In re Woodman, 03-2451.

• Decision Date: 11 August 2004
• Docket Number: No. 03-2451.,03-2451.
• Citation: 379 F.3d 1
• Parties: In re Clare A. WOODMAN, Debtor. Evergreen Credit Union, Creditor, Appellant, v. Clare A. Woodman, Debtor, Appellee, Peter C. Fessenden, Trustee, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 1

379 F.3d 1

In re Clare A. WOODMAN, Debtor Evergreen Credit Union, Creditor, Appellant, v. Clare A. Woodman, Debtor, Appellee Peter C. Fessenden, Trustee, Appellee.

No. 03-2451.

United States Court of Appeals, First Circuit.

Heard April 8, 2004.

Decided August 11, 2004.

Appeal from the District Court, D. Brock Hornby, J.

Stanley Greenberg, with whom Greenberg & Greenberg was on the brief, for creditor, appellant.

Barry Evan Schklair, with whom The Schklair Law Firm, LLC was on the brief, for debtor, appellee.

Peter C. Fessenden, Standing Chapter 13 Trustee, for trustee, appellee.

Before TORRUELLA, Circuit Judge, GIBSON, Senior Circuit Judge,^* and LIPEZ, Circuit Judge.

LIPEZ, Circuit Judge.

Evergreen Credit Union, an undersecured creditor, appeals from the decision of the district court upholding the bankruptcy court's confirmation of debtor Clare A. Woodman's First Amended Chapter 13 Plan ("the plan"). Evergreen objected to the confirmation of the plan on the ground that it did not meet the requirement set forth in § 1325(b) that debtors devote all of their "disposable income" to their plans for at least three years. In particular, Evergreen claimed that Woodman's monthly purchases of cigarettes, amounting to $136.00, were not "reasonably necessary" expenses within the meaning of § 1325(b)(2)(A). Thus, it argued that § 1325(b) required the exclusion of Woodman's cigarette expenditures from the calculation of her reasonably necessary expenses, thereby increasing her projected disposable income and consequently the amount that she would be required to pay each month into the plan. The bankruptcy court, in a thoughtful rescript, overruled Evergreen's objection to the confirmation of the plan. In re Woodman, 287 B.R. 589, 596 (Bankr.D.Me.2003). Evergreen appealed, and the district court affirmed the bankruptcy court's judgment. Adhering to our long-standing rule that arguments not squarely presented below may not be advanced for the first time on appeal, we affirm the judgment of the district court.

I.

Evergreen contends that the bankruptcy court's analysis of whether cigarette expenses are disposable income was flawed because it did not include "a rigorous review" of "objective factors" relating to the reasonableness of Woodman's asserted need for cigarettes. Section 1325(b)(2)(A), Evergreen avers, required the court to consider such factors as

whether the Debtor experiences any ill-health effects from her smoking, whether her physician has recommended that she cease smoking, how long she has smoked, the extent to which her consumption of cigarettes varies, the brands or brands she smokes, whether she wants to stop smoking, and the efforts she has made to quit.

Because the bankruptcy court did not consider those factors, Evergreen argues, it erred as a matter of law in overruling Evergreen's objection to Woodman's cigarette expenses and confirming her Chapter 13 plan.

As the bankruptcy trustee points out correctly in its response brief, Evergreen never asked the bankruptcy court to adopt the "objective factors" that it now claims should be applied to any analysis under 11 U.S.C. § 1325(b)(2)(A). Instead, it argued that Woodman's cigarette expenses were excessive in the context of her other discretionary expenditures and that it was, furthermore, unreasonable per se since "there is no redeeming value to smoking, and [the bankruptcy court] need not tolerate a debtor's behavior which is not only counterproductive but self-destructive."

A party's failure to advance an issue before the bankruptcy court in the first instance forfeits its right to raise that issue on appeal. See Gannett v. Carp (In re Carp), 340 F.3d 15, 25-26 (1st Cir.2003) (argument not raised before the bankruptcy court will not be considered on appeal); LaRoche v. Amoskeag Bank (In re LaRoche), 969 F.2d 1299, 1305 (1st Cir.1992) (same). "That a party may not advance an argument for the first time on appeal is a virtually ironclad rule in this circuit...." In re Carp, 340 F.3d at 26 (internal quotation marks omitted). We find no extraordinary circumstances in the record that would justify a departure from this well-established prudential rule. See Nat'l Assoc of Soc. Workers v. Harwood, 69 F.3d 622, 637 (1st Cir.1995) (exceptions to the raise-or-waive principle are "few and far between"). Having failed to raise its "objective factors" argument before the bankruptcy court, Evergreen is foreclosed from advancing it on appeal.¹

II.

Evergreen further argues that the bankruptcy court committed a legal error by failing to aggregate all of Woodman's discretionary expenditures and assess the reasonable necessity of that total sum. It argues that the court should have applied the methodology adopted by the bankruptcy court in In re Gonzales, 157 B.R. 604 (Bankr.E.D.Mich.1993). The Gonzales court explained that its task was

to identify how much of the Debtors' anticipated expenses are discretionary in nature and to weigh them on this scale. If the discretionary expenses in the aggregate allow the Debtors to exceed their basic needs, including a reasonable reserve for recreation and exigencies (the reasonable "cushion"), then their plan cannot be confirmed.

Id. at 609. According to Evergreen, "[t]he Bankruptcy Court below did not use this methodology ... despite being urged to do so by Evergreen, and thereby committed an error of law." Applying this aggregating methodology to Woodman's discretionary expenses, Evergreen contends, leads to the "inescapable" conclusion that "Woodman has reserved too much discretionary income for herself, and too little disposable income to the Plan, due principally to the inclusion of her expenditure for cigarettes and the lack of any meaningful sacrifice in pre-petition levels of discretionary consumption."

We do not agree that Evergreen urged the Bankruptcy Court to assess whether Woodman's aggregate discretionary expenses allowed her to exceed her basic needs including a reasonable cushion for...