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UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. OR-11-1448-PaJuKu

)

DAVID REED and REBECCA REED, ) Bankr. No. 10-38478-elp13

)

Debtors. )

___________________________________)

)

WAYNE GODARE, Chapter 13 Trustee, )

)

Appellant, )

)

v. ) M E M O R A N D U M1

)

DAVID REED; REBECCA REED; )

UNITED STATES TRUSTEE, PORTLAND,2 )

)

Appellees. )

___________________________________)

Submitted Without Oral Argument3

on March 11, 2014

Filed - March 11, 2014

Appeal from the United States Bankruptcy Court

for the District of Oregon

Honorable Elizabeth L. Perris, Bankruptcy Judge, Presiding 

Appearances: Appellant Wayne Godare, Chapter 13 Trustee, pro se

on brief; Brian D. Turner of Turner Uhlemann PC on

brief for Appellees David Reed and Rebecca Reed. 

FILED

 MAR 11 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

1

 This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may have

(see Fed. R. App. P. 32.1), it has no precedential value. See 9th

Cir. BAP Rule 8013-1.

2 The United States Trustee did not participate in this

appeal.

3 After examination of the briefs and record, and after

notice to the parties, the Panel unanimously determined that oral

argument was not needed for this appeal in an order entered

October 21, 2013. See Fed. R. Bankr. P. 8012; 9th Cir. BAP

Rule 8012-1.

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Before: PAPPAS, JURY and KURTZ, Bankruptcy Judges.

Appellant, Chapter 134 Trustee Wayne Godare (“Trustee”),

appeals the order of the bankruptcy court confirming the

chapter 13 plan of Appellees, Debtors David and Rebecca Reed

(“Debtors”). Because, in making its decision to confirm Debtors’

plan, the bankruptcy court relied on the Ninth Circuit’s decision

in Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir.

2008), and because the rule of law announced in In re Kagenveama

has since been overruled by the Ninth Circuit sitting in Danielson

v. Flores (In re Flores), 735 F.3d 855 (9th Cir. 2013) (en banc)

(“Flores II”), we VACATE the bankruptcy court’s order and REMAND

this matter for further proceedings.

PROCEDURAL HISTORY5

In an extensive amended memorandum opinion (the “Memorandum

Opinion”) entered on August 9, 2011, the bankruptcy court decided

that Debtors’ chapter 13 plan should be confirmed, and that

Trustee’s objection to confirmation should be overruled. ER at

106-28. In particular, the bankruptcy court found that Debtors

were above-median income debtors for purposes of § 1325(b)(4), but

that they had negative disposable income per § 1325(b)(2)–(3) and

line 59 of Form B22C. Therefore, based on the rule announced in

In re Kagenveama, the court held that Debtors were not required to

4 Unless otherwise indicated, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all Rule references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037.

5 As discussed below, this appeal is resolved on a question

of law. Therefore, a full recitation of the facts, which are well

known to the parties, is unnecessary.

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propose a five-year plan, as Trustee argued they must, and instead

confirmed Debtors’ chapter 13 plan, which was to be completed in

forty-three months. Memorandum Opinion at 22, ER at 127. In the

Memorandum Opinion, the bankruptcy court explained how it had

calculated Debtors’ projected disposable income6 and concluded it

was bound by In re Kagenveama concerning its determination of the

applicable commitment period in Debtors’ case stating, “I conclude

that the Supreme Court’s decisions [of Hamilton v. Lanning,

560 U.S. 505 (2010) and Ransom v. FIA Card Servs., N.A.,

131 S. Ct. 716 (2011)] did not effectively overrule

[In re] Kagenveama’s holding regarding applicable commitment

period. Therefore, I am bound to follow that holding.” 

Memorandum Opinion at 22, ER at 127. 

Trustee filed a timely notice of appeal on August 17, 2011. 

ER at 129. Trustee then filed a motion before this Panel to

suspend briefing in the appeal because a pending, related appeal

to the Ninth Circuit in Danielson v. Flores (In re Flores) might

yield a decision impacting the issues in this case. See Motion to

Suspend the Briefing Schedule, BAP dkt. 4. The Panel granted

Trustee’s motion, extended the briefing deadlines, and ordered the

parties to file supplemental briefing once Flores was decided. 

BAP dkt. 5.

On August 31, 2012, a three-judge panel of the Ninth Circuit

decided the Flores appeal and determined that the court’s decision

6

 The bankruptcy court’s calculation of Debtors’ projected

disposable income in the Amended Memorandum Opinion was not

challenged on appeal by Trustee. See Trustee’s Op. Br. at 6

(stating the issue of the appeal was limited to the bankruptcy

court’s determination on the applicable commitment period).

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in In re Kagenveama was controlling. Danielson v. Flores

(In re Flores), 692 F.3d 1021 (9th Cir. 2012) (“Flores I”). 

However, on December 19, 2012, the Ninth Circuit granted rehearing

en banc. 704 F.3d 1067 (9th Cir. 2012). Sitting en banc, the

court then reversed course, determined In re Kagenveama and

Flores I had been wrongly decided, and held that the applicable

commitment period is a “temporal” requirement, and that, under

§ 1325(b)(1)(B), a bankruptcy court may confirm a plan “only if

the plan’s duration is at least as long as the applicable

commitment period provided by § 1325(b)(4).” Flores II, 735 F.3d

at 862. Under § 1325(b)(4)(A)(ii), the applicable commitment

period for above-median income debtors is “not less than 5 years”.

Given the decision in Flores II, the appeal is now ripe for

disposition.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334

and 157(b)(2)(L). We have jurisdiction under 28 U.S.C. § 158.

ISSUE

Whether the bankruptcy court erred in confirming Debtors’

chapter 13 plan by applying a rule of law that has been overruled.

STANDARD OF REVIEW

“Whether a chapter 13 plan should be confirmed involves mixed

questions of fact and law, where factual determinations are

reviewed under the clearly erroneous standard, and determinations

of law are reviewed de novo.” Meyer v. Lepe (In re Lepe),

470 B.R. 851, 855 (9th Cir. BAP 2012) (citing Andrews v. Loheit

(In re Andrews), 155 B.R. 769, 770 (9th Cir. BAP 1993)). A

bankruptcy court’s interpretation of the Bankruptcy Code is

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reviewed de novo. Flores II, 735 F.3d at 856 n.4 (citing Samson

v. W. Capital Partners, LLC (In re Blixseth), 684 F.3d 865, 869

(9th Cir. 2012)).

DISCUSSION

No extensive analysis of the issue on appeal is necessary.

Because Flores II overruled In re Kagenveama on the applicable

commitment period issue, and because the bankruptcy court relied

on In re Kagenveama in determining the applicable commitment

period in Debtors’ case, the bankruptcy court applied an incorrect

rule of law in deciding that Debtors’ plan should be confirmed. 

We must therefore vacate the bankruptcy court’s order confirming

the Debtors’ chapter 13 plan and remand this case to the

bankruptcy court for further proceedings in light of Flores II. 

See Mele v. Mele (In re Mele), 501 B.R. 357, 364 (9th Cir. BAP

2013) (deciding that vacating and remanding to the bankruptcy

court was required when, during the appeal, the rule of law

applied by the bankruptcy court was superseded or overruled).

CONCLUSION

For the reasons set forth above, we VACATE the bankruptcy

court’s order confirming Debtors’ chapter 13 plan and REMAND this

case to the bankruptcy court for further proceedings in light of

Flores II.

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