In re Attariwala
| Decision Date | 03 February 2023 |
| Docket Number | Case No. 19-00828-ELG |
| Citation | 648 B.R. 335 |
| Parties | IN RE: Jaspreet Kaur ATTARIWALA, Debtor. |
| Court | United States Bankruptcy Courts – District of Columbia Circuit |
Benjamin Joseph Beatty, Rebeca A. Herr, Chapter 13 Trustee, Annapolis, MD, for Trustee Rebecca A. Herr.
David E. Lynn, Rockville, MD, for Debtor.
Elizabeth L. Gunn, U.S. Bankruptcy Judge The Court has before it the Amended Chapter 13 Plan (ECF No. 61) filed by the above-captioned Debtor, confirmation of which was stayed by the Consent Order on Motion to Compel and Motion to Stay Entry of Order Confirming Chapter 13 Plan entered by the Court on October 14, 2020. ECF No. 133. For the reasons stated below, the Court will overrule any outstanding objection to confirmation by BioConvergence LLC d/b/a Singota Solutions LLC and confirm the Amended Chapter 13 Plan.
This case presents an unusual situation in a chapter 13 case, where more than three years after the filing of the petition the debtor has yet to have a confirmed chapter 13 plan. The path to confirmation of the Amended Chapter 13 Plan herein was hotly litigated throughout the pendency of this case. A thorough understanding of the history of this case is necessary in support of Court's final determination on confirmation of the Amended Chapter 13 Plan.
On December 17, 2019 (the "Petition Date"), Jaspreet Attariwala (the "Debtor") filed a voluntary petition under chapter 13. Voluntary Pet., ECF No. 1. Prior to the filing of her case, Ms. Attariwala was a defendant in ongoing litigation removed from the Monroe County, Indiana Circuit Court to the United States District Court for the Southern District of Indiana (the "Indiana Litigation"), which litigation was initially stayed by the filing of the petition. After an extension of the filing deadline, the Debtor timely filed her initial proposed plan on January 12, 2020, which was objected to by BioConvergence LLC d/b/a Singota Solutions ("Singota") on February 3, 2020. On March 4, 2020, Singota issued discovery to the Debtor on the contested matter of plan confirmation including a deposition notice and written discovery (the "Plan Discovery"). ECF No. 57. Shortly thereafter, on March 16, 2020, the Debtor filed her amended chapter 13 plan (the "Plan"), which remains the operative plan in this case. ECF No. 61. Under the applicable Local Bankruptcy Rules at the time, the filing of the Plan mooted Singota's pending objection to the original plan but did not impact the pending discovery requests. The Plan provides for payments of $300.00 over a period of 60 months for a plan base of $18,000.00, with proposed pro rata distributions to unsecured creditors. The Debtor proposes to make ongoing payments on her two secured obligations—her mortgage and car loan—directly to the lienholders. The secured obligations were current at the time of the filing of this case and there are no arrears cured through the Plan. Nor does the Debtor have any priority unsecured claims. Therefore, except for the chapter 13 trustee's statutory fees, the entirety of the Plan's funding is proposed to be paid to unsecured creditors.2
On April 6, 2020, Singota filed its objection to confirmation of the Debtor's Plan (the "Objection") (ECF No. 63). The Objection alleges that the Plan could not be confirmed for failure to comply with any or all of three specific subsections of § 1325 of the Bankruptcy Code :3 (i) § 1325(a)(7) that the Debtor's filing of the petition was not in good faith; (ii) § 1325(a)(6) that the Debtor will not be able to make all payments under the Plan and comply with the Plan; and (iii) § 1325(a)(4) that the Plan fails to meet the best interests of creditors test. Objection at ¶¶ 13–48. A preliminary hearing on confirmation of the Plan was held on June 12, 2020, at which time an evidentiary hearing was set for August 21, 2020 (the "2020 Confirmation Hearing"). Prior to the 2020 Confirmation Hearing, on July 17, 2020, Singota filed a Motion to Compel Production of Documents (the "Motion to Compel") (ECF No. 92) related to the Plan Discovery. The Motion to Compel was not set for hearing until three days after the 2020 Confirmation Hearing and no motion to expedite a hearing thereon was filed.
On August 21, 2020, this Court (Teel, J.) conducted an evidentiary hearing on confirmation of the Plan, at which hearing4 the Debtor was the only witness and testified in support of confirmation. In addition to the Debtor's testimony at the 2020 Confirmation Hearing, the Court took judicial notice of its oral opinion from June 24, 2020 granting Singota relief from the automatic stay to continue the Indiana Litigation, as well as the Debtor's testimony and evidence produced in prior hearings in the case. See generally Tr. Oral Ruling at 13:7–14:19, 34:2–42:21, ECF No. 109. Upon conclusion of the evidence, Singota and the Debtor argued the question of whether the Debtor's Plan should be confirmed. Tr. Oral Ruling at 14:20–32:11. During argument, the Court entered into evidence the Debtor's history of payments to the chapter 13 trustee (the "Trustee"). Tr. Oral Ruling 20:9–21:2. The Trustee, by counsel, participated in the 2020 Confirmation Hearing, did not object to confirmation of the Plan, and did not take a position on the other issues raised during the hearing. Tr. Oral Ruling at 3:2–11. At no time during the 2020 Confirmation Hearing did Singota move to continue or otherwise delay the consideration of confirmation of the Debtor's Plan as a result of the outstanding Plan Discovery or pending Motion to Compel. See generally Tr. Oral Ruling. At the conclusion of the 2020 Confirmation Hearing, the Court took a recess, after which it issued an extensive oral ruling (the "Oral Ruling") on the question of confirmation. Tr. Oral Ruling 32:24–25. The Oral Ruling included both findings of fact and conclusions of law, which will be discussed in more detail below. The Court ultimately decided that the Debtor and the Plan met the requirements of § 1325 and ordered confirmation of the Debtor's Plan.
Shortly after the 2020 Confirmation Hearing, on September 8, 2020, the Trustee filed her Recommendation Regarding Confirmation of Plan Filed March 16, 2020 (ECF No. 111) recommending confirmation and submitted a proposed confirmation order to the Court for entry.
Before the Court entered a confirmation order consistent with its Oral Ruling, on September 9, 2020, Singota filed an Expedited Motion to Stay Entry of Order Confirming Chapter 13 Plan (the "Stay Motion") (ECF No. 112) alleging that on August 31, 2020, ten (10) days after the 2020 Confirmation Hearing, the Debtor produced additional bank statements pursuant to the Plan Discovery, which raised the possibility that the Debtor "concealed assets and engaged in bankruptcy fraud in filing her petition." Stay Motion at 1, ECF No. 112. The Stay Motion raised, for the first time, the argument that confirmation of the Debtor's Plan should be delayed pending resolution of not only the Motion to Compel, but also pending the Debtor's compliance with any order compelling production (and thus the Plan Discovery), and a "reasonable period of time" thereafter for Singota to review the documents produced. Id. at 5–6. The Stay Motion raised several different issues related to responses to the Plan Discovery that Singota alleged was outstanding and relevant to the consideration of confirmation of the Debtor's Plan, specifically her good faith in filing this case as required by § 1325(a)(7). See generally id. The Stay Motion did not raise any issues related to the Court's findings in the Oral Ruling as to §§ 1327(a)(4) and (a)(6). See id . at 27–28.
On September 14, 2020,5 the Debtor filed an objection to the Stay Motion and the next day Singota filed a reply in support of the same. The Court held an initial hearing on the Stay Motion on September 16, 2020, which was continued to September 23, 2020, on request of the parties to allow for the continuation of settlement discussions. See Minute Entry, ECF No. 123. At the continued hearing, Singota and the Debtor advised the Court that they had reached an agreement as to the Motion to Compel and the Stay Motion. See Minute Entry, ECF No. 126. Therefore, on October 14, 2020, the Court entered the Consent Order on Motion to Compel and Motion to Stay Entry of Order Confirming Chapter 13 Plan (the "Consent Order") (ECF No. 133) in which the parties agreed to, inter alia , certain conditions relating to the outstanding Plan Discovery. Specifically, the Consent Order required the Debtor to sit for a continued deposition and the Court's holding in abeyance entry of a confirmation order for sixty (60) days after the last day when the Debtor produced all required documents (the "Abeyance Period"). Id. The Debtor and Singota were to file a joint praecipe with the Court upon the completion of the agreed discovery. Id. Unfortunately, the entry of the Consent Order did not result in the final resolution of the discovery issues between the Debtor and Singota, nor was a joint praecipe advising the Court of the commencement of the Abeyance Period ever filed. Entry of the Consent Order was followed in the next twelve months by motions to extend the deadlines contained therein, a motion for protective order by the Debtor, and multiple other pleadings regarding third party discovery, all purportedly arising from information obtained through the Plan Discovery.
On December 10, 2021, almost fifteen (15) months after the 2020 Confirmation Hearing, the Debtor filed a Motion to Conclude Confirmation Hearing (the "Motion to Set") (ECF No. 181) requesting the Court set a date to conclude the process of consideration of confirmation of the Plan. Once again, the Debtor's motion drew an objection from Singota, who raised issues with discovery disclosures, and a response thereto from the Debtor. ECF Nos. 182, 187. The Court set a hearing on the Motion to...
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