Ferrell v. Countryman

398 B.R. 857, 2009 U.S. Dist. LEXIS 409, 2009 WL 35061
CourtDistrict Court, E.D. Texas
DecidedJanuary 6, 2009
Docket1:08-cv-00330
StatusPublished
Cited by9 cases

This text of 398 B.R. 857 (Ferrell v. Countryman) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ferrell v. Countryman, 398 B.R. 857, 2009 U.S. Dist. LEXIS 409, 2009 WL 35061 (E.D. Tex. 2009).

Opinion

*860 MEMORANDUM AND ORDER

MARCIA A. CRONE, District Judge.

Pending before the court is an appeal of a decision rendered by United States Bankruptcy Judge Brenda T. Rhoades (“Judge Rhoades”) denying Appellants Ronald C. Ferrell, Jr., and Sharon L. Fer-rells’ (collectively, “the Ferrells”) Motion to Alter or Amend Dismissal Order Entered on May 21, 2008, Motion for Relief from the Egregious Effect of the Agreed Order Entered in this Case on February 9, 2006, Request for Attorney Fees and Sanctions Against the Chapter 13 Trustee, Motion to Reinstate Debtor’s Chapter 13 Case with Notice of Hearing. See In re Ferrell, No. 04-40048, 2008 WL 2857141 (Bankr.E.D.Tex. July 21, 2008). Having reviewed the opinion, the record, the submissions of the parties, and the applicable law, the court is of the opinion that the decision of the bankruptcy court should be affirmed.

I. Background

The Ferrells initiated this bankruptcy proceeding by filing a voluntary petition for relief under Chapter 13 of the Bankruptcy Code on January 5, 2004. Subsequently, Janna L. Countryman (“the Trustee”) was appointed Trustee. On August 4, 2004, the bankruptcy court entered an order confirming the Ferrells’ Chapter 13 Plan (“the Plan”), which required that the Ferrells make six monthly payments of $421.00 and 54 monthly payments in the amount of $502.00, for a total payment of $29,634.00 over 60 months.

On March 31, 2005, following the Fer-rells’ failure to make the required payments, the Trustee filed a motion to dismiss the case. A hearing was held on October 19, 2005, at which time the motion was withdrawn. On October 20, 2005, the bankruptcy court entered an Agreed Order Approving Modified Plan and Limiting Notice, in which the Plan was modified to require the Ferrells to pay the sum of $316.38 per month for 19 months beginning February 19, 2004, and then $515.90 per month for 41 months beginning September 19, 2005, for a total payment of $27,163.12 over 60 months.

On January 20, 2006, the Trustee filed another motion to dismiss the case based on the Ferrells’ failure to make the required payments under the modified Plan, which, as of January 19, 2006, left them in default in the amount of $1,546.42. On February 9, 2006, prior to a hearing on the motion, the parties submitted an Agreed Order on Trustee’s Motion to Dismiss (“Agreed Order”), in which the parties agreed and the bankruptcy court ordered that:

1. In addition to the regular monthly plan payments, the Chapter 13 Trustee’s office must receive all past due Chapter 13 plan payments that are owed through January 19, 2006, in the total amount of $1,546.42 to be paid as follows:
a. $515.47 delinquency payment due by February 3, 2006, and monthly plan payment of $515.90 due February 19, 2006;
b. $515.47 delinquency payment due by March 3, 2006, and monthly plan payment of $515.90 due March 19, 2006;
c. $515.48 delinquency payment due by April 3, 2006, and monthly plan payment of $515.90 due April 19, 2006; and
*861 2. The Debtors shall remain current on the monthly plan payments until this case is completed.
3. In the event the Debtors fail to make any of the payments referenced in Paragraphs 1 and 2 herein-above, the Trustee will submit a Certificate of Non-Compliance and the Court will enter the Dismissal Order submitted therewith without further motion.

On May 8, 2008, the Trustee filed a Certificate of Non-Compliance with the bankruptcy court, stating that the Ferrells “failed to make the required monthly payment amount, and thus failed to bring the Chapter 13 Plan payments current in accordance with the Conditional Dismissal Order.” The Ferrells filed a Motion to Modify Chapter 13 Plan on May 15, 2008.

On May 21, 2008, pursuant to the Agreed Order and the Certificate of NonCompliance, the bankruptcy court entered an Order Dismissing Chapter 13 Case with Retention of Jurisdiction (“Dismissal Order”), dismissing the Ferrells’ case. Subsequently, on May 27, 2008, the Ferrells filed a Motion to Alter or Amend Dismissal Order Entered on May 21, 2008, a Motion for Relief from the Egregious Effect of the Agreed Order Entered in this Case on February 9, 2006, a Request for Attorney Fees and Sanctions against the Chapter 13 Trustee, and a Motion to Reinstate Debt- or’s Chapter 13 Case with Notice of Hearing pursuant to Federal Rules of Civil Procedure 59(e) and 60(b). In their motions, the Ferrells argue that they entered into the Agreed Order without the benefit of attorney representation. They further assert that the Trustee failed to perform her statutory duties because she did not disclose that the Agreed Order waived all future opportunities to file a modified plan under 11 U.S.C. § 1329 and that they were misled by the Trustee’s representative, who allegedly stated that the Trustee would file a motion to dismiss as opposed to a Certificate of Non-Compliance.

A hearing was held, and on July 21, 2008, the bankruptcy court entered an order denying the Ferrells’ motions. Based on the Ferrells’ failure to make their Plan payment obligations, Judge Rhoades found that cause existed to dismiss their bankruptcy case at the time the dismissal order was entered pursuant to United States Bankruptcy Code § 1308(c)(6). On July 30, 2008, the Ferrells filed their Notice of Appeal regarding the bankruptcy court’s memorandum and order. On September 2, 2008, they submitted Appellants’ Designation of Record and Statement of Issues on Appeal, setting forth the following issues for review by this court:

A. Entry of the Dismissal Order on May 21, 2008, constituted clear error of law in that the Modification filed by Debtors on May 15, 2008, and before completion of their plan payments changed the plan terms whereby Debtors were in fact current on their plan payments under the modification when the Court entered the Dismissal Order.
B. Striking of the Debtors’ Motion to Modify filed on May 15, 2008, constituted clear error of law in that 11 U.S.C. § 1329 provides an absolute right for Debtors to file an amendment of their plan after confirmation and before the end of payments under the plan.
C. Entry of the conditional Agreed Order constituted clear error of law and an abuse of discretion in that the Agreed Order modified the terms of Debtors’ plan without determining under 11 U.S.C. § 1329(b)(1) and 11 U.S.C. § 1325(a)(6) whether it was feasible for the Debtors to make the pay *862 ments required under the Agreed Order.
D.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Hardwick v. Anderson
E.D. Texas, 2024
Ruff v. Moser
E.D. Texas, 2023
Alejandro Cervantes
E.D. California, 2020
In re Colón Martinez
472 B.R. 137 (First Circuit, 2012)
Lussier v. Sullivan (In Re Sullivan)
455 B.R. 829 (First Circuit, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
398 B.R. 857, 2009 U.S. Dist. LEXIS 409, 2009 WL 35061, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ferrell-v-countryman-txed-2009.