In re Grant

• Decision Date: 19 March 2007
• Docket Number: No. 06-32318.,No. 06-32299.,06-32299.,06-32318.
• Parties: In re Rick Morey GRANT a/k/a Morey Grant Angelle NMN Grant a/k/a Angela Grant a/k/a Angela Dean, Debtors. In re Terry W. Mosher, Debtor.
• Court: United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Eastern District of Tennessee

364 B.R. 656

In re Rick Morey GRANT a/k/a Morey Grant Angelle NMN Grant a/k/a Angela Grant a/k/a Angela Dean, Debtors.

In re Terry W. Mosher, Debtor.

No. 06-32299.

No. 06-32318.

United States Bankruptcy Court, E.D. Tennessee.

March 19, 2007.

COPYRIGHT MATERIAL OMITTED

Law Offices of Mayer & Newton, Richard M. Mayer, John P. Newton, Jr., Knoxville, TN, for Debtors.

MEMORANDUM ON CHAPTER 13 TRUSTEE'S OBJECTIONS TO CONFIRMATION

RICHARD STAIR, Jr., United States Bankruptcy Judge.

Before the court is the Chapter 13 Trustee Objection to Confirmation (Objection to Confirmation) filed by the Chapter 13 Trustee in both of these bankruptcy cases by which she opposes confirmation on the grounds that the Debtors do not propose to pay all of their disposable income into their respective plans for the required "applicable commitment period." 11 U.S.C. § 1325(b)(4) (2006). As set forth in the Supplemental Joint Statement of Issues and Supplemental Joint Stipulation of Facts filed by the parties, "[t]he issue for determination ... is not the amount of disposable income to be paid into the plan as the parties hereby stipulate that the projected and/or disposable income available and necessary to fund [the plan proposed by Rick and Angelic Grant is $64.00 weekly and the projected and/or disposable income available and necessary to fund the plan proposed by Terry Mosher is $334.00 bi-weekly]. ... [T]he sole issue for determination by the Court is whether the required plan length under 11 U.S.C. § 1325(b)(4) is three or five years."

At the preliminary hearing held on January 31, 2007, the parties agreed that an evidentiary hearing would not be required and that all issues could be decided on stipulations and briefs. Because the confirmation issue is identical in both cases, the court has consolidated its ruling into this single Memorandum.

This is a core proceeding. 28 U.S.C. § 157(b)(2)(L) (2006).

I

A

The Debtors in case number 06-32299, Rick and Angelle Grant (the Grants), filed the Voluntary Petition commencing their Chapter 13 case on October 5, 2006. Their Chapter 13 Plan (Plan) proposes weekly payments to the Chapter 13 Trustee of $64.00 for 36 months, plus all tax refunds, with a proposed dividend of 5-20% to nonpriority unsecured creditors. The Trustee filed her Objection to Confirmation on November 16, 2006.

The parties filed a Joint Statement of Issues and a Joint Stipulation of Facts on January 23, 2007, as well as a Supplemental Joint Statement of Issues and Supplemental Joint Stipulation of Facts on February 13, 2007. The Trustee filed her Brief in Support of Objection of `Trustee to Confirmation of Plan on January 23, 2007, and the Trustee's Supplementary Brief Regarding Projected Disposable Income in Support of Objection of Trustee to Confirmation of Plan on February 13, 2007. The Debtors filed the Debtor's [sic] Brief in Support of Confirmation of Chapter 13 Plan on January 24, 2007, and the Debtors['] Supplemental Brief in Support of Confirmation of Chapter 13 Plan on February 13, 2007. The parties have stipulated that the Grants' annualized current monthly income as set forth on line 21 of their Form B22C, the means test form, is $51,372.00, which exceeds the median in come for a 2 — person family in Tennessee.¹ The parties also stipulate that the Grants' monthly disposable income as evidenced on line 58 of their Form B22C is a negative ($284.16), and their average or projected monthly net income at the time their case was filed, as evidenced by their Schedules I and J, was $277.49.² As noted, the parties have also stipulated that "the required disposable income to fund this [P]lan for purposes of confirmation is $64.00 weekly."

B.

The Debtor in case number 06-32318, Terry W. Mosher (Mosher), filed the Voluntary Petition commencing his Chapter 13 case on October 6, 2006. His Chapter 13 Plan (Plan) proposes bi-weekly payments of $334.00 for 36 months, plus all tax refunds, with a proposed dividend of 5-20% to, nonpriority unsecured creditors. The Trustee filed her Objection to Confirmation on November 16, 2006.

The parties filed a Joint Statement of Issues and a Joint Stipulation of Facts on January 23, 2007, as well as a Supplemental Joint Statement of Issues and Supplemental Joint Stipulation of Facts on February 13, 2007. The Trustee filed her Brief in Support of Objection of Trustee to Confirmation of Plan on January 23, 2007, and the Trustee's Supplementary Brief Regarding Projected Disposable Income in Support of Objection of Trustee to Confirmation of Plan on February 14, 2007. The Debtor filed the Debtor's Brief in Support of Confirmation of Chapter 13 Plan on January 24, 2007, and the Debtor[s] Supplemental Brief in Support of Confirmation of Chapter 13 Plan on February 13, 2007. The parties have stipulated that Mosher's annualized current monthly income as set forth on line 21 of their Form B22C, the means test form, is $46,464.00, which exceeds the median income for a 21-person family in Tennessee.³ The parties also stipulate that his monthly disposable income as evidenced on line 58 of his Form B22C is a negative ($394.08), and that his average or projected monthly net income at the time his case was filed, as evidenced by Schedules I and J, was $723.98.⁴ As noted, the parties have also stipulated that "the required disposable income to fund this [P]lan for purposes of confirmation is $334.00 bi-weekly."

II

The Trustee contends that the "applicable commitment period," as determined under 11 U.S.C. § 1325(b)(4)(A), is temporal, and that because the Debtors in both cases have incomes above the median family income, they may not propose plans that are shorter than five years in length. In opposition, the Debtors contend that because they have negative monthly disposable income as evidenced by their respective Form B22C means test forms, they are not actually required to pay anything to unsecured creditors, and thus, they are allowed to propose plans for the minimum three year length set forth in § 1325(b)(4)(A).

III

Following years of debate, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) became effective on October 17, 2005, for all cases filed on and after that date.⁵ One section receiving revision under Chapter 13 was 11 U.S.C. § 1325 (2006), which sets forth at subsection (a), a list of confirmation requirements and at subsection (b), a. disposable income test. As it relates to the present contested matters, § 1325(b) provides, in material part:

(b)(1) If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan —

. . . .

(B) the plan provides that all of the debtor's projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan.

(2) For purposes of this subsection, the term "disposable income" means current monthly income⁶ received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child) less amounts reasonably necessary to be expended —

(A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed; and

(ii) for charitable contributions ... [.]

. . . .

(3) Amounts reasonably necessary to be expended under paragraph (2) shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2), if the debtor has current monthly income, when multiplied by 12, greater than —

. . . .

(B) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals[.]

. . . .

(4) For purposes of this subsection, the "applicable commitment period" —

(A) subject to subparagraph (B), shall be —

(i) 3 years; or

(ii) not less than 5 years, if the current monthly income of the debtor and the debtor's spouse combined, when multiplied by 12, is not less than —

. . . .

(II) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals;[]

. . . .

(B) may be less than 3 or 5 years, whichever is applicable under subparagraph (A), but only if the plan provides for payment in full of all allowed secured claims over a shorter period.

11 U.S.C. § 1325(b).

Nevertheless, "BAPCPA did not replace the Bankruptcy Code, it amended and added several new provisions. As a result, any analysis must start with the ample statutory interpretation, legislative history (along with stated policies), and case law development from the 1978 Code, unless it is clear that there has been an abrogation." In re Grady, 343 B.R. 747, 751 (Bankr.N.D.Ga.2006).

IV

The issue to be determined is whether the newly added "applicable commitment period" set forth in § 1325(b)(4) is a temporal measurement or a multiplicand, and thus, whether the Debtors, who are undisputedly above-median income debtors, must propose five-year plans.

"When interpreting a statute, [courts] must begin with its plain language, and may resort to a review of congressional intent or legislative history only when the language of the statute is not clear." Hoffman v. Comshare, Inc. (In re Comshare, Inc. Sec. Litig.), 183 F.3d 542, 549 (6th Cir.1999). Moreover,

when interpreting statutes, courts are generally obligated to look at the statute as a whole. "When interpreting a statute, the court will not look merely to a particular clause in which general words may be used, but will take in connection with it the whole statut...