In re Jernigan
| Decision Date | 11 October 1991 |
| Docket Number | Bankruptcy No. 89-00045-W. |
| Citation | 130 BR 879 |
| Parties | In re Rosa Lee JERNIGAN, Debtor. |
| Court | U.S. Bankruptcy Court — Northern District of Oklahoma |
COPYRIGHT MATERIAL OMITTED
Tom Wagenblast, Suite B, Tulsa, Okl., for debtor.
Catherine O'Leary, Tulsa, Okl., for creditor McDonnell Douglas Federal Credit Union.
Lonnie Eck, Trustee.
ORDER DENYING CONFIRMATION OF PLAN AND CONTINUING MOTION TO DISMISS
On August 23, 1989, the Court held a hearing on confirmation of a Ch. 13 plan in the above-styled case, and entertained objection thereto pursuant to Bankruptcy Rule 3020(b); thereafter, the matter was taken under advisement. Upon consideration of the record herein, the Court, pursuant to Bankruptcy Rules 7052 and 9014, finds, concludes, and orders as follows.
The facts of this case may be summarized as follows. Debtor formerly worked for General Motors, but her employment by them ceased under circumstances which caused her to sue General Motors. General Motors won a jury verdict, and thereafter was awarded attorney fees of over $25,000; but debtor dodged notice of General Motors' judgment. Meanwhile, debtor was re-employed by McDonnell-Douglas; and she borrowed some $13,000 from her new employer's Credit Union to buy a new Ford pickup truck, even though she already owned two other, less valuable motor vehicles. Debtor gave Credit Union a security interest in her new truck, which Credit Union perfected two weeks after the date of the loan. Just as Credit Union was perfecting its lien, General Motors garnished debtor's paycheck, causing debtor to flee into bankruptcy. Debtor did not attempt to simply shed her debts under 11 U.S.C. Chapter 7 ("Ch. 7"), but rather filed bankruptcy under 11 U.S.C. Chapter 13 ("Ch. 13") and proposed to repay some portion of her debts from her future income pursuant to a plan. But debtor's proposed plan takes advantage of an accident in timing of Credit Union's perfection of its lien, and would use bankruptcy law to cancel or avoid the lien and enable debtor to keep the new truck while paying Credit Union only a fraction of the truck's purchase price or resale value. Credit Union objects to confirmation of this plan. While the matter remained under advisement, debtor made the payments proposed in her unconfirmed plan to the Trustee, who has in turn paid these monies over to debtor's creditors. Detailed facts are as follows, in the order in which they presented themselves to this Court.
On January 11, 1989, Rosa Lee Jernigan ("debtor") filed her petition for relief under 11 U.S.C. Ch. 13 in this Court. The case came under the supervision of Lonnie D. Eck, who has been appointed, pursuant to 11 U.S.C. § 1302(a), 28 U.S.C. § 586(b), as standing trustee ("the Trustee") in Ch. 13 cases in this District.
Debtor works as a "Facilitator" for McDonnell Douglas Corp., at a salary of $23,400 per year, Statement of Affairs ¶ 2a, b, Ch. 13 Statement ¶ 2a, b. Debtor's budget indicates gross wages of $450 per week; payroll deductions of $128 per week (including $5 per week for "Charity"); and take-home pay of $266 per week or $1,200 per month. These figures appear somewhat inaccurate. Debtor's stated weekly gross wages equal slightly more than $1,800 per month or a total of only $22,500 per year (not $23,400 per year); her stated weekly gross wage of $450 per week minus deductions of $128 per week equals take-home pay of $322 per week (not $266 per week), which is slightly more than $1,288 per month (not $1,200 per month), Ch. 13 Statement ¶ 2f. Debtor's budget further indicates expenses of $840.58 per month, Ch. 13 Statement ¶ 4b. The exact "excess of . . . income . . . over . . . expenses" called for in Ch. 13 Statement ¶ 4c is not correctly stated by debtor on her form, but should equal $359.42. This amount is closely approximated by the "Total amount to be paid each month under plan" of $350, Ch. 13 Statement ¶ 4d.
Debtor's Ch. 13 Statement reported no priority debts, although debtor commented "Rec'd past due property tax bill but I don't owe it — was paid to owner of property," Ch. 13 Statement ¶ 12a; secured debts totalling $26,935.99 secured by collateral valued at $95,530, Ch. 13 Statement ¶ 12b, ¶ 14; and unsecured debts totalling $32,723.95, Ch. 13 Statement ¶ 12c. The secured debts included a debt of $3,954.96 owed to Anest Development Corp. on a contract for deed on debtor's home valued at $28,000; a debt of $5,333.23 owed to Ford Motor Credit Corp. ("FMCC"), paid in installments of $135.99, presumably per month, and secured by a 1988 Yugo automobile valued at $3,000; and a debt of $17,647.80 owed to McDonnell Douglas Federal Credit Union ("Credit Union") secured by a 1989 Ford pick-up valued at $9,500. The unsecured debts included a "Judgment" in favor of Central Foundry Division, General Motors Corp. ("General Motors") for $25,265.60; a debt for "Personal loan" owed to Almeta Johnson in the amount of $5,000; a debt for "Medical" owed to Hillcrest Medical Center in the amount of $1.578.25; and miscellaneous debts owed to five other creditors totalling $880.10, of which $186.45 was "disputed," Ch. 13 Statement ¶ 12c.
Besides the above-mentioned items of property, debtor's Ch. 13 Statement reported her ownership of a 1964 Chevrolet pickup valued at $200; household goods valued at $2,500; personal effects including one "38 S & W" valued at a total of $2,120 (or perhaps $2,240); cash of $50; checking account of $160; and "claims" against General Motors for "Workers Comp." and "discrimination," said to be of "unknown value" but estimated together at a value of $50,000, Ch. 13 Statement ¶ 14b, Schedule B-4.
All of debtor's property described in the two preceding paragraphs, except the 1988 Yugo and 1989 Ford pickup, was claimed as exempt, Schedule B-4.
Debtor also reported holding $519 belonging to one Leola Robinson, which sum was "deposited in checking account to pay invalid mother's debts from social security checks," Statement of Affairs ¶ 6.
Debtor's attorney filed a "Statement of Attorney's Compensation" which, although not perfectly clear, appears to report that debtor paid or promised a total attorney fee for work in this case of $950, of which $125 was paid down by debtor, $500 was "paid by Leola Robinson," and "the rest to be paid in plan."
Debtor reported her involvement in three lawsuits within the year preceding the filing of her Ch. 13 case, all three against General Motors, and one of them, in the District Court for Tulsa County, producing a "Notice of Garnishment" against debtor and in favor of General Motors, "Demand amount of $25,265.60 (plus costs)," date not stated, Statement of Affairs ¶ 10, Ch. 13 Statement ¶ 9b.
On February 8, 1989, Credit Union filed its "Proof of Claim" herein, as a secured claim in the amount of $13,507.38 secured by a "Motor Vehicle." Later, on September 5, 1989, Credit Union filed another "Proof of Claim" herein, not designated "Amended," but apparently intended only to add certain documentation to that appended to the earlier "Proof of Claim." Documents appended to these proofs of claim showed that debtor had borrowed $13,507.38 from Credit Union on December 22, 1988, less than three weeks before debtor filed for bankruptcy under Ch. 13; that collateral for the loan was a 1989 Ford Supercab XLT; that a security agreement was executed on or about January 3, 1989; and that a lien entry form dated "12/22/88" was submitted to an Oklahoma motor license agent on January 5, 1989.
On February 22, 1989, Nadine Thoos, Creek County Treasurer, filed her "Proof of Claim" herein, for priority payment of $509.02 in "unpaid Personal Property taxes" for the years "1986, 1987 and 1988."
On February 23, 1989, General Motors filed its "Proof of Claim" herein, showing such claim to be based on an "original judgment . . . in the amount of $25,265.50" which was reduced by "Amount received from garnishment of $82.68" for a net "Balance owing of $25,182.82." Copies of documents attached to said proof of claim show that the claim arose in a lawsuit by debtor against General Motors in the Circuit Court for the County of Saginaw, State of Michigan; that debtor's action against General Motors was defeated when a "jury . . . rendered its verdict of no cause of action against General Motors, based on its concluding General Motors had not discriminated against debtor on the basis of her race, color or sex;" and that thereafter the Circuit Court for the County of Saginaw, State of Michigan, ordered debtor to pay General Motors' attorney fees in the amount of $25,265.50.
On February 7, 1989, debtor filed her "Chapter 13 Plan." On February 24, 1989, Credit Union filed its objection to debtor's plan. Hearing on confirmation of said plan was scheduled for March 1, 1989. This hearing was continued to March 17, 1989. On March 14, shortly before the hearing, Credit Union withdrew its objection, for unstated reasons. The hearing on March 17, 1989 was continued, evidently to no definite date, to allow for "Amendments to be filed on or before March 28, 1989," see minute dated March 17, 1989.
To continue reading
Request your trial