Danielson v. Flores (In re Flores)
- 2012 U.S. App. LEXIS 18508 (2012)
- In reversing the bankruptcy court and remanding the decision to apply the Ninth Circuit's decision in Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868, 872 (9th Cir. 2008), the Ninth Circuit ruled that its decision in Kagenveama remains applicable with respect to determining the applicable commitment period in chapter 13 plans in light of the U.S. Supreme Court's decision in Hamilton v. Lanning, 130 S. Ct. 2464 (2010). The Ninth Circuit held the Lanning decision is not clearly irreconcilable with its Kagenveama decision because Lanning involved the interpretation of "projected disposable income." The holding was silent on the issue of how to interpret the "applicable commitment period" provision of Sec. 1325(b). Accordingly, read together, the Ninth Circuit found that while Lanning overruled the Ninth Circuit's intepretation of "projected disposable income," it did not reject Kagenveama's interpretation of "applicable commitment period". As far as the Ninth Circuit is concerned, Kagenveama remains good law for purposes of determining the "applicable commitment period" in chapter 13 plans.
- Procedural context:
- Appeal to the Ninth Circuit pursuant to a motion for certification for direct appeal by the Chapter 13 trustee in the case. The bankruptcy court granted the motion and certified the plan duration issue for direct apeal to the Ninth Circuit pursuant to 28 USC Sec. 158(d)(2) over the Debtor's timely appeal to the Bankruptcy Appellate Panel.
- Cesar and Ana Flores (collectively, "Debtors") filed for bankruptcy relief under chapter 13 of the Code. Debtors proposed a 3-year plan of reorganization. The Debtors have negative disposable income as defined in the Bankruptcy Code but are above median for their locality under the means test. The chapter 13 trustee objected to the plan because the Debtors are above median and therefore, the plan ought to be a minimum 5-year plan under Sec. 1325(b)(1). The trustee cited to the U.S. Supreme Court's decision in Lanning which trustee argued overruled the Ninth Circuit precedent, Kagenveama, a pre-BAPCA case. Under Kagenveama, when there is no "projected disposable income," there is no "applicable commitment period." The bankruptcy court sustained the objection and confirmed a 60-month plan.
- Hons. Harry Pregerson, Susan P. Graber (Circuit Judges) and Edward Chen (District Court Judge sitting by designation).
Appeal from a ruling by Hon. Meredith Jury (Bankruptcy Court Judge for the Central District of California).
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!