In re Castello

• Decision Date: 27 February 1991
• Docket Number: Bankruptcy No. 388-04809-H13.
• Citation: 127 BR 257
• Parties: In re Dennis Kent CASTELLO, Debtor.
• Court: U.S. Bankruptcy Court — District of Oregon

127 B.R. 257 (1991)

In re Dennis Kent CASTELLO, Debtor.

Bankruptcy No. 388-04809-H13.

United States Bankruptcy Court, D. Oregon.

February 27, 1991.

B. Gil Sharp, Hood River, Or., for creditor.

Todd Trierweiler, Portland, Or., for debtor.

Robert W. Myers, Portland, Or., trustee in Bankruptcy.

SUPPLEMENTAL OPINION

HENRY L. HESS, Jr., Chief Judge.

In this case this court entered an order confirming the debtor's Chapter 13 Plan. Thereafter the court entered its opinion, April 7, 1989, 98 B.R. 523 (Bankr.Or.1989) and an order of that same date overruling objections to confirmation. This latter order was appealed by a creditor, Terry J. Serdy. The appeal was heard by the Bankruptcy Appellate Panel for the Ninth Circuit (BAP). The BAP entered its "Not For Publication" Memorandum on January 23, 1991 in which it determined that the order of confirmation be vacated and the appeal be remanded to this court for further proceedings in accordance with its memorandum 123 B.R. 466.

The BAP recognized that the issues in this matter were determined upon agreed facts noted in this court's opinion of April 7, 1989. The BAP Memorandum does not suggest that further evidence should be required or that any of the legal tests used in finding that the plan was in good faith were in error. The BAP merely questions whether or not this court inappropriately placed the confirmation burden on the creditor to show "bad faith", instead of on the debtor to show "good faith". This concern arose because this court's opinion contained the statement "the creditor must muster some other evidence of bad faith". This quoted statement is a paraphrase of a statement made by the Ninth Circuit Court of Appeals in the case of In re Goeb, 675 F.2d 1386 (9th Cir.1982) in which the court stated on page 1391: "Unless the court can muster other evidence of bad faith on remand, it must confirm the Goeb's proposed plan."

This court recognizes that a debtor in Chapter 13 has the burden of showing that the plan is in "good faith" and that it is not the burden of a creditor to show "bad faith". But this does not mean that the court must consider evidence not presented by the parties or that the debtor must present evidence to disprove a negative by anticipating arguments which might be, but have not been made, by the creditor.

In this case, as stated in the opinion of April 7, 1989, the creditor pointed to three matters which he contended indicated bad faith. The court considered those three...