In re Williams, C/A No. 18-01639-JW

CourtUnited States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
Writing for the CourtJohn E. Waites, US Bankruptcy Judge
Citation631 B.R. 398
Parties IN RE: Ronnie Allen WILLIAMS and Laura Denise Williams, Debtor(s).
Docket NumberC/A No. 18-01639-JW
Decision Date01 September 2021

631 B.R. 398

IN RE: Ronnie Allen WILLIAMS and Laura Denise Williams, Debtor(s).

C/A No. 18-01639-JW

United States Bankruptcy Court, D. South Carolina.

Signed September 1, 2021


631 B.R. 399

Lauren J. Schumann, Richard A. Steadman, Jr., Steadman Law Firm, North Charleston, SC, for Debtor(s).

ORDER

John E. Waites, US Bankruptcy Judge

This matter comes before the court upon a Notice and Application for Settlement and Compromise Nunc Pro Tunc ("Application") filed and served on all creditors and the Chapter 13 trustee by Ronnie Williams and Laura Williams ("Debtors") on August 2, 2021. Through the Application, Debtors seek the Court's approval, nunc pro tunc, of a settlement for a post-confirmation worker's compensation action arising from injuries suffered by Debtor Laura Williams ("Injured Debtor"). No creditor or party in interest timely objected to the Application, and the Trustee noted his consent to the Application on August 24, 2021.

The South Carolina Worker's Compensation Commission for Charleston County, South Carolina approved the settlement of the Injured Debtor's worker's compensation claim for $47,500.00, and it also approved a deduction for attorney's fees1 in

631 B.R. 400

the amount of $15,833.33 and certain costs of $2,635.36, which included medical expenses that Debtors paid. Debtors assert that the remaining settlement proceeds of $29,031.31 are fully exempt, but instead of claiming the exemption, they have voluntarily elected to use the proceeds to pay off the remaining payments due under their confirmed plan.2

After considering the matter, the Court has concluded that its approval of the settlement is not required. See Fed. R. Bankr. P. 9019(a) (narrowly applying to instances where approval of a settlement arises "[o]n motion by the trustee"); see, e.g., In re Revels , 616 B.R. 675, 679-81 (Bankr. E.D.N.C. 2020) ("A chapter 13 debtor does not have the duty to file a motion to approve compromise or settlement under Rule 9019."). But to any degree the Court's approval could be required, the Court approves the settlement.

The Debtors' Chapter 13 plan, which the Court confirmed on September 4, 2019, states that property of the estate will vest in the Debtors upon confirmation as follows:

Upon confirmation of the plan, property of the estate will remain property of the estate, but possession of property of the estate shall remain with the Debtor. The chapter 13 trustee shall have no responsibility regarding the use or maintenance of property of the estate..... Nothing in the plan is intended to waive or affect adversely any rights of the debtor, the trustee, or party with respect to any causes of action owned by the debtor.3

Inherent in this provision is the intent that the Debtors will use and gain property of the estate without the additional permission of the Chapter 13 Trustee or the Court.

According to a prior holding of the Court in In re Boyd , a chapter 13 debtor, in possession of property of the estate post-confirmation, has standing to maintain a cause of action on behalf of the estate, such as a worker's compensation claim, in her own name exclusive of the trustee, in any tribunal and without court approval .4 618 B.R. 133, 174 (Bankr. D.S.C. 2020).

This holding was based in part on the Fourth Circuit's reasoning in Wilson v. Dollar General Corporation , which found that absent a provision in a confirmed plan or other order, a chapter 13 debtor shall remain in possession of all property of the estate and is explicitly given the authority, exclusive of the trustee to use, sell, or

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lease property of the estate, including the right to sue in his own name pursuant to 11 U.S.C. § 1306(b). 717 F.3d 337, 343-44 (4th Cir. 2013) (citing Fed. R. Bankr. P. 6009 and Fed. R. Civ. P. 17(a) ). While Wilson addressed a prepetition cause of action, the reasoning is equally applicable to post-petition lawsuits. See Boyd, 618 B.R. at 174 (holding that a Chapter 13 debtor had the ability to pursue post-confirmation litigation in his or her own name pursuant to Wilson v. Dollar General, Corp. , 717 F.3d 337, 343 (4th Cir. 2013) ). Moreover, 11 U.S.C. § 1302 sets forth the duties of the chapter 13 trustee, which notably do not include the duty "to collect and reduce to money the property of the estate for which such trustee serves" as set forth in § 704(a)(1). See 11 U.S.C. § 1302 (incorporating duties specified in §§ 704(a)(2), 704(a)(3), 704(a)(4), 704(a)(5), 704(a)(6), 704(a)(7), and 704(a)(9), but not § 704(a)(1)).

Additionally, a confirmed plan is res judicata and binding on all parties, including the trustee pursuant to § 1327(a). Absent a voluntary decision by debtors, the proper means to provide for post confirmation property to be used to accelerate or increase...

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2 practice notes
  • Liebmann v. Goden, Civil Action CCB-21-2887
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • 21 September 2022
    ...no updates about his administration of the estate in over four months. These facts support the bankruptcy court's decision. See Holmes, 631 B.R. at 398 (dismissing case when “[a]fter more than two years th[e] case showfed], little progress” and noting the “trustee ha[d] not begun to liquida......
  • In re Jenkins, C/A No. 20-02610-JW
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • 6 October 2021
    ...allowed under applicable state law. No party timely objected to the exemption claim.According to the recent opinion in In re Williams , 631 B.R. 398, 400–01 (Bankr. D.S.C. 2021), which cited In re Boyd , 618 B.R. 133, 174 (Bankr. D.S.C. 2020) and Wilson v. Dollar General Corporation, 717 F.......
2 cases
  • Liebmann v. Goden, Civil Action CCB-21-2887
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • 21 September 2022
    ...no updates about his administration of the estate in over four months. These facts support the bankruptcy court's decision. See Holmes, 631 B.R. at 398 (dismissing case when “[a]fter more than two years th[e] case showfed], little progress” and noting the “trustee ha[d] not begun to liquida......
  • In re Jenkins, C/A No. 20-02610-JW
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • 6 October 2021
    ...allowed under applicable state law. No party timely objected to the exemption claim.According to the recent opinion in In re Williams , 631 B.R. 398, 400–01 (Bankr. D.S.C. 2021), which cited In re Boyd , 618 B.R. 133, 174 (Bankr. D.S.C. 2020) and Wilson v. Dollar General Corporation, 717 F.......

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