely on some future extrinsic event to trigger liability. Rather, all events giving rise to liability for these debts arose when Boss Fruit received the agricultural goods and trucking services. Furthermore, debt- or’s potential personal liability stems from Boss Fruit’s failure to pay for the PACA obligations. 6 All of these events occurred prior to the debtor’s bankruptcy filing.
At the confirmation hearing, counsel for the debtor argued that the debts of Boss Fruit were listed on the debtor’s schedules out of an abundance of caution “in the event that some of [the creditors] claimed that [the
Whatever the debtor believes, even a bona fide dispute over liability for a claim does not make the debt contingent.
Dill,
b. Disputes and Unliquidated or Liquidated Debt
On appeal, the debtor appears to argue that besides being contingent, most of the $4,103,209.80 in listed debts are also “unliqui-dated,” again because they are obligations of Boss Fruit and not those of the individual debtor. The debtor previously raised this argument at the hearing on plan confirmation but the court below made no ruling on the issue of whether debtor’s dispute over liability rendered the debt “unliquidated.”
A debt is liquidated if it is capable of “ready determination and precision in computation of the amount due.”
Fostvedt,
It is the term “disputed” that creates the most confusion in characterizing debts as liquidated or unliquidated. Debts which are merely disputed are presumably included in the § 109(e) limitation calculation.
See, e.g., In re Hutchens, supra; In re Williams,
At least three views have been expressed. The first and most expansive view holds that a dispute as to liability or amount renders a debt unliquidated.
In re Lambert,
In concluding that a dispute could render a debt unliquidated, the Ninth Circuit Bankruptcy Appellate Panel relied on its decision in
Sylvester. See Wenberg,
The theory on which claims have been held insufficient is that they were open, unliq-uidated claims (e.g., tort or quantum me-ruit claims requiring proof as to liability, reasonable value, damages, etc.) which by their very nature are not fixed until juridical award to fix liability and amount.
Id. (citations omitted) (emphasis added). This language implicitly rejects the more rigid view that a dispute never renders a debt unliquidated.
The Ninth Circuit Bankruptcy Appellate Panel expanded Sylvester’s definition of “ready determination” and analyzed the interplay between “disputed” debts and “unliquidated” debts in Wenberg. The Panel in Wenberg held that
[t]he definition of “ready determination” turns on the distinction between a simple hearing to determine the amount of a certain debt, and an extensive and contested evidentiary hearing in which substantial evidence may be necessary to establish amounts or liability. On this issue, the bankruptcy judge has the best occasion to determine whether a claim will require an overly extensive hearing or whether the claim is subject to a bona fide dispute; therefore not subject to “ready determination.”
More recently, the Panel followed
Sylvester
and
Wenberg
when it found that since only the briefest of hearings would be necessary, the claims were readily determinable and, thus, liquidated.
In re Loya,
[W]hether a debt is liquidated or not for purposes of 11 U.S.C. § 109(e) does not depend strictly on whether the claim sounds in tort or in contract, but whether it is capable of ready computation. For the same reason, whether a debt is liquidated does not depend on whether it is disputed.
Id. at 340.
Construing
Sylvester
with
Wen-berg
and
Loya,
we hold that the fact that a
Under this test, even though disputed, debts of a contractual nature are generally liquidated.
Sylvester,
It is important to emphasize today that the bottom line is that § 109(e) calculations depend on “ready determination,” not upon the existence or absence of disputes. If a debt is not readily determinable, whether as a result of a dispute or otherwise, then the claim is unliquidated. This approach encourages administrative efficiency, recognizes that Congress deliberately limited the availability of Chapter 13, and helps prevent potential abuse of the “super-discharge” provisions of Chapter 13.
In any event, the bankruptcy court must determine whether the debts in question are subject to ready determination and whether computation of the amount due is a simple matter. If the court determines that such debts are readily determinable, then they are liquidated and included in the debt- or’s eligibility tally. If they are not readily determinable, then they are unliquidated and excluded from the eligibility tally. Since such determinations depend on an analysis of the facts, the Panel will remand this case to the bankruptcy court for the necessary factual determinations pursuant to Fed.R.Bankr.P. 8013.
See also Wenberg,
4. Good Faith and Feasibility
The bankruptcy court made no ruling upon Johnny Appleseed’s argument that the plan was not filed in good faith and that it was not feasible. Upon remand, those issues would need to be determined only if the court concludes that the debtor is eligible to be a debtor under Chapter 13.
V. CONCLUSION
We REMAND this case to the bankruptcy court to complete the determination of the debtor’s eligibility for Chapter 13. As part of this process, the court should ascertain whether Johnny Appleseed’s claim or any of the other obligations of Boss Fruit listed on the debtor’s schedules are capable of “ready determination” as the personal obligations of the debtor, and thus liquidated debts eligible for inclusion in the § 109(e) limitation calculation. Finally, if necessary, the court should examine the good faith and feasibility issues raised by Johnny Appleseed.
REMANDED WITH INSTRUCTIONS.
Notes
. In his appellate brief, debtor states that the debt for trucking should have also been listed as a contingent debt. He also states that, since the confirmation hearing, he has amended his schedule F to show that he has seven noncontingent, general, unsecured claims in the approximate amount of $34,000 plus a disputed claim with West One Bank.
.At the confirmation hearing, Johnny Appleseed argued that debtor was personally liable under PACA as the sole shareholder and as an officer and director of Boss Fruit for the perishable agricultural commodities sold to Boss Fruit by Johnny Appleseed.
. Hereafter, unless otherwise stated, all statutory references are to 11 U.S.C. §§ 101 et seq., prior to the October 22, 1994, amendments.
. A chapter 13 debtor must file a proposed debt repayment plan within 15 days after filing the petition. 11 U.S.C. § 1321; Fed.R.Bankr.P. 3015. The debtor must commence payments to the trustee under the proposed plan — whether confirmed or not — within 30 days after the plan is filed. 11 U.S.C. § 1326(a)(1). However, the trustee does not begin distributing such payments until the plan is confirmed. 11 U.S.C. § 1326(a)(2).
. The Perishable Agricultural Commodities Act (PACA) provides in relevant part:
Perishable agricultural commodities received by a commission merchant, dealer, or broker in all transactions, and all inventories of food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such commodities or products, shall be held by such commission merchant, dealer, or broker in trust for the benefit of all unpaid suppliers or sellers of such commodities or agents involved in the transaction, until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers, sellers, or agents.
7 U.S.C. § 499e(c)(2).
Courts have held that under PACA, an individual who is in a position of control of a corporation may be personally liable to the beneficiaries for amounts due to unpaid suppliers.
Mid-Valley Produce Corp. v. 4-XXX Produce Corp.,
. A tort claim ordinarily is not contingent as to liability; the events that gave rise to liability to the tort claim usually have occurred and liability is not dependent on some future event that may never happen. It is immaterial that the tort claim is not adjudicated or liquidated, or that the claim is disputed, or indeed that it has any of the many other characteristics of claims under the Code.
In re Dill,
. The
Sylvester
panel found that the debts were readily determinable in three ways: from the debtor's underlying contract with the creditor coupled with the debtor’s knowledge of the orders placed; from the creditor's invoices; and from the cumulative monthly billings which the lower court found to constitute an account stated.
Sylvester,