Filing 12

OPINION. Signed by Judge Evelyn Padin on 11/21/2022. (lag, )

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Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 1 of 21 PageID: 570 NOT FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY FREEDOM MORTGAGE CORPORATION, Appellant, Civil Action No. 21cv11025 (EP) v. OPINION TIFFANY D. SMITH and MARIE-ANN GREENBERG, Appellees. PADIN, District Judge. This is a bankruptcy appeal. 1 Appellant Freedom Mortgage Corporation is a 2 Freedom appeals the Bankruptcy C Third Modified Chapter 13 Bankr. D.E. 85.3 The issues, while technical, boil down to this: Freedom objected to the Third Modified Plan because it: (1) credited the future rents to Debtor, rather than to Freedom, as the required (the Jason Realty issue 4); (2) undervalued the Property; (3) provided for unequal monthly payments; and (4) was not financially feasible. The Bankruptcy 1 This Court has appellate jurisdiction over Bankruptcy Court decisions. 28 U.S.C. § 158(a)(1). Co-Appellee Marie-Ann Greenberg is the bankruptcy trustee, who takes no position in this appeal. 3 at 19bk20603. 2 4 In re Jason Realty, L.P., 59 F.3d 423 (3d Cir. 1995), which held that upon an absolute assignment of rent, the rents are not property of the estate and are not available as cash collateral nor as a funding source for the debtor s reorganization plan. Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 2 of 21 PageID: 571 Court held objections were (or could have been) raised in plans, and overruled them on res judicata grounds. Because the Bankruptcy Court was correct, this Court will AFFIRM. I. BACKGROUND A. Debtor files for chapter 13 bankruptcy Debtor filed her initial Chapter 13 bankruptcy petition on August 5, 2019. R. 16 (the Freedom is one of her creditors. Id. claim was for $242,905.98, about Id. Freedom (prioritized) by the mortgage on the Property, a two-unit building located at 255 South 11 th Street, Newark, New Jersey.5 Id. The Property had a tenant in each unit who, at least before the COVID19 pandemic, paid rent. B. On October 11, 2019, Debtor sought the of her First Modified Plan. R. 64, et seq. The Plan, as relevant here, sought to limit secured claim values., i Id. This took the form of underlying claims as partially secured and partially value to $95,000. R. 71. Or to use bankruptcy colorful terminology, the 905.98 mortgage into (1) a $105,000 secured claim ($95,000 + 4% annual interest over 60 months); and (2) the rest into an unsecured claim, to be paid with other unsecured (lower priority) creditors. Id. The Property had a second lien, not at issue here: a $106,107 judgment lien by creditor West End Properties. R. 71. 5 2 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 3 of 21 PageID: 572 To p the First Modified Plan would have Debtor pay the bankruptcy $8,2006, then $450 per month for the trustee remaining 56 months. R. 65. From those funds, the Trustee would pay $15,400, and the remaining secured claim would be paid , theoretically totaling $89,600 ($1,600 rental income for the 56 remaining months of the plan). R. 72. C. Freedom objects Freedom, as one might expect, objected to most of the First Modified Plan: the cramdown and the at $95,000, the proposed 4% interest rate, and failure to account for all post-petition taxes and insurance (which Freedom was paying while Debtor could not). R. 76-77. to enforce -2. Freedom objected (and continues to object here) to income to fund the Plan (the Jason Realty issue). According to Freedom, Debtor agreed, as part of the mortgage, to assign the rents to Freedom make timely mortgage payments. Thus, the argument goes, the could not be considered to fund the Plan. R. 76. And without those rents, Freedom argues, the Plan is no longer feasible. Id. D. The Court confirms the First Modified Plan and addresses the rent issue After a hearing on November 14, 2019, the Court addressed the Jason Realty issue. R. 7879, 135-52. The Court entered an order The Bankruptcy Court adjourned the hearing to January 23, 2020 to determine how to effectuate that ruling, as well as to address 6 3 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 4 of 21 PageID: 573 . R. 153-61. What happened at this hearing and thereafter appeal Debtor argues that the relevant issues were all decided then, and therefore subject to res judicata, and Creditor argues that they were not, and therefore could be, and were, revisited later. Before the adjourned hearing, on January 13, 2020, the Bankruptcy Court approved a R. 80. The Consent Order, as relevant here, agreed to a cramdo fair market value: $95,000. R. 81 ¶ 3a. The remaining $147,905.98 would convert to unsecured debt to be paid out with the other unsecured creditors. Id. Additionally, Debtor would remain responsible for Property maintenance, tax payments, and insurance. R. 82 ¶ 3i. If Debtor did not pay the taxes or lacked insurance, Freedom could send a 10-day Notice of Default and then file to dismiss the bankruptcy proceeding if the default was uncured. Id. ¶ 3j. Freedom could also pay those expenses and seek reimbursement as additional debt owed by the Debtor. Id. ¶ 3k. On January 30, 2020, after the January 23, 2020 hearing, the Bankruptcy Court confirmed the First Modified Plan, which incorporated the Consent Order. R. 84-85. As relevant here, the First Modified Plan established an annual interest rate of 6.75% 4%) on the $95,000 cramdown value, totaling $122,022.16 7 to be paid over 60 months. R. 82 ¶3d. The Plan required $2,440 monthly payments for the remaining 52 months. R. 85. Crucially, the parties also resolved the rent assignment (Jason Realty) issue by determining 7 $95,000, plus $15,128.70 of interest and $11,893.46 of post-petition escrow on the Property paid by Freedom. Smith had already paid $14,350. 4 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 5 of 21 PageID: 574 that rents would be turned over to the Trustee. R. 82 ¶ 3f. The extent of that resolution is disputed, and discussed below. E. Debtor modifies the Plan during the COVID-19 pandemic The COVID-19 pandemic began in March of 2020. Congress passed the Coronavirus Aid, , broad legislation economic effects. Pub. L. No. 116-136, 134 Stat. 281 (Mar. 27, 2020). Included among its provisions was the ability for Chapter 13 debtors to extend their payment plan terms beyond 60 months. ) seeking an extension of her plan beyond 60 months pursuant to the CARES Act and, importantly, providing for unequal monthly payments. Bankr. D.E. 52. The Second Modified Plan listed monthly payments of $1,500 for six months, then $2,483.00 for the following 47 months.8 Id. at 2. Freedom did not object, and the Bankruptcy Court confirmed the Second Modified Plan on July 10, 2020. Bankr. D.E. 60. As the pandemic persisted, o two tenants was paying rent and even then, only partial rent. R. 97. Because Debtor could evict neither due to pandemic-related eviction moratoriums, Debtor moved on December 5, 2020 to modify the bankruptcy plan a third time. R. 86. The new application sought, again pursuant to the CARES Act, to extend the payment term to 84 months (the . R. 94. The $95,000 cramdown value and escrow ($11,893.46) remained the same, but because of the longer payment period, interest would increase to $24,466.69, totaling $131,360.15 to be repaid under the plan. R. 90. Like the Second Modified 8 The plan credited $16,350.00 paid by Debtor to that point. Bankr. D.E. 60 at 2. 5 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 6 of 21 PageID: 575 Plan, Smith would pay $1,500 payments for the first few months (but eight instead of six), then equal monthly payments ($2,010 for the final 57 months. R. 130. This time, Freedom objected. R. 99. 2021 Notice of Default which Freedom sent to Debtor. R. 115. The n counsel that Freedom had advanced 3rd Quarter 2020 taxes ($1,441.95), property insurance ($1,961.00) and 4th Quarter 2020 taxes ($1,418.10) when Debtor failed to timely pay those bills and demanded payment within 10 days to cure default. Id. On March 10, 2021, Debtor provided updated financial information. R. 118. Specifically, Debtor certified that that Debtor expected to receive a tax refund. R. 119. taxes through first quarter 2021 and otherwise [has funds] on hand to reimburse [Freedom] for any Id. F. The Bankruptcy Court confirms the Third Modified Plan, finding that objections were precluded by res judicata On March 25, 2021, the Bankruptcy Court ordering Debtor to reimburse Freedom $2,860.05 for tax payments within 48 hours. 9 R. 128, ¶ 1. The Court reserved judgment on remaining objections to confirmation of the Third Modified Plan. Id. ¶ 3. issue here) were barred by res judicata. The Bankruptcy Court stated that it had not yet ruled conclusively on the matter. R. 180. It would later, correctly, reverse itself. After an April 22, 2021 hearing, the Court granted the modification on April 26, 2021. R. 129-30. Factoring in $25,350 paid over the preceding 19 months, Debtor would pay $1,500 9 denied without prejudice application for reimbursement. R. 128, ¶ 2. 6 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 7 of 21 PageID: 576 payments for eight months, then $2,010 monthly for the final 57 months. R. 130. 10 The unsecured creditors would be paid, pro rata, from Id. The order noted that the Bankruptcy Court had rent assignment (Jason Realty) objection on the record on April 22, 2021. The Bankruptcy Court explained its reasoning: prior to the entry of the Consent Order and First Modified Plan on January 30, 2020 establishing the $95,000 cramdown value and 6.75% annual interest rate, the parties had discussed the rent assignment issue. R. 202. And the subsequent Consent Order and confirmation, according to the Bankruptcy Court Id. Likewise, the Bankruptcy Court also determined that unequal/stepped payment plan, and the feasibility of the payment plan, were also precluded by the confirmation of the First and Second Modified Plans. R. 207. The Bankruptcy Court held or challenge the Second Modified Plan at all, precluded Freedom from objecting to the same issues in the Third Modified Plan. Id. G. This appeal appeal followed, asserting five claims. The primary claim, and the focus of this Opinion, is whether the Bankruptcy Court erred by invoking res judicata to overrule objections and confirm the Third Modified Plan. Or phrased differently, whether Modified Plan objections were (or could have been) raised or decided in response to the First or Second Modified Plans. 10 Smith had already paid $25,350 over the first 19 months. R. 87, ¶ e. 7 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 8 of 21 PageID: 577 The remaining four issues are the same underlying objections discussed above, which according to Freedom . Freedom argues that the Bankruptcy Court erred in confirming the Third Modified Plan because it: (1) uses th (the Jason Realty issue) (Freedom Br. 13); (2) permits unequal monthly payments (Id. at 21); (3) ascribes a historical value to the Property (Id. at 24); and (4) was not feasible because it impermissibly relied upon uncertain rental income (Id. at 27). As Debtor recognizes, if the res judicata issue is decided determinative and the other objections having been precluded are irrelevant. This Court finds that to be the case. II. LEGAL STANDARD 28 U.S.C. § 158(a)(1). bankruptcy court s legal determinations de novo, its factual findings for clear error and its exercise See In re United Health Sys., Inc., 396 F.3d 247, 249 (3d Cir. Meridian Bank v. Alten, 958 F.2d 1226, 1229 (3d Cir. 1992) (cleaned up). The parties agree that every issue except the last ( feasibility) is a question of law reviewed by this Court de novo, while the feasibility issue must be reviewed for abuse of discretion. Freedom Br. 1-2; Debtor Br. 6-7. 8 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 9 of 21 PageID: 578 III. DISCUSSION A. The First and Second Modified Plans were final for res judicata purposes As in other contexts, res judicata requires the following four elements: (1) the parties must be identical in the two actions; (2) the prior judgment must have been rendered by a court of competent jurisdiction; (3) there must be a final judgment on the merits; and (4) the same cause of action must be involved in both cases. In re Notre Dame Invs., Inc., 306 F. App x 62, 64 (5th Cir. 2009). When a bankruptcy court enters a confirmation order, it renders a final judgment. In re Arctic Glacier Int'l, Inc., 901 F.3d 162, 166 (3d Cir. 2018), as amended (Oct. 24, 2018) (citing 8 Collier on Bankruptcy ¶ 1141.01[4], at 1141-11 (Richard Levin & Henry J. Sommer eds., 16th ed. 2017)). That judgment, like any other judgment, is res judicata. Id. It bars all challenges to the plan that could have been raised. Challengers must instead raise any issues beforehand by objecting to confirmation. Id. A plan s preclusive effect is a principle that anchors bankruptcy law: A confirmation order is res judicata as to all issues decided or which could have been decided Id. (cleaned up, emphasis added); cf In re Harrison, 259 B.R. 794, 798 (Bankr. M.D. Ga. 2000) (Chapter 13 trustee s proceeding to avoid creditor s security interest in debtor mobile home was not precluded where the avoidance issue was not raised before confirmation, and the issue could not have been raised by trustee, since she did not discover the untimely perfection of creditor s lien until after confirmation). Thus, the entire [confirmed p]lan is res judicata, including its releases. Arctic Glacier, 901 F.3d at 166 (emphasis added). The same is true of accorded res judicata In re Galluzzo, No. 06-15392-SLM, 2018 WL 4191476, at *22 (Bankr. D.N.J. Aug. 14, 2018) 9 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 10 of 21 PageID: 579 (citing Espinosa, 559 U.S. at 275), 2021), , No. 06-BK-15392, 2021 WL 9595296 (D.N.J. Oct. 25, No. 22-1550, 2022 WL 10319775 (3d Cir. Oct. 18, 2022). Res judicata is a double- edged sword, applying equally to debtors and creditors. See, e.g., Ruhl v. HSBC Mortg. Servs., Inc., 399 B.R. 49, 57 (E.D. Wis. 2008) (holding that Chapter 13 debtors interest were barred by res judicata); In re Beam, 510 B.R. 399, 404 (Bankr. N.D. Ga. 2014) (Chapter 13 debtors were barred from belatedly asserting that value of mortgaged property on petition date was lower for the Freedom raises three arguments against applying res judicata to its objections: the first is that the First Modified Plan could not be final because it violated certain Bankruptcy Code requirements in other words, the plan should never have been confirmed. The second is that all plans, including the ones here, are subject to amendment, and therefore not final. And the final argument is that objections to the Third Modified Plan value, unequal payments, and payment plan feasibility rent assignment, Property could not be barred because the Bankruptcy Court never conclusively decided them earlier. 1. The First Modified Plan was final, even if certain provisions violated 11 § U.S.C. 1325, because the violations do not implicate jurisdiction or due process concerns first argument the Bankruptcy Code that the First Modified Plan was not final because it violated highlights the tension between two competing Bankruptcy Code provisions: 11 U.S.C. § 1327 and § 1325. Section he provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted or has rejected the plan. Generally, § 1327 evidences a s plan binds both In re Szostek, 886 F.2d 1405, 1408 (3d Cir. 1989). 10 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 11 of 21 PageID: 580 a confirmation order is res judicata as to all issues decided or which could have been decided at Id. at 1408 (3d Cir. 1989) (emphasis added). Or as one leading authority stated, the binding effect of a chapter 13 plan extends to any issue actually litigated by the parties and any issue necessarily determined by the confirmation order, including whether the plan complies with sections 1322 and 1325 of the Bankruptcy Code. For example, a creditor may not after confirmation assert that the plan was not filed in good faith, ... that the creditor should have been paid interest; that the debtor is ineligible for chapter 13 relief; or that the plan is otherwise inconsistent with the Code in violation of Section 1322(b)(10) or section 1325(a)(1). Id. at 1409 (citing 5 Collier on Bankruptcy, § 1327.01 (5th ed. 1988)). But there is some tension with § 1325(a) which meets [certain] conditions listed provides that a court shall confirm a plan for example, that the plan is proposed in good faith, that the plan is feasible, and that the debtor has complied with other federal, state and local tax regulations. Id. at 1408. attend the confirmation hearing, object timely to the plan, or as relevant here ppeal the order of confirmation, regardless of the reason, precludes the creditor from obtaining full recovery of the present value of its claim when such was not provided for in the confirmed plan Id. Or asked differently: can a plan be final under § 1327 if it violated § 1325? Szostek, and other cases since, have answered that question: with certain exceptions not relevant here, yes . The Third Circuit interpreted § 1325, which holds tha if , to be discretionary. Id. at 1411 (comparing § 1325 to § 1322, which unequivocally provides that three elements) (emphasis added). to take an active role in protecting their claims 11 reditors are obligated failure to timely appeal the First Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 12 of 21 PageID: 581 Modified Plan res judicata later objections to the Third Modified Plan. Id. at 1414. Szostek was undercut in United Student Aid Funds, Inc. v. Espinosa, requires bankruptcy courts to U.S. 260, 277, n.14 (2010) (emphasis in original). But Espinosa First, Espinosa involved a Rule 60(b)(4) motion to vacate what a student loan creditor considered to be an invalid judgment. There, like here, the creditor argued that a bankruptcy plan). Id. But as Freedom recognizes, Espinosa when considering plan confirmation to what happens after the plan is already confirmed. Second, and most importantly, the Espinosa Court did not the bankruptcy as Freedom urges here void confirma contrary, the Supreme Court denied The Supreme Court found that the defect e had neither jurisdictional nor due process implications. Id. at 271; cf. Jacobo v. BAC Home Loans Servicing, LP, 477 B.R. 533, 538 (D.N.J. 2012) (res judicata did not apply to bar secured creditor challenge to confirmed Chapter 13 plan where debtors did not serve creditor with plan and notice of confirmation hearing). 12 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 13 of 21 PageID: 582 d] enforceable and binding on [the creditor] because [the creditor] had notice of the error and failed Id. at 275. fter Espinosa, its rights by not objecting to a plan does so at its own peril and as long as due process requirements are met, In re Diruzzo, 527 B.R. 800, 806 (B.A.P. 1st Cir. 2015) (quoting In re McLemore, 426 B.R. 728, 744 (Bankr. S.D.Ohio 2010)). Because neither jurisdictional nor due process concerns are implicated here, the First Confirmed Plan preclude notwithstanding its errors can objections. 2. res judicata preclusion Freedom also argues that Section 1329, which permits certain post-confirmation modifications res judicata bar. Specifically, Freedom argues that res judicata will not bar a post-confirmation modified plan Freedom Br. 6, et seq. Freedom argues that applying language of 11 U.S.C. § res judicata bar Id. But Freedom has it backwards few approved modifications prove general res judicata bar. out of the Bankruptcy Code. See DIRECTV, Inc. v. Pepe, 431 F.3d 162, 168 (3d Cir. 2005) language, we must, whenever possible, read the statute in such a manner as to give effect to every (citing Mountain States Tel. & Tel. Co. v. Santa Ana, 472 U.S. 237, 249 (1985)). Section 1329 permit (1) increase or reduce the amount of payments on claims of a particular class provided for by the plan; 13 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 14 of 21 PageID: 583 (2) extend or reduce the time for such payments; (3) alter the amount of the distribution to a creditor whose claim is provided for by the plan to the extent necessary to take account of any payment of such claim other than under the plan; or (4) reduce amounts to be paid under the plan by the actual amount expended by the debtor to purchase health insurance for the debtor (and for any dependent of the debtor if such dependent does not otherwise have health insurance coverage) . Moreover, the CARES Act explicitly permitted modification by adding a provision to § -19] pandemi PL 116- 136, March 27, 2020, 134 Stat 28.11 Debtor certified to that hardship. R. 96-98. Freedom spends nearly its entire res judicata argument discussing cases which improperly required a mechanism change in circumstance to use in other words, reading a requirement into § 1329 that strengthened res judicata bar. See Freedom Br. 6-12. Freedom appears to argue that it can shoehorn its own attempt to relitigate precluded objections. But the Bankruptcy Court correctly held that Freedom could not use attempt to modify the payment schedule in the Third Modified Plan authorized § 1329 res judicata exception to relitigate an unrelated, precluded objections. R. 206-07; Massachusetts Hous. Fin. Agency v. Evora, 255 B.R. 336, 343 (D. Mass. 2000) (denying redetermination of secured claim); accord In re Loden, 572 B.R. 211, 219 (Bankr. W.D. Ark. 2017). Accordingly, § 1329 3. (res judicata) because were (or could have been) addressed in earlier Plans, and cannot be raised here under § 1329 The remaining issue is whether Third Modified Plan objections were substantively raised and denied (or could have been raised) in prior plan confirmations. See Beam, 11 The provision had a sunset clause and was automatically repealed a year after passage. 14 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 15 of 21 PageID: 584 510 B.R. at 406 confirmed plan values collateral, and thus the secured status of an allowed claim, that valuation cannot be changed absent a modification of the plan; and modification of a confirmed plan is narrowly limited by section 1329 Because Third Modified Plan objections were previously raised and decided without further appeal at the First Modified Plan and not raised at all during the Second Modified Plan , , they were properly barred by the Bankruptcy Court. Confirming the Third iled by record at the 4/22/21 confirmation hearing i.e. on res judicata grounds R. 130. In other words, d later dissatisfaction, the matter had actually been resolved as of the First Specifically, the rent assignment issue was discussed at length at the November 14, 2019 hearing. R. 135, et seq. That hearing bega Jason Realty counse Throughout the proceeding, the parties debated the finer points of the rent assignment issue. ng to Freedom, afforded 15 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 16 of 21 PageID: 585 preserve its rights to the Property. R. 140. The parties specifically addressed the two diverging views on how to apply Jason Realty holding that a complete assignment of rents means that a debtor cannot utilize the rents in a bankruptcy plan. R. 141. The first was In re Parks, which resolved the issue in favor of the debtor and credited rent payments toward secured debt. No. 12-13045, 2012 WL 3561738 (Bankr. D.N.J. Aug. 16, 2012) In re Surma, which declined to follow Parks. 504 B.R. 770, 775 (Bankr. D.N.J. 2014). R. 141. The The parties addressed a middle ground trustee collects the Pr - 44. And ultimately, the Bankruptcy Court discussed its interpretation of both the Parks and Serma decisions. R. 144- again, attempting a middle ground the Bankruptcy Court Id. The R. 149debtor 16 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 17 of 21 PageID: 586 -52. , without further objection and apparently understanding the Bankr then discussed on the record. R. 153. And if there remained any doubt regarding the motion to enforce the assignment of rents, it was eliminated when the Bankruptcy Court granted the motion. R. 157. The Bankruptcy Court then discussed the exact wording of the proposed order and carried any remaining issues (none relevant here) to January 23, 2020 for final confirmation of the First Modified Plan. R. 159-161. But on January 13, 2020, and the Court approved, a consent order. claim, and agreed that all rental payments held and received in the future by Debtor would be forwarded to the bankruptcy trustee the Parks approach. R. 112. The consent order also provided that requested and confirmed without objection. The Second Modified Plan provided for step payments similar to those which Freedom would later challenge: $1,500 equal monthly payments for six months, followed by $2,440 equal monthly payments for the remaining 47 months of that plan. Bankr. D.E. 52 at 2. The Third Modified plan, filed on De term to 84 months under the CARES Act due to economic hardship. R. 87. Like the Second Modified Plan, Debtor would pay $1,500 monthly from for six months. Id. Debtor would then pay $2,010 monthly for the final 57 months of the plan. Id. 17 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 18 of 21 PageID: 587 Only then did Freedom object. As relevant here, those familiar objections were: (1) that (citing Jason Realty faith nor feasible in violation of 11 U.S.C. § 1325, R. 101 at ¶ 11; and (3) that Debtor violated 11 U.S.C. § 1325 by undervaluing the Property, R. 101 at ¶¶ 12-14. The Bankruptcy Court overruled the objections on the record on April 22, 2021. R. 200, et seq. The Bankruptcy Court recalled Jason Realty Bankruptcy Court 12 The Parks but believed the issue moot based on the consent order having resolved the matter. Id. The Bankruptcy Court noted that the Second Modified Plan provided for unequal payments: $1,500 for six months, then $2,483 for the remaining months of the plan. R. 203. The Bankruptcy Court held that other issues that really -07. In other words, § 1329, under which Debtor sought to modify the plan, who agreed to the use of the rents of the payment of the rents to the trustee object to the Second Modified Plan utilizing step payments, R. 207-08, another opportunity to object when Debtor sought unrelated relief explicitly authorized by statute. Freedom did not have 210-11. 12 As Debtor argues, t was incorrect, given as discussed above the extensive discussion (and decision) at the First Modified Plan hearing. Indeed, in reply, Freedom acknowledges in the context of arguing that it did not sleep on its rights that [t]he [B]ankruptcy [C]ourt granted the motion to enforce Freedom Reply 6. Id. 18 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 19 of 21 PageID: 588 Freedom could not have known no one could have that the COVID-19 pandemic was around the corner, that it would have disastrous economic effects, and that Congress would pass the CARES Act and include within it a provision enabling the extension of bankruptcy plan But if Freedom disagreed with the Bankruptcy Cour Plan, including the decision on the rent assignment issue or any other, or regretted entering into the consent order, it did not timely say so. It did not immediately appeal. Nor did Freedom object to CARES Act to extend the payment term and introduced the stepped payment plan. Freedom slept on its rights, opting not to object until the Third Modified Plan. Thus, the First and Second Modified Plans precluded Freedom argue, without support, Confirmation. Reply 3. But to In re Thomas, 395 B.R. 914, 917 (B.A.P. 6th Cir. 2008); cf Bullard v. Blue Hills Bank, of proposed Chapter 13 plan wit order resolving an objection to the First Modified Chapter 13 Plan that benefit the Debtor and refusing to enforce the default provisions that [Freedom] sought to exercise in the same consent -10. Of course, this implicitly acknowledges that the Bankruptcy Court 19 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 20 of 21 PageID: 589 Freedom also argues that the Bankruptcy Court understood its First Modified Plan findings to be dicta. Reply 2. There was, indeed, discussion on the record at a March 25, 2021 hearing in which the Bankruptcy Court characterized its discussion of its First Modified Plan confirmation hearing as dicta as precluded by res judicata. R. 191. But that comment followed earlier discussion in which the Bankruptcy Court acknowledged that it the content of the earlier hearing, R. 188-89. And more importantly, the Bankruptcy Court, having reviewed the prior precluded. to the Third Modified Plan were, or could have been, adjudicated in response to either the First or Second Modified Plans. But because Freedom eterminations on the rent assignment and Property valuation issues in the First Modified Plan, or object to the unequal payment and feasibility issues 13 in response to the Second Modified Plan, the Bankruptcy Court correctly held that those objections were precluded when Debtor filed the Third Modified Plan. 13 they would nevertheless have properly been denied. Numerous courts have confirmed Chapter 13 plans calling for unequal payments to secured creditors, finding that they do not violate § 1325 so long as they are feasible. See In re Cochran, 555 B.R. 892, 901-06 (Bankr. M.D. Ga. 2016) The feasibility issue, subject to a more deferential abuse of the First, Second, and Third Modified Plan confirmations. 20 Case 2:21-cv-11025-EP Document 12 Filed 11/21/22 Page 21 of 21 PageID: 590 IV. CONCLUSION For the reasons above, this Court will AFFIRM the Order Confirming 85). An appropriate order accompanies this Opinion. __________________ Evelyn Padin, U.S.D.J. Dated: November 21, 2022 21

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