Court Opinion

ID: 9373921
Source: CourtListenerOpinion
Date Created: 2023-02-22 16:10:31.767064+00
Date Added: 2024-06-11T17:16:49.777464
License: Public Domain

FILED
                                                                                   OCT 28 2022

                           NOT FOR PUBLICATION                                SUSAN M. SPRAUL, CLERK
                                                                                 U.S. BKCY. APP. PANEL
                                                                                 OF THE NINTH CIRCUIT

          UNITED STATES BANKRUPTCY APPELLATE PANEL
                    OF THE NINTH CIRCUIT

 In re:                                               BAP No. EC-21-1159-SLB
 MARILYN THERESA PAVENTY,
             Debtor.                                  Bk. No. 2:14-bk-29018

 MARILYN THERESA PAVENTY,
             Appellant,
 v.                                                   MEMORANDUM∗
 USDA RURAL HOUSING SERVICE,
             Appellee.

               Appeal from the United States Bankruptcy Court
                     for the Eastern District of California
              Christopher M. Klein, Bankruptcy Judge, Presiding

Before: SPRAKER, LAFFERTY, and BRAND, Bankruptcy Judges.

Memorandum by Judge Brand

Dissent by Judge Spraker

                                   INTRODUCTION

      Appellant Marilyn Theresa Paventy appeals an order denying her

motion for reconsideration of the bankruptcy court's prior order denying her

motion to hold creditor USDA Rural Housing Service ("USDA") in contempt

      ∗  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 8024-1.
                                               1
for violation of the discharge injunction and her completed chapter 13 1 plan.

Paventy has not provided us with a transcript from the hearing where the

bankruptcy court made its ruling denying the underlying contempt motion,

and she has not argued on appeal how the bankruptcy court erred in denying

reconsideration of the contempt order. Instead, Paventy argues about issues

she believes the court resolved with respect to the validity of her plan and the

extent of her discharge regarding USDA's debt. Nevertheless, we conclude

that Paventy failed to present any grounds for reconsideration, and we

AFFIRM.

                                         FACTS

A.    The USDA loan

      In 1991, Paventy obtained a loan for $56,726.56 from USDA to purchase

her residence. The terms of the loan were set forth in a promissory note

providing for 8.75% annual interest and monthly payments for 33 years – i.e.,

until 2024. The note was secured by a deed of trust against the residence in

favor of USDA. The loan also included a subsidy repayment agreement

("Subsidy"), whereby $22,659.00 of the original principal amount would not

bear interest and would not be subject to repayment until Paventy sold or

ceased to occupy the residence.

      1
       Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532, all "Rule" references are to the Federal Rules of
Bankruptcy Procedure, and all "Civil Rule" references are to the Federal Rules of Civil
Procedure.
                                             2
B.    The chapter 13 bankruptcy and plan

      Paventy filed a chapter 13 bankruptcy case in 2014. She valued the

residence at $65,000.00 and listed USDA's secured claim as $32,947.00,

representing the outstanding loan balance exclusive of the Subsidy.

      Along with the petition, Paventy filed her chapter 13 plan using the

form plan adopted by the district. She proposed to make 60 monthly plan

payments of $1,030.00. Paventy listed USDA's claim in Class 2, which is

reserved for secured claims that are modified by the plan, or that have

matured or will mature before the plan is completed. Paventy proposed to

pay USDA's entire claim in full over 60 months, even though the maturity

date for the loan was 10 years away. The plan broke USDA's claim into two

parts: $27,611.58, and $5,335.42 in arrears. As to the larger component,

Paventy proposed a monthly payment of $517.91 with annual interest at

4.75%. For the arrears, Paventy proposed a monthly payment of $88.92 with

no interest. These payments did not include her obligation to pay taxes or

insurance for the residence, which USDA ultimately paid.

      Section 2.04 of Paventy's plan, regarding proofs of claim, provided:

"The proof of claim, not this plan or the schedules, shall determine the

amount and classification of a claim unless the court's disposition of a claim

objection, valuation motion, or lien avoidance motion affects the amount or

classification of the claim." Section 2.09(c)(2) of Paventy's plan, regarding

Class 2 secured claims, provided: "Debtor is prohibited from modifying the

rights of a holder of a claim secured only by a security interest in real

                                        3
property that is Debtor's principal residence."

      USDA filed a secured proof of claim for $55,541.36, which included

$30,911.07 in principal, with $4,744.58 of that in arrears, $2,089.71 in

prepetition interest, and $22,659.00 for the Subsidy. The proof of claim stated

that the secured debt accrued interest at an annual rate of 8.75%. The attached

loan documents established that the debt was secured by the residence and

fully matured in 2024 – several years after plan completion.

      USDA did not object to Paventy's plan or otherwise participate in the

confirmation process. The bankruptcy court entered an order confirming

Paventy's plan on December 29, 2014.

      Post-confirmation, Paventy objected to USDA's claim. The objection

sought to reduce the secured claim by the Subsidy amount because it was not

presently due. Paventy acknowledged that USDA's claim was secured by her

residence, and she did not dispute that its claim was accruing interest at the

contract rate of 8.75%. USDA did not oppose the claim objection. The

bankruptcy court entered an order sustaining the objection and disallowing

USDA's claim to the extent of the Subsidy amount.

      In 2018, the bankruptcy court granted Paventy's motion to modify her

plan to address a plan default. Paventy's modified plan differed from her

original plan in only one material respect and did not affect USDA's plan

treatment. The modified plan disclosed a nonstandard provision to increase

her monthly plan payments to cure the plan default over the course of the

remaining term of her 60-month plan.

                                         4
      Section 3.2 of Paventy's modified plan (Section 2.04 in the original

plan)2 provided the same language that the proof of claim, not the plan or

schedules, would determine the amount and classification of a claim unless

otherwise ordered by the court. Section 3.8(c)(3) of Paventy's modified plan

(Section 2.09(c)(2) in the original plan), regarding Class 2 secured claims, was

slightly altered to read: "Except as permitted by 11 U.S.C. § 1322(c), Debtor is

prohibited from modifying the rights of a holder of a claim secured only by

Debtor's principal residence."

      After completing her plan payments, Paventy received a discharge on

April 20, 2020.

C.    USDA's post-discharge collection efforts and Paventy's motion for
      contempt

      Shortly after entry of the discharge order, USDA began contacting

Paventy about an unpaid balance owed on the loan. USDA maintained that

$11,724.41 remained unpaid, which consisted of monthly payments totaling

$11,257.97, fees of $279.44, and $187.00 in late charges. Paventy and her

counsel exchanged correspondence with USDA, contending that the Subsidy

portion of USDA's claim was disallowed in the bankruptcy and that the

remaining principal balance had been paid in full per the plan. Thus, it was

Paventy's position that the principal amount due on USDA's loan was $0.

      Paventy then filed a motion requesting that the bankruptcy court find

      2
        The district had amended and renumbered its form chapter 13 plan between the
time Paventy filed her original and modified plans. Although the numbering had changed,
the substance of both form plans remained nearly identical for our purposes here.
                                            5
USDA in contempt for violating the confirmed plans and the discharge

injunction. Paventy argued that USDA was attempting to collect the

disallowed Subsidy of $22,659, as well as the principal and interest provided

for and paid through the plan.

      USDA denied that it was attempting to collect the Subsidy, which

Paventy later agreed was correct, but did admit it was attempting to collect

the balance of its debt that it argued survived the discharge. USDA noted that

Paventy had made payments using a 4.75% interest rate when the contract

interest rate was 8.75%, which accounted for much of the shortfall. Relying on

its interpretation of Section 2.04 of the original plan and Section 3.2 of the

modified plan, USDA insisted that its proof of claim controlled the applicable

interest rate and that neither Paventy's claim objection nor the resulting order

altered the contractual interest rate. USDA further relied on Section 2.09 of

the plan and Section 3.8(c)(3) of the modified plan and § 1322(b)(2) to argue

that Paventy was prohibited from modifying its claim, which did not fully

mature until 2024 and was wholly secured by her residence. Alternatively,

USDA argued that it could not be found in contempt; the conflicting plan

provisions and the lack of an adversary proceeding by Paventy gave USDA

an objectively reasonable basis for believing that its lien survived the

discharge and that its post-discharge conduct was consistent with

enforcement of its lien rights.

      In reply, Paventy contended the plans' deviation from the contractual

interest rate did not affect the "amount" or the "classification" of USDA's

                                         6
claim and hence did not implicate Section 2.04 of the original plan or Section

3.2 of the modified plan. In other words, while the proof of claim controlled

the amount of the debt, it did not control the interest rate – the plan did.

Paventy argued that her plans distinguished and dealt separately with the

"amount" of debt she owed to USDA and the "interest rate" applicable to that

debt. She maintained that when a chapter 13 debtor states in the plan that the

debtor is paying the balance of the secured loan during the plan, the interest

rate is "routinely" modified – without motion, adversary proceeding, or

additional notice. Paventy argued that there were no conflicting provisions in

the plans as USDA contended; it was clear she intended to pay the principal

balance of the loan at an interest rate of 4.75%. Paventy argued that USDA

was properly served with the plans and did not oppose or object to either.

      The bankruptcy court denied the contempt motion, stating its findings

of fact and conclusions of law on the record. Paventy did not appeal the later

written order, which simply referenced the court's findings and conclusions

at the hearing. Instead, Paventy filed a timely motion for reconsideration.

D.    Paventy's motion for reconsideration of the contempt order

      Paventy argued that reconsideration of the contempt order was

warranted for three reasons: (1) the court made a factual error when it stated

that she had not objected to USDA's claim; (2) the court incorrectly ruled that

the interest rate stated in USDA's proof of claim controlled the plan and was

incorporated into the "amount" stated on the proof of claim; and (3) the court

had ruled without reviewing USDA's supplemental accounting of her loan

                                        7
payments, which was not available until after the contempt hearing. As to her

second argument, Paventy contested the conclusion that USDA's proof of

claim overrode the plan treatment to pay the outstanding balance at reduced

interest. Specifically, Paventy argued that the term "amount," as used in

Section 2.04 of the original plan or Section 3.2 of the modified plan, could not

be interpreted to presumptively include the interest rate, meaning that the

cram-down interest rate stated in the plans controlled, which she argued was

authorized under Till v. SCS Credit Corp., 541 U.S. 465 (2004).

      In response, USDA argued that Paventy failed to present any grounds

for reconsideration; rather, she was rehashing earlier arguments or was

inappropriately raising new ones. In any case, USDA argued that the court

did not err in finding that USDA's proof of claim controlled its treatment

under the plans in denying the contempt motion, and again argued that the

Code and plans both prohibited modification of its loan and lien rights

because the claim was wholly secured by Paventy's residence.

      In reply, Paventy denied that her plans violated the Code. However, to

the extent USDA had a viable objection to its treatment under the plans,

argued Paventy, it waited too long to raise it. In support of her argument, she

cited to § 1327 and United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260

(2010).

      The bankruptcy court held a hearing on the reconsideration motion.

Counsel for Paventy stated that the reason for filing the motion rather than

appealing the contempt order was so that the court could have another

                                        8
opportunity to review the facts and to consider new evidence, namely,

USDA's supplemental accounting for the loan payments that was not

available at the prior hearing. Counsel for USDA referenced a tentative ruling

in which the court presumably set forth its ruling on reconsideration, but we

do not have a copy of it in the record.

      After spending considerable time discussing the Subsidy, which was no

longer at issue for USDA's alleged contempt, counsel for the parties discussed

the language in the plans and argued over whether the plan or the proof of

claim controlled the interest rate paid on USDA's claim – an issue that had

already been raised and decided by the bankruptcy court in denying

Paventy's contempt motion. Upon reviewing and discussing the conflicting

provisions in the plans, the bankruptcy court orally denied the motion to

reconsider. Paventy appeals the subsequent written order.

                                JURISDICTION

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

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

                                     ISSUE

      Did the bankruptcy court abuse its discretion in denying Paventy's

reconsideration motion?

                           STANDARD OF REVIEW

      We review for abuse of discretion a bankruptcy court's denial of a

motion for reconsideration. Carruth v. Eutsler (In re Eutsler), 585 B.R. 231, 235

(9th Cir. BAP 2017). The bankruptcy court abuses its discretion if it applies

                                          9
the wrong legal standard, misapplies the correct legal standard, or makes

factual findings that are illogical, implausible, or without support in the

record. United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en

banc).

                                   DISCUSSION

A.    Governing law on reconsideration

      A motion for reconsideration may be brought under Civil Rules 59(e) or

60(b), applicable in bankruptcy under Rules 9023 and 9024. While Paventy

cited to a nonexistent "Rule 9024(b)(1)(2), and (6)" in her reconsideration

motion, her arguments indicate that she was requesting relief under Civil

Rule 59(e) and Rule 9023. USDA argued that her motion should be treated as

a motion to alter or amend judgment under Civil Rule 59(e). The bankruptcy

court did not cite under which rule it was proceeding.

      We construe a motion for reconsideration as a motion to alter or amend

judgment under Civil Rule 59(e) and Rule 9023 when a party files the motion

within 14 days following the date of the entry of the judgment or order.

Shapiro ex rel. Shapiro v. Paradise Valley Unified Sch. Dist. No. 69, 374 F.3d 857,

863 (9th Cir. 2004) (applying former 10-day rule). Absent highly unusual

circumstances, a motion for reconsideration should not be granted unless the

court is presented with newly discovered evidence, committed clear error, or

if there is an intervening change in the controlling law. 389 Orange St. Partners

v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999); see Kona Enters., Inc. v. Est. of

Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (reconsideration is an "extraordinary

                                          10
remedy, to be used sparingly in the interests of finality and conservation of

judicial resources.") (quotation marks and citation omitted).

      A party may not use a Civil Rule 59(e) motion as a vehicle to present a

new legal theory for the first time, to raise legal arguments which could have

been raised in connection with the original motion, or to rehash the same

arguments presented the first time or simply to express the opinion that the

court was wrong. Wall St. Plaza, LLC v. JSJF Corp. (In re JSJF Corp.), 344 B.R.

94, 103 (9th Cir. BAP 2006), aff'd and remanded, 277 F. App'x 718 (9th Cir.

2008). "The standard for granting a motion to reconsider is strict in order to

preclude repetitive arguments that have already been fully considered by the

court." Id.; see In re Mannie, 299 B.R. 603, 608 (Bankr. N.D. Cal. 2003) ("A

motion to reconsider should not be used to ask the court to rethink what the

court had already thought through – rightly or wrongly – or to reiterate

arguments previously raised.") (cleaned up).

B.    The bankruptcy court did not abuse its discretion in denying
      Paventy's reconsideration motion.

      In an appeal of an order denying a reconsideration motion under Civil

Rule 59(e) and Rule 9023, we have jurisdiction to review both the order

denying reconsideration and the underlying order. In re JSJF Corp., 344 B.R. at

99. However, our review of the order denying the contempt motion is

hampered because Paventy failed to provide us with a transcript of the

hearing where the bankruptcy court set forth its findings of fact and

conclusions of law. Where the court's findings of fact and conclusions of law

                                        11
were stated on the record at a hearing, the appellant is required to provide a

transcript of the hearing as part of the record on appeal. McCarthy v. Prince (In

re McCarthy), 230 B.R. 414, 417 (9th Cir. BAP 1999). Determining whether the

bankruptcy court here abused its discretion in denying reconsideration is

problematic when we do not know the basis for its denial of the contempt

motion.

      To be fair, the bankruptcy court made a number of statements at the

reconsideration hearing during its colloquy with counsel, including that

Paventy was free to appeal its ruling and that "the facts that we have talked

about today, I'm willing to say here and now are findings of fact, you know,

to identify the record." Hr'g Tr. (June 8, 2021) at 35:5-7. The dissent believes

that the bankruptcy court's statements at the reconsideration hearing were

effectively a revisit of its prior contempt ruling, and thus we should be

reviewing the merits of its underlying decision to not hold USDA in

contempt. But a fair reading of the transcript reveals that the bankruptcy

court did not articulate any real findings of fact or conclusions of law that we

can meaningfully review.

      On appeal, Paventy fails to assert any specific argument for why the

bankruptcy court erred in denying reconsideration. She does not cite to Civil

Rule 59(e) or Rule 9023 or even discuss the proper standard of review. In fact,

the word "reconsider" or "reconsideration" is found nowhere in her opening

brief. As such, any arguments with respect to reconsideration have been

waived. In re JSJF Corp., 344 B.R. at 103 (failing to brief issues regarding

                                        12
reconsideration of claims results in waiver and affirmance).

      Notwithstanding Paventy's failures, however, we conclude that she did

not present any grounds for reconsideration. Again, relying only on what

Paventy said the bankruptcy court did at the contempt hearing, which we are

unable to corroborate, the arguments she raised in her reconsideration

motion were either irrelevant to the ultimate issue of contempt or were

simply an improper rehash of previous arguments.

      In her reconsideration motion, Paventy argued first that the court erred

in stating that she had not objected to USDA's proof of claim when she had.

This fact is irrelevant. Her claim objection focused solely on the Subsidy,

which everyone agrees USDA was not trying to collect and was not the basis

for the alleged contempt. Her second argument, that the court erred in

finding that USDA's proof of claim and not the plan controlled the interest

rate, was a rehash of an argument she raised specifically in her contempt

motion. The bankruptcy court considered that argument before and rejected

it. If she disagreed with that ruling, she should have properly appealed the

contempt order, not filed a motion for reconsideration to ask the bankruptcy

court to rethink what it had already thought through. In re Mannie, 299 B.R. at

608. Finally, as for the new, supplemental accounting that was not available

until after the contempt hearing, Paventy argued that USDA's accounting was

incorrect. However, she did not articulate how this was material to whether

USDA committed contempt, or that if the court considered the supplemental

accounting it would change the contempt analysis and result.

                                       13
      We believe that the dissent's decision to go beyond the scope of

reconsideration and address the underlying merits of the contempt issue is

not warranted in this case. And its decision to interpret the meaning of the

plans and confirmation orders and the effect of the discharge order as to

USDA's debt answers a different question not before us, even if review of the

alleged contempt were proper.3 In fact, Paventy's counsel stated at oral

argument that he was not seeking the Panel's review of any issues regarding

the plans or discharge order. Those issues should be presented to the

bankruptcy court in the first instance and properly briefed by the parties.

                                     CONCLUSION

      As to the order denying reconsideration of the contempt order, we

AFFIRM.

      Dissent begins on next page.

      3
        The dissent's reliance on Espinosa, 559 U.S. 260 is misplaced. Espinosa involved a
creditor's attempt under Civil Rule 60(b) to obtain relief from a confirmation order. This is
an appeal of an order denying a motion for civil contempt for violation of a discharge
injunction which turned on the clarity of the confirmation order. The issue here is whether
the confirmation orders were clear and unambiguous such that there is an objectively
reasonable basis for concluding that the creditor's conduct might be lawful under the
discharge order.
                                              14
SPRAKER, Bankruptcy Judge, dissenting.

      I believe the bankruptcy court committed clear error by not enforcing

the entry of discharge resulting from Marilyn Paventy’s performance of her

confirmed chapter 13 plan. Paventy’s plan provided for the full payment of

USDA’s outstanding loan balance over five years. USDA failed to object to

confirmation of her plan or entry of her discharge. After entry of the

discharge USDA sought to collect what it calculates to be the unpaid balance

of that debt. It argues that Paventy failed to pay the full outstanding loan

balance because she improperly reduced the contract rate of interest.

      Paventy moved to hold USDA in contempt for violating her confirmed

plan and the discharge. The bankruptcy court denied the motion. On

reconsideration, it held that the interest rates stated in the confirmed plan did

not reduce the contract rate because the reduction conflicted with standard

language in the form chapter 13 plan. But the instructions within a form plan

cannot have more effect than the statutes they serve. For this reason, I

conclude that the bankruptcy court’s decision is clearly erroneous and at

odds with the Supreme Court’s decision in United Student Aid Funds, Inc. v.

Espinosa, 559 U.S. 260 (2010). Paventy performed her obligations under the

confirmed plan on the terms she proposed. For more than five years, USDA

never objected or raised the issue of the applicable interest rate. Its

postpetition efforts to collect additional amounts violated the confirmed plan.

      Moreover, Paventy sought to pay the outstanding loan balance in full

through her plan, not to cure and maintain the long-term debt. As a result,

                                        15
that debt has been discharged under § 1328(a) as paid in full. Again, USDA

had the opportunity to object to entry of the discharge and failed to do so. A

debtor’s discharge has consequences, as does a creditor’s inaction. USDA’s

post-discharge actions violated Paventy’s discharge as a matter of law.

Therefore, the reasoning the bankruptcy court expressed at the

reconsideration hearing for denying Paventy’s motion for contempt was clear

legal error.

      These errors of law incorrectly led the bankruptcy court to deny

Paventy’s reconsideration motion. Accordingly, I dissent.

A.    The scope of reconsideration and the procedural posture on appeal.

      I agree with the majority that the posture of this appeal is not ideal.

Paventy appealed denial of her motion for reconsideration. Unfortunately,

the record does not include the court’s reasoning for originally denying her

motion for contempt. 4 The majority concludes that Paventy has failed to

demonstrate that the court abused its discretion when denying

      4
         Citing McCarthy v. Prince (In re McCarthy), 230 B.R. 414, 417 (9th Cir. BAP 1999),
the majority takes the position that because Paventy failed to provide the transcript from
the contempt hearing, which presumably set forth the bankruptcy court’s factual and legal
basis for denying the contempt motion, we either cannot or should not review the
reconsideration motion. I disagree. Paventy did not appeal the denial of her contempt
motion. She only appealed the denial of her reconsideration motion. Moreover, the
absence of an adequate record on appeal typically warrants dismissal or summary
affirmance only to the extent the record deficiencies preclude meaningful review. See Kyle
v. Dye (In re Kyle), 317 B.R. 390, 393 (9th Cir. BAP 2004), aff'd, 170 F. App’x 457 (9th Cir.
2006). The record provided, including the reconsideration hearing transcript, is sufficient
to permit meaningful review of the controlling issues raised by this appeal: the
consequences of Paventy’s plan and Espinosa. Both of these issues present questions of law
that an appellate court typically reviews independent of the trial court’s decision.
                                                 16
reconsideration. Paventy has consistently maintained that she discharged the

outstanding loan balance through her plan by paying it in full. She argues

that she did so because she paid the total amount of USDA’s allowed secured

claim at reduced interest rates. USDA argues that she did not fully pay the

outstanding loan balance because the higher contract rate applied. On

reconsideration, the bankruptcy court rejected application of Espinosa and

Paventy’s effort to apply the reduced interest rates. That issue is squarely

before us on appeal.

      Civil Rule 59(e), made applicable in bankruptcy cases by Rule 9023,

applies in this instance because Paventy filed her reconsideration motion

within 14 days of entry of the order on her contempt motion. First Ave. W.

Bldg., LLC v. James (In re Onecast Media, Inc.), 439 F.3d 558, 561-62 (9th Cir.

2006). Reconsideration under Rule 59(e) is appropriate when the court: “(1) is

presented with newly discovered evidence, (2) committed clear error or the

initial decision was manifestly unjust, or (3) if there is an intervening change

in controlling law.” Smith v. Clark Cnty. Sch. Dist., 727 F.3d 950, 955 (9th Cir.

2013) (quoting School Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.

1993)). The ultimate question presented when reviewing the denial of a

motion brought under Rule 59(e) is whether the court abused its discretion in

denying relief. In re Onecast Media, Inc., 439 F.3d at 561.

      In this instance Paventy did not present newly discovered evidence or

argue an intervening change in the controlling law. Rather, she argued that

the court committed clear error. “A court abuses its discretion in denying a

                                        17
motion to reconsider if the underlying decision “involved a clear error of

law.” Id. (quoting McDowell v. Calderon, 197 F.3d 1253, 1255 (9th Cir. 1999) (en

banc)); see also Jaynes Corp. v. Zurich Am. Ins., No. 05-16671, 2007 WL 2141611,

at *1 (9th Cir. July 26, 2007) (holding that district court did not abuse its

discretion in granting reconsideration after it identified “a clearly erroneous

error of law” in its prior misinterpretation of insurance policy provision). For

purposes of Civil Rule 59(e), clear error analysis implicates the same review

standard as a clearly erroneous factual finding. See Smith, 727 F.3d at 955

(citing United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).

      The bankruptcy court clearly erred in denying reconsideration if its

interpretation of Paventy’s confirmation and discharge orders was illogical,

implausible, or without support in the record. Retz v. Samson (In re Retz), 606

F.3d 1189, 1196 (9th Cir. 2010). The genesis for my dissent is based on the

court’s refusal to apply Espinosa to Paventy’s confirmed plan. This matter was

clearly raised during the reconsideration proceedings, both in the briefing

and at oral argument. During the hearing on the motion to reconsider, the

court pointedly asked Paventy’s counsel for the authority to reduce the

contract interest rate on a debt secured primarily by the debtor’s residence.

Counsel cited Espinosa. The bankruptcy court rejected Paventy’s arguments as

a basis for reconsideration, though it acknowledged that “this is fair game for

appeal and that it’s a complicated situation.”

      The court focused on, and rejected, Paventy’s argument that USDA was

bound to the lower interest rates by confirmation of the plan under Espinosa.

                                         18
But the underlying motion subject to reconsideration was for contempt, not

determination of the applicable interest rate. Paventy’s contempt motion

alleged that USDA was in contempt for violations of both the confirmation

order and her discharge. Throughout the briefing and argument, the parties

acknowledged that Paventy had accelerated the outstanding loan balance and

sought to pay it through her plan. Paventy’s counsel argued that under her

plan there was nothing owed to USDA except the contingent Subsidy.5

Counsel agreed with the court’s observation at the hearing on reconsideration

that her plan accelerated the outstanding balance. During that hearing the

court directly asked Paventy’s counsel, “what is the alleged contempt?” He

replied: “[t]he contempt is that USDA is still—still alleges that the debtor

owes principal. Not on the subsidy, but on the original underlying loan. And

is sending notices—was sending notices to the debtor stating that she was

       5
         As explained by the majority, Paventy borrowed $56,726.56 under a loan program
with USDA. Of this amount $22,659.00 was part of a subsidy repayment agreement that is
payable only when she sells or moves from the residence. USDA filed its proof of claim in
the total amount of $55,541.36, but the parties agree that at the time Paventy filed her
bankruptcy she only owed $32,882.36 ($55,541.36 - $22,659.00 (the subsidy) = $32,882.36).
Paventy objected to USDA’s claim on the basis that she did not currently owe the Subsidy
as she continued to live in the residence. USDA did not oppose the claim objection, and
the court sustained the objection. As a result, the Subsidy was not part of USDA’s secured
claim in the bankruptcy. While there is no dispute that the Subsidy continues to exist, it is
essentially a nonrecourse obligation due upon the sale of the residence. Admittedly, the
Subsidy remains part of the loan and is unpaid. But the parties agree it was not part of the
bankruptcy as a result of the claim objection. For this reason, I refer to USDA’s claim in the
bankruptcy as the outstanding loan balance as it represents the total amounts due during
Paventy’s bankruptcy. Even though payment of that outstanding loan balance could not
satisfy the loan in full (because of the Subsidy), she sought to pay the full amount of
USDA’s secured claim.
                                               19
delinquent, that there was still a remaining balance due on the principal

amount.”

      In its opposition to Paventy’s motion for reconsideration, USDA

admitted that it understood that she had proposed to accelerate the loan

balance, stating: “Section 2.09 of the plan proposed to pay USDA the full

amount of its secured claim with interest on the nondelinquent balance at

4.75% and curing arrearages of $5,335.42 without interest.” At oral argument,

USDA explained that it was still seeking principal of $11,253.35 and directed

the court to an exhibit breaking down the interest, fees, and late charges it

believed remained outstanding.6 Significantly, USDA never denied that her

plan accelerated the loan. After Paventy’s counsel stated that she had paid the

outstanding loan balance in full, the court asked USDA’s counsel to explain

why any amounts were still due. Counsel for USDA responded:

      The why is because the terms of the plan did not modify the
      mortgage on the debtor’s residence. It continued to accrue interest
      at the contract rate which is 8.75 percent which was not the
      amount that was paid through the plan. And because the plan did
      not modify the mortgage, there was an amount left at the end to
      be paid, and that’s what the debtor got statements for.

      The bankruptcy court denied Paventy’s motion for contempt. On

reconsideration, Paventy again argued that USDA’s outstanding loan

balance had been paid in full at reduced interest pursuant to the

      6
        USDA’s exhibit demonstrates that Paventy strictly made her plan payments but
did not address any postpetition escrow amounts for taxes and insurance. USDA never
objected or raised these unpaid amounts either and does not address them on appeal.
                                            20
confirmed plan. In denying reconsideration the bankruptcy court

reasoned that it did not clearly err in its prior denial of the contempt

motion because the interest rates set forth in Paventy’s plan did not

apply. For the reasons that follow, this was clear error.

B.    The applicable rate of interest and Espinosa.

      Paventy’s plan provided for a reduced interest rate below the contract

interest rate of 8.75%. 7 USDA failed to object to her original or amended

plans. The bankruptcy court agreed with USDA that Paventy had

impermissibly modified its secured debt because the loan was secured by

Paventy’s residence, and any modification was precluded under § 1322(b)(2).

The form chapter 13 plan required in the district contained standard

provisions similarly precluding modification of USDA’s loan under

§ 1322(b)(2). Yet, USDA did not object, and the bankruptcy court confirmed

the plans with these lower interest rates.

      The bankruptcy court held that the standard chapter 13 plan provisions

precluded Paventy from modifying the interest rates in violation of

§ 1322(b)(2) because the debt did not mature until after conclusion of her plan

and was secured by her residence. Paventy believed she could modify the

contract rate because she proposed to pay the outstanding balance through

her plan. Her argument is contrary to the Bankruptcy Code. It is well

accepted that reducing interest rates on long-term loans secured by the

      7
         Though Paventy sought to accelerate the outstanding loan balance and pay it
through her plan, she provided that the unpaid balance would be paid at 4.5% annual
interest while the prepetition arrears would not accrue any interest.
                                             21
debtor’s residence violates the anti-modification provision of § 1322(b)(2). See

Greenpoint Mortg. Funding, Inc. v. Herrera (In re Herrera), 422 B.R. 698, 718-19

(9th Cir. BAP 2010) (listing cases), aff'd & adopted sub nom. Home Funds Direct

v. Monroy (In re Monroy), 650 F.3d 1300 (9th Cir. 2011). Section 1322(c)(2),

however, does permit debtors to modify the rights of a creditor secured by a

principal residence if the total debt was originally scheduled to come due

during the term of the chapter 13 plan. But USDA’s secured debt was

originally scheduled to mature well after her plan term. Modification of

USDA’s loan rights was, therefore, impermissible under § 1322(c)(2) and

violated § 1322(b)(2) as well as the district’s form plan.

      Having established that Paventy’s interest rate reduction impermissibly

violated § 1322(b)(2), and that the standard plan provisions mirrored the

statute, what was the consequence of Paventy’s impermissible plan

provisions? Neither the court’s hearing remarks nor its order denying the

motion for reconsideration specifically addresses this question. But USDA

contends that because Paventy understated the interest rate, she did not

actually pay the full outstanding loan balance through her plan and the

balance remains due. It argues that it can collect this amount postdischarge.

      On reconsideration, the court agreed with USDA that the reduced

interest rates in Paventy’s plan were ineffective as a matter of law. The court

rejected application of the Supreme Court’s decision in Espinosa to Paventy’s

confirmed plan. In Espinosa, a chapter 13 debtor’s plan provided for the

discharge of his student loan upon the completion of his plan. This provision

                                        22
violated § 523(a)(8). But the creditor failed to object to the debtor’s plan or

otherwise challenge entry of his discharge. After the debtor completed his

plan and received his discharge, the creditor sought to set aside confirmation

of the performed plan under Civil Rule 60(b)(4). The Supreme Court held that

even though confirmation of the plan in violation of § 523(a)(8) was clear

legal error, “the order remains enforceable and binding on United because

United had notice of the error and failed to object or timely appeal.” 559 U.S.

at 275. In reaching its decision, the Supreme Court rejected the creditor’s

arguments that the statute imposed “a self-executing limitation on the effect

of a discharge order that renders the order legally unenforceable, and thus

void, if it is not satisfied.” Id. at 273 (internal quotation marks omitted).

      Relevant to the instant case, the Supreme Court wrote:

      Rule 60(b)(4) does not provide a license for litigants to sleep on
      their rights. United had actual notice of the filing of Espinosa’s
      plan, its contents, and the Bankruptcy Court’s subsequent
      confirmation of the plan. In addition, United filed a proof of claim
      regarding Espinosa’s student loan debt, thereby submitting itself
      to the Bankruptcy Court’s jurisdiction with respect to that claim.
      United therefore forfeited its arguments regarding the validity of
      service or the adequacy of the Bankruptcy Court’s procedures by
      failing to raise a timely objection in that court.

      Rule 60(b)(4) strikes a balance between the need for finality of
      judgments and the importance of ensuring that litigants have a
      full and fair opportunity to litigate a dispute. Where, as here, a
      party is notified of a plan’s contents and fails to object to
      confirmation of the plan before the time for appeal expires, that
      party has been afforded a full and fair opportunity to litigate, and

                                         23
      the party’s failure to avail itself of that opportunity will not justify
      Rule 60(b)(4) relief.

Id. at 275-76 (citations omitted); see also HSBC Bank USA v. Blendheim (In re

Blendheim), 803 F.3d 477, 498 (9th Cir. 2015) (“Once HSBC received notice of

[the objection to its claim], it was deemed to have notice that its claim might

be affected and it ignored the ensuing proceedings to its peril.” (citation

omitted)).

      Under Espinosa, the responsibility to object to impermissible plan

provisions rests with the creditor if notice is properly given. Additionally,

courts are obligated to ensure that the plan “complies with the provisions of

Chapter 13 and with other applicable provisions of this title.” Espinosa, 559

U.S. at 277 (cleaned up). Courts have applied Espinosa broadly in situations

where chapter 13 plans are mistakenly confirmed containing provisions

violating the Code including modification of rights in violation of § 1322(b)(2)

and (c)(2). See, e.g., In re Edwards, 603 B.R. 516, 523-24 (Bankr. S.D. Fla.), as

amended (May 22, 2019); Smith v. Rushmore Loan Mgmt. Servs., LLC (In re

Smith), 575 B.R. 869, 879 (Bankr. W.D. Ark. 2017); In re Shank, 569 B.R. 238, 249

(Bankr. S.D. Tex. 2017).

      As in Espinosa, Paventy’s plan specifically identified the plan treatment

in question—in this instance the reduced interest rates. USDA did not object

to plan confirmation or appeal the plan confirmation order. In fact, USDA

never even attempted to obtain relief under Civil Rule 60(b)(4), as the creditor

did in Espinosa. Instead, USDA—and the bankruptcy court—reasoned that

                                          24
the anti-modification provisions in the Code and in the form plan

automatically nullified Paventy’s other plan provisions. In essence, the court

found the standard plan language to be self-executing. But the plan

provisions mirroring § 1322(b)(2) and (c)(2) merely incorporate the statutory

prohibitions into the plan text. The standard plan language at issue was

instructive in nature and provided no substantive authority beyond

§ 1322(b)(2). Most importantly, no explanation has been provided as to how

the standard plan provisions can be any more effective than the statute they

serve.

      Espinosa acknowledged that courts sometimes make mistakes in

confirming plans that should not be confirmed. Unless that mistake is

jurisdictional, however, creditors are bound by confirmation orders

mistakenly entered. See Espinosa, 559 U.S. at 271. Paventy thought she could

modify the interest rate because she was paying the outstanding balance in

full. She was wrong. However, as in Espinosa this was merely a legal error not

affecting jurisdiction. Instead, it is the creditor’s obligation to object to plan

treatment that violates its rights. USDA is no different than the creditor in

Espinosa. Nor can courts, or creditors, avoid their obligations to address

problematic plan provisions at confirmation by relying on statutory

prohibitions incorporated into the standardized plan text. The standard plan

provisions are no more self-executing than the statutes they serve.

Accordingly, I would reverse the bankruptcy court’s decision that Espinosa

                                         25
did not govern USDA’s failure to object to Paventy’s plan treatment of its

interest rate.8

C.    Paventy discharged USDA’s outstanding loan balance.

      USDA believes that its outstanding loan balance, calculated at the

contract rate of interest, survived Paventy’s discharge. It has argued that

because Paventy owed a long-term debt the loan survived the discharge, and

the balance remains collectible. This misstates the applicable law. Section

1328(a) governs the discharge in chapter 13, which generally discharges all

debts provided for by the plan subject to four exceptions. The relevant

exception here excepts from discharge those debts provided for under

§ 1322(b)(5). § 1328(a)(1). In turn, § 1322(b)(5) authorizes debtors to propose

plans that “provide for the curing of any default within a reasonable time and

maintenance of payments while the case is pending on any unsecured claim

or secured claim on which the last payment is due after the date on which the

final payment under the plan is due.” In sum, § 1328(a)(1) excepts from the

chapter 13 discharge that portion of a long-term secured debt scheduled to

      8
         USDA also cited a standard plan provision giving supremacy to the “amount” and
“classification” of a claim set forth in a proof of claim over that specified in the plan.
USDA has argued that the contractual interest rate of 8.75% noted in its proof of claim
controls over the interest rates stated in Paventy’s plan. Even if USDA is correct, it cannot
lie in wait over five years. The plan proposed to pay USDA in full over five years. There
was never any objection from USDA even when the chapter 13 trustee gave notice that the
plan had been completed. This necessarily gave notice to USDA that the debtor and trustee
believed USDA had been paid in full pursuant to the confirmed plan and discharge would
be entered. Again, USDA did not object and is bound by the consequence that all amounts
owed on its outstanding loan balance were paid in full under the plan.

                                             26
mature after the plan period if the debtor seeks to cure the loan’s prepetition

arrears and stays current on the postpetition payments that come due during

the plan. See generally 8 Collier on Bankruptcy ¶ 1322.09[1] (Richard Levin &

Henry J. Sommer eds., 16th ed. 2022) (“A long term debt dealt with by the

chapter 13 plan in the manner authorized under section 1322(b)(5) is excepted

from any discharge granted under section 1328, and the creditor’s lien

remains intact, except to the extent it may have been declared void pursuant

to section 506(d).” (footnotes omitted)). Importantly, “[n]ot all long-term

debts are entitled to be excepted from discharge . . . but only those debts

which the debtor wishes to continue treating as long-term debts.” In re

Chappell, 984 F.2d 775, 780 (7th Cir. 1993) (quoting In re Smith, 8 B.R. 543, 547

(Bankr. D. Utah 1981)).

      USDA has also observed that it is a secured creditor and liens generally

survive bankruptcy. Johnson v. Home State Bank, 501 U.S. 78, 82-83 (1991).

While this is a correct general statement of the law, it ignores the significance

of confirmation and Paventy’s performance of the chapter 13 plan discussed

above. Paventy did not seek to strip USDA’s lien. Rather, she proposed to pay

its claim in full through her plan. In this instance, the lien continues to secure

the contingent Subsidy that was excluded from USDA’s claim within the

bankruptcy. But the lien only follows the debt. Carpenter v. Longan, 83 U.S.

271, 275 (1872). USDA was afforded every opportunity to raise the issue of

full payment of its claim during the course of Paventy’s plan. It failed to do

so. It is simply too late now.

                                        27
      Chappell is instructive. The debtors’ plan proposed to accelerate the loan

and pay their secured creditor in full on its two secured claims during the

course of the plan. 984 F.2d at 777. However, the amount debtors proposed to

pay on account of the second mortgage only included the principal balance

and excluded interest or other charges and fees that accrued during the plan

term. Id. Absent acceleration, the final payment under that loan was not due

until well after plan completion. Id. As with USDA, however, the secured

creditor did not object to plan confirmation or otherwise timely raise its

concerns to the bankruptcy court. Id. at 777-78. Nor did the secured creditor

object to entry of the discharge or to the trustee’s final report indicating that

the second mortgage had been paid in full. Id. at 778.

      After the secured creditor commenced foreclosure proceedings post-

discharge the parties brought the matter to the bankruptcy court, which held

that the second mortgage had been fully discharged. Id. at 778-79. The district

court affirmed. On appeal to the Seventh Circuit Court of Appeals the

secured creditor argued the debt was not discharged pursuant to § 1328(a)(1).

The Court of Appeals noted that chapter 13 debtors may elect to cure and

maintain a long-term debt under § 1322(b)(5) and except the remaining

balance from discharge under § 1328(a)(1), but the debtor had proposed a full

payment plan not subject to this discharge exception. Id. at 781. The Court of

Appeals specifically addressed the secured creditor’s argument that it was

still entitled to full interest under § 506(b) that had not been paid. The court

held that the plan governed what the debtors proposed to pay and was

                                        28
controlling. If the secured creditor believed it was entitled to more than the

plan proposed, it could have objected, but it failed to do so. Id. at 781-82. As

the Court of Appeals explained, the secured creditor “didn't even bring the

matter to the attention of the bankruptcy court before the court entered the

discharge order and closed the case.” Id. at 782; see also Doral Mortg. Corp. v.

Echevarria (In re Echevarria), 212 B.R. 185, 188 (1st Cir. BAP 1997), aff'd, 1998

WL 166146, 141 F.3d 1149 (1st Cir. 1998) (following Chappell and holding that

secured creditor who filed a proof of claim that did not assert any right to

interest or other charges, who did not object to debtor’s confirmed chapter 13

plan, and who waited for plan completion before asserting any claim to

interest, did not have a claim for interest that survived the discharge).

      Mortgage Corp. of the South v. Bozeman (In re Bozeman), 623 B.R. 811 (M.D.

Ala. 2020), is another factually analogous case. In Bozeman, the secured

creditor similarly did not object to debtor’s so-called full payment plan, even

though the plan only provided for payment of arrearages and not the

principal balance due. Id. at 813-14. After plan completion, the trustee filed a

notice indicating that the debt had been fully paid. The secured creditor then

responded to the trustee’s notice of final payment. The creditor stated that the

principal balance of $15,032.73 had not been paid, its debt remained

unsatisfied, and its lien had not been extinguished by the completion of plan

payments. At the same time, secured creditor twice amended its claim—first

stating an outstanding loan balance of $15,032.73 and later increasing that

amount to $22,382. Id. at 814. The bankruptcy court ruled in the debtor’s

                                         29
favor. It held that upon plan completion, the secured creditor’s mortgage had

been satisfied and its lien released pursuant to the plan’s specific terms. Id.

      On appeal, the district court affirmed. As the Bozeman court explained:

      While MCS repeatedly characterizes the confirmed plan as unlawful
      and illegal, the plan was objectionable. But no matter how unlawful,
      illegal, or objectionable the plan may have been, MCS chose not to
      object to it or appeal; instead, MCS [initially] filed a proof of claim that
      did not fully, completely or accurately disclose its debt. Sitting on its
      hands, the full payment plan was confirmed and once confirmed,
      became binding on MCS, no matter how objectionable it may have
      otherwise been.

Id. at 816-17 (cleaned up). Bozeman also rejected the secured creditor’s

argument that its lien passed through the bankruptcy unaffected. The

Bozeman court acknowledged that a bankruptcy court generally cannot alter

the contract rights of secured creditors. But it observed that it can confirm a

full payment plan that specifies the precise amount owed to that creditor. If

the creditor disagrees with the amounts specified in the plan, it must object.

The creditor cannot wait until plan completion to dispute the amount owed:

“[o]nce a plan is successfully completed, including payment of the provided

for debt, there is no longer any prepetition debt [or lien] supporting the in

rem rights of the creditor.” Id. at 818.

      USDA’s situation is reminiscent of both Chappell and Bozeman. USDA

participated in Paventy’s bankruptcy by filing its proof of claim. Though

Paventy had the option to cure and maintain the outstanding loan balance,

she sought to pay the balance in full through her plan instead. USDA

                                           30
understood that. Paventy also unambiguously stated the interest rates to be

used to pay USDA’s outstanding loan balance. As in Chappell and Bozeman,

USDA had notice of the plan and was afforded multiple opportunities to raise

its concerns. This included the chapter 13 trustee’s notice of completed plan

payments and notice of final report reflecting that USDA had been paid in

full. As in those cases, USDA said nothing.

      In opposition to the contempt motion USDA argued that the provisions

of Paventy’s plan were in conflict.9 The only provision at issue was the

applicable interest rate. Paventy clearly stated the rate to be applied, though

the reduced rates were prohibited by § 1322(b)(2), and contrary to the

instructions in the standard plan. As explained above, this gave rise to

objections that were never filed. As a result, the bankruptcy court confirmed a

plan that should not have been confirmed. Years afterwards, USDA is not

entitled to recast Paventy’s plan after it was completed and her discharge

entered. Paventy stated how much she would pay to fully satisfy the USDA’s

outstanding loan balance and paid that amount. If that calculation was

wrong, it was incumbent upon USDA to object in a timely manner. It failed to

do so and is bound by the consequences. Paventy having fully paid the

      9  In contrast to the interest rate, USDA has not argued that acceleration of the
outstanding loan balance was an impermissible modification. The loan documents
attached to USDA’s proof of claim appear to provide Paventy with the option of
prepaying the outstanding loan balance. As one leading treatise states, a plan providing
for loan acceleration, “would not offend the antimodification provision of § 1322(b)(2) if
the mortgage contract itself permits prepayment.” Keith M. Lundin, LUNDIN ON CHAPTER
13, § 85.4, at ¶ 8, available at https://www.LundinOnChapter13.com (last visited Oct. 25,
2022); see also In re Bozeman, 623 B.R. at 816.
                                                31
outstanding loan balance pursuant to her confirmed plan, that obligation is

satisfied and discharged. There is simply no remaining debt currently

outstanding to USDA, except for the contingent Subsidy.

      USDA’s post-discharge collections efforts, therefore, were done in

violation of the discharge order entered under § 1328 and the discharge

injunction imposed by § 524(a). For this reason, this Panel should be

reversing the bankruptcy court’s denial of the motion for reconsideration.

D.    Fair ground of doubt.

      USDA violated the confirmation order and the discharge injunction.

However, contempt sanctions against a creditor for violation of the discharge

injunction are appropriate only when “there is no objectively reasonable basis

for concluding that the creditor’s conduct might be lawful under the

discharge order.” Freeman v. Nationstar Mortg. LLC (In re Freeman), 608 B.R.

228, 234 (9th Cir. BAP 2019) (quoting Taggart v. Lorenzen, 139 S. Ct. 1795, 1801

(2019)). As a result, there is no civil contempt if “there is [a] fair ground of

doubt as to the wrongfulness of the defendant’s conduct.” Taggart, 139 S. Ct.

at 1801.

      Where the order is clear and unambiguous, “a party’s subjective belief

that she was complying with an order ordinarily will not insulate her from

civil contempt if that belief was objectively unreasonable.” Id. at 1802. “As a

general rule, ignorance of the law, or mistake as to the law, will not operate as

an excuse from a charge of contempt, but it may be a mitigating circumstance,

as in a case of honest mistake as to the controlling law.” 17 C.J.S. Contempt

                                         32
§ 64. This is because the standard for contempt is an objective one. Therefore,

a good faith mistake generally does not preclude contempt. Taggart, 139 S. Ct.

at 1802; High Tech Nat'l, LLC v. Charles Stead, Case No. MC 19-191, 2020 WL

5076796, at *3 (E.D. Pa. Aug. 27, 2020) (“[G]ood faith is not a defense to civil

contempt.” (quoting Robin Woods Inc. v. Woods, 28 F.3d 396, 399 (3d Cir.

1994))); In re Freeman, 608 B.R. at 234. The Supreme Court has recognized,

however, that subjective intent is not always irrelevant and may be a factor in

assessing any sanctions. Taggart, 139 S. Ct. at 1802.

      The record arguably suggests that USDA mistakenly understood, or

failed to appreciate, the significance of Paventy’s plan treatment and her

discharge. USDA contends that the standard language of Paventy’s plan

prohibiting reduction of its contract interest rate created a fair ground of

doubt whether any amounts were still owed after entry of her discharge.

Similarly, it contends that this conflict also was a fair ground to believe that it

could attempt to collect any balance post-discharge, though it is unclear how

this affects the dischargeability of the debt. There is nothing in the record

provided to suggest that the bankruptcy court considered whether a fair

ground of doubt supported USDA’s post-discharge collection efforts. Rather,

the court’s denial of reconsideration held that such efforts did not violate

either the confirmation order or the discharge. Therefore, I would reverse the

bankruptcy court’s denial of Paventy’s reconsideration motion, and remand

for further consideration of the fair ground of doubt issue.

      Accordingly, I DISSENT.

                                        33