In Re. Vicente Perez-Acevedo

Filing 18

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER. In accordance with the foregoing, the orders of the Bankruptcy Court are AFFIRMED and the bankruptcy appeal (Docket No. ( 1 ) is DISMISSED.So ordered.(Franklin, Yvonne)

United States District Court
District of Massachusetts

VICENTE PEREZ-ACEVEDO,
Debtor-Appellant,
v.
UNITED STATES DEPARTMENT OF
EDUCATION,
Creditor-Appellee.

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Bankruptcy Appeal No.
17-10937-NMG

MEMORANDUM & ORDER
GORTON, J.
This bankruptcy appeal emanates from the alleged repayment
of student loans by the debtor-appellant, Vicente Perez-Acevedo
(“Perez-Acevedo” or “appellant”).

Those loans were incurred by

Perez-Acevedo, beginning in 1993, to pursue his college
education.

At the time of the filing of the adversary

proceeding in bankruptcy court, appellant states that he owed
$3,978 in student loans to the Department of Education (“the
DOE”).
I.

Background and Procedural History
On October 10, 2012, appellant filed for bankruptcy

protection under Chapter 13 of the Bankruptcy Code.

The plan

was confirmed in November, 2012 and that plan was modified by
order after confirmation.

The Chapter 13 Trustee’s final report

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and account was submitted in July, 2016.

On May 14, 2017,

appellant filed a motion to set aside discharge, revoke
confirmation and modify his previously filed 36-month Chapter 13
plan, or, in the alternative, to set aside his discharge and
allow him to convert to a Chapter 11 proceeding.

The Bankruptcy

Court denied that motion on May 18, 2017 and appellant timely
filed the appeal in this Court.
Prior to his filing of the motion to set aside his
discharge, Perez-Acevedo contends that he received several
telephone calls and dunning letters from collection agencies
attempting to collect on behalf of the DOE.

Appellant surmises

that the DOE assigned claims against him to collection agencies
for incorrect amounts.

He asserts that the agencies have

refused to provide original documentation or account numbers for
the student loans in question.
In May, 2017, appellant filed in the Bankruptcy Court an
emergency motion to reinstate the stay after discharge to
address 11 U.S.C. § 524 violations.

That motion was denied

without prejudice to the filing of a motion for contempt for
violating the discharge injunction.

Appellant claims that he is

unable to file such a motion because he cannot separate the
particular entity that is violating the injunction from the
several agencies that have attempted to collect the loans.

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Appellant filed a motion for a stay in this Court in May,
2017, seeking to preclude any collection efforts during the
pendency of this appeal.

This Court denied that motion in July,

2017, because appellant is entitled to pursue in the Bankruptcy
Court a motion for contempt for any violation of his discharge.
II.

Analysis
United States district courts have jurisdiction to hear

appeals from final orders of bankruptcy courts. See 28 U.S.C. §
158.

In reviewing an appeal from an order of a bankruptcy

court, a district court reviews de novo conclusions of law but
must accept the bankruptcy judge’s findings of fact unless they
are clearly erroneous. TI Fed. Credit Union v. DelBonis, 72 F.3d
921, 928 (1st Cir. 1995).
Appellant avers that the Bankruptcy Court abused its
discretion when it denied appellant’s motion to vacate his
discharge.

He contends that the Bankruptcy Court committed

reversible error when it refused his request to set aside his
discharge and to revoke his Chapter 13 plan confirmation in
order to allow him to modify such a plan or, in the alternative,
to revoke his discharge in order to be allowed to convert his
bankruptcy to a Chapter 11 proceeding.

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A.

Vacating the Confirmation Order Pursuant to Fed. R.
Civ. P. 60(b)

First, Perez-Acevedo contends that he is entitled to have
the confirmation set aside under Fed. R. Civ. P. 60(b) as made
applicable to the Bankruptcy Code through Fed. R. Bankr. P.
9024.

Fed. R. Civ. P. 60(b) provides, in relevant part, that a

court may relieve a party from a final judgment for any of six
reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence; . . .
(3) fraud[,] misrepresentation, or misconduct
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharge
. . . [or]
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b).

A bankruptcy court should dispense the

broad equitable powers under Fed. R. Civ. P. 60(b)
only in extraordinary circumstances where, without such
relief, an extreme and unexpected hardship would occur.
See e.g., Cohen v. Abramowitz, 549 B.R. 316, 325-26 (W.D. Penn.
2016) (quoting Cox v. Horn, 757 F.3d 113, 120 (3d Cir. 2014)).
Appellant here has not demonstrated that the Bankruptcy
Court erred in denying his motion to vacate the discharge order
pursuant to Rule 60(b).

He contends that

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he had [only] recently found of the [sic] mistakes and
errors and potential fraud committed by the mentioned
agencies acting on behalf of the [DOE].
Appellant’s statement that there was “potential fraud” does not
warrant the extraordinary relief of Fed. R. Civ. P. 60(b). See
Lardas v. Grcic, 847 F.3d 561, 571 (7th Cir. 2017) (affirming
the denial of Rule 60(b) motion and stating that relief under
Rule 60(b) is “an extraordinary remedy for exceptional
situations”).

Perez-Acevedo has made no such showing here,

particularly where the Bankruptcy Court and this Court have
directed him, on multiple occasions, to file a motion for
contempt for any violation of his discharge.
Furthermore, Rule 60 requires a party to move for relief
under that Rule “within a reasonable time”. Fed. R. Civ. P.
60(c).

The text of the rule explicitly requires that the motion

must be made “no more than a year after the entry of the
judgment or order or the date of the proceeding” if the movant
is seeking relief for one of the first three enumerated reasons
in the Rule, including fraud. Fed R. Civ. P. 60(c); see also
Wells Fargo Bank, N.A. v. AMH Roman Two NC, LLC, 859 F.3d 295,
300-01 (4th Cir. 2017) (affirming the bankruptcy court’s
decision that a Rule 60(b) motion was not timely).

Accordingly,

appellant’s request for relief under Rule 60 is properly denied
as untimely.

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Appellant’s motion to vacate also invokes 11 U.S.C. § 1330
which allows the Bankruptcy Court to revoke an order of
confirmation entered pursuant to § 1325 where it was procured by
fraud, provided the party in interest makes that request “within
180 days” after the entry of the order.

As explained above,

appellant has not made a requisite showing of fraud.

Even if he

could demonstrate that the DOE had procured the confirmation
order by fraud, however, he is not entitled to relief under this
section because he did not move to vacate the order within the
statutory period.
B.

Converting Case to Chapter 11 Proceeding

Perez-Acevedo contends that 11 U.S.C. § 706 confers on him
an absolute right to convert a case to Chapter 11 “at any time”
provided that it has not been converted under sections 1112,
1208 or 1307.

Appellant cites no authority for the proposition

that the terms of § 706 apply after the confirmation of a plan.
He appears to assert this alternative ground to circumvent the
terms of 11 U.S.C. § 1329, which clarifies a debtor’s right to
make modifications after the confirmation of the plan.

That

provision expressly limits the right to modify, however, to the
period “before the completion of payments under such plan”. 11
U.S.C. § 1329(a).

Accordingly, the Bankruptcy Court was correct

in its decision to prevent appellant from circumventing the

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stricture of § 1329(a) by converting the case to Chapter 11
after confirmation.

ORDER
In accordance with the foregoing, the orders of the
Bankruptcy Court are AFFIRMED and the bankruptcy appeal (Docket
No. 1) is DISMISSED.

So ordered.
/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated March 30, 2018

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