USA v. Boutwell

2011 DNH 144

• Court: District Court, D. New Hampshire
• Decided: September 22, 2011
• Docket: 07-CV-401-PB
• Status: Published

Opinion

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

United States of America

v. Case N o . 07-cv-401-PB Opinion N o . 2011 DNH 144 William E . Boutwell

O R D E R

The United States filed this action against William

Boutwell to recover taxes, interest, and penalties he owed

pursuant to Section 6672 of the Internal Revenue Code. The case

was stayed after Boutwell sought Chapter 13 bankruptcy

protection and the United States responded in bankruptcy court

with a proof of claim seeking to recover the taxes, interest,

and penalties that it was owed as of the date that Boutwell

filed his bankruptcy petition. After negotiations between the

parties, the United States filed an amended proof of claim

seeking $57,996.82. Boutwell withdrew his objection to the

claim as amended, a plan of confirmation was approved stating

that the United States would receive $57,997 “payable at 0%

interest per plan,” and the court approved the amended proof of

claim in the same amount. The United States then obtained relief from the stay in bankruptcy court and resumed its

litigation in this court. The parties filed cross motions for

summary judgment and the only issue that remains in dispute is

whether the United States is entitled to recover post-petition

interest.

Boutwell contends that he cannot be held liable for post-

petition interest because the bankruptcy court specified in

approving the plan of confirmation that interest would not be

assessed on the amount he owed the government under the plan.

I reject this argument because it is inconsistent with First

Circuit precedent. In In re Cousins, the First Circuit held

that post-petition interest on a non-dischargeable tax

obligation could be recovered from a taxpayer who had completed

all payments owed under a confirmed plan and received a

discharge in a Chapter 12 proceeding. 209 F.3d 3 8 , 41-42 (1st

Cir. 2000). In reaching this conclusion, the court held that

post-petition interest owed on a non-dischargeable debt is not

dischargeable in a Chapter 12 bankruptcy proceeding. Id. Thus,

the court reasoned, it may be recovered in a subsequent action

against the debtor even though the debtor has received a

discharge in bankruptcy. Id. Boutwell presents no persuasive

2 argument to distinguish In re Cousins. Accordingly, I grant the

government’s motion for summary judgment (Doc. N o . 27) and deny

Boutwell’s corresponding motion (Doc. N o . 2 3 ) .

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

September 2 2 , 2011

cc: James E . Brown, Esq. Barry C . Richmond, Esq. Victor W . Dahar, Esq.