Beth Austin v. John Fitzerald, et al

Filing 24

Judge William G. Young: ORDER entered. MEMORANDUM AND ORDER"Although Austin has successfully argued that the Mortgagee accepted the Proposed Plan, in order to have the Proposed Plan confirmed, she also needed to demonstrate to the Bankruptcy Court that all other confirmation requirements had been met. Austin failed to do this and thus, for the foregoing reasons, this Court AFFIRMS the Bankruptcy Courts order. AFFIRMED. "(Sonnenberg, Elizabeth)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

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BETH A. AUSTIN,
Appellant,
v.
CAROLYN A. BANKOWSKI, CHAPTER 13
TRUSTEE,
Appellee.

CIVIL ACTION
NO. 13-12304-WGY

YOUNG, D.J.

September 25, 2014

MEMORANDUM AND ORDER
I. INTRODUCTION
Beth A. Austin (“Austin”), a Chapter 13 debtor, appeals
from an order of the Bankruptcy Court for the District of
Massachusetts (“Bankruptcy Court”) sustaining Chapter 13 Trustee
Carolyn Bankowski’s (the “Trustee”) objection to the
confirmation of Austin’s proposed Chapter 13 plan (“Proposed
Plan”) pursuant to 11 U.S.C. § 1325(a)(6) (“Section
1325(a)(6)”).
The crux of this appeal is whether a Chapter 13 plan is
“feasible” where it is contingent upon the achievement of a loan
modification.

In the proceedings before the Bankruptcy Court,

Austin alleged that the secured creditor who had made the loan
1 

in question had accepted the Proposed Plan and, on that basis,
to deny confirmation would be unfair to the other creditors.
Tr. Hr’g Trustee’s Objection Confirmation Plan (“Bankr. Tr.”)
4:17-24, Aug. 8, 2013, ECF No. 11.

The Bankruptcy Court

disagreed, concluding that under these circumstances it was not
appropriate to confirm Austin’s Proposed Plan.

On appeal,

Austin argues that the Bankruptcy Court erred when it sustained
the Trustee’s objection to confirmation and ruled that it would
be premature to confirm a plan which is contingent upon a
pending loan modification.

Bankr. Tr. 5:7.

A. Procedural Posture
On August 23, 2013, Austin filed a motion for leave to
appeal the decision sustaining the Trustee’s objection to the
United States District Court for the District of Massachusetts,
Mot. Leave Appeal, ECF No. 1, and on October 8, 2013, this
motion was granted.

Elec. Order, Oct. 8, 2013, ECF No. 5.

parties subsequently filed supporting briefs.

Both

Br. Appellant

Beth A. Austin (“Austin’s Br.”), ECF No. 10; Appellee Carolyn A.
Bankowski’s Br. (“Trustee’s Br.”), ECF No. 14; Reply Br.
Appellant Beth A. Austin (“Reply”), ECF No. 16.

This Court

heard the case on March 25, 2014, and took the matter under
advisement.

Elec. Clerk’s Notes, Mar. 25, 2014, ECF No. 23.

B. Summary of Undisputed Facts
1. Background
2 

The underlying facts of this matter are undisputed.

On

March 28, 2012, Austin voluntarily petitioned for bankruptcy
relief under Chapter 13 of the United States Bankruptcy Code
(the “Code”) and, pursuant to 11 U.S.C. section 1321, submitted
a Chapter 13 Reorganization Plan.

U.S. Bankr. Ct. Dist. Mass.

(Bos.) Bankr. Pet. #: 12-12571 (“Bankr. Ct. Docket”) 1:1, 2:4,
ECF No. 2.

Nationstar Mortgage L.L.C., the servicing agent for

First Horizon Home Loans (the “Mortgagee”), successfully
objected to the confirmation of both this plan, see id. at 5:48,
and a subsequent, amended Chapter 13 plan (the “Amended Plan”)
filed by Austin.

Id. at 8:79.

The Mortgagee also filed for,

and obtained, relief from the 11 U.S.C. section 362 automatic
stay.

Id. at 7:67, 8:80.

Despite granting the Mortgagee’s

motion for relief from stay, and sustaining its objection to the
confirmation of the Amended Plan, on March 21, 2013, the
Bankruptcy Court permitted Austin to file a further amended
Chapter 13 plan.

Id. at 8:82.

Prior to drafting this further

amended Chapter 13 plan (the “Proposed Plan”), Austin sought and
retained specialist legal counsel to assist her in negotiating a
loan modification with the Mortgagee.
Ct. Docket 8:73.

Austin’s Br. 4; Bankr.

Subsequently, on May 6, 2013, Austin filed

both the Proposed Plan and a motion for its approval.
Ct. Docket 9:91-92.
2. Proposed Plan
3 

Bankr.

The Proposed Plan was for a term of sixteen and a half
months, though as of May 6, 2013 – the date of filing – only
four and a half remained.

Bankruptcy Ct. Docket Record (“Bankr.

Ct. Record”) 13, ECF No. 15-1.

Under the Proposed Plan, Austin

was required to make monthly payments of $523.00 to the Trustee
for distribution to her unsecured creditors.1

Id.

Further, with

respect to the treatment of secured claims, Austin proposed that
“[a]ll payments to [the Mortgagee] shall be in accordance with
the [terms of an application for a] modification [of the loan],
when approved.”

Id.

Austin’s motion for approval of the

Proposed Plan stated that, “[i]n order to maintain the status
quo while the modification is being considered, no distribution
to the mortgagee/servicer is proposed.”

Id. at 17.

Austin

proposed to pay the Mortgagee’s claim directly, instead of
paying to the Trustee for distribution.

See id.

The Proposed

Plan did not, however, include any provision for addressing the
outstanding pre-petition arrears of $60,0002 that Austin owed to
the Mortgagee.

See id. at 13-17; Bankr. Tr. at 2:10-12.

1

As of the date of filing the Proposed Plan, all payments
were up to date. Bankr. Ct. Record 13.
2

At the motion hearing on March 25, 2014, the Trustee
reiterated her objection to confirmation and stated that the
arrearage owed was $73,000.
Tr., March 27, 2014, 6:2, ECF No.
22. This Court assumes that this discrepancy is due to interest
charges on the pre-petition arrearage owed, however, neither
party has placed anything on the record which would confirm or
deny this assumption.
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3. Confirmation Hearing
On May 14, 2013, Austin filed a certificate of service in
the Bankruptcy Court, indicating that all relevant creditors and
parties, including the Mortgagee, had been properly notified of
the terms of the Proposed Plan.

Bankr. Ct. Record 19-21.

The

Trustee filed an objection to confirmation of the Proposed Plan
on June 6, 2013.

Id. at 22.

The Mortgagee, however, did not

file an objection.
On August 8, 2013, the Bankruptcy Court conducted a hearing
to consider the Trustee’s objection to confirmation of the
Proposed Plan.

See Bankr. Ct. Docket 10:102.

At the hearing,

the Trustee argued that the Bankruptcy Court must sustain her
objection to confirmation, because at the time of hearing, the
status of a loan modification was still pending and there was no
sign it would be approved prior to the end of the Plan’s term,
which was, at that time, within the month.

Bankr. Tr. 5:22-6:1.

In response, Austin argued that the Mortgagee’s failure to
object constituted an acceptance of the terms of the Plan.
at 6:20-7:1.

Id.

Because the Plan proposed that no payments be made

to the Mortgagee while the loan modification was under
consideration, “[d]enial of confirmation in this situation is
unfair to other creditors.”

Id. at 4:17-18.

At the conclusion

of the confirmation hearing, the Bankruptcy Court sustained the
Trustee’s objection and denied confirmation of the Plan.
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Id. at

5:14.

The Bankruptcy Court did, however, permit Austin to file

a further amended plan.
10:102.

Id. at 5:9-11; Bankr. Ct. Docket

The Bankruptcy Court explained that “[t]o confirm a

plan which requires a modification when you haven’t got the
modification is probably doing a vain thing.”

Id. at 5:5-7.

Subsequently, on August 23, 2013, Austin filed a motion for
leave to appeal the Bankruptcy Court’s order sustaining the
Trustee’s objection to confirmation and denying confirmation of
the Plan.

Mot. Leave Appeal.

The issue before this Court is whether the Bankruptcy Court
erred in sustaining the Trustee’s objection to confirmation of
the Proposed Plan and denying confirmation of Austin’s Proposed
Plan under Section 1325(a)(6) of the United States Bankruptcy
Code when the Mortgagee did not object to the treatment of its
secured claims under the Plan.
II. ANALYSIS
A. Jurisdiction and Standard of Review
This Court has jurisdiction to hear bankruptcy court
appeals “with leave of the [District C]ourt, from . . .
interlocutory orders and decrees,” 28 U.S.C. § 158(a)(3), and
“may affirm, modify, or reverse [a bankruptcy court’s order] or
remand with instructions for further proceedings.”
Bankr. P. 8013.

Fed. R.

“An order denying confirmation of a chapter 13

plan is interlocutory where the debtor may propose another
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plan.”

Hamilton v. Wells Fargo Bank, N.A. (In re Hamilton), 401

B.R. 539, 542 (B.A.P. 1st Cir. 2009) (citing Watson v. Boyajian
(In re Watson), 309 B.R. 652, 659 (B.A.P. 1st Cir. 2004), aff’d,
403 F.3d 1 (1st Cir. 2005)).

Here, the Bankruptcy Court’s order

was interlocutory, as Austin was free to submit another plan.
Bankr. Ct. Docket 10:103.

This Court has granted Austin the

requisite leave to appeal.

Order, Oct. 9, 2013, ECF No. 5.

When reviewing an appeal from a Bankruptcy Court’s order,
this Court reviews questions of fact for clear error and
questions of law de novo.

Palmacci v. Umpierrez, 121 F.3d 781,

785 (1st Cir. 1997).
B. Legal Framework
Section 1325(a) of chapter 11 of the United States Code
(“Section 1325(a)”) governs the confirmation of a Chapter 13
plan, and in relevant part provides that:
[T]he court shall confirm a plan if:
(1) The plan complies with the provisions of this
chapter and with the other applicable provisions of
the title; . . .
(5) with respect to each allowed secured claim
provided for by the plan
(A) the holder of such claim has accepted the
plan . . .
(6) the debtor will be able to make all payments under
the plan and to comply with the plan.
11 U.S.C. § 1325(a).
To obtain confirmation under Section 1325(a), the burden is
on the debtor to prove that each of the statutory criteria for

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confirmation is met.

See In re Haque, 334 B.R. 486, 489 (Bankr.

D. Mass. 2005) (holding that under Section 1325(a)(3), the
burden of proof is on the debtor); see also In re Virden, 279
B.R. 401, 407 (Bankr. D. Mass. 2002).

In undertaking its

review, the bankruptcy court “should exercise [its] judicial
discretion and assess the evidence to ensure that [the proposed
Chapter 13 plan] meets the guidelines established by [S]ection
1325.”

First Nat’l Bank of Boston v. Fantasia (In re Fantasia),

211 B.R. 420, 423 (B.A.P. 1st Cir. 1997) (citing Fidelity & Cas.
Co. of N.Y. v. Warren (In re Warren), 89 B.R. 87 (B.A.P. 9th
Cir. 1988)).

Even in the absence of an objection to

confirmation by a creditor, the Chapter 13 trustee, or any other
interested party, the bankruptcy court must ensure that all of
the Section 1325 requirements have been met.

See United Student

Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 278 (2010).

Where a

Chapter 13 plan accords with all the statutory criteria, the
Bankruptcy Court must confirm the plan.

In re Hamilton, 401

B.R. at 542.
On appeal, Austin makes two arguments.

First, Austin

contends that the Trustee lacks standing to object to the
Proposed Plan in the absence of an objection by an otherwise
interested party.

Austin’s Br. 7.

In the alternative, she

contends that even if the Trustee has standing, the Bankruptcy
Court erred in denying confirmation of the Proposed Plan because
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the Proposed Plan was still “feasible.”

Id. at 6 (arguing that

“even the most impecunious of debtors has the ability to make no
payments to creditor”).
C. Standing
Despite objecting to the confirmation of both of Austin’s
previous proposed Chapter 13 plans, the Mortgagee did not object
to the confirmation of the Proposed Plan.

Id. at 4.

The issue

before the Court is whether, given this lack of an objection by
the secured creditor, the Trustee has standing to object to the
confirmation of the Proposed Plan.
Before considering this issue, however, it is first
necessary to consider what effect the non-objection of the
Mortgagee has on the potential confirmation of the plan specifically, whether it can be considered acceptance of the
Proposed Plan and the proposed treatment of its claim therein as
required by 11 U.S.C. section 1325(a)(5) (“Section 1325(a)(5)”).
1. Treatment of Allowed Secured Claims under Section
1325(a)(5)
Pursuant to Section 1325(a)(5) “the court shall confirm a
plan if . . . [inter alia] with respect to each allowed secured
claim provided for by the plan” one of the following three
events has occurred: (1) the affected secured claim holder has
accepted the plan pursuant to Section 1325(a)(5)(A); (2) the
plan meets the requirements of Section 1325(a)(5)(B) (the “cram9 

down” requirements); or (3) the debtor surrenders its property
secured by such claim to the secured claim holder pursuant to
Section 1325(a)(5)(C).

11 U.S.C. §1325(a)(5); Flynn v.

Bankowski (In re Flynn), 402 B.R. 437, 442 (B.A.P. 1st Cir.
2009) (“The presence of any one of the three will support
confirmation.”).

The contested issue in this case is whether

the Mortgagee has accepted the proposed treatment of its claim
in accordance with Section 1325(a)(5)(A).
Though Section 1325(a)(5) provides that a proposed Chapter
13 plan may be confirmed where the holder of an allowed secured
claim accepts the proposed treatment of its claim, neither the
United States Bankruptcy Rules nor the Code provides any
guidance on what constitutes “acceptance.”
B.R. at 443.

In re Flynn, 402

Some courts considering this issue have concluded

that a secured creditor’s failure to object may constitute an
acceptance of the plan for the purpose of Section 1325(a)(5)(A).
See, e.g., In re Jones, 530 F.3d 1284, 1291 (10th Cir. 2008)
(“[I]f a secured creditor fails to object to confirmation, the
creditor will be bound by the confirmed plan’s treatment of its
secured claim under [Section] 1325(a)(5).”) (citing Talbot v.
Richman (In re Talbot), 124 F.3d 1201, 1209 n.10 (10th Cir.
1997)); In re Szostek, 886 F.2d 1405, 1412-13 (3d Cir. 1989)
(observing that Section 1325(a)(5) is satisfied if the secured
claim holder has accepted the plan by failing to make an
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objection).

But cf. In re Ferguson, 27 B.R. 672, 673 (Bankr.

S.D. Ohio 1982) (holding that without the express agreement of
priority claim holders, the proposed plan failed to comport with
Section 1322(a)(2), and thus could not be confirmed under
Section 1325(a)(1)).
The Bankruptcy Appellate Panel of the First Circuit (the
“Bankruptcy Appellate Panel”) has adopted the reasoning of the
Third Circuit, namely that the failure to object may be deemed
to be acceptance of a proposed Chapter 13 plan.

See In re

Flynn, 402 B.R. at 443-44 (observing that “chapter 13 has no . .
. mechanism by which secured creditors may evidence acceptance
of a plan” and that “[i]t is, therefore, ‘only the negative – a
filed objection – that evidences the lack of acceptance’”
(quoting In re Montoya, 341 B.R. 41, 45 (Bankr. D. Utah 2006))).
In Flynn, the Bankruptcy Appellate Panel held that a secured
creditor’s failure to object to a Chapter 13 plan raises the
presumption of acceptance.

Id.; see also In re Gusmao, No. 09-

18401-FJB, 2010 WL 4918978 at *1 (Bankr. D. Mass. Nov. 29, 2010)
(Bailey, B.J.) (clarifying that Flynn stands for the proposition
that a secured creditor’s failure to object to a Chapter 13 plan
gives rise to a rebuttable presumption of acceptance).

This

presumption arises, however, only where the debtor can
demonstrate that an affected creditor has “failed to timely
object to confirmation after receiving adequate and proper
11 

notice and adequate and proper service.”

See In re Flynn, 402

B.R. at 445 (vacating the Bankruptcy Court’s denial of
confirmation where it had failed to consider whether secured
creditor had received proper and adequate notice and service).
Here, the record undisputedly demonstrates that the
Mortgagee received proper and adequate notice and service, see
Bankr. Ct. Record 19-21, thereby raising the presumption that it
has accepted the proposed treatment of its claim, see In re
Flynn, 402 B.R. at 444.

Further, there is nothing on the record

which gives the Court pause in accepting this presumption, and
thus this Court concludes that the Mortgagee has accepted the
proposed treatment of its claim; accordingly the confirmation
requirements with respect to Section 1325(a)(5) have been met.
2. Trustee has Standing to Object to the Confirmation
of the Proposed Plan
Given this Court’s conclusion that the Mortgagee has, by
implication, accepted the Proposed Plan and its treatment of its
claim for the purposes of confirmation, see 11 U.S.C. §
1325(a)(5), the issue at bar is thus whether the Trustee then
has standing to object to the confirmation of the Proposed Plan.
“[T]he primary purpose of the Chapter 13 trustee is . . .
to serve the interests of all creditors,” Andrews v. Loheit (In
re Andrews), 49 F.3d 1404, 1407 (9th Cir. 1995) (citing Tower
Loan of Miss., Inc. v. Maddox (Matter of Maddox), 15 F.3d 1347,
12 

1355 (5th Cir. 1994)).

Pursuant to the Bankruptcy Code, a

Chapter 13 trustee “shall . . . appear and be heard at any
hearing that concerns . . . [the] confirmation of a plan,” 11
U.S.C. § 1302(b)(2)(B), and accordingly has standing to object
to a plan that fails to satisfy any and all of the confirmation
requirements of Section 1325(a).

In re Andrews, 49 F.3d at

1406-07 (“The plain language of [Section] 1302(b)(2) confers
standing to object to confirmation of a plan . . . .”).

Where,

however, a creditor has accepted the treatment of its claim,
conferring standing on a Chapter 13 trustee to object under
Section 1325(a)(5) is a more difficult question.

The First

Circuit has not addressed the issue, see In re Gusmao, 2010 WL
4918978 at *1, although the Ninth Circuit has held that where a
secured creditor has accepted a Chapter 13 plan pursuant to
Section 1325(a)(5), including by failing to object, the Chapter
13 Trustee cannot object to confirmation on this same basis.

In

re Andrews, 49 F.3d at 1409.
Turning to the instant matter, this Court is not required
to address this question because the Trustee did not object to
the confirmation of the Proposed Plan under Section 1325(a)(5) –
the only part of Section 1325(a) for which creditor acceptance
is relevant.

As the Trustee made clear, both before the

Bankruptcy Court and in her subsequent brief, she did not object
to the Proposed Plan’s treatment of the Mortgagee’s claims under
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Section 1325(a)(5).

Bankr. Tr. 5:8-16; Trustee’s Br. 4.

Instead, the Trustee argued that the Proposed Plan should not be
confirmed because Austin’s failure to obtain a loan modification
rendered it unfeasible, noting that because the Proposed Plan
expired on September 15, 2013, Austin’s unpaid pre-petition
arrears and outstanding mortgage principal would not be entitled
to discharge under 11 U.S.C. section 1328(a).
Transcript at 6:6-17.

March 25, 2014

On this basis, this Court concludes that

the Trustee had standing to object under Section 1325(a)(6).
D. Feasibility
The Trustee objected to the confirmation of the Proposed
Plan under Section 1325(a)(6), alleging that the Proposed Plan
as filed failed to meet the feasibility requirement necessary
for confirmation.

Trustee’s Br. 4.

The determination of the feasibility of a Chapter 13 plan –
a matter to which this Court will shortly turn – is a factual
determination of the Bankruptcy Court and thus its conclusion
shall not be overturned absent a demonstration of clear error.
In re Fantasia, 211 B.R. at 422-23 (“Feasibility is a factual
determination and the Bankruptcy Court’s decision will not be
disturbed absent a firm conviction that clear error has been
committed.” (citing Fed. R. Bankr. P. 8013)).
In order for the Bankruptcy Court to confirm a Chapter 13
plan, it must satisfy itself that the debtor has met all the
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confirmation requirements of Section 1325(a).

See 11 U.S.C. §

1325(a)(1); In re Hamilton, 401 B.R. at 542 (“A bankruptcy court
must confirm a chapter 13 plan that meets the criteria set forth
in [Section] 1325(a).”).

Thus, despite having satisfied the

confirmation requirement of Section 1325(a)(5), Austin was also
required to demonstrate to the Bankruptcy Court that she would
be “able to make all payments under the plan and to comply with
the plan” - in plain language, that the Proposed Plan was
feasible.

11 U.S.C. § 1325(a)(6); see also In re Fantasia, 211

B.R. at 423 (“The debtor carries the initial burden of showing
that the plan is feasible.” (citing In re Felberman, 196 B.R.
678, 685 (Bankr. S.D.N.Y. 1995); Matter of Endicott, 157 B.R.
255, 263 (W.D. Va. 1993))).

To satisfy the feasibility

requirement, “a debtor’s plan must have a reasonable likelihood
of success,” and the debtor must be able to demonstrate that she
has both the present and future capacity to meet the
requirements of the proposed plan.

Id.; see also In re Lundahl,

307 B.R. 233, 244-45 (Bankr. D. Utah 2003) (concluding that a
proposed Chapter 13 plan was not feasible where the debtor’s
proposed budget was unrealistically lean, rendering the debtor’s
future ability to satisfy the terms of the plan unlikely); In re
Heck, 355 B.R. 813, 823-25 (Bankr. D. Kan. 2006) (holding that
the debtor’s plan was not feasible because she did not have
sufficient income to make all payments under the plan).
15 

In a

situation where a debtor’s ability to make payments under the
proposed Chapter 13 plan is contingent on the refinancing of
assets or the selling of properties, a bankruptcy court will
deny confirmation where it considers the contingency to be too
speculative.

Cf., e.g., In re Gavia, 24 B.R. 216, 218 (Bankr.

E.D. Cal. 1982) (denying confirmation of a Chapter 13 plan which
proposed the sale of the debtor’s home to generate funds to pay
creditors), aff’d, 24 B.R. 573 (B.A.P. 9th Cir. 1982).

But see

In re Anderson, 28 B.R. 628, 631 (S.D. Ohio 1982) (affirming the
bankruptcy court’s conclusion that a Chapter 13 “plan’s
probability of success was high enough to meet the threshold of
feasibility imposed by [Section 1325](a)(6)” despite being
contingent upon the sale of property).
This Court affirms the Bankruptcy Court’s order denying
confirmation of Austin’s Proposed Plan.

The fact that the loan

modification had not been obtained so close to the end of the
Proposed Plan’s term weighs heavily against a holding that the
Proposed Plan is feasible.

This is particularly true given

that, as argued before this Court, a failure to obtain the
modification before the end of the Proposed Plan means that
Austin would either get a discharge without having resolved her
mortgage debt or would simply not get a discharge at all, either
of which would run afoul of the purpose of Chapter 13.
March 25, 2014 Transcript at 6:6-17.
16 

See

Austin has failed to demonstrate that there was a
“reasonable likelihood” that the loan modification would have
been approved before the Proposed Plan expired.
211 B.R. at 423.

In re Fantasia,

Simply claiming that the loan modification was

likely to have been achieved solely on the basis that she had
engaged a specialist attorney to negotiate with the Mortgagee,
see Austin’s Br. 6, does not adequately reduce the speculative
nature of actually obtaining a loan modification before the end
of the Proposed Plan’s term – “if wishes were horses, beggars
would ride.”

I. Opie & P. Opie, The Oxford Dictionary of

Nursery Rhymes (Oxford: Oxford University Press, 1951, 2nd ed.,
1997) at 427.
Moreover, in discharging its duties under Section 1325(a)
the Bankruptcy Court was required to satisfy itself “that
[Austin] ha[d], not only the present ability, but [also] the
future ability to comply with the [P]roposed [P]lan.”
Hockaday, 3 B.R. 254, 255 (Bankr. S.D. Cal. 1980).

In re

Though

Austin, at the time, appeared able to meet the terms of the
Proposed Plan,3 see Reply 4, without a confirmed loan
modification her actual future financial obligations are
entirely speculative.

As Judge Hillman astutely pointed out,

3

Austin claims that she has “completed all of her payments
to the trustee, sufficient to pay all allowed claims 100%,”
Reply 4, however, neither party has placed anything on the
record which supports this assertion.
17 

confirming the Proposed Plan “was a vain thing,” Bankr. Tr. 5:7,
because without confirmation of the modification and its terms,
the Bankruptcy Court did not have the means to determine whether
Austin, if a modification did eventuate, would be able to meet
the requirements of that agreement whilst still complying with
the terms of the Proposed Plan.

For these reasons, this Court

is satisfied that the Bankruptcy Court did not act in clear
error, see In re Fantasia, 211 B.R. at 423, and thus affirms the
Bankruptcy Court’s determination.
E. Austin’s Reliance on In re Mayberry is Misplaced
In making her argument that the Bankruptcy Court must
confirm the Proposed Plan, despite the pending nature of the
loan modification and the continuing non-objection by the
Mortgagee in regards to the plan, Austin relies upon the
decision in In re Mayberry, 487 B.R. 44 (Bankr. D. Mass. 2013).
That case held that in similar circumstances, the possibility
that a loan modification might be denied did not constitute
“cause” for dismissal.

Id. at 47.

Though a similar premise,

the critical facts of that case make its application inapposite
to the present matter.
In Mayberry, the debtor filed a Chapter 13 plan which bears
some similarities to the one at bar.

That plan proposed for

payments to be made to unsecured creditors via the Chapter 13
trustee, and, like in the instant matter, its proposed treatment
18 

of the secured creditor’s claim was contingent on a yet to be
attained loan modification.

Id. at 45.

Again, similar to the

facts in this matter, the secured creditor did not object to the
proposed treatment, but an objection was filed by the Chapter 13
trustee who sought to dismiss the debtor’s case on the ground,
inter alia, that a modification had not been obtained, and if
one was not achieved, the debtor would face foreclosure.
id.

See

This, the Chapter 13 trustee argued, was “antithetical to

the concept of the [d]ebtor’s fresh start.”

Id.

The Bankruptcy

Court denied the trustee’s motion, concluding that “a decision
predicated on [the] possibility [that a modification would not
be achieved] would be premature.”

Id. at 46 (emphasis added).

Mayberry is distinguishable from this case, however, because its
analysis on this point went to the issue of the bad faith of the
debtor rather than the objective feasibility of the plan absent
approval of the loan modification.

See id. at 46-47.

Additionally, the court’s conclusion in Mayberry cannot be
divorced from its factual matrix – unlike the instant matter,
the conclusion of the plan was not imminent.

Accordingly, the

Bankruptcy Court indicated that a motion to dismiss would be
more appropriately filed where the parties failed to agree on a
loan modification (implying that failure to secure the loan
truly does call the feasibility of the plan into question).
at 46.
19 

Id.

III. CONCLUSION
Although Austin has successfully argued that the Mortgagee
accepted the Proposed Plan, in order to have the Proposed Plan
confirmed, she also needed to demonstrate to the Bankruptcy
Court that all other confirmation requirements had been met.
Austin failed to do this and thus, for the foregoing reasons,
this Court AFFIRMS the Bankruptcy Court’s order.

AFFIRMED.

/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE

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