UNITED STATES BANKRUPTCY COURT Eastern District of California. Honorable Ronald H. Sargis Bankruptcy Judge Sacramento, California

Transcription

1 UNITED STATES BANKRUPTCY COURT Eastern District of California Honorable Ronald H. Sargis Bankruptcy Judge Sacramento, California E-13 DANNETTE MORTIMER MOTION TO MODIFY PLAN JT-1 John Tosney [29] Local Rule (f)(1) Motion - No Opposition Filed. Proper Notice Not Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor, Chapter 13 Trustee, all creditors, parties requesting special notice, and Office of the United States Trustee on November 23, However, the U.S. Department of Education and the United States Attorney were not properly served. By the court s calculation, 48 days notice was provided. 35 days notice is required. Tentative Ruling: The Motion to Confirm the Plan was not properly set for hearing on the notice required by Local Bankruptcy Rule (f)(1), General Order 05-03, Paragraph 8(b), and Federal Rule of Bankruptcy Procedure 3015(g). The court s tentative decision is to deny the Motion to Confirm the Modified Plan without prejudice. Oral argument may be presented by the parties at the scheduled hearing, where the parties shall address the issues identified in this tentative ruling and such other issues as are necessary and appropriate to the court s resolution of the matter. If the court s tentative ruling becomes its final ruling, the court will make the following findings of fact and conclusions of law: The motion is denied unless the moving party provides sufficient evidence that the U.S. Department of Education and the United States Attorney were properly served. Federal Rule of Bankruptcy Procedure 2002(j) and Local Rule (a) require service on the United States Attorney when giving notice for an indebtedness to the United States for other than taxes. Here, Debtor discloses an indebtedness to the United States through the Department of Education. Further, Local Bankruptcy Rule (b) requires that notices to certain government agencies, including the Department of Education, be made at addresses designated on the Roster of Governmental Agencies maintained by the Office of the Clerk. While the Department of Education was provided notice, the address used by the Debtor (Utica, New York) does not conform to the address provided the Roster of Governmental Agencies (San Francisco). Moreover, the United States Attorney was not provided with notice. If evidence is provided that the required notices were provided, the court will revise its tentative ruling to be: The Motion to Confirm the Modified Plan is granted. - Page 1 of 277 -

2 11 U.S.C permits a debtor to modify a plan after confirmation. The modified Plan complies with with 11 U.S.C and 1325(a) and is confirmed. FN FN.1. The declaration in support of confirmation offers little evidence in support of confirmation. Rather, the declaration merely offers a series of declarative statements which make the legal conclusion that the Debtor meets the requirements for confirmation imposed by 11 U.S.C. 1325(a). The Debtor bears burden of proving the requirements of confirmation. See Amfac Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510, 512 (9th Cir. B.A.P. 1982). However, the Debtor's legal conclusions are not evidence since, in most cases, a debtor's opinion on the legal effect of his or her actions is not rationally based on his or her perception and his or her conclusion is not helpful to the understanding of his or her testimony. See Fed. R. Evid Rather than offering legal conclusions, the Debtor should offer the factual information that will lead the court as the trier of fact to the appropriate legal conclusion. Rather than providing testimony of evidentiary issues, the Debtors merely conclude that they can make the payments due under the plan. No evidence is provided concerning their ability to actually perform under the plan. No reason exists for the Debtors not clearly stating their finances in the declaration. As to good faith, the Debtors merely "testify" that the plan has been proposed in good faith. No economic information is provided as to what is being provided for creditors, what has led to the bankruptcy, what has caused the need to have multiple amended plans, and other facts which the court can use to find that good faith exists in this case. The Debtors make their own "finding of fact" that they can make the proposed payments, but do not provide the court with any testimony as to their income and expenses as they exist now, and the facts by which the court can determine the Debtors can make all the required payments. The Debtors make their own "finding of fact" and then draw the "conclusion of law" that they meet the liquidation test and creditors will receive at least as much through the plan as they would through a Chapter 7 liquidation. The Debtors provide no testimony as to their assets, how they compute a Chapter 7 liquidation analysis, and the distributions to be made under the Chapter 13 plan. Merely parroting legal requirements for confirmation does not constitute evidence from which the court can make the necessary findings and conclusions of law. The Motion to Confirm also fails to comply with the requirements of Fed. R. Bankr. P because it fails to plead with particularity the grounds upon which the requested relief (confirmation) is based. The motion merely states that it is based on other pleadings and the court should confirm the plan. Beginning with motion set for hearing March 1, 2012 and thereafter, the court shall deny motions when the evidence consists of such conclusory statements and/or the motions fail to plead with particularity the grounds for the relief requested. The court shall also order that counsel who fail to provide evidence, as opposed to their lay clients statements of "findings of fact" and "conclusions of law" must set all motions to confirm for an initial hearing on the motion, at which time the court will set the matter for a full evidentiary hearing Findings of Fact and Conclusions of Law are stated in the - Page 2 of 277 -

3 The Motion to Confirm the Chapter 13 Plan filed by the Debtor having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that the Motion is granted, Debtor s Chapter 13 Plan filed on November 23, 2011, is denied without prejudice E-13 MICHAEL PANNELL AND LORI MOTION TO VALUE COLLATERAL OF APR-1 CHERNEY THE BANK OF NEW YORK [31] Local Rule (f)(1) Motion - No Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Chapter 13 Trustee, respondent creditor, and Office of the United States Trustee on December 8, By the court s calculation, 33 days notice was provided. 28 days notice is required. The moving party is reminded that the Local Rules require the use of a new Docket Control Number with each motion. Local Bankr. R (c). Here the moving party reused a Docket Control Number. This is improper. The Court will consider the motion, but counsel is reminded that failure to comply with the Local Rules is grounds, in and of itself, to deny the motion. Local Bankr. R (g), (l). Final Ruling: The Motion to Value Collateral has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1). The failure of the respondent and other parties in interest to file written opposition at least 14 days prior to the hearing as required by Local Bankruptcy Rule (f)(1)(ii) is considered to be the equivalent of a statement of nonopposition. Cf. Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995). Further, because the court will not materially alter the relief requested by the moving party, an actual hearing is unnecessary. See Law Offices of David A. Boone v. Derham-Burk (In re Eliapo), 468 F.3d 592, 602 (9th Cir. 2006). Therefore, the defaults of the respondent and other parties in interest are entered. Upon review of the record there are no disputed material factual issues and the matter will be resolved without oral argument. The court will issue its ruling from the parties pleadings. The Motion to Value Collateral is granted and creditor s secured claim is determined to be $0.00. No appearance required. The motion is accompanied by the Debtors declaration. The Debtors are the owners of the subject real property commonly known as 4136 Galbrath Drive, North Highlands, California. The Debtors seek to value the property at a fair market value of $108, as of the petition filing date. As the owner, the Debtors opinion of value is evidence of the asset s value. See Fed. R. Evid. 701; see also Enewally v. Wash. Mut. Bank (In re Enewally), 368 F.3d 1165, 1173 (9th Cir. 2004). - Page 3 of 277 -

4 The first deed of trust secures a loan with a balance of approximately $266,164.00x. The Bank of New York s second deed of trust secures a loan with a balance of approximately $32, Therefore, the respondent creditor s claim secured by a junior deed of trust is completely under-collateralized. The creditor s secured claim is determined to be in the amount of $0.00, and therefore no payments shall be made on the secured claim under the terms of any confirmed Plan. See 11 U.S.C. 506(a); Zimmer v. PSB Lending Corp. (In re Zimmer), 313 F.3d 1220 (9th Cir. 2002); Lam v. Investors Thrift (In re Lam), 211 B.R. 36 (B.A.P. 9th Cir. 1997). The valuation motion pursuant to Federal Rule of Bankruptcy Procedure 3012 and 11 U.S.C. 506(a) is granted. Findings of Fact and Conclusions of Law are stated in the The Motion for Valuation of Collateral filed by Debtor(s) having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that the Motion pursuant to 11 U.S.C. 506(a) is granted and the claim of The Bank of New York secured by a second deed of trust recorded against the real property commonly known as 4136 Galbrath Drive, North Highlands, California, is determined to be a secured claim in the amount of $0.00, and the balance of the claim is a general unsecured claim to be paid through the confirmed bankruptcy plan. The value of the Property is $108, and is encumbered by senior liens securing claims which exceed the value of the Property. - Page 4 of 277 -

5 E-13 DANNY/PEGGY WILLIAMSON MOTION TO MODIFY PLAN MTM-10 Michael McEnroe [102] Local Rule (f)(1) Motion - No Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor s, Chapter 13 Trustee, all creditors, parties requesting special notice, and Office of the United States Trustee on November 15, By the court s calculation, 56 days notice was provided. 35 days notice is required. Tentative Ruling: The Motion to Confirm the Plan has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1), General Order 05-03, Paragraph 8(b), and Federal Rule of Bankruptcy Procedure 3015(g). The failure of the respondent and other parties in interest to file written opposition at least 14 days prior to the hearing as required by Local Bankruptcy Rule (f)(1)(ii) is considered to be the equivalent of a statement of nonopposition. Cf. Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995). The Motion to Confirm the Modified Plan is granted. presented at the hearing. Oral argument may be 11 U.S.C permits a debtor to modify a plan after confirmation. The Debtors have not provided the court with sufficient evidence to determine that the Plan complies with 11 U.S.C and 1325(a). The declaration in support of confirmation offers little evidence in support of confirmation. Rather, the declaration merely offers a series of declarative statements which make the legal conclusion that the Debtor meets the requirements for confirmation imposed by 11 U.S.C. 1325(a). The Debtor bears burden of proving the requirements of confirmation. See Amfac Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510, 512 (9th Cir. B.A.P. 1982). However, the Debtor s legal conclusions are not evidence since, in most cases, a debtor s opinion on the legal effect of his or her actions is not rationally based on his or her perception and his or her conclusion is not helpful to the understanding of his or her testimony. See Fed. R. Evid Rather than offering legal conclusions, the Debtor should offer the factual information that will lead the court as the trier of fact to the appropriate legal conclusion. Rather than providing testimony of evidentiary issues, the Debtors merely direct the court to review amended schedules. Since Schedules I and J state the income and expenses of the Debtors as of the commencement of the case, the information therein is not relevant to a present motion to confirm an amended plan. Further, no reason exists for the Debtors not clearly stating their finances in the declaration. As to good faith, the Debtors merely testify that the plan has been proposed in good faith. No economic information is provided as to what is being provided for creditors, what has led to the bankruptcy, what has caused the need to have multiple amended plans, and other facts which the court can use to find that good faith exists in this case. The Debtors make their own finding of fact that they can make the proposed payments, but do not provide - Page 5 of 277 -

6 the court with any testimony as to their income and expenses as they exist now, and the facts by which the court can determine the Debtors can make all the required payments. The Debtors make their own finding of fact and then draw the conclusion of law that they meet the liquidation test and creditors will receive at least as much through the plan as they would through a Chapter 7 liquidation. The Debtors provide no testimony as to their assets, how they compute a Chapter 7 liquidation analysis, and the distributions to be made under the Chapter 13 plan. Merely parroting legal requirements for confirmation does not constitute evidence from which the court can make the necessary findings and conclusions of law. Moreover, the motion to confirm does not plead with particularity the grounds for relief. See Fed. R. Bankr. P Rather the motion merely states: 1. Debtors seek confirmation of their fifth amended plan. 2. The court should read Debtors declaration. The motion here is insufficient to support granting a motion to confirm a Chapter 13 plan. Given that the Debtors have not pled with particularity the grounds upon which they base the requested relief, the court will not grant the motion. The court to declines the opportunity to read all of the other pleadings, assemble what it divines to be the grounds the Debtors desire to assert in support of the Motion, assert those grounds, and then rule on those grounds. That work is properly left to the Debtors and their counsel. Findings of Fact and Conclusions of Law are stated in the The Motion to Confirm the Chapter 13 Plan filed by the Debtor having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that the Motion is granted, Debtor s Chapter 13 Plan filed on November 16, 2011, is confirmed, and counsel for the Debtor shall prepare an appropriate order confirming the Chapter 13 Plan, transmit the proposed order to the Chapter 13 Trustee for approval as to form, and if so approved, the Chapter 13 Trustee will submit the proposed order to the court. - Page 6 of 277 -

7 E-13 STEVEN THOMPSON MOTION TO MODIFY PLAN PGM-5 Peter Macaluso [92] Local Rule (f)(1) Motion - Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor, Chapter 13 Trustee, all creditors, parties requesting special notice, and Office of the United States Trustee on December 2, By the court s calculation, 39 days notice was provided. 35 days notice is required. Final Ruling: The Motion to Confirm the Plan has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1), General Order 05-03, Paragraph 8(b), and Federal Rule of Bankruptcy Procedure 3015(g). The Trustee filed opposition. The court has determined that oral argument will not be of assistance in resolving this matter. No oral argument will be presented and the court shall issue its ruling from the pleadings filed by the parties. The Motion to Confirm the Modified Plan is denied as moot. required. No appearance 11 U.S.C permits a debtor to modify a plan after confirmation. Subsequent to the filing of this Motion, the Debtor filed a first amended Plan on January 3, The filing of a new plan is a de facto withdrawal of the pending Plan. The motion is denied as moot. Findings of Fact and Conclusions of Law are stated in the The Motion to Confirm the Chapter 13 Plan filed by the Debtor having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that Motion to Confirm the Plan is denied as moot and the proposed Chapter 13 Plan is not confirmed. - Page 7 of 277 -

8 E-13 DAVID OBST MOTION TO CONFIRM PLAN CDN-2 Clark Nicholas [32] Local Rule (f)(1) Motion - No Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor, Chapter 13 Trustee, all creditors, parties requesting special notice, and Office of the United States Trustee on November 13, By the court s calculation, 58 days notice was provided. 42 days notice is required. Tentative Ruling: The Motion to Confirm the Plan has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1), General Order 05-03, Paragraph 8(a), and Federal Rule of Bankruptcy Procedure 2002(b). The failure of the respondent and other parties in interest to file written opposition at least 14 days prior to the hearing as required by Local Bankruptcy Rule (f)(1)(ii) is considered to be the equivalent of a statement of nonopposition. Cf. Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995). The court s tentative decision is to deny the Motion to Confirm the Amended Plan. Oral argument may be presented by the parties at the scheduled hearing, where the parties shall address the issues identified in this tentative ruling and such other issues as are necessary and appropriate to the court s resolution of the matter. If the court s tentative ruling becomes its final ruling, the court will make the following findings of fact and conclusions of law: 11 U.S.C permits a debtor to amend a plan any time before confirmation. The plan only provides for the payment of attorneys fees, Chapter 13 Trustee s fees, and full payment of $2, in Class 7 general unsecured claims no other claims are included in the plan, though Debtor does not schedule any other claims. All of Debtor s scheduled unsecured claims relate to his mortgage loan with the Debtor contending that the loan is now unsecured. Debtor s proposed $ plan payment is patently not feasible. Debtor filed an amended Schedules I and J on November 7, See Dckt. 31. No declaration explaining the changes in the amended schedule is offered. The amended Schedule J lists no expense for rent or mortgage expense. This is not believable since (1) the Debtor has a mortgage loan and (2) the new owner of Debtor s home, Federal National Mortgage Association, sought relief from the automatic stay to complete an unlawful detainer action. FN.1. Either Debtor has a claim secured by his residence he must address or the residence belongs to Fannie Mae and Debtor must make other living arrangements. Debtor has an undisclosed mortgage expense or undisclosed rent expense. This unaccounted expnese impairs the feasibility of the proposed plan payment and is cause to deny confirmation. 11 U.S.C. 1325(a)(6) FN.1. In opposition to the motion for relief, the Debtor contends that the nonjudicial foreclosure of his real property did not comport with relevant California Law and that he still owns the property. No explanation if offered - Page 8 of 277 -

9 for why Debtor owns the property free and clear of the lien created by the mortgage loan and why he need not make any payments on that claim Though neither the Trustee, the U.S. Trustee, nor any creditor challenged the feasibility of the Debtor s plan payment, the court has an independent duty to make certain that the requirements for confirmation have been met. See United Student Aid Funds, Inc. v. Espinosa, 559 U.S., 130 S. Ct. 1367, 1381 n.14, 176 L. Ed. 2d 158, 173 n.14 (2010); see also Varela v. Dynamic Brokers, Inc. (In re Dynamic Brokers, Inc.), 293 B.R. 489, 499 (B.A.P. 9th Cir. 2003) (citing Everett v. Perez (In re Perez), 30 F.3d 1209, 1213 (9th Cir. 1994)). The declaration in support of confirmation offers little evidence in support of confirmation. Rather, the declaration merely offers a series of declarative statements which make the legal conclusion that the Debtor meets the requirements for confirmation imposed by 11 U.S.C. 1325(a). The Debtor bears burden of proving the requirements of confirmation. See Amfac Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510, 512 (9th Cir. B.A.P. 1982). However, the Debtor s legal conclusions are not evidence since, in most cases, a debtor s opinion on the legal effect of his or her actions is not rationally based on his or her perception and his or her conclusion is not helpful to the understanding of his or her testimony. See Fed. R. Evid Rather than offering legal conclusions, the Debtor should offer the factual information that will lead the court as the trier of fact to the appropriate legal conclusion. Rather than providing testimony of evidentiary issues, the Debtors merely conclude that they can make the payments due under the plan. No evidence is provided concerning their ability to actually perform under the plan. No reason exists for the Debtors not clearly stating their finances in the declaration. As to good faith, the Debtors merely testify that the plan has been proposed in good faith. No economic information is provided as to what is being provided for creditors, what has led to the bankruptcy, what has caused the need to have multiple amended plans, and other facts which the court can use to find that good faith exists in this case. The Debtors make their own finding of fact that they can make the proposed payments, but do not provide the court with any testimony as to their income and expenses as they exist now, and the facts by which the court can determine the Debtors can make all the required payments. The Debtors make their own finding of fact and then draw the conclusion of law that they meet the liquidation test and creditors will receive at least as much through the plan as they would through a Chapter 7 liquidation. The Debtors provide no testimony as to their assets, how they compute a Chapter 7 liquidation analysis, and the distributions to be made under the Chapter 13 plan. Merely parroting legal requirements for confirmation does not constitute evidence from which the court can make the necessary findings and conclusions of law. The Motion to Confirm also fails to comply with the requirements of Fed. R. Bankr. P because it fails to plead with particularity the grounds - Page 9 of 277 -

10 upon which the requested relief (confirmation) is based. The motion merely states that it is based on other pleadings and the court should confirm the plan. Beginning with motion set for hearing March 1, 2012 and thereafter, the court shall deny motions when the evidence consists of such conclusory statements and/or the motions fail to plead with particularity the grounds for the relief requested. The court shall also order that counsel who fail to provide evidence, as opposed to their lay clients statements of findings of fact and conclusions of law must set all motions to confirm for an initial hearing on the motion, at which time the court will set the matter for a full evidentiary hearing. The amended Plan does not comply with 11 U.S.C. 1325(a) and is not confirmed. Findings of Fact and Conclusions of Law are stated in the The Motion to Confirm the Chapter 13 Plan filed by the Debtor having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that the Motion is denied and the plan is not confirmed. - Page 10 of 277 -

11 E-13 TONIA HAILEY OBJECTION TO CONFIRMATION OF NLE-1 Muoi Chea PLAN BY DAVID P. CUSICK [17] Local Rule (f)(2) Motion. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor and Debtor s Attorney on December 8, By the court s calculation, 33 days notice was provided. 14 days notice is required. Tentative Ruling: The Objection to the Plan was properly set for hearing on the notice required by Local Bankruptcy Rule (f)(2) and the procedure authorized by General Order 05-03, Paragraph 3(c). Consequently, the Debtor, the Trustee, the U.S. Trustee, and any other parties in interest were not required to file a written response or opposition to the motion. If any of these potential respondents appear at the hearing and offers opposition to the motion, the court will set a briefing schedule and a final hearing unless there is no need to develop the record further. If no opposition is offered at the hearing, the court will take up the merits of the motion. Below is the court s tentative ruling, rendered on the assumption that there will be no opposition to the motion. Obviously, if there is opposition, the court may reconsider this tentative ruling. The court s tentative decision is to overrule the Objection, the Trustee having filed a notice of withdrawl. Oral argument may be presented by the parties at the scheduled hearing, where the parties shall address the issues identified in this tentative ruling and such other issues as are necessary and appropriate to the court s resolution of the matter. If the court s tentative ruling becomes its final ruling, the court will make the following findings of fact and conclusions of law: The Chapter 13 Trustee opposes confirmation of the Plan on the basis that the Debtor s plan depends upon a motion to value a secured claim which the Debtor had not filed. Debtor subsequently filed the motion and set it for hearing in late January The Motion seeks to value the claim of JPMorgan Chase Bank, N.A., which is secured by a second deed of trust against the Debtor s residence. JPMorgan Chase Bank, N.A. is identified as the creditor and whose claim is requested to be valued. The Proofs of Service filed by the Debtor attest to service on JPMorgan Chase Bank, N.A., including service on an officer by certified mail. The court will proceed with considering confirmation, notwithstanding that hearing being completed given that the Debtor is actively prosecuting the motion, the nature of the claim to be valued, and the evidence submitted in support of that motion. The Trustee argues that the Plan is not Debtor s best effort. The Statement of Monthly Income (Form 22C) shows that Debtor is above the relevant median income, but computes monthly disposable income of -$ Debtor proposes a 36-month plan while the applicable commitment period is 60 months. 11 U.S.C. 1325(b)(4). The Trustee also objects to some of the deductions included on Form 22C. FN Page 11 of 277 -

12 FN.1. After the court had prepared the ruling on this Motion, the Trustee filed a withdrawal of his opposition. Given that the objection related to the applicability of Kagenveama after the Supreme Court ruling in Lanning, the court has issued this ruling for the benefit of counsel. Additionally, as directed by the Supreme Court in Espinosa v , before confirming a plan the court must determine that it complies with the Bankruptcy Code, and must address this issue even if raised sua sponte APPLICABLE COMMITMENT PERIOD The Debtor s decision to propose a 36-month plan appears to rest almost solely on the holding in Kagenveama that if the disposable income as computed on Form 22C is negative there is no applicable commitment period is binding precedent on this court. This interpretation is based on a fundamental misreading of Kagenveama. In Kagenveama, the Ninth Circuit was presented with the question of determining the debtor s projected disposable income, 11 U.S.C. 1325(b)(2), and then the applicable commitment period for the plan. The decision in Kagenveama was built on the foundation that projected disposable income computed under 1325(b)(2) has the same meaning as current monthly income as used in 1325(b)(4) and defined in 101(10A), which is a historic snapshot of the Debtors income during the six-month period immediately preceding the commencement of the bankruptcy case. FN FN U.S.C. 101(10A) defines current month income as follows. (A) [Current Monthly Income] means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor s spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on (i) the last day of the calendar month immediately preceding the date of the commencement of the case if the debtor files the schedule of current income required by section 521(a)(1)(B)(ii); or (ii) the date on which current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521(a)(1)(B)(ii); The Ninth Circuit panel began its consideration of this question with the plain meaning of the statue and to enforce its terms, U.S. v. Ron Pair Enters., Inc., 489 U.S. 235, 241 (1989), and giving meaning to every clause and word of the statute, Negonsott v. Samuels, 507 U.S. 99, 106 (1993). Evaluating how Congress structured the statute, the court concluded that the term disposable income was linked to projected disposable income and concluded that - Page 12 of 277 -

13 the six-month-retrospective current monthly income used to compute the applicable commitment period in 1325(b)(5) is the projected disposable income for purposes of 1325(b)(1) and (2). In Kagenveama this resulted in the projected disposable income which the debtor was required to fund a plan if a creditor or trustee objected was $0.00. The court in Kagenveama then considered what the Bankruptcy Code required the applicable commitment period to be in a case where the debtor was obligated to pay $0.00 to fund a Chapter 13 plan. Though on its face the Bankruptcy Code states that a plan shall be 3 years, or not less than 5 years if the current monthly income is above median family income, 11 U.S.C. 1325(b)(4), the court found that provision to be irrelevant when a debtor was not obligated to make any minimum payment under a plan. The Trustee argues that applicable commitment period mandates a temporal measurement, i.e., it denotes the time by which a debtor is obligated to pay unsecured creditors, while Kagenveama argues that it mandates a monetary multiplier, i.e., it is merely useful in calculating the total amount to be repaid by a debtor. Based on the plain language of the statute, we conclude that the Trustee's interpretation is correct, but that the applicable commitment period requirement is inapplicable to a plan submitted voluntarily by a debtor with no projected disposable income. Kagenveama, 527 F.3d at 876. If the interpretation that projected disposable income is an amount mechanically computed based on historic data, notwithstanding the applicable commitment period being a mandatory time period, one could contend that where no money has to be paid then no commitment period exists. The Ninth Circuit concluded that an applicable commitment period only applies when there is projected disposable income. Id. However, in 2010 the United States Supreme Court decided Hamilton v. Lanning, 560 U.S., 130 S. Ct. 2464, 177 L. Ed. 2d 23 (2010), which resolved the issue as to the meaning of projected disposable income as used in Sections 1325 (b)(1) and (2). The Supreme Court rejected a mechanical approach which conclusively determined projected disposable income to be the prebankruptcy, six-month current income as defined in 101(10)(A) for purposes of the 1325(b)(4) applicable commitment period computation. BAPCPA left the term projected disposable income undefined but specified in some detail how disposable income is to be calculated. Disposable income is now defined as current monthly income received by the debtor less amounts reasonably necessary to be expended for the debtor s maintenance and support, for qualifying charitable contributions, and for business expenditures. 1325(b)(2)(A)(i) and (ii) (2006 ed.). Current monthly income, in turn, is calculated by averaging the debtor s monthly income during what the parties refer to as the 6-month look-back period, which generally consists of the six full months preceding the filing of the bankruptcy petition. - Page 13 of 277 -

14 See 101(10A)(A)(i). [FN.1.] The phrase amounts reasonably necessary to be expended in 1325(b)(2) is also newly defined. For a debtor whose income is below the median for his or her State, the phrase includes the full amount needed for maintenance or support, see 1325(b)(2)(A)(i), but for a debtor with income that exceeds the state median, only certain specified expenses are included, [FN.2.] see 707(b)(2), 1325(b)(3)(A) Footnotes However, if a debtor does not file the required schedule (Schedule I), the bankruptcy court may select a different 6-month period. See 101(10A)(A)(ii). 2 The formula for above-median-income debtors is known as the means test and is reflected in a schedule (Form 22C) that a Chapter 13 debtor must file. See Fed. Rule Bkrtcy. Proc. Official Form 22C (2009); In re Liverman, 383 B. R. 604, 606, n. 1, (Bkrtcy. Ct. NJ 2008) Consistent with the text of 1325 and pre-bapcpa practice, we hold that when a bankruptcy court calculates a debtor s projected disposable income, the court may account for changes in the debtor s income or expenses that are known or virtually certain at the time of confirmation. Lanning, 130 S. Ct. at , The Supreme Court s command is to follow the statutory provisions and begin with the historic current income calculation and make the necessary adjustments to determine the projected disposable income required to be paid under the Chapter 13 plan. Interestingly, the Supreme Court s decision in Lanning was foreshadowed by the Ninth Circuit Bankruptcy Appellate Panel s decision in John Pak v. ecast Settlement Corporation, 378 B.R. 257 (B.A.P. 9th Cir. 2007). The decision of the B.A.P. was that projected disposable income was a forward-looking concept which begins with current monthly income. In his concurrence to the panel s decision, the Hon. Christopher M. Klein reviewed the various provisions of the Bankruptcy Code providing for adjustments to current monthly income in applying the Code. In connection with the court determining whether a Chapter 7 filing is an abuse of that Chapter, 11 U.S.C. 707(b)(1) and (2), adjustments for actual additional or special circumstances expenses are to be considered by the court, 11 U.S.C. 707(b)(2)(A)(ii)-(iv), (B). The premise in Kagenveama that applicable commitment period only applies when there is projected disposable income rests upon a foundation that the projected disposable income is mechanically determined, a foundation rejected by the Supreme Court. The Bankruptcy Code requires that an abovemedian-income debtor commit to a 60-month plan if a party in interest objects. - Page 14 of 277 -

15 11 U.S.C. 1325(b)(4). Such an objection has been raised and Debtor s plan does not meet the requirements of the Bankruptcy Code. DEDUCTIONS ON FORM 22C The Trustee also challenges two deductions on Form 22C: Line 40: Line 47c: A $ deduction for the support of Debtor s disabled brother. Debtor did not disclose these payments on the Statement of Financial Affairs. Debtor subsequently amended the Statement of Financial Affairs to include the payments. Debtor has not offered any evidence to support the payment under 11 U.S.C. 707(b)(2)(A)(ii)(II) (the family member must be unable to afford the expenses paid by the debtor and the expenses must be reasonable and necessary). A $ average monthly payment for a debt related to windows attached to Debtor s residence. Debtor lists the monthly payment on Schedule J as $ Therefore, the deduction should be only $ After making the adjustments to Form 22C, Debtor s Monthly Disposable Income is -$3.26 (-$ $157.70). The Debtor has no projected disposable income with which to fund a Chapter 13 Plan. The only other source of information (since the Debtor has not responded to the Objection) for projected disposable income are Schedules I and J filed by the Debtor. Considering these two statements under penalty of perjury two statements under penalty of perjury, the Debtor actually has $ a month in net monthly income (which expenses include the $ payment for the Debtor s brother). No qualifications are given in these Schedules that the $ a month subject to change. Rather, the best evidence before the court is that this income and expense calculation reflects the actual income and expenses which is relatively certain to be incurred during the life of this plan. This Debtor has $ a month in projected disposable income. The applicable commitment period is computed based upon the currently monthly income of the Debtor, 11 U.S.C. 1325(b)(4). Currently monthly income is defined in 11 U.S.C. 101(10)(A) to be the average monthly income for the six year period preceding the bankruptcy filing from all sources that the Debtor receives. That amount for this Debtor $5, Form 22C, Dckt. 1, line 11. This results in an annualized income of $66,510.96, which is higher than the applicable median income in California of $62, Id., line 16. Thus, we begin with a 60 month applicable commitment period in this case. 11 U.S.C. 1325(b)(4)(A)(ii)(II). At this juncture, if the Trustee or a creditor holding a general unsecured claim objects, the plan must provide for payment of claims in full or payment of all projected disposable income for the applicable commitment period. 11 U.S.C. 1325(b)(1)(B). In this case, that amount would be $ for 60 months, which equals $19, However, since the Chapter 13 Trustee has withdrawn his objection and no other objection to confirmation has been filed, this requirement is not applicable. - Page 15 of 277 -

16 The court takes the withdrawal of the objection as being the proper exercise of discretion by the Chapter 13 Trustee based upon his superior knowledge of the facts and circumstances surrounding this case. The judicious exercise of this discretion is essential to making the bankruptcy system work in the most effective manner. There is no requirement that the Debtor s plan be longer than the current forty-eight (48) months. Dckt. 5. The Plan does not comply with 11 U.S.C. 1325(a). The objection is sustained and the Plan is not confirmed. Findings of Fact and Conclusions of Law are stated in the The Objection to the Chapter 13 Plan filed by the Trustee having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that Objection to confirmation the Plan is overruled as having been withdrawn by the Trustee. Counsel for the Debtor shall prepare an appropriate order confirming the Chapter 13 Plan, transmit the proposed order to the Chapter 13 Trustee for approval as to form, and if so approved, the Chapter 13 Trustee will submit the proposed order to the court. - Page 16 of 277 -

17 E-13 JAMES/RHODELIA PALISOC MOTION TO VALUE COLLATERAL OF SLH-1 Seth Hanson JPMORGAN CHASE, N.A [14] Local Rule (f)(1) Motion - No Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Chapter 13 Trustee, respondent creditor, and Office of the United States Trustee on November 21, By the court s calculation, 50 days notice was provided. 28 days notice is required. Final Ruling: The Motion to Value Collateral has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1). The failure of the respondent and other parties in interest to file written opposition at least 14 days prior to the hearing as required by Local Bankruptcy Rule (f)(1)(ii) is considered to be the equivalent of a statement of nonopposition. Cf. Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995). Further, because the court will not materially alter the relief requested by the moving party, an actual hearing is unnecessary. See Law Offices of David A. Boone v. Derham-Burk (In re Eliapo), 468 F.3d 592, 602 (9th Cir. 2006). Therefore, the defaults of the respondent and other parties in interest are entered. Upon review of the record there are no disputed material factual issues and the matter will be resolved without oral argument. The court will issue its ruling from the parties pleadings. The Motion to Value Collateral is granted and creditor s secured claim is determined to be $0.00. No appearance required. The motion is accompanied by the Debtors declaration. The Debtors are the owners of the subject real property commonly known as 3565 Headwater Drive, Vallejo, California. The Debtors seek to value the property at a fair market value of $322, as of the petition filing date. As the owner, the Debtors opinion of value is evidence of the asset s value. See Fed. R. Evid. 701; see also Enewally v. Wash. Mut. Bank (In re Enewally), 368 F.3d 1165, 1173 (9th Cir. 2004). The first deed of trust secures a loan with a balance of approximately $422, JPMorgan Chase Bank, N.A. s second deed of trust secures a loan with a balance of approximately $69, Therefore, the respondent creditor s claim secured by a junior deed of trust is completely undercollateralized. The creditor s secured claim is determined to be in the amount of $0.00, and therefore no payments shall be made on the secured claim under the terms of any confirmed Plan. See 11 U.S.C. 506(a); Zimmer v. PSB Lending Corp. (In re Zimmer), 313 F.3d 1220 (9th Cir. 2002); Lam v. Investors Thrift (In re Lam), 211 B.R. 36 (B.A.P. 9th Cir. 1997). The valuation motion pursuant to Federal Rule of Bankruptcy Procedure 3012 and 11 U.S.C. 506(a) is granted. Findings of Fact and Conclusions of Law are stated in the - Page 17 of 277 -

18 The Motion for Valuation of Collateral filed by Debtor(s) having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, IT IS ORDERED that the Motion pursuant to 11 U.S.C. 506(a) is granted and the claim of JPMorgan Chase Bank, N.A. secured by a second deed of trust recorded against the real property commonly known as 3565 Headwater Drive, Vallejo, California, is determined to be a secured claim in the amount of $0.00, and the balance of the claim is a general unsecured claim to be paid through the confirmed bankruptcy plan. The value of the Property is $322, and is encumbered by senior liens securing claims which exceed the value of the Property E-13 JEFFERY/JUANITA SCHAFF MOTION TO MODIFY PLAN RPB-6 Raymond Burton [88] Local Rule (f)(1) Motion - Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor, Chapter 13 Trustee, all creditors, parties requesting special notice, and Office of the United States Trustee on November 11, By the court s calculation, 60 days notice was provided. 35 days notice is required. Final Ruling: The Motion to Confirm the Plan has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1), General Order 05-03, Paragraph 8(b), and Federal Rule of Bankruptcy Procedure 3015(g). The Trustee filed opposition. The court has determined that oral argument will not be of assistance in resolving this matter. No oral argument will be presented and the court shall issue its ruling from the pleadings filed by the parties. The Motion to Confirm the Modified Plan is denied as moot. required. No appearance 11 U.S.C permits a debtor to modify a plan after confirmation. Subsequent to the filing of this Motion, the Debtor filed a first amended Plan on December 30, The filing of a new plan is a de facto withdrawal of the pending Plan. The motion is denied as moot. Findings of Fact and Conclusions of Law are stated in the The Motion to Confirm the Chapter 13 Plan filed by the Debtor having been presented to the court, and upon review of the pleadings, evidence, arguments of counsel, and good cause appearing, - Page 18 of 277 -

19 IT IS ORDERED that Motion to Confirm the Plan is denied as moot and the proposed Chapter 13 Plan is not confirmed E-13 ALAN/SHARON MORSE MOTION TO CONFIRM PLAN RPH-3 Robert Huckaby [73] Local Rule (f)(1) Motion - Opposition Filed. Proper Notice Provided. The Proof of Service states that the Motion and supporting pleadings were served on Debtor s, Chapter 13 Trustee, all creditors, parties requesting special notice, and Office of the United States Trustee on November 16, By the court s calculation, 55 days notice was provided. 42 days notice is required. Tentative Ruling: The Motion to Confirm the Plan has been set for hearing on the notice required by Local Bankruptcy Rule (f)(1), General Order 05-03, Paragraph 8(a), and Federal Rule of Bankruptcy Procedure 2002(b). The Trustee and a creditor having filed an opposition, the court will address the merits of the motion at the hearing. If it appears at the hearing that disputed material factual issues remain to be resolved, a later evidentiary hearing will be set. Local Bankr. R (g). The court s tentative decision is to deny the Motion to Confirm the Amended Plan. Oral argument may be presented by the parties at the scheduled hearing, where the parties shall address the issues identified in this tentative ruling and such other issues as are necessary and appropriate to the court s resolution of the matter. If the court s tentative ruling becomes its final ruling, the court will make the following findings of fact and conclusions of law: 11 U.S.C permits a debtor to amend a plan any time before confirmation. Both the Chapter 13 Trustee and Springleaf Financial Services, Inc. oppose confirmation of the plan. FN FN.1. The declaration in support of confirmation offers little evidence in support of confirmation. Rather, the declaration merely offers a series of declarative statements which make the legal conclusion that the Debtor meets the requirements for confirmation imposed by 11 U.S.C. 1325(a). The Debtor bears burden of proving the requirements of confirmation. See Amfac Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510, 512 (9th Cir. B.A.P. 1982). However, the Debtor s legal conclusions are not evidence since, in most cases, a debtor s opinion on the legal effect of his or her actions is not rationally based on his or her perception and his or her conclusion is not helpful to the understanding of his or her testimony. See Fed. R. Evid Rather than offering legal conclusions, the Debtor should offer the factual information that will lead the court as the trier of fact to the appropriate legal conclusion. Rather than providing testimony of evidentiary issues, the Debtors merely conclude that they can make the payments due under the plan. No evidence is provided concerning their ability to actually perform under the - Page 19 of 277 -

20 plan. No reason exists for the Debtors not clearly stating their finances in the declaration. As to good faith, the Debtors merely testify that the plan has been proposed in good faith. No economic information is provided as to what is being provided for creditors, what has led to the bankruptcy, what has caused the need to have multiple amended plans, and other facts which the court can use to find that good faith exists in this case. The Debtors make their own finding of fact that they can make the proposed payments, but do not provide the court with any testimony as to their income and expenses as they exist now, and the facts by which the court can determine the Debtors can make all the required payments. The Debtors make their own finding of fact and then draw the conclusion of law that they meet the liquidation test and creditors will receive at least as much through the plan as they would through a Chapter 7 liquidation. The Debtors provide no testimony as to their assets, how they compute a Chapter 7 liquidation analysis, and the distributions to be made under the Chapter 13 plan. Merely parroting legal requirements for confirmation does not constitute evidence from which the court can make the necessary findings and conclusions of law. The Motion to Confirm also fails to comply with the requirements of Fed. R. Bankr. P because it fails to plead with particularity the grounds upon which the requested relief (confirmation) is based. The motion merely states that it is based on other pleadings and the court should confirm the plan. Beginning with motion set for hearing March 1, 2012 and thereafter, the court shall deny motions when the evidence consists of such conclusory statements and/or the motions fail to plead with particularity the grounds for the relief requested. The court shall also order that counsel who fail to provide evidence, as opposed to their lay clients statements of findings of fact and conclusions of law must set all motions to confirm for an initial hearing on the motion, at which time the court will set the matter for a full evidentiary hearing CHAPTER 13 TRUSTEE S OPPOSITION The Trustee opposes confirmation arguing that the Debtors are $ delinquent in plan payments, which represents more than one month of the $ plan payment. Additionally, Debtors Schedule J demonstrates that Debtors can only afford a payment totaling $56.00, not the $ proposed. Nor do the Debtors offer sufficient other evidence to support their ability to make the proposed plan payment. This demonstrates that the Debtors cannot afford the plan payments or abide by the Plan and is cause to deny confirmation. 11 U.S.C. 1325(a)(6). FN FN.2. This opposition and evidence stands in stark contrast to the Debtors unsupported argument that they can make the plan payments, including the ongoing mortgage payments on the defaulted mortgage Page 20 of 277 -