Because there is not yet a split of circuits, it’s not surprising that the Supreme Court yesterday denied two petitions for certiorari asking the justices to decide whether the fees of chapter 13 trustees are paid if dismissal precedes confirmation of a plan.
Any day now, the Second Circuit will hand down an opinion on the same question and will create a split of circuits if the panel affirms the decisions from the bankruptcy and district courts holding that fees are paid to chapter 13 trustees whether or not a plan is confirmed.
The first petition for certiorari came to the Court seeking review of Goodman v. Doll (In re Doll), 57 F.4th 1129 (10th Cir. Jan. 18, 2023), where the Tenth Circuit held that the debtor must confirm a chapter 13 plan before the trustee is entitled to a commission. The Tenth Circuit denied motions for rehearing and rehearing en banc, and also denied a motion to stay the issuance of the mandate pending a petition for certiorari to the Supreme Court. To read ABI’s report on Doll, click here.
Joining the Tenth Circuit, the Ninth Circuit likewise held on June 12 that chapter 13 trustees are not paid their fees when cases are dismissed before confirmation. Evans v. McCallister (In re Evans), 69 F.4th 1101 (9th Cir. June 12, 2023). To read ABI’s report, click here. The Ninth Circuit denied petitions for rehearing and rehearing en banc.
The chapter 13 trustee in the Tenth Circuit filed a petition for certiorari on September 5. Goodman v. Doll, 23-218 (Sup. Ct.). The trustee in the Tenth Circuit filed a certiorari petition on November 21. McCallister v. Evans, 23-560 (Sup. Ct.).
The justices held a conference on February 16 to consider both petitions. By orders on February 20, the justices denied the petitions in both cases.
There yet may be a split of circuits. The identical issue was argued in the Second Circuit on February 15, 2023, almost exactly one year ago. See Soussis v. Macco (In re Soussis), 22-155 (2d Cir.).
Bankruptcy Judge Robert E. Grossman from the Eastern District of New York ruled that a chapter 13 trustee is entitled to compensation if the case is dismissed before confirmation. See In re Soussis, 624 B.R. 559 (Bankr. E.D.N.Y. Nov. 12, 2020). To read ABI’s report, click here. Judge Grossman was affirmed in district court. See Soussis v. Macco, 20-05673, 2022 WL 203751 (E.D.N.Y. Jan. 24, 2022). To read ABI’s report on the district court opinion in Soussis, click here.
Needless to say, the opinions of the Ninth and Tenth Circuits were brought to the attention of the three judges on the Second Circuit panel.
Observations
It is not unusual for the Second Circuit to consider an appeal for a year before issuing an opinion. Still, this writer wonders whether the Second Circuit judges have been contemplating a decision allowing payment of trustee fees even if no plan is confirmed.
Do you suppose the Second Circuit judges have been withholding a decision, thinking that the Supreme Court might take up the question?
This writer is guessing that the Second Circuit will create a split of circuits and has been awaiting action on the certiorari petitions.
I invite readers to offer derisive comments if this writer has guessed wrong about the forthcoming decision from the Second Circuit.
Because there is not yet a split of circuits, it’s not surprising that the Supreme Court yesterday denied two petitions for certiorari asking the justices to decide whether the fees of chapter 13 trustees are paid if dismissal precedes confirmation of a plan.
Any day now, the Second Circuit will hand down an opinion on the same question and will create a split of circuits if the panel affirms the decisions from the bankruptcy and district courts holding that fees are paid to chapter 13 trustees whether or not a plan is confirmed.