In Re: Tiffany Stevens Walker

Filing 3

ORDER AND REASONS: ORDERED that the bankruptcy court's rulings are AFFIRMED. Judgment shall be entered in favor of appellee, Tiffany Stevens Walker, DISMISSING the consolidated appeal filed by appellant, Bank of America NA. Signed by Judge Lance M Africk on 2/6/2015.(blg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

IN RE: TIFFANY WALKER

CIVIL ACTION
No. 14-1505
c/w Nos. 14-1574, 14-1575, 14-1576
REF: 14-1574, 14-1575, 14-1576
SECTION I

ORDER AND REASONS
Before the Court is a consolidated appeal 1 filed by Bank of America NA (“Bank of
America” or “appellant”) of two orders of the U.S. Bankruptcy Court in In re Walker, Bankr.
Pet. No. 13-13039 (May 15, 2014). 2 The debtor in the bankruptcy proceedings, Tiffany Stevens
Walker (“debtor”), has filed an opposition. 3 For the following reasons, the orders 4 of the U.S.
Bankruptcy Court are AFFIRMED.
BACKGROUND
Debtor filed a petition seeking Chapter 13 bankruptcy protection on November 1, 2013, 5
initially asserting in her proposed Chapter 13 plan that she was $35,000.00 behind on her
mortgage payments to appellant. 6 Appellant objected to the plan on January 27, 2014, asserting
that debtor was actually $49,831.98 in arrears. 7 Debtor apparently disagreed, as she filed a proof
of claim on appellant’s behalf on March 14, 2014, asserting a total amount of arrearage of

1

R. Doc. No. 9.
This order and reasons refers to any documents from the bankruptcy court’s record as “Bankr.
R. Doc. No. [#],” and to any documents from this Court’s record on appeal as “R. Doc. No. [#].”
3
R. Doc. No. 24.
4
Bankr. R. Doc. Nos. 88, 89.
5
Bankr. R. Doc. No. 1.
6
Bankr. R. Doc. No. 5, at 2.
7
Bankr. R. Doc. No. 23, at 2.
2

$20,000.00. 8 Debtor also amended her Chapter 13 plan three times, and each amended plan
provided for $20,000.00 in arrears owed to appellant. 9 Appellant did not file its own proof of
claim before the March 17, 2014 bar date, 10 and it did not object to the proof of claim that debtor
filed on its behalf.
On April 1, 2014, appellant filed an objection to debtor’s amended plan, this time
asserting that debtor was actually $50,589.96 in arrears. 11 On the same date, appellant filed a
motion for leave to file an after-bar-date amended proof of claim, 12 which was opposed by
debtor and the trustee. 13 At a hearing on May 14, 2014, the bankruptcy court denied appellant’s
motion for leave to file an amended proof of claim after the bar date, overruled appellant’s
objections to debtor’s plan, and confirmed the plan. 14 Appellant timely appealed the bankruptcy
court’s order denying the motion for leave to file an amended proof of claim 15 and the order
confirming debtor’s Chapter 13 plan. 16
STANDARD OF REVIEW
When reviewing the bankruptcy court’s determination of whether to allow or disallow a
proof of claim and whether to confirm a debtor’s Chapter 13 plan, both of which are “core”

8

Bankr. R. Doc. No. 108, at 1.
E.g., Bankr. R. Doc. No. 65, at 2; see also R. Doc. No. 9, at 11-13.
10
See R. Doc. No. 9, at 10. “A creditor who fails to file its proof of claim before the bar date, and
who fails timely to request an extension of time to file, . . . may not file a late claim and
participate in the voting or distribution from the debtor’s estate.” In re Kolstad, 928 F.2d 171,
173 (5th Cir. 1991); see also Fed. R. Bankr. P. 3002(c).
11
Bankr. R. Doc. No. 49, at 2.
12
Bankr. R. Doc. No. 50. Additionally, appellant amended and supplemented its motion. See
Bankr. R. Doc. Nos. 52, 76. Appellant also inadvertently filed a different amended proof of
claim on May 14, 2014, which it immediately withdrew. See Bankr. R. Doc. Nos. 85, 86.
13
Bankr. R. Doc. Nos. 69, 83.
14
See Bankr. R. Doc. No. 107.
15
Bankr. R. Doc. No. 88.
16
Bankr. R. Doc. No. 89.
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bankruptcy proceedings, 17 “the district court is bound to review the bankruptcy court’s decision
under the same standards that [an appellate court applies] to an ordinary district court opinion.”
Coston v. Bank of Malvern (In re Coston), 991 F.2d 257, 261 n.3 (5th Cir. 1993) (citing Griffith
v. Oles (In re Hipp, Inc.), 895 F.2d 1503, 1517 (5th Cir. 1990)). When reviewing the bankruptcy
court’s findings of fact, the district court applies the clearly erroneous standard. AT&T Universal
Card Servs. v. Mercer (In re Mercer), 246 F.3d 391, 402 (5th Cir. 2001) (en banc). “If a finding
is not supported by substantial evidence, it will be found to be clearly erroneous.” Westcap
Enters. v. City Colls. of Chi. (In re Westcorp Enters.), 230 F.3d 717, 725 (5th Cir. 2000) (internal
quotation marks omitted). A bankruptcy court’s factual findings will be reversed only if, after
considering all of the evidence, the appellate court is “left with the definite and firm conviction
that a mistake has been committed.” In re Luhr Bros., Inc., 325 F.3d 681, 684 (5th Cir. 2003)
(internal quotation marks omitted); Norris v. First Nat’l Bank in Luling (In re Norris), 70 F.3d
27, 29 (5th Cir. 1995). “Where there are two permissible views of the evidence, the factfinder’s
choice between them cannot be clearly erroneous.” In re Luhr Bros., 325 F.3d at 684.
The district court reviews the bankruptcy court’s conclusions of law and mixed questions
of fact and law de novo. Universal Seismic Assocs., Inc. v. Harris County (In re Universal
Seismic Assocs., Inc.), 288 F.3d 205, 207 (5th Cir. 2002); In re Mercer, 246 F.3d at 402; Century
Indem. Co. v. Nat’l Gypsum Settlement Trust (In re National Gypsum Co.), 208 F.3d 498, 504
(5th Cir. 2000). “‘When reviewing mixed questions of law and fact, [we] reverse only if the
findings are based on a misunderstanding of the law or a clearly erroneous view of the facts.’”
Nationwide Mut. Ins. Co. v. Dunning, 252 F.3d 712, 716 (5th Cir. 2001) (quoting Tokio Marine
& Fire Ins. Co. v. FLORA MV, 235 F.3d 963, 966 (5th Cir. 2001)).

17

See 28 U.S.C. § 157(b)(2)(A) and (B).
3

Decisions that are within the bankruptcy court’s discretion or decisions based upon
equitable grounds are reviewed for abuse of discretion. See In re Coastal Plains, 179 F.3d 197,
205 (5th Cir. 1999); Kolstad, 928 F.2d at 173. However, “‘[t]he abuse of discretion standard
includes review to determine that the discretion was not guided by erroneous legal conclusions.’”
Coastal Plains, 179 F.3d at 205 (quoting Koon v. United States, 518 U.S. 81, 100 (1996)).
DISCUSSION
I.

Denial of Leave To File an Amended Proof of Claim After the Bar Date

The parties agree, and the Fifth Circuit has established, that a bankruptcy court has the
discretion to allow a creditor to amend a debtor-filed proof of claim after the bar date pursuant to
its equitable powers. 18 See Kolstad, 928 F.2d at 175; see also 11 U.S.C. § 105(a) (“The court
may issue any order, process, or judgment that is necessary or appropriate to carry out the
provisions of this title.”). 19 The question before the Court is whether the bankruptcy court abused
its discretion. See Kolstad, 928 F.2d at 175.
In Kolstad, the Fifth Circuit reviewed the bankruptcy court’s decision (affirmed by the
district court) to allow the IRS an opportunity to file an amendment to the debtor’s timely filed
proof of claim after the bar date had passed. See Kolstad, 928 F.2d at 172. The Fifth Circuit
noted that courts often consider five factors when determining whether to allow such an
amendment: (1) whether the debtors and creditors relied upon the earlier proof of claim or
whether they had reason to know that later proofs of claim would follow; (2) whether the other
creditors would receive a windfall to which they are not entitled if the court disallowed the

18

R. Doc. No. 9, at 19; R. Doc. No. 24, at 15.
The Court notes that Kolstad “is not universally accepted.” In re Oscar, No. 04-18900F, 2005
WL 6522763, at *5 (Bankr. E.D. Pa. Apr. 14, 2005) (citing In re Hamilton, 179 B.R. 749 (Bankr.
S.D. Ga. 1995)). However, it has not been overruled or otherwise modified by the U.S. Court of
Appeals for the Fifth Circuit and this Court is bound to follow it.
19

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amendment; (3) whether the creditor intentionally or negligently delayed in filing the proof of
claim stating the amount owed; (4) the justification, if any, for the creditor’s failure to request an
extension of time for the submission of further proofs pending an audit; and (5) whether any
other equitable consideration should be taken into account. Id. at 175 n.7. “[T]hese
considerations are overlapping and seem to subsume two general questions: (1) whether [the
creditor] is attempting to stray beyond the perimeters of the original proof of claim and
effectively file a ‘new’ claim that could not have been foreseen from the earlier claim or events
such as an ongoing or recently commenced audit; and (2) the degree and incidence of prejudice,
if any, caused by [the creditor]’s delay.” Id.
Appellant argues that its proposed amended proof of claim was “not a new claim” but
“merely a correction of the amount listed on the proof of claim Debtor filed on Bank of
America’s behalf,” 20 that “the amendment would not be unfair to other creditors,” 21 and that
“permitting the amendment of the claim clearly would have caused no surprise to any party.” 22
However, in its briefing before this Court, appellant does not offer any justification for its failure
to timely file an amended proof of claim or its failure to seek leave for additional time within
which to do so. 23
In its motion before the bankruptcy court, appellant stated only that it “requires that all
Proof of Claims go through an internal approval process by its office to assure accuracy of the
claim before Counsel for Creditor can file [the] same into the claims register.” 24 The bankruptcy

20

R. Doc. No. 9, at 20.
R. Doc. No. 9, at 21.
22
R. Doc. No. 9, at 21.
23
Cf. R. Doc. No. 9, at 10 (acknowledging that “Bank of America did not file a proof of claim
before the deadline” without any explanation).
24
Bankr. R. Doc. No. 50, at 2.
21

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court found that this explanation was unsatisfactory, 25 and it concluded that it would not “let the
internal procedures of Bank of America govern when proofs of claim are filed or when they’re to
be amended.” 26 In the absence of any substantial justification by appellant for its failure to timely
amend the debtor-filed proof of claim, this Court does not find that the bankruptcy court abused
its discretion in denying leave to file an untimely amendment.
Appellant argues that the bankruptcy court’s denial of its motion for leave to amend “will
result in limiting the amount of [a secured creditor’s claim] to whatever amount the Debtor
alleged” if such secured creditor chooses not to file a proof of claim. 27 Such argument ignores
the fact that appellant had ample opportunity to protect its rights.
Debtor claimed a lower amount of arrearages in her first proposed plan on November 1,
2013, 28 and appellant had more than four-and-a-half months between the initial bankruptcy
filings and the bar date in which to confer with debtor’s counsel 29 and/or file its own proof of
claim. Appellant’s status as a secured creditor does not absolve it of its responsibility to
diligently protect its claim and abide by the bankruptcy court’s deadlines. The Court does not
interpret Kolstad to permit a secured creditor to ignore deadlines at will and without justification.

25

E.g., Bankr. R. Doc. No. 107, at 19-20 (“Bank of America didn’t do anything to get the proof
of claim filed timely and they blame their own internal system. Well, they’ve got to be
responsible for their own internal system working in time for them to timely file a proof of
claim.”).
26
Bankr. R. Doc. No. 107, at 23.
27
R. Doc. No. 9, at 22.
28
Bankr. R. Doc. No. 5, at 2.
29
Cf. R. Doc. No. 107, at 15 (“We [debtor and debtor’s counsel] weren’t working with Bank of
America this entire time. We were waiting for their numbers. It came to the bar date and we still
didn’t have them. We pushed back confirmation because of this. I’m going off my Debtor’s
advice because I have no other proof as to what it is except what [they’re] saying in an objection
to confirmation and what my client’s saying. Well, without proof I’m going to go with my client,
okay.”).
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II.

Confirmation of the Bankruptcy Plan

Appellant also argues that the bankruptcy court erred in confirming the debtor’s plan in
light of the dispute over the amount of arrearages. 30 Appellant argues that the plan does not
comply with the bankruptcy code because the plan: (1) does not fully cure debtor’s default (but
rather only accounts for $20,000.00 in arrearages) in violation of 11 U.S.C. § 1322(b)(5); 31 (2)
modifies appellant’s secured claim on debtor’s primary residence in violation of 11 U.S.C.
§ 1322(b)(2); 32 and (3) ultimately may result in the discharge of a portion of otherwise
nondischargeable debt in violation of 11 U.S.C. § 1328(a)(1). 33
Appellant’s argument turns on the proper amount of arrearages—if the bankruptcy
court’s finding 34 of a $20,000.00 total arrearage is clearly erroneous, then the plan does not
comply with the above sections and it was not confirmable pursuant to 11 U.S.C. § 1325. 35

30

R. Doc. No. 9, at 16-17.
“[T]he plan may . . . notwithstanding paragraph (2) of this subsection, provide for the curing of
any default within a reasonable time and maintenance of payments while the case is
pending . . . .” 11 U.S.C. § 1322(b).
32
“[T]he plan may . . . modify the rights of holders of secured claims, other than a claim secured
only by a security interest in real property that is the debtor’s principal residence . . . .” 11 U.S.C.
§ 1322(b) (emphasis added).
33
“[A]s soon as practicable after completion by the debtor of all payments under the plan, . . . the
court shall grant the debtor a discharge of all debts provided for by the plan . . . except any debt
. . . provided for under section 1322(b)(5) . . . .” 11 U.S.C. § 1328(a).
34
Appellant argues that the bankruptcy court did not actually make a finding as to the amount of
arrearages the debtor owes. See R. Doc. No. 25, at 1. Appellant contends that this failure runs
afoul of United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010), in which the Supreme
Court noted that 11 U.S.C. § 1325(a) “requires bankruptcy courts to address and correct a defect
in a debtor’s proposed plan even if no creditor raises the issue.” Id. at 277 n.14.
The bankruptcy court overruled appellant’s objection, see Bankr. R. Doc. No. 107, at 2324, and it found “that the plan filed in this case . . . complies with 11 U.S.C. § 1325,” Bankr. R.
Doc. No. 89. By overruling appellant’s objection and confirming the plan, the bankruptcy court
implicitly (if not explicitly) found that the amount of arrearages in the debtor-filed proof of claim
was adequate and, as stated below, such a finding was not clearly erroneous based on the record
that was before the court.
35
“[T]he court shall confirm a plan if . . . the plan complies with the provisions of this chapter
and with the other applicable provisions of this title . . . .” 11 U.S.C. § 1325(a).
31

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However, if the finding that debtor was $20,000.00 in arrears is not clearly erroneous, then the
plan complies with the bankruptcy code and it was properly confirmed.
Appellant filed two objections to confirmation, first asserting that debtor was in default
with $49,831.98 in arrears, 36 and later asserting that the arrearage was $50,589.96. 37 Appellant
attached the mortgage and note to each of the objections, 38 but it did not include with its
objections any documentation related to past-due or missed payments. 39
Having rejected appellant’s request to untimely file an amended proof of claim, the
bankruptcy court was not presented with any evidence to support appellant’s asserted amount of
arrearages other than appellant’s bare assertions. On the other hand, “[a] proof of claim executed
and filed in accordance with these rules shall constitute prima facie evidence of the validity and
amount of the claim.” Fed. R. Bankr. P. 3001(f); see 11 U.S.C. § 502(a) (“A claim or interest,
proof of which is filed under section 501 of this title, 40 is deemed allowed, unless a party in
interest . . . objects.”). 41 The mortgage and note, which were the only documents attached to

36

Bankr. R. Doc. No. 23, at 2.
Bankr. R. Doc. No. 49, at 2.
38
Bankr. R. Doc. Nos. 23-2, 23-3, 49-1, 49-2.
39
Such documentation was only included with appellant’s proposed amended proof of claim. See
Bankr. R. Doc. No. 76, at 4-11.
40
“A creditor or an indenture trustee may file a proof of claim. . . . If a creditor does not timely
file a proof of such creditor’s claim, the debtor or the trustee may file a proof of such claim.” 11
U.S.C. § 501(a)-(c).
41
As stated, appellant does not contend that it objected to the proof of claim filed by debtor on
its behalf. However, appellant asserts that “[t]he proof of claim filed and executed by Debtor’s
counsel included no supporting documentation, and at the hearing on plan confirmation, counsel
for the Debtor[] admitted that the $20,000 was nothing more than a guess.” R. Doc. No. 9, at 17.
“An assertion that a proof of claim is not supported by documentation, standing alone, is
never sufficient to support an objection to a proof of claim.” In re Falwell, 434 B.R. 779, 784
(Bankr. W.D. Va. 2009). The documentation requirements listed in Rule 3001(c) of the
Bankruptcy Rules “do[] not create an independent ground for claim disallowance because failure
to comply is an evidentiary defect that only deprives a claim of its prima facie validity.” In re
MacFarland, 462 B.R. 857, 880 (Bankr. S.D. Fla. 2011); see also In re Hilton, No. 12-61102,
2013 WL 6229100, at *5 (Bankr. W.D. Va. Dec. 2, 2013); cf. Fed. R. Bankr. P. 3001(c)(1),
37

8

appellant’s objections, say nothing about the total amount and timing of any past-due or missed
payments, and such evidence does not rebut debtor’s assertion in the sworn proof of claim that
she filed on appellant’s behalf that she was $20,000.00 in arrears. Accordingly, the bankruptcy
court did not clearly err in confirming the plan over appellant’s objections.
Appellant contends that it was punished for failing to file a proof claim. 42 However,
appellant’s failure to file a proof of claim is separate from its failure to provide the necessary
documentation in support of its objections to the plan. Had appellant attached that information to
its objections, the lack of a proof of claim would have been irrelevant because its supporting
documentation would have been in the record. The fact that appellant was less than diligent in
supporting its objection does not provide a basis for finding clear error on the part of the
bankruptcy court which made a permissible ruling based on the evidence it had before it.

(2)(C) (providing the documentation requirements for secured claims on the debtor’s principal
residence).
The proof of claim submitted by debtor on appellant’s behalf is a sworn document. See
Bankr. R. Doc. No. 108, at 2. Even if the debtor-filed proof of claim was not prima facie valid,
the bankruptcy court was presented with a sworn statement, unrebutted by any evidence provided
by appellant in connection with its objection to confirmation. Accordingly, this Court finds that
the bankruptcy court’s finding was supported by the evidence. See In re Muller, 479 B.R. 508,
514 (Bankr. W.D. Ark. 2012) (noting that the burden of proof regarding a claim “may be met on
the face of the proof of claim”); In re Cluff, 313 B.R. 323, 338 (Bankr. D. Utah 2004) (“[A]
claim that contains undisputed or unchallenged evidence on its face still presents evidence of a
right to payment or to an equitable remedy.”).
42
R. Doc. No. 9, at 17.
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CONCLUSION
For the foregoing reasons,
IT IS ORDERED that the bankruptcy court’s rulings are AFFIRMED. Judgment shall
be entered in favor of appellee, Tiffany Stevens Walker, DISMISSING the consolidated appeal
filed by appellant, Bank of America NA.

New Orleans, Louisiana, February 6, 2015.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

10