Court Opinion

ID: 2757113
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:31.811186+00
Date Added: 2024-06-11T12:17:35.210582
License: Public Domain

FILED
                                                          MAY 01 2012
 1                         NOT FOR PUBLICATION        SUSAN M SPRAUL, CLERK
                                                        U.S. BKCY. APP. PANEL
 2                                                      O F TH E N IN TH C IR C U IT

 3                   UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                             OF THE NINTH CIRCUIT
 5
 6   In re:                          )    BAP No.     CC-10-1332-PaDKi
                                     )
 7   JULIE THUY VU,                  )    Bk. No.     LA 10-17213 AA
                                     )
 8                  Debtor.          )
     ________________________________)
 9                                   )
     U.S. BANK, N.A.,                )
10                                   )
                    Appellant,       )
11                                   )
     v.                              )     M E M O R A N D U M1
12                                   )
     JULIE THUY VU; KATHY A. DOCKERY,)
13   Chapter 13 Trustee,             )
                                     )
14                  Appellees.       )
     ________________________________)
15
                     Submitted Without Argument on the Briefs
16
                               Filed - May 1, 2012
17
                  Appeal from the United States Bankruptcy Court
18                    for the Central District of California
19             Honorable Alan M. Ahart, Bankruptcy Judge, Presiding
20
     Appearances:     Lee S. Raphael, Esq. of Prober & Raphael ALC on
21                    brief for Appellant U.S. Bank, N.A.; Barry E.
                      Borowitz, Esq. of Borowitz, Lozano & Clark, LLP on
22                    brief for Appellee Julie Thuy Vu.
23
24   Before:    PAPPAS, DUNN and KIRSCHER, Bankruptcy Judges.
25
26
          1
             This disposition is not appropriate for publication.
27   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
28   Cir. BAP Rule 8013-1
 1        U.S. Bank, N.A. (“U.S. Bank”) appeals the Order of the
 2   bankruptcy court denying U.S. Bank’s Motion to Reconsider the
 3   Order Confirming Chapter 132 Plan, and denying its Motion to Amend
 4   the Addendum.   We AFFIRM.
 5                                   FACTS
 6        The facts in this appeal are undisputed.
 7        Julie Thuy Vu (“Vu”) filed a petition under chapter 13 on
 8   February 27, 2010.   At the same time, she filed a proposed plan
 9   which provided for payments of $437 per month for sixty months.
10   From those payments, $392.73 per month for sixty months was
11   dedicated to the payment of arrearages totaling $21,600 on the
12   mortgage held by U.S. Bank on Vu’s home.   Attached to, and
13   incorporated in Vu’s plan was a copy of Local Form F-3015-1.1A
14   (the “Addendum”).    The Addendum is a local form adopted by the
15   Central District of California Bankruptcy Court that contains
16   optional chapter 13 plan provisions, and imposes various post-
17   confirmation reporting and other duties on mortgage creditors.
18   Greenpoint Mortg. Funding, Inc. v. Herrera (In re Herrera), 422
19   B.R. 698, 704-06 (9th Cir. BAP 2010), aff’d & adopted sub nom.
20   Home Funds Direct v. Monroy (In re Monroy), 650 F.3d 1300 (9th
21   Cir. 2011).3
22
          2
23           Unless otherwise indicated, all chapter,   section and rule
     references are to the Bankruptcy Code, 11 U.S.C.   §§ 101-1532, and
24   the Federal Rules of Bankruptcy Procedure, Rules   1001-9037. The
     Federal Rules of Civil Procedure are referred to   as "Civil Rules."
25
          3
             For a full description of the Addendum and its contents,
26   see pp. 704-06 of the Herrera case cited here. The BAP’s Herrera
     Opinion was affirmed and adopted as law of the circuit in the
27   Monroy case. For unknown reasons, West Publishing Co. failed to
     include in the Federal Reporter the Herrera opinion as an appendix
28                                                        (continued...)

                                      -2-
 1        On April 8, 2010, counsel for U.S. Bank sent an email to Vu’s
 2   attorney, requesting a modification of the Addendum,
 3        as my client is not able to create manual monthly
          statement[s] with what the Addendum requires and prepare
 4        quarterly disclosures without incurring fees each month
          and each quarter to do so. . . . I estimate a fee of
 5        $75 per month to prepare, review and disburse such
          monthly statements . . . and another $100 per quarter to
 6        prepare the quarterly disclosures.
 7   Vu’s counsel responded by letter on April 21, 2010, questioning
 8   the reasonableness of the fees and requesting a “detailed
 9   breakdown of exactly how you calculated the monthly costs you
10   quoted in the email.”   Vu also requested information about why
11   U.S. Bank was unable to comply with the Addendum’s reporting
12   requirements.   Id.
13        On May 12, 2010, U.S. Bank responded to Vu’s request for
14   information:
15        As you know, the Addendum mandates a mortgage lender to
          create new monthly statements that provide information,
16        not currently provided in the regular monthly
          statements, or in any disclosure statement, that my
17        client currently provides your client. Such revised
          monthly statements must be reviewed by an attorney, not
18        only to ensure compliance with the Addendum, but to
          further ensure accuracy concerning post-petition
19        activity in the bankruptcy case and the inclusion of
          other post-petition fees.
20
21   The May 12 letter again referred to the fee of $75 for monthly
22   statements, and $100 for quarterly reports.   U.S. Bank also
23
24
          3
           (...continued)
25   of the Monroy opinion as was directed by the Ninth Circuit in its
     published Order. West instead referred readers to the Bankruptcy
26   Reporter for the text of the BAP Opinion. Thus, we refer to the
     Ninth Circuit’s opinion as Herrera/Monroy, with page citations to
27   the original BAP Opinion published in the Bankruptcy Reporter,
     bearing in mind that the BAP’s Opinion was adopted as its own by
28   the Ninth Circuit.

                                     -3-
 1   proposed modifications be made to the Addendum incorporated in
 2   Vu’s plan to allow U.S. Bank to send notice to Vu of any post-
 3   petition fees or advances within 90 days4 of any such charges
 4   (modifying ¶ A2 of the Addendum, which required such notices on a
 5   monthly basis) and to substitute the existing annual report under
 6   RESPA sent by U.S. Bank to Vu for the quarterly reports required
 7   in ¶ A6.
 8        Meanwhile, on April 15, 2010, U.S. Bank filed an objection to
 9   confirmation of Vu’s proposed plan.    The bank argued that the
10   plan’s incorporation of the Addendum rendered the plan infeasible
11   because the Addendum is unduly burdensome and costly, and because
12   it directly conflicts with applicable non-bankruptcy law
13   (principally RESPA).   U.S. Bank alleged, “it is estimated that the
14   Objecting Secured Creditor will incur attorney fees in having any
15   custom created monthly mortgage statements reviewed and in having
16   the Addendum-mandated quarterly disclosures reviewed.”   The bank
17   again estimated the additional fees to be $75 per month and $100
18   per quarter.   Id.   Vu responded to the objection on May 7, 2010,
19   generally disputing U.S. Bank’s allegations.
20        The bankruptcy court conducted the confirmation hearing
21   concerning Vu’s plan on May 13, 2010; the chapter 13 trustee, Vu
22   and U.S. Bank were represented by counsel who were heard.     U.S.
23   Bank requested modification of the Addendum as noted above.     Hr’g
24   Tr. 2:3-21, May 13, 2010.   Vu argued that the plan and the
25
26        4
             At some point not clear in the record before us, U.S. Bank
     changed its request from ninety days to sixty days. Regardless,
27   either period would be inconsistent with the Addendum’s
     requirement that such notices be provided in the monthly
28   statements.

                                      -4-
 1   Addendum should be approved without modification.      Hr’g Tr.
 2   3:24–4:9.    The trustee supported confirmation of the plan with the
 3   Addendum unchanged, consistent with the Panel’s opinion in In re
 4   Herrera.    Hr’g Tr. 4:11-14, May 13, 2010.
 5        The bankruptcy court confirmed Vu’s plan from the bench.
 6   Hr’g Tr. 5:15-16.    On June 3, 2010, the bankruptcy court entered
 7   an order confirming the plan substantially as presented by Vu,
 8   including the unchanged Addendum.
 9        On June 17, 2010, U.S. Bank filed a Motion for
10   Reconsideration of Order Confirming Chapter 13 Plan Under Federal
11   Rules of Civil Procedure 60(b) (“Motion for Reconsideration”) or,
12   in the alternative, Motion for Mortgage Creditor to Request that
13   Debtor Accept Statements that Substantially Comply with the Local
14   Form F 3015-1.1A Section B(3) (“Motion to Amend the Addendum”).
15   In this motion, U.S. Bank does not plead any of the elements for
16   reconsideration under Civil Rule 60(b).5      Rather, again, U.S. Bank
17   argued that the Addendum was costly, duplicative and inconsistent
18   with RESPA, modified its substantive rights, and violated the
19   separation of powers.    U.S. Bank submitted the declaration of
20   Olivia Todd, president of the bank’s servicing agency, discussing
21   the effect of the Addendum on accounting practices.      Vu filed an
22   Opposition to Motion for Reconsideration and Motion to Amend the
23   Addendum on July 8, 2010.    Vu suggested that U.S. Bank had failed
24   to demonstrate any reason for reconsideration of the confirmation
25
          5
             The only discussion of a grounds for reconsideration in
26   either the bankruptcy court record or in the appeal briefs appears
     in the transcript of the hearing on reconsideration, where counsel
27   for U.S. Bank suggests that there was newly discovered evidence
     consisting of emails between counsel regarding modification of the
28   Addendum. This allegation will be discussed below.

                                      -5-
 1   order under Civil Rule 60(b), and that the bank had failed to
 2   provide a reasonable explanation as to why it was unable to comply
 3   with the terms of the Addendum.    Id.
 4        Before the hearing on U.S. Bank’s two motions, on July 22,
 5   2010, the bankruptcy court entered a short tentative ruling:
 6   “Deny because no basis to reconsider confirmation of the plan
 7   under [Rule] 9024 and because the other relief requested must be
 8   initiated by an adversary proceeding.”   Tentative Ruling, July 22,
 9   2010.   At the hearing, in a colloquy with counsel for U.S. Bank,
10   the bankruptcy court expressed considerable skepticism over the
11   bank’s argument that compliance with the Addendum would require
12   extensive and expensive review by counsel at the rate of $75 per
13   month and $100 per quarter:
14        COUNSEL (U.S. BANK): They have to send [each monthly and
          quarterly statement] to my office to review it. . . .
15
          THE COURT: Why would it have to go to your office
16        necessarily?
17        COUNSEL: Because it’s manually created. For the first
          few months at the very least, we have to look at each
18        statement and make sure it complies with —
19        THE COURT: Why do you as a lawyer have to do that?    That
          I don’t follow.
20
          COUNSEL: Well, the fact is that the statements were
21        never created for this addendum, and this addendum is a
          legal document which my client must comply with now.
22
          THE COURT: Well, if they choose to send it to you that’s
23        their business but I don’t know that there’s any
          requirement that they do that.
24
          COUNSEL: Well, if they abide by the addendum, then —
25
          THE COURT: Don’t they have to comply with laws all the
26        time, and they don’t always talk to lawyers about every
          time they have to comply with the law?
27
          COUNSEL: Well, most laws are created by Congress or
28        state legislatures but this —

                                       -6-
 1        THE COURT: So, there’s a different compliance if it’s a
          Court order — you don’t want to go down that path,
 2        [counsel].
 3   Tr. Hr’g 3:12—4:13, July 22, 2010.
 4        The bankruptcy court adopted its tentative ruling that U.S.
 5   Bank had failed to demonstrate any grounds for reconsideration
 6   under Rule 9024.      Tr. Hr’g 7:14-15.   However, the court did agree
 7   with U.S. Bank’s position that the Motion to Amend the Addendum
 8   was not the type of motion contemplated in Rule 7001, and an
 9   adversary proceeding was not required.        Tr. Hr’g 7:15.   The
10   bankruptcy court entered its order denying U.S. Bank’s Motion for
11   Reconsideration and Motion to Amend the Addendum on August 18,
12   2010.
13        U.S. Bank filed a timely appeal of the bankruptcy court’s
14   order on August 27, 2010.6     The Panel suspended consideration of
15   this appeal pending a decision by the Ninth Circuit of the appeal
16   in In re Herrera, a case involving similar issues.        The Ninth
17   Circuit issued a decision in In re Monroy, a companion case to In
18   re Herrera, on June 20, 2011, in which the court adopted the BAP’s
19   opinion in In re Herrera as its own.      In re Monroy, 650 F.3d 1300.
20        On October 17, 2011, the Panel invited the parties to submit
21   supplemental briefing in this appeal addressing the implications
22   of the Ninth Circuit’s decision in In re Monroy.        That briefing is
23   now complete, and this appeal is now ripe for decision.
24                                  JURISDICTION
25        The bankruptcy court had jurisdiction under 28 U.S.C.
26   §§ 1334(b)and § 157(b)(2)(A).      We have jurisdiction over this
27
28           6
                 The confirmation order was not appealed.

                                        -7-
 1   appeal under 28 U.S.C. § 158.
 2                                    ISSUES
 3        Whether the bankruptcy court abused its discretion in denying
 4   U.S. Bank’s Motion for Reconsideration.
 5        Whether the bankruptcy court abused its discretion in denying
 6   U.S. Bank’s Motion to Amend the Addendum.
 7                           STANDARDS OF REVIEW
 8        We review denial of a motion for reconsideration under Rule
 9   9024 (incorporating Civil Rule 60(b)) for abuse of discretion.
10   Determan v. Sandoval (In re Sandoval), 186 B.R. 490, 494 (9th Cir.
11   BAP 1995).
12        Where we review "rulings of the [bankruptcy] court regarding
13   local practice and local rules, the appropriate standard of review
14   is abuse of discretion."   Guam Sasaki Corp. v. Diana’s, Inc., 881
15   F.2d 713, 716 (9th Cir. 1989).
16        In applying an abuse of discretion test, we first "determine
17   de novo whether the [bankruptcy] court identified the correct
18   legal rule to apply to the relief requested."   United States v.
19   Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).    If the
20   bankruptcy court identified the correct legal rule, we then
21   determine whether its "application of the correct legal standard
22   [to the facts] was (1) illogical, (2) implausible, or (3) without
23   support in inferences that may be drawn from the facts in the
24   record."   Id. (internal quotation marks omitted).   If the
25   bankruptcy court did not identify the correct legal rule, or its
26   application of the correct legal standard to the facts was
27   illogical, implausible, or without support in inferences that may
28   be drawn from the facts in the record, then the bankruptcy court

                                       -8-
 1   has abused its discretion.   Id.
 2                                DISCUSSION
 3   I.   The bankruptcy court did not abuse its discretion in
          denying U.S. Bank’s Motion for Reconsideration.
 4
 5        In its argument during the hearing on the reconsideration
 6   motion on July 22, 2010, U.S. Bank explained its reasons for
 7   seeking reconsideration of the confirmation order under Civil Rule
 8   60(b).
 9        In regards to the reconsideration aspect of the denial
          of our Motion, I believe that there was [sic] new facts
10        that were not before the court’s record that we have
          also added to the motion, correspondence between
11        ourselves and Debtor’s counsel trying to plead for a
          modification of the addendum under these circumstances.
12
13   Tr. Hr’g 2:8–13, July 22, 2010.     Although U.S. Bank did not
14   clarify under which provision of Civil Rule 60(b) it sought
15   relief, we interpret the above statement as referring to Civil
16   Rule 60(b)(2), which provides:
17        Grounds for Relief from a Final Judgment, Order, or
          Proceeding. On motion and just terms, the court may
18        relieve a party or its legal representative from a final
          judgment, order, or proceeding for the following
19        reasons: . . . (2) newly discovered evidence that, with
          reasonable diligence, could not have been discovered in
20        time to move for a new trial under Rule 59(b)[.]
21   Rule 9024 (incorporating Civil Rule 60(b)(2)).7
22
          7
23           There is no indication anywhere in the record that U.S.
     Bank argued that it was the victim of mistake, inadvertence,
24   surprise, or excusable neglect, Civil Rule 60(b)(1);
     fraud (whether previously called intrinsic or extrinsic),
25   misrepresentation, or misconduct by an opposing party, Civil Rule
     60(b)(3); a void judgment, Civil Rule 60(b)(4); judgment
26   satisfied, released or discharged, Civil Rule 60(b)(5). And while
     U.S. Bank might argue that Civil Rule 60(b)(6) applies because it
27   would be manifestly unjust to allow Vu’s confirmed plan to proceed
     without amendment, this subsection of the Rule "is to be utilized
28                                                        (continued...)

                                        -9-
 1        Relief from an order or judgment to offer newly discovered
 2   evidence under Civil Rule 60(b)(2) is warranted if (1) the moving
 3   party can show the evidence relied on in fact constitutes "newly
 4   discovered evidence" within the meaning of Rule 60(b); (2) the
 5   moving party exercised due diligence to discover this evidence;
 6   and (3) the newly discovered evidence must be of "such magnitude
 7   that production of it earlier would have been likely to change the
 8   disposition of the case."   Feature Realty, Inc. v. City of
 9   Spokane, 331 F.3d 1082, 1093 (9th Cir. 2003) (citing Coastal
10   Transfer Co. v. Toyota Motor Sales, U.S.A., Inc., 833 F.2d 208,
11   211 (9th Cir. 1987)).
12        U.S. Bank’s reconsideration argument is groundless.   The
13   “newly discovered evidence” it seeks to offer consists of an
14   exchange of emails between counsel for the parties during the
15   bankruptcy case.   But evidence is not "newly discovered under the
16   Federal Rules if it was in the moving party’s possession” at the
17   time of the original order.   Feature Reality, 331 F.3d at 1093;
18   Wallis v. J.R. Simplot Co., 26 F.3d 885, 892 (9th Cir. 1995).    The
19   emails were not only in the possession of U.S. Bank before entry
20   of the order confirming the plan, the emails were in fact created
21   by U.S. Bank and Vu, and were thus always known to both parties.
22   Simply put, the emails could not have been considered newly
23   discovered by the bankruptcy court.
24
25        7
           (...continued)
     only where extraordinary circumstances prevented a party from
26   taking timely action to prevent or correct an erroneous judgment."
     United States v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1049
27   (9th Cir. 1993). Because it actively contested confirmation of
     Vu’s plan, U.S. Bank cannot suggest that it was prevented from
28   taking timely action to contest the confirmation order.

                                     -10-
 1         Since newly discovered evidence was the only argument
 2   advanced by U.S. Bank in its reconsideration motion, and the
 3   evidence it wanted the bankruptcy court to consider was
 4   conclusively not newly discovered, the bankruptcy court did not
 5   abuse its discretion in its finding that U.S. Bank had not shown
 6   any grounds for reconsideration of the confirmation order under
 7   Civil Rule 60(b) and Rule 9024.
 8   II.   The bankruptcy court did not abuse its discretion in denying
           U.S. Bank’s Motion to Amend the Addendum.
 9
10         U.S. Bank’s attacks on the Central District’s Addendum are
11   familiar to the Panel.   U.S. Bank was an objecting secured
12   creditor in one of the four constituent bankruptcy cases in which
13   the bankruptcy courts approved the inclusion of the Addendum in
14   chapter 13 debtors’ plans.   See In re Hannon, case no. SV-09-
15   11330-MT (Bankr. C.D. Cal. 2009).    Indeed, U.S. Bank prosecuted
16   the appeal of that decision to this Panel, resulting in the
17   decision in In re Herrera.   Then, when the Panel affirmed the
18   bankruptcy court’s rulings concerning the Addendum, U.S. Bank
19   appealed that decision to the Court of Appeals.     As noted above,
20   the Ninth Circuit affirmed the Panel’s decision and adopted the
21   BAP’s opinion in a published Order.      Home Funds Direct v. Monroy
22   (In re Monroy), 650 F.3d 1300 (9th Cir. 2011).8     U.S. Bank asked
23   for rehearing of the In re Monroy decision, which was denied.
24
          8
             While U.S. Bank’s counsel in this appeal did not represent
25   the creditor in the bankruptcy court in this case, he represented
     all of the secured creditors in the bankruptcy court proceedings
26   in the four cases involved in Herrera/Monroy, as well as in the
     appeals to the BAP, and to the Ninth Circuit. It is safe to
27   assume that both U.S. Bank and its counsel are well-acquainted
     with the Addendum, and the decisions of the bankruptcy courts, the
28   Panel, and the Ninth Circuit concerning the Addendum.

                                       -11-
 1   There was no certiorari petition to the Supreme Court.
 2        Throughout all these cases and appeals, U.S. Bank has
 3   consistently challenged the incorporation of the Addendum in the
 4   chapter 13 plans of debtors in Central District bankruptcy cases
 5   where debtors seek, through the Addendum, to impose various
 6   post-confirmation reporting and other duties on mortgage
 7   creditors.   Although the emphases change from one appeal to the
 8   next, U.S. Bank’s principal objections to the Addendum’s
 9   requirements for enhanced reporting all fall into four categories.
10   It argues that: (1) nothing in § 1322 allows debtors to propose a
11   plan that includes additional mortgage creditor reporting
12   obligations; (2) RESPA does not allow an individual chapter 13
13   debtor to supplement a mortgage creditor’s reporting requirements;
14   (3) the Addendum’s mandate that a mortgage creditor provide
15   additional information to a chapter 13 debtor is a usurpation of
16   the power of Congress to legislate, and consequently, is a
17   violation of the doctrine of separation of powers; and (4)
18   compliance with the Addendum is unduly burdensome for creditors,
19   requiring substantial changes in accounting systems and the costs
20   associated with those changes.
21        The first three of these arguments were addressed and
22   rejected with finality in Herrera/Monroy.   The fourth category is
23   at the focus of this appeal, because Herrera/Monroy acknowledged
24   that a challenge to the Addendum based on excessive burden and
25   expense to the creditor, if true, might constitute grounds for not
26   allowing, or requiring modification of, the terms of the Addendum,
27   in particular cases.   We will explore all of U.S. Bank’s
28   arguments.

                                      -12-
 1        First, U.S. Bank states in its supplemental brief in this
 2   appeal that “there is nothing in 11 U.S.C. § 1322 that allows
 3   debtors to propose a plan including the provisions listed in the
 4   Addendum.” U.S. Bank’s Supp. Br. at 3.    On the contrary, as noted
 5   in the BAP’s prior opinion,
 6        § 1322(b)(11) provides that a chapter 13 debtor’s plan
          may “include any other provision not inconsistent with
 7        [title 11]." This grant gives debtors considerable
          discretion to tailor the terms of a plan to their
 8        individual circumstances. Bankruptcy courts have
          endorsed a broad range of provisions under
 9        § 1322(b)(11). Besides enhanced creditor account
          reporting requirements, other provisions approved by
10        bankruptcy courts under § 1322(b)(11) include, for
          example: (1) authorizing the debtor to exercise a
11        trustee’s avoiding powers, Hearn v. Bank of New York
          (In re Hearn), 337 B.R. 603 (Bankr. E.D. Mich. 2006);
12        (2) establishing reserve funds to pay utilities in event
          of default, In re Epling, 255 B.R. 549 (Bankr. S.D. Ohio
13        2000); (3) paying taxes in a particular order, In re
          Klaska, 152 B.R. 248 (Bankr. C.D. Ill. 1993).
14
15   Herrera/Monroy, 422 B.R. at 710-11.     U.S. Bank is therefore simply
16   wrong when it suggests that § 1322 is an impediment to the
17   enhanced reporting requirements of the Addendum.
18        The second broad category of U.S. Bank’s challenges to the
19   Addendum relies on RESPA, which the bank contends “does not allow
20   for each individual chapter 13 debtor to supplement the reporting
21   requirements as they see fit.”   U.S. Bank’s Supp. Br. at 7.   This
22   assertion was also squarely rejected in Herrera/Monroy:
23             We conclude that the mortgage creditors’ argument
          that RESPA occupies the field of reports required by
24        mortgage creditors such that chapter 13 debtors are
          precluded from crafting additional reporting rules in
25        their chapter 13 plans lacks merit and is directly
          contradicted by the plain language of RESPA. . . . The
26        Addendum seeks to address chapter 13 issues which are
          neither addressed nor remedied by the reporting
27        provisions of RESPA. Specifically, the debtors and the
          court need to know the amount of default so as to
28        implement § 1322(b)(5), which provides that

                                      -13-
 1        “[n]otwithstanding paragraph (2) of this subsection,
          [the plan may] provide for the curing of any default
 2        within a reasonable time and maintenance of payments
          while the case is pending on any unsecured claim or
 3        secured claim on which the last payment is due after the
          date on which the final payment under the plan is due.”
 4        The bankruptcy court and debtors need the information
          targeted by the Addendum to implement § 1322(b)(5), and
 5        are hampered in that task by . . . “the increasing
          problem of undisclosed and sometimes questionable
 6        post-petition mortgage charges assessed by lenders
          during the course of a chapter 13 proceeding.” Indeed,
 7        even the Federal Reserve Board recognized the inadequacy
          of RESPA in its comments proposing the imposition of
 8        additional, and more intrusive, reporting requirements
          on mortgage servicers for their “abusive practices.”
 9
10   Herrera/Monroy, 422 B.R. at 715.
11        The bank’s third argument is that the Addendum violates the
12   doctrine of separation of powers.   U.S. Bank Op. Br. at 25.   By
13   this argument, U.S. Bank appears to suggest that, in authorizing
14   the Addendum, the Central District’s bankruptcy judges were
15   usurping the power of Congress to legislate.   Once again, though,
16   Herrera/Monroy directly addressed and rejected this assertion.
17             Only a brief comment is required to dispatch the
          mortgage creditors’ concerns that inclusion of the
18        offensive provisions in the debtors’ confirmed chapter
          13 plans somehow violates the doctrine of separation of
19        powers. They apparently contend that when a majority of
          the Central District’s bankruptcy judges approved an
20        optional local form containing provisions that could be
          included in the District’s chapter 13 plans, several of
21        which provisions creditors contend run afoul of RESPA,
          those judges somehow usurped the prerogative of Congress
22        to enact laws regulating residential mortgages.
23             The mortgage creditors’ argument is a non-starter
          because it ignores the bankruptcy judges’ decision to
24        make use of the Addendum optional, such that the
          incorporation of its provisions in debtors’ plans was
25        subject to review by bankruptcy courts on a case-by-case
          basis. Indeed, the instructions on Local Form 3015.1.1A
26        state that "[a] chapter 13 debtor may attach this
          addendum to his/her chapter 13 plan." This [is] not a
27        situation where the local bankruptcy court has, through
          a local rule or general order, mandated the terms of a
28        debtor’s proposed plan and treatment of a creditor’s

                                    -14-
 1        claim. As a result, the propriety of the plan
          provisions arising from incorporation of the Addendum
 2        into the debtors’ plans was freely subject to challenge
          in each of these cases, and the mortgage creditors’
 3        argument that the bankruptcy courts somehow violated the
          separation of powers doctrine misses the point.
 4
 5   Herrera/Monroy, 422 B.R. at 710.
 6        In short, three of U.S. Bank’s general areas of challenge to
 7   the Addendum in this appeal have been definitively dispatched by
 8   the Panel and Ninth Circuit in Herrera/Monroy.    U.S. Bank must
 9   understand that, with respect to these contentions, its ship has
10   sailed.
11        As mentioned above, there is at least some potential for U.S.
12   Bank’s fourth argument in this appeal that, even after
13   Herrera/Monroy, incorporation of the Addendum in Vu’s plan will be
14   unduly burdensome and costly to the mortgage creditor.   Unlike the
15   facts in the Herrera/Monroy cases, where the creditors did not
16   present evidence of the costs of complying with the Addendum, U.S.
17   Bank argues that in this case it did offer proof of the costs of
18   complying with the Addendum.    In Herrera/Monroy, the Panel
19   cautioned that where “substantial, company-wide modification of [a
20   mortgage creditor’s] accounting procedures would be required to
21   comply with the Addendum” doubts might be raised about the
22   propriety of adding the Addendum to a chapter 13 plan in those
23   cases.    Herrera/Monroy, 422 B.R. at 722 n.20.
24        U.S. Bank argues that it presented evidence to the bankruptcy
25   court in this case that the estimated additional monthly costs to
26   prepare, review and disburse monthly statements to Vu pursuant to
27   the terms of the Addendum and plan would be approximately $75, and
28   that the fee necessary to prepare the quarterly disclosures would

                                      -15-
 1   be another $100.   U.S. Bank’s Reply to Appellee’s Response to
 2   Appellant’s Supp. Br. at 9.9
 3        It is helpful to trace the history of the alleged $75/$100
 4   fees through the course of U.S. Bank’s submissions in this appeal.
 5   A reference by counsel to those fees first appears in U.S. Bank’s
 6   email to Vu’s lawyer on April 8, 2010.    The fees are described as
 7   “attorney fees” in the bank’s objection to confirmation of Vu’s
 8   plan filed on April 14, in its letter to Vu’s counsel on May 12,
 9   its Motion for Reconsideration filed on June 17, at the hearing on
10   the Motion to Amend the Addendum on July 22, 2010, and now in its
11   reply to Vu’s supplemental brief in this appeal.    What is critical
12   to understand is that all of these statements and references to
13   fees are found in the arguments of counsel.    In searching the
14   bankruptcy court’s record, not a single declaration or affidavit
15   was submitted, nor other testimonial or documentary evidence
16   offered, to support U.S. Bank’s contention regarding the need for
17   these fees.
18        “[A]rguments and statements of counsel are not evidence.”
19   Wood v. Stratos Prod. Dev., LLC (In re Ahaza Sys.), 482 F.3d 1118,
20   1122 n.1 (9th Cir. 2007).    This principle has been frequently
21   cited in bankruptcy cases.     Exeter Bancorporation, Inc. v. Kemper
22   Securities Group, 58 F.3d 1306, 1312 n.5 (8th Cir. 1995)
23   (statement of counsel not evidence); Malloy v. Wallace (In re
24   Wallace), 298 B.R. 435, 441 (10th Cir. BAP 2003) (opening
25   statement is not testimony); Braunstein v. Sanders (In re
26
          9
27           The Panel authorized the parties to submit supplemental
     briefs, but did not authorize U.S. Bank to submit yet another
28   reply brief to Vu’s supplemental brief. Since Vu has not objected
     to the extra brief, we will accept it.

                                       -16-
 1   Muhammed), 2011 Bankr. LEXIS 2214 at * 7-8 (Bankr. D. Mass. 2011)
 2   (arguments of counsel cannot substitute for evidence); In re Olde
 3   Block Owner, LLC, 448 B.R. 482, 484 (Bankr. N.D. Ill. 2011) (“Of
 4   course, the argument of counsel is not evidence.”); In re Valley
 5   Park, Inc.,   217 B.R. 864, 866 (Bankr. D. Mont. 2006); In re
 6   Osborne, 257 B.R. 14, 19-20 (Bankr. C.D. Cal. 2000).
 7        In this case, the bankruptcy court was not obliged to
 8   consider as “evidence” the statements of U.S. Bank’s attorneys
 9   that fees of $75 per month and $100 per quarter would be added to
10   each debtor utilizing the Addendum.    Further, even if counsel’s
11   statements were to be given some persuasive weight,10 this
12   information was not probative concerning the principal harm
13   alleged by U.S. Bank — that the Addendum would cause significant
14   expense to the bank because it would require new accounting
15   systems, training, and associated costs.   In other words, it is
16   difficult to understand how add-on attorney fees create
17   significant accounting burdens, let alone a need for restructuring
18   U.S. Bank’s whole accounting system.
19        In addition, implicit in U.S. Bank’s position is that these
20   additional fees will be required as to each of its debtor-
21   customers using the Addendum every month and quarter throughout
22   the bankruptcy period.   But counsel conceded at the hearing in the
23   bankruptcy court that the fees might only arise for a few months.
24        THE COURT: Why would [the statements] have to go to your
          office necessarily?
25
26        10
             To the extent that the bankruptcy court considered
     counsel’s argument that such fees were required as evidence, as
27   indicated in the colloquy quoted above in the description of
     facts, the court was obviously skeptical about the factual basis
28   for the statements.

                                     -17-
 1        COUNSEL: Because it’s manually created. For the first
          few months at the very least, we have to look at each
 2        statement and make sure it complies with —
 3   Tr. Hr’g 3:12—15, July 22, 2010 (emphasis added).   According to
 4   this statement, even if additional attorney fees are incurred by
 5   U.S. Bank to comply with the Addendum, that expense may not
 6   necessarily continue longer than a few months.   If so, the
 7   presence of these additional fees would not show U.S. Bank would
 8   experience a significant economic cost, nor that significant
 9   changes in the bank’s accounting systems would be required.
10        Interestingly, while not referred to by U.S. Bank in any of
11   its briefs in this appeal, there is one relevant, evidentiary item
12   in the record of the bankruptcy proceedings regarding the
13   accounting system costs to U.S. Bank of complying with the
14   Addendum.   In the declaration of Olivia A. Todd, the president of
15   the servicing agent for U.S. Bank, submitted with U.S. Bank’s
16   Motion for Reconsideration, Todd notes:
17        This new accounting system mandated by the Central
          District of California Form Addendum will include, but
18        are not limited to, costs to hire accountants and
          program designers to adequately design a new accounting
19        system; costs to pay Information Technology
          professionals and engineers to create the new accounting
20        system; costs of creating new training programs to
          implement the new accounting system; and costs of
21        actually training employees to learn how to use a new
          accounting system.
22
23        The Todd Declaration is inadequate to show U.S. Bank will
24   experience the sort of economic burden required to avoid
25   compliance with the Addendum.   First, Todd’s statement does not
26   quantify the alleged costs resulting from compliance with the
27   Addendum.   Second, Todd’s statement does not allocate these costs
28   among the several customers of U.S. Bank filing for chapter 13

                                     -18-
 1   relief in the Central District of California who elect to
 2   incorporate the Addendum in their chapter 13 plans.   And finally,
 3   Todd’s declaration states that she is the custodian of records for
 4   the servicing agent, and the person most familiar with Vu’s loan
 5   on the property in Fontana, California.   However, Vu owns no
 6   property in Fontana.   The U.S. Bank loan impacted by Vu’s plan in
 7   this case is secured by a trust deed on property in West Covina,
 8   California.   For these reasons, like the bankruptcy court, we
 9   decline to consider Todd’s declaration as probative or reliable
10   evidence of U.S. Bank’s costs of complying with the Addendum in
11   this case.
12        In sum, whether compliance with the Addendum may cause a
13   given creditor to incur burdensome costs, either on an individual
14   or general basis, may still be an open question.   Indeed, the
15   intent of the Panel in offering the parties the opportunity for
16   supplemental briefing in this appeal was not to belabor the
17   settled legal questions on RESPA or separation of powers, but to
18   allow the parties to explore the true costs of U.S. Bank’s
19   compliance with the Addendum.   However, U.S. Bank did not provide
20   any competent, evidentiary support for its position that the
21   Addendum imposes unreasonable and unnecessary burdens on its
22   financial and accounting systems.
23                                CONCLUSION
24        Most of U.S. Bank’s arguments in this appeal have been
25   rejected by both the Panel and Ninth Circuit in Herrera/Monroy.
26   As for its contention that compliance with the Addendum in Vu’s
27   case would be unduly burdensome or expensive, U.S. Bank has not
28   provided the necessary evidence to establish that claim in fact.

                                     -19-
 1        The bankruptcy court did not abuse its discretion in denying
 2   U.S. Bank’s Motion for Reconsideration and its Motion to Amend the
 3   Addendum.   We AFFIRM.
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