In re Walker

• Decision Date: 09 December 2013
• Docket Number: No. 13bk42168.,13bk42168.
• Parties: In re Charles WALKER, Debtor.
• Court: United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois

502 B.R. 324

In re Charles WALKER, Debtor.

No. 13bk42168.

United States Bankruptcy Court,

N.D. Illinois,

Eastern Division.

Dec. 9, 2013.

Charles Walker, pro se.

Marilyn O. Marshall, Trustee, Chicago, IL, for Plaintiff.

MEMORANDUM DECISION

TIMOTHY A. BARNES, Bankruptcy Judge.

The matter before the court arises out of a Motion to Dismiss Case for Ineligibility (the “ Motion ”), filed by Marilyn O. Marshall (the “ Trustee ”), the standing chapter 13 trustee assigned to this case, against Charles Walker (the “ Debtor ”), who is unrepresented in this case. For the reasons set forth herein, the court denies the Motion.

JURISDICTION

The federal district courts have “original and exclusive jurisdiction” of all cases under title 11 of the United States Code (the “ Bankruptcy Code ”). 28 U.S.C. § 1334(a). The federal district courts also have “original but not exclusive jurisdiction” of all civil proceedings arising under title 11 of the United States Code, or arising in or related to cases under title 11. 28 U.S.C. § 1334(b). District courts may, however, refer these cases to the bankruptcyjudges for their districts. 28 U.S.C. § 157(a). In accordance with section 157(a), the District Court for the Northern District of Illinois has referred all of its bankruptcy cases to the Bankruptcy Court for the Northern District of Illinois. N.D. Ill. Internal Operating Procedure 15(a).

A bankruptcy judge to whom a case has been referred may enter final judgment on any core proceeding arising under the Bankruptcy Code or arising in a case under title 11. 28 U.S.C. § 157(b)(1). A motion to dismiss a bankruptcy case is unique to bankruptcy administration and arises only in a bankruptcy case. As such, such a motion is unquestionably a core proceeding and within the bankruptcy court's statutory and constitutional jurisdiction. 28 U.S.C. § 157(b)(2)(A); In re Gossett, 369 B.R. 361, 364 (Bankr.N.D.Ill.2007) (Squires, J.); In re Luedtke, 337 B.R. 918, 919 (Bankr.E.D.Wis.2006).

Accordingly, final judgment is within the scope of the court's authority.

BACKGROUND

The facts and procedural history of this matter are simple and undisputed. On October 29, 2013, the Debtor commenced the above-captioned case by filing a petition under chapter 13 of the Bankruptcy Code. Later that same day, the Debtor obtained the credit counseling described in section 109(h)(1) of the Bankruptcy Code, and later in the case filed a certificate of credit counseling evidencing the same.

The Trustee has taken the position that the Debtor's credit counseling is untimely and thus dismissal is appropriate pursuant to 11 U.S.C. § 1307 and § 109(h). At a hearing on the matter in November of this year, the court expressed its concerns regarding the wording of section 109(h)(1). Though the Debtor failed to appear, given that the Debtor is pro se, the court determined to investigate further the issue. This Memorandum Decision is the result.

DISCUSSION

[T]he [Bankruptcy] Act must be liberally construed to give the debtor the full measure of the relief afforded by Congress ..., lest its benefits be frittered away by narrow formalistic interpretations which disregard the spirit and the letter of the Act.

Wright v. Union Cent. Life Ins. Co., 311 U.S. 273, 279, 61 S.Ct. 196, 85 L.Ed. 184 (1940).

* * *

The question of whether a debtor may avail itself of bankruptcy relief is the most fundamentally important question in all of bankruptcy. If the answer is “no,” then no other question matters. Only if the answer is “yes” does the court move on to issues such as equality of distribution to similarly situated creditors and the debtor's fresh start—the so-called “twin pillars of bankruptcy law.” R. Ginsberg & R. Martin, Ginsberg & Martin on Bankruptcy, § 1.01[H] (5th ed. 2013).

Concurrent with this Memorandum Decision, Judge Steven W. Rhodes of the United States Bankruptcy Court for the Eastern District of Michigan has issued his decision regarding the eligibility of the City of Detroit to be a debtor under chapter 9 of the Bankruptcy Code. That decision numbers more than 150 pages. Economies of scale govern and, as a result, this Memorandum Decision is far shorter. Nonetheless, each decision addresses section 109 of the Bankruptcy Code and the result of each decision is for the respective debtor, crucial.

With these overriding principles in mind, the court will begin its analysis of the issue at bar.

A. The Plain Language of Section 109(h)(1).

The Supreme Court has stated that “[t]he task of resolving [a] dispute over the meaning of [a statute] begins where all such inquiries must begin: with the language of the statute itself.” United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989); In re Randle, 358 B.R. 360, 362 (Bankr.N.D.Ill.2006) (Doyle, J.), aff'd,No. 07C631, 2007 WL 2668727 (N.D.Ill. July 20, 2007). Where the language of the statute is unambiguous, no further inquiry is necessary or appropriate. Sebelius v. Cloer, 659 U.S. ––––, ––––, 133 S.Ct. 1886, 1895, 185 L.Ed.2d 1003 (2013); In re Vecera, 430 B.R. 840, 842 (Bankr.S.D.Ind.2010) ( citing Griffin v. Oceanic, Inc., 458 U.S. 564, 570, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982)). Absent contrary definitions within the statute itself, words in a statute are presumed to have their “ordinary, contemporary, common meaning.” Pioneer Inv. Servs. v. Brunswick Assocs., 507 U.S. 380, 388, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993) ( citing Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979)).

Our inquiry begins, therefore, with the statute itself.

Section 109(h)(1) reads, in pertinent part: ¹

[A]n individual may not be a debtor under this title unless such individual has, during the 180–day period ending on thedateof filing of the petition by such individual, received from an approved nonprofit budget and credit counseling agency ... an individual or group briefing ... that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis.

11 U.S.C. § 109(h)(1) (emphasis added). As discussed below, section 109(h) is a relatively new provision of the Bankruptcy Code seeking to have debtors obtain credit counseling as a condition to bankruptcy relief. It is one of two such requirements in chapter 13; the second being a condition to receiving its discharge that the debtor, “after filing of the petition,” complete a personal financial management course. 11 U.S.C. § 1328(g)(1).

The language emphasized above clearly states that a debtor has 180 days to receive credit counseling, and that 180–day period ends on “the date of filing of the petition.” 11 U.S.C. § 109(h)(1). It is this phrase that creates the problem before the court.

There are those who advocate reading section 109(h)(1) as a precondition to filing a petition (hence, commencing a case). Such persons advocate a reading of the emphasized phrase akin to “ending on the date and time of the filing of the petition” or “ending with the filing of the petition” or “ending at the moment of filing.” Had Congress chosen any of those phrases, such a reading would make sense.

However, such a reading is not consistent with the plain language of the term “date.” Black's Law Dictionary defines “date” as “[t]he day when an event happened or will happen....” Black's Law Dictionary 452 (9th ed. 2009). Moreover, Black's Law Dictionary defines “day” as “[a]ny 24–hour period; the time it takes the earth to revolve once on its axis....” Id. at 453.

The Supreme Court has, in the context of determining calculation of time periods for tax assessments following filing of returns, concluded that both days and dates envision indivisible time periods (either as a single point in time or as viewed as an indivisible entirety). Burnet v. Willingham Loan & Trust Co., 282 U.S. 437, 439, 51 S.Ct. 185, 75 L.Ed. 448 (1931). As the Court stated, “[t]he fiction that a day has no parts is a figurative recognition of the fact that people do not trouble themselves without reason about a nicer division of time.” Id. at 440, 51 S.Ct. 185;see also Richardson v. Ford, 14 Ill. 332, 333 (Ill.1853) (“Where an act is to be done on a particular day, the party has the whole of that day in which to perform it.”).

The language of section 109(h)(1) is expressed in plain terms. The 180–day period of a debtor to receive credit counseling includes the date of the filing of the petition. No finer distinction is included in the statute, and thus, the court is bound to apply the clear and unambiguous language of the statute pursuant to its terms. As the Debtor in this case obtained his credit counseling on the date of the filing of his bankruptcy petition, that credit counseling—though taken after the filing of the petition—satisfies the express terms of section 109(h)(1). As such, the Debtor is entitled to be a debtor and on these grounds the Trustee's Motion is not well taken.

B. Counterarguments and Contrary Case Law.

Given the court's conclusion as stated above, further discussion is, perhaps, unwarranted. However, as the court has discussed certain of the counterarguments in footnote 1 above and there exists at least one case that has held the opposite of today's determination, the court feels compelled to address some additional arguments that have been or could have been made.

1. Congressional Intent

Perhaps the strongest argument in favor of dismissing a case where credit counseling is obtained on the date of the petition but after the petition is filed is found in the history of the statute. In partial reliance on that history, another bankruptcy court has analyzed the statute under facts nearly identical to those at bar and concluded that dismissal is appropriate. See In re Soohyun Koo, No. 12–00121, 2012 WL 692578 (Bankr.D.D.C. Mar. 2, 2012); see also In re Francisco, 390 B.R. 700, 703–04 (10th Cir. BAP 2008) (holding that under pre-amendment section 109(h), the term date must mean the precise...