Osborne, In re, 94-55890

• Decision Date: 12 February 1996
• Docket Number: No. 94-55890,94-55890
• Citation: 76 F.3d 306
• Parties: -965, 96-1 USTC P 50,185, Bankr. L. Rep. P 76,831, 96 Cal. Daily Op. Serv. 963, 96 Daily Journal D.A.R. 1599 In re Rex O. OSBORNE; Helen C. Osborne, Debtors. UNITED STATES INTERNAL REVENUE SERVICE, Appellant, v. Rex O. OSBORNE, fdba: the Original Hamburger Stand # 7; fdba: Tommies Hamburgers; Helen C. Osborne, fdba; the Original Hamburger Stand # 7; fdba: Tommies Hamburgers, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 306

76 F.3d 306

77 A.F.T.R.2d 96-965, 96-1 USTC P 50,185,

Bankr. L. Rep. P 76,831,

96 Cal. Daily Op. Serv. 963,

96 Daily Journal D.A.R. 1599

In re Rex O. OSBORNE; Helen C. Osborne, Debtors UNITED STATES INTERNAL REVENUE SERVICE, Appellant, v. Rex O. OSBORNE, fdba: the Original Hamburger Stand # 7 fdba: Tommies Hamburgers; Helen C. Osborne fdba; the Original Hamburger Stand # 7 fdba: Tommies Hamburgers, Appellees.

No. 94-55890.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 13, 1995.

Decided Feb. 12, 1996.

Marc J. Winter, Taylor, Simonson & Winter, Claremont, California, for appellees.

Gary R. Allen (on the briefs) and Gary D. Gray (argued), United States Department of Justice, Tax Division, Washington, D.C., for appellant.

Appeal from the Bankruptcy Appellate Panel of the Ninth Circuit; OLLASON, JONES, and MEYERS, Judges, Presiding.

Before: ALDISERT, ^* FARRIS and RYMER, Circuit Judges.

ALDISERT, Senior Circuit Judge.

We are to decide a case that arose prior to the enactment of the Bankruptcy Reform Act of 1994, Pub.L. No. 103-394, 108 Stat. 4106 (codified as amended at 11 U.S.C. § 502(b)(9) (1995)). This new statute specifically provides that a claim may be disallowed if proof of such claim is not timely filed. This amendment to the Bankruptcy Code, however, applies only to cases filed after October 22, 1994, the effective date of the Reform Act. Because this case was filed before that date, we must interpret the statutes, rules and case law that governed proceedings prior to the effective date.

This appeal by the United States from a judgment of the Bankruptcy Appellate Panel of the Ninth Circuit requires us to decide whether the government's claim for taxes, advanced by the Internal Revenue Service (IRS) in a Chapter 13 proceeding, was timely filed under Rule 3002 of the Bankruptcy Rules. We must decide whether this case is governed by the teachings of In re Tomlan, 102 B.R. 790, 791-92 n. 1 (E.D.Wash.1989), aff'd per curiam, 907 F.2d 114 (9th Cir.1990), or In re Pacific Atlantic Trading Co. (United States v. Towers), 33 F.3d 1064 (9th Cir.1994). We hold that there is a fundamental distinction between Chapter 13 and Chapter 7 timeliness requirements. Because timeliness is of the essence in claims filed in a Chapter 13 reorganization, this case is governed by the strict time requirements on filing claims set forth in In re Tomlan. Accordingly, we affirm the judgment on the basis that the IRS claims were not timely filed. In reaching this conclusion, we decide that the teaching of Pacific Atlantic is limited to Chapter 7 proceedings.

The Bankruptcy Appellate Panel had jurisdiction under 28 U.S.C. §§ 158(a) and 158(b)(1). This court has jurisdiction under 28 U.S.C. § 158(d). Appeal was timely filed under Rule 4(a), Federal Rules of Appellate Procedure.

Whether a claim may be disallowed in a bankruptcy proceeding on the ground that the proof of claim was not timely filed pursuant to Rule 3002(c), Fed.R.Bankr.P., is a question of law subject to de novo review. Pacific Atlantic, 33 F.3d at 1065 (citing In re Acequia, Inc., 787 F.2d 1352, 1357 (9th Cir.1986)).

I.

The facts are not in dispute. Rex and Helen Osborne are debtors who filed a joint voluntary petition under Chapter 13 of the Bankruptcy Code on July 24, 1991. The debtors' schedule included, as priority unsecured debts, income and payroll taxes for the tax years 1985 through 1987 in the amount of $9,228 and income taxes for the tax years 1989 through 1990 in the amount of $16,000. The debtors' plan, which provided for full payment of these priority claims, was confirmed by the bankruptcy court on October 2, 1991. The bankruptcy court established December 31, 1991 as a bar date for filing timely proofs of claim.

The IRS filed a proof of claim on December 24, 1991 for $11,746.10, including estimates for personal income taxes for the tax years 1985 through 1989. A supplemental claim filed April 10, 1992 detailed personal income taxes for the years 1986 through 1990 in the amount of $31,470.32. A second amended claim followed on November 30, 1992, asserting for the first time a claim for unpaid payroll taxes. This claim, for $214,287.69, listed personal income tax liabilities and penalties for the years 1985 through 1990, and federal payroll tax liabilities and penalties for the years 1983 through 1986.

Debtors objected to the supplemental (April 10, 1992) claim on the ground that the 1990 tax year was not listed in the original proof of claim. They objected to the amended (November 30, 1992) claim on two separate grounds: first, that the amounts claimed for 1988 and 1990 were dramatically higher than those listed on the original proof of claim; and second, that the claim for payroll taxes was not listed on the original proof of claim.

The bankruptcy court ruled that the supplemental claim filed by the IRS related back to the timely filed original proof of claim, and thus allowed the claim in its entirety. Similarly, the bankruptcy court allowed the personal income tax liabilities listed in the IRS's amended (November 30, 1992) claim because they related back to the original claim. The bankruptcy court disallowed the claim for payroll taxes, however, because that claim was of a character different from those set forth in the original proof of claim and thus were untimely filed pursuant to Rule 3002(c). The IRS appealed to the Bankruptcy Appellate Panel of the Ninth Circuit, which affirmed.

The flash point of controversy is the power and authority of the bankruptcy court to enforce a claims bar in a Chapter 13 proceeding under Bankruptcy Rule 3002(c), which provides:

(c) Time for filing

In a chapter 7 liquidation ... or chapter 13 individual's debt adjustment case, a proof of claim shall be filed within 90 days after the first date set for the meeting of creditors called pursuant to § 341(a) of the Code ...

(1) On motion of the United States, a state, or subdivision thereof before the expiration of such period and for cause shown, the court may extend the time for filing of a claim by the United States, a state, or subdivision thereof.

Although Bankruptcy Rule 3002 is merely a procedural rule, it has the force of law unless it is in direct violation of a specific statutory provision. The Advisory Committee note to Rule 3002 states in part the following:

Subdivision (a) of this rule is substantially a restatement of the general requirement that claims be proved and filed....

Subdivision (c) is adapted from former Bankruptcy Rule 302(e) but changes the time limits on the filing of claims in chapter 7 and 13 cases from six months to 90 days after the first date set for the meeting of creditors ...

Former Rule 302 applied to proceedings brought under the Bankruptcy Act of 1898, ch. 541, 30 Stat. 544. Section 57(n) of the 1898 Act specifically disallowed claims not filed within six months after the first meeting of creditors, see 11 U.S.C. § 93(n) (1976), and Rule 302(a) accommodated this statutory requirement by providing that a claim had to be filed within the six-month period in order to be allowed. Prior to the Bankruptcy Reform Act of 1994, the Bankruptcy Code contained no provision comparable to former Section 57(n) disallowing late claims.

Yet the legislative history of 11 U.S.C. § 501 indicates that Congress intended to delegate to the Rules of Bankruptcy Procedure the authority to suggest proper time limits:

The Rules of Bankruptcy Procedure will set the time limits, the form, and the procedure for filing, which will determine whether claims are timely or tardily filed. The rules governing time limits for filing proofs of claims will continue to apply under section 405(d) of the bill. These provide a 6-month bar date for the filing of tax claims.... In light of the difficult administrative burden on taxing authorities, especially the Internal Revenue Service, in dealing with a bankrupt taxpayer and being required to prepare and file a tax claim, it is anticipated that any amendment to the Rules of Bankruptcy Procedure will not deprive taxing authorities of this amount of time to file proofs of claims.

H.R.Rep. No 595, 95th Cong. 1st Sess. 351 (1977); S.Rep. No. 95-989, 95th Cong., 2d Sess. 61 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5847, 6307.

It is on this statutory authority that the present Rule provides that claims must be filed within 90 days of the first date set for a meeting of creditors and that government agencies may apply to the bankruptcy court for additional time to file tax claims. No such request was made here.

II.

Were this panel writing on a clean slate, our analysis would end here. But we are bound by the doctrine of stare decisis, and must follow decisions of previous panels. Unfortunately, we are confronted with a panel decision of this court holding unequivocally that Bankruptcy Rule 3002 is valid and sets appropriate time limits in a Chapter 13 reorganization case, In re Tomlan, 102 B.R. at 795; and the decision of a later panel declaring that in the context of a Chapter 7 case, "Rule 3002(c) does not disallow a late claim. It simply divides claims into two categories: timely and late." Pacific Atlantic, 33 F.3d at 1067.

Two basic precepts will inform our decision. First, a panel of this court may not overrule a decision of a previous panel; only a court in banc has such authority. United States v. Lucas, 963 F.2d 243, 247 (9th Cir.1992). Second, the doctrine of stare decisis concerns the holdings of previous cases, not the rationales:

A judicial precedent attaches a specific legal consequence to a detailed set of facts in an adjudged case or judicial decision, which is then considered as furnishing the rule for the determination of a subsequent case involving identical or similar material facts and arising in the same court or a lower court in the judicial hierarchy.

Allegheny General Hospital v. NLRB, 608 F.2d 965, 969-970 (3rd Cir.1979) (footnote omitted)....