Michigan Dept. of Treasury v. Hight (In re Hight)

Summarized by Dean Langdon , DelCotto Law Group PLLC
13 years 12 months ago

Citation:

12a0069p.06; Docket No. 10-2103

Tag(s):

Ruling:

In affirming the rulings of the courts below overruling the objection of the Michigan Department of Treasury ("Treasury") to the debtor's protective claim, the Sixth Circuit Court of Appeals held that the debtor's claim for 2008 taxes qualifed as a prepetition claim under Code Sections 502(i) and 507(a)(8). Thus, the debtor properly filed the claim under Code Section 501(c). The Court held that while the language of Code Section 1305(a) only allowed creditors (not debtors) to file postpetition claims, its language was permissive rather than restrictive. The Court recognized that to qualify as for treatment as a prepetition claim (and payment through the chapter 13 plan), the claim filed by the debtor must fall within the exception of Code Section 502(i) for income taxes which arise after commencement of a case. The Court determined the claim fell within the scope of Code Section 507(a)(8)(A)(i) and (iii) and could therefore be treated as a prepetition claim under Code Section 501(i). Finally, the Court tied the circumstances back to the debtor's ability to file a claim under Code Section 501(c) in reliance on the definition of a "creditor" in Code Section 101(10), which specifically includes claims described in Code Section 502(i).

Procedural context:

The bankruptcy court overruled the Michigan Department of Treasury's objection to the Debtor's claim filed on behalf of the Department. The federal district court affirmed the bankruptcy court's ruling, as did the Sixth Circuit Court of Appeals in this decision.

Facts:

Debtor Dianette Hight filed a Chapter 13 petition on January 28, 2009. She filed her Michigan state income tax return for 2008 on April 8, 2009, which reflected taxes owing of $4,900. On July 17, 2009, Hight filed a proof of claim for her 2008 state taxes on behalf of the Michigan Department of Treasury. The Michigan Department of Treasury objected, claiming Hight was not authorized to file a claim on its behalf.

Judge(s):

Martin, Gibbons and Steeh (District Judge); authored by Hon. Julia Smith Gibbons

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