United States Court of Appeals

For the First Circuit

No. 03-2451

In re CLARE A. WOODMAN, Debtor

EVERGREEN CREDIT UNION,

Creditor, Appellant,

v.

CLARE A. WOODMAN,

Debtor, Appellee,

PETER C. FESSENDEN,

Trustee, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Torruella, Circuit Judge,

Gibson, Senior Circuit Judge,*

and Lipez, Circuit Judge.

Stanley Greenberg, with whom Greenberg & Greenberg was on the

brief, for creditor, appellant.

Barry Evan Schklair, with whom The Schklair Law Firm, LLC was

on the brief, for debtor, appellee. 

Peter C. Fessenden, Standing Chapter 13 Trustee, for trustee,

appellee.

August 11, 2004

________________________

* The Honorable John R. Gibson, of the Eighth Circuit, sitting

by designation.
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LIPEZ, Circuit Judge. Evergreen Credit Union, an

undersecured creditor, appeals from the decision of the district

court upholding the bankruptcy court's confirmation of debtor Clare

A. Woodman's First Amended Chapter 13 Plan ("the plan"). Evergreen

objected to the confirmation of the plan on the ground that it did

not meet the requirement set forth in § 1325(b) that debtors devote

all of their "disposable income" to their plans for at least three

years. In particular, Evergreen claimed that Woodman's monthly

purchases of cigarettes, amounting to $136.00, were not "reasonably

necessary" expenses within the meaning of § 1325(b)(2)(A). Thus,

it argued that § 1325(b) required the exclusion of Woodman's

cigarette expenditures from the calculation of her reasonably

necessary expenses, thereby increasing her projected disposable

income and consequently the amount that she would be required to

pay each month into the plan. The bankruptcy court, in a

thoughtful rescript, overruled Evergreen's objection to the

confirmation of the plan. In re Woodman, 287 B.R. 589, 596 (Bankr.

D. Me. 2003). Evergreen appealed, and the district court affirmed

the bankruptcy court's judgment. Adhering to our long-standing

rule that arguments not squarely presented below may not be

advanced for the first time on appeal, we affirm the judgment of

the district court.
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I.

Evergreen contends that the bankruptcy court's analysis

of whether cigarette expenses are disposable income was flawed

because it did not include "a rigorous review" of "objective

factors" relating to the reasonableness of Woodman's asserted need

for cigarettes. Section 1325(b)(2)(A), Evergreen avers, required

the court to consider such factors as

whether the Debtor experiences any ill-health effects

from her smoking, whether her physician has recommended

that she cease smoking, how long she has smoked, the

extent to which her consumption of cigarettes varies, the

brands or brands she smokes, whether she wants to stop

smoking, and the efforts she has made to quit.

Because the bankruptcy court did not consider those factors,

Evergreen argues, it erred as a matter of law in overruling

Evergreen's objection to Woodman's cigarette expenses and

confirming her Chapter 13 plan.

As the bankruptcy trustee points out correctly in its

response brief, Evergreen never asked the bankruptcy court to adopt

the "objective factors" that it now claims should be applied to any

analysis under 11 U.S.C. § 1325(b)(2)(A). Instead, it argued that

Woodman's cigarette expenses were excessive in the context of her

other discretionary expenditures and that it was, furthermore,

unreasonable per se since "there is no redeeming value to smoking,

and [the bankruptcy court] need not tolerate a debtor's behavior

which is not only counterproductive but self-destructive." 
1Evergreen did raise its "objective factors" argument before

the district court, which rejected it on the merits. That the

district court chose to address this issue, however, does not

preserve it for appeal to this court. See In re Carp, 340 F.3d at

21 ("Notwithstanding the fact that we are the second-in-time

reviewers, we cede no special deference to the district court

determinations. Rather our review directly addresses the

bankruptcy court's decision.") (citation omitted).

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A party's failure to advance an issue before the

bankruptcy court in the first instance forfeits its right to raise

that issue on appeal. See Gannett v. Carp (In re Carp), 340 F.3d

15, 25-26 (1st Cir. 2003) (argument not raised before the

bankruptcy court will not be considered on appeal); LaRoche v.

Amoskeag Bank (In re LaRoche), 969 F.2d 1299, 1305 (1st Cir. 1992)

(same). "That a party may not advance an argument for the first

time on appeal is a virtually ironclad rule in this circuit. . . ."

In re Carp, 340 F.3d at 26 (internal quotation marks omitted). We

find no extraordinary circumstances in the record that would

justify a departure from this well-established prudential rule.

See Nat'l Assoc. of Soc. Workers v. Harwood, 69 F.3d 622, 637 (1st

Cir. 1995) (exceptions to the raise-or-waive principle are "few and

far between"). Having failed to raise its "objective factors"

argument before the bankruptcy court, Evergreen is foreclosed from

advancing it on appeal.1

II.

Evergreen further argues that the bankruptcy court

committed a legal error by failing to aggregate all of Woodman's
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discretionary expenditures and assess the reasonable necessity of

that total sum. It argues that the court should have applied the

methodology adopted by the bankruptcy court in In re Gonzales, 157

B.R. 604 (Bankr. E.D. Mich. 1993). The Gonzales court explained

that its task was

to identify how much of the Debtors' anticipated expenses

are discretionary in nature and to weigh them on this

scale. If the discretionary expenses in the aggregate

allow the Debtors to exceed their basic needs, including

a reasonable reserve for recreation and exigencies (the

reasonable "cushion"), then their plan cannot be

confirmed.

Id. at 609. According to Evergreen, "[t]he Bankruptcy Court below

did not use this methodology . . . despite being urged to do so by

Evergreen, and thereby committed an error of law." Applying this

aggregating methodology to Woodman's discretionary expenses,

Evergreen contends, leads to the "inescapable" conclusion that

"Woodman has reserved too much discretionary income for herself,

and too little disposable income to the Plan, due principally to

the inclusion of her expenditure for cigarettes and the lack of any

meaningful sacrifice in pre-petition levels of discretionary

consumption." 

We do not agree that Evergreen urged the Bankruptcy Court

to assess whether Woodman's aggregate discretionary expenses

allowed her to exceed her basic needs including a reasonable

cushion for recreation and exigencies. As Evergreen acknowledges

elsewhere in its brief, its "objection to confirmation [of
2 The bankruptcy court rejected Evergreen's per se argument,

which Evergreen does not challenge on appeal, as well as its claim

that taking into account other discretionary expenditures,

Woodman's cigarette expenditures were excessive. In doing so, the

court adopted an approach that was similar to Gonzales's case-bycase analysis, explaining that

if the trustee or a creditor comes forward with evidence

that the debtor is not committing all available projected

disposable income to the plan as required by §

1325(b)(1), the court, without the aid of arbitrary,

bright line formulae, must scrutinize the debtor's budget

in view of the debtor's particular circumstances, and use

its best judgment to determine whether expenses other

than those that are "reasonably necessary" have been

improperly included in the disposable income calculus. 

Applying that approach, the bankruptcy court questioned whether

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Woodman's plan] was limited to the 'expense of cigarettes issue.'"

While Evergreen's memorandum of law in support of its objection to

confirmation noted that Woodman had "already expend[ed] a

sufficient amount on so-called 'lifestyle' items," it did not claim

that her aggregate discretionary expenditure was unreasonable.

Rather, as previously noted, it singled out Woodman's cigarette

expenses, arguing that in light of her other discretionary

expenditures, "[a]ny additional amount for cigarettes is excessive"

and "must be eliminated." It also "urge[d] the [Bankruptcy] Court

to go further to adopt a per se rule that any expenditure by a c.13

debtor for cigarettes is not 'reasonably necessary' for support and

maintenance." Evergreen did not argue, as it does here, that the

bankruptcy court was required as a matter of law to aggregate

Woodman's discretionary expenses and assess the reasonableness of

that total figure in light of Woodman's basic needs and the monthly

dividends paid to her unsecured creditors.2 Nor did Evergreen
Evergreen had produced sufficient evidence to require Woodman to

establish the reasonableness of her expenses by a preponderance of

the evidence but concluded that, in any event, Woodman had met that

burden.

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advance that claim in its appeal to the district court, choosing

instead to raise only the new "objective factors" claim of error.

Consequently, the argument is twice forfeited. See In re Carp, 340

F.3d at 25-26; Advanced Testing Tech., Inc. v. Desmond (In re

Computer Eng'g Assoc., Inc., 337 F.3d 38, 45 (1st Cir. 2003)

(creditor trustee "forfeited its right to appeal the bankruptcy

court's determination by failing to raise it on appeal to the

district court").

Affirmed.