Summary
allowing objection to claim long after chapter 13 plan confirmation and explaining that "[n]either the Bankruptcy Code nor the Bankruptcy Rules specify the time for filing an objection to a claim"
Summary of this case from Chorba v. Quantum3 Grp. LLC (In re Chorba)Opinion
CASE NO. 03-80333-G3-13.
February 11, 2009
MEMORANDUM OPINION
The court has held a hearing on the "Trustee's Motion to Dismiss" (Docket No. 35) and the "Debtors' Objection to Claim of Dell Financial Services" (Docket No. 38). The following are the Findings of Fact and Conclusions of Law of the court. A separate Judgment will be entered granting the relief sought by Debtors, and denying the relief sought by Trustee. To the extent any of the Findings of Fact are considered Conclusions of Law, they are adopted as such. To the extent any of the Conclusions of Law are considered Findings of Fact, they are adopted as such.
Findings of Fact
Steve O. Haraldson and Betty Haraldson ("Debtors") filed a voluntary petition under Chapter 13 of the Bankruptcy Code on March 28, 2003. William E. Heitkamp ("Trustee") is the Chapter 13 Trustee.
Together with the petition, Debtors filed, inter alia, schedules of secured and unsecured creditors. In the schedules, Debtors listed Dell Financial Services, with an unsecured claim of $450. (Docket No. 1).
On May 2, 2003, Trustee gave notice of the meeting of creditors. The notice included a deadline for filing proofs of claim, for nongovernmental units, of August 26, 2003. (Docket No. 8).
On June 9, 2003, Debtors filed an amended plan. The amended plan provided that Debtors were to pay $246 per month to the Chapter 13 Trustee. The Trustee was to make specific payments on a secured claim of Prosperity Bank, and on a priority claim of Debtor's attorney. The remainder of $18.68 was to be distributed on unsecured claims. (Docket No. 12). The amended plan was confirmed, by order entered August 12, 2003. (Docket No. 14).
On October 16, 2003, Dell Financial Services filed a proof of claim, in the amount of $1,565.60, asserting that computer equipment was collateral for the claim. The only document attached to the proof of claim is an "Account Summary" dated May 5, 2003. (Claim No. 12-1).
On August 26, 2004, Trustee filed a "Notice of Intent to Pay Claims." In the notice, Trustee states that he "has examined the proofs of claim. After such examination, the Trustee states that claims should be deemed allowed, or `not filed' as indicated below." The list of claims in the notice includes Dell Financial Services as a secured claim, in the amount of $1,565.60. (Docket No. 21).
On November 19, 2008, after Debtors made all payments due under the plan, Trustee filed the instant motion to dismiss, on grounds the plan does not provide for the secured claims in full as a result of the allowance of the secured claim of Dell Financial Services. (Docket No. 35).
On December 2, 2008, Debtors filed the instant objection to the claim of Dell Financial Services, on grounds "The debt is actually one based on a simple account. Dell's unsecured claim seeks to establish a non-possessory security interest in and to the debtors exempt personal property." (Docket No. 38).
At the hearing on the instant motion and claim objection, Steve Haraldson testified that Debtors' debt to Dell Financial Services was based on a revolving charge account. Dell Financial Services did not appear at the hearing.
Conclusions of Law
Neither the Bankruptcy Code nor the Bankruptcy Rules specify the time for filing an objection to a claim. In re Simmons, 765 F.2d 547 (5th Cir. 1985).
When a proof of claim in bankruptcy is filed, the party filing the claim is presumed to have made a prima facie case against the debtor's assets. The objecting party must produce evidence rebutting the presumption raised by the proof of claim. If such evidence is produced, the party filing the claim must then prove by a preponderance of the evidence the validity of the claim. The claiming party, through this process, bears the ultimate burden of proof. In re Fidelity Holding Company, Ltd., 837 F.2d 696, 698 (5th Cir. 1988); In re Missionary Baptist Foundation of America, 818 F.2d 1135, 1143-1144 (5th Cir. 1987).
In the instant case, Dell Financial Services filed a proof of claim asserting that it is secured by computer equipment. The testimony of Steve Haraldson is sufficient to rebut the presumption that the claim is secured. Dell Financial Services presented no evidence to prove by a preponderance of the evidence that it is secured. The court concludes that the claim of Dell Financial Services is unsecured. As a result, the plan remains feasible.
The court further notes that Dell Financial Services filed its proof of claim after the bar date.
Based on the foregoing, a separate Judgment will be entered granting "Debtors' Objection to Claim of Dell Financial Services" (Docket No. 38), and denying "Trustee's Motion to Dismiss" (Docket No. 35).