DeHart v. Eckert (In re Eckert)

485 B.R. 77
CourtUnited States Bankruptcy Court, M.D. Pennsylvania
DecidedJanuary 14, 2013
DocketNo. 5-10-bk-09573 RNO
StatusPublished
Cited by9 cases

This text of 485 B.R. 77 (DeHart v. Eckert (In re Eckert)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DeHart v. Eckert (In re Eckert), 485 B.R. 77 (Pa. 2013).

Opinion

OPINION1

ROBERT N. OPEL, II, Bankruptcy Judge.

This case raises a question of first impression in this district. Where a joint debtor’s income increases, can the Chapter 13 trustee, nearly one year after confirmation, move to require modification of the [79]*79plan to increase the monthly payment amount? I find that, on the facts presented, he cannot.

1. Jurisdiction

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157(b)(2). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A).

II.Procedural History

The Debtors, Paul N. Eckert (“Mr. Eckert”) and his wife, Roxanne M. Eckert (“Mrs. Eckert”), filed a voluntary petition under Chapter 13 of the Bankruptcy Code on November 29, 2010. Mr. and Mrs. Eckert are sometime hereinafter referred to as the “Debtors.”

The case docket shows that the Debtors filed their required schedules and statements pursuant to 11 U.S.C. § 521 of the Bankruptcy Code.2 An original Chapter 13 plan was filed on November 29, 2010; that plan was objected to by the standing Chapter 13 trustee, Charles J. DeHart, III (“Trustee”). The Objection alleged, in part, that the Debtors had not committed their projected disposable income to the plan, as required.

The Debtors filed their First Amended Plan on February 9, 2011 (“Amended Plan”). The Trustee, in turn, objected alleging that the Amended Plan did not meet the requirements of § 1325(a)(4) of the Bankruptcy Code. This provision essentially requires that the value of the distributions to unsecured creditors under the plan not be less than the distribution to such creditors under a hypothetical Chapter 7 liquidation.

The Trustee subsequently withdrew his Objection to the Amended Plan. The Amended Plan was confirmed on April 28, 2011.

There was an absence of docket activity in the case until April 19, 2012, when the Trustee filed his Trustee’s Motion to Require Modification of Plan (“Modification Motion”). The Modification Motion alleged that “income of the debtors has increased substantially above the amount reported by the debtors prior to confirmation of the plan.” Trustee’s Mot. to Require Modification of Plan ¶ 2.

The Modification Motion requested that, effective May 1, 2012, the Amended Plan be modified to increase the Debtors’ monthly payment, going forward, from $500.00 to $2,500.00. The Debtors objected to the Modification Motion. The Debtors’ Objection questions some of the factual predicates of the Modification Motion and allege that the “Chapter 13 Trustee’s request to increase plan payments violates the finality of a Confirmed Chapter 13 Plan pursuant to 11 U.S.C. § 1327.” Debtors’ Answer and Objections to the Trustee’s Mot. to Require a Modification of Their Confirmed Chapter 13 Plan ¶ 3.

A hearing was held on the Modification Motion on August 28, 2012. At hearing, both of the Debtors testified. Post-hearing briefs were subsequently filed. On December 18, 2012, a hearing was held to allow final argument by counsel for the Trustee and the Debtors. This matter is now ripe for decision.

III.Discussion

The Modification Motion implicates § 1329 of the Bankruptcy Code which provides, in part:

(a) At any time after confirmation of the plan but before the completion of pay[80]*80ments under such plan, the plan may be modified, upon request of the debtor, the trustee, or the holder of an allowed unsecured claim, to—
(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan ...

11 U.S.C. § 1329(a)(1) (emphasis added).

Section 1329 requires that a Chapter 13 plan modification comply with some of the same requirements which must be met for confirmation of a plan. The confirmation requirements are codified in § 1325 of the Bankruptcy Code. The following sections of this Opinion, in part, will discuss which of § 1325’s requirements are and are not implicated by the Modification Motion.

The Trustee advanced several arguments in support of the Modification Motion. He contends the principle that confirmation is res judicata as to all issues that were or could have been decided at confirmation is inapplicable here. He argues the principle does not apply because “§ 1329 of the Bankruptcy Code provides a means to change the binding effect of confirmation.” Trustee’s Br. in Supp. of Mot. to Require Modification of Plan Pursuant to § 1329, 4.

The Trustee also asserts that the record, which reflects a post confirmation increase in Mr. Eckert’s earnings, justifies an upward modification in the monthly plan payment amount.

The Trustee maintains that statutory references which § 1325(a) of the Bankruptcy Code makes to § 1325(b) impliedly make the § 1325(b) requirements applicable to § 1329 modifications. Trustee’s Br. in Supp. of Mot. to Require Modification of Plan Pursuant to § 1329, 6.

I understand a portion of the Debtors argument to be that taking a second look at the Debtors’ projected disposable income, nearly one year post confirmation, is an improper attempt to relitigate an issue that was disposed of at confirmation.

A. Motions to Modify and the Burden of Proof

It is well settled that a Chapter 13 debtor bears the burden of persuasion on whether • a proposed plan meets the elements required for confirmation pursuant to § 1325. In re Martorana, No. 07-13861bf, 2008 WL 1745784, at *2 (Bankr.E.D.Pa. April 11, 2008); In re Brown, 244 B.R. 603, 607 (Bankr.W.D.Va.2000); In re Norwood, 178 B.R. 683, 687 (Bankr.E.D.Pa.1995); In re Fricker, 116 B.R. 431, 437 (Bankr.E.D.Pa.1990). Similarly, the proponent of a plan modification bears the burden of proof that the statutory requirements have been met. In re Robenhorst, No. 10-25094-svk, 2011 WL 1434696, at *1 (Bankr.E.D.Wis. April 14, 2011); In re Coay, No. 09-71814, 2012 WL 2319100, at *7 (Bankr.C.D.Ill. June 19, 2012).

B. Evidence of Post-Confirmation Change in Income

Here, the Modification Motion was triggered by the Trustee’s belief that Mr. Eckert benefitted from a post-confirmation increase in his earnings. The evi-dentiary record shows that Mr. Eckert, despite his apparent efforts to remain continuously employed, has suffered from significant forces of change which are beyond his control. At the time he testified, Mr. Eckert was fifty-nine years old; his household included Mrs. Eckert and their twenty-one-year-old daughter, a full time college student. Trial Tr. vol. 1, 7, August 28, 2012. Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
485 B.R. 77, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dehart-v-eckert-in-re-eckert-pamb-2013.