Court Opinion

ID: 9521095
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:56:58.381452+00
Date Added: 2024-06-11T12:47:38.104987
License: Public Domain

JAROSLOVSKY, Bankruptcy Judge,
concurring.
I agree completely with my brethren that In re Nash is still good law and is controlling in this case. I write separately only to express my concern over the Trustee’s argument that Tran’s conduct amounted to a fraud on the court. The record reflects that Tran’s rights under the Bankruptcy Code were considerably curtailed by procedures set forth in the court’s local rules, and that what the Trustee calls “fraud” was nothing more than working within those procedures to exer*339cise rights that were Tran’s under the Code to begin with.
As the Trustee pointed out during argument, the form of plan used by Tran was mandatory pursuant to local rules. Indeed, each page of the plan states: “This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.” Setting aside questions as to the legitimacy of any court-mandated form,9 the form in this case crossed over the line from facilitating Chapter 13 administration to dictating Chapter 13 terms.
Part VIII of the mandatory plan provides:
REVESTMENT OF PROPERTY
Property of the estate shall not revest in the debtor until such time as a discharge is granted or the case is dismissed. Revestment shall be subject to all liens and encumbrances in existence when the case was filed, except those liens avoided by court order or extinguished by operation of law. In the event the ease is converted to a case under chapter 7, 11, or 12 of the Bankruptcy Code, the property of the estate shall vest in accordance with applicable law. After confirmation of the plan, the chapter 13 trustee shall have no further authority or fiduciary duty regarding the use, sale, or refinance of property of the estate, except to respond to any motion for proposed use, sale, or refinance as required by the Chapter 13 General Order of this court. Prior to any discharge or dismissal, the debtor must seek approval of the court to purchase, sell, or refinance real property. (Emphasis added)
The mandatory plan does not give a debtor any other choice regarding revesting, even though § 1322(b) of the Bankruptcy Code provides that a plan may “provide for the vesting of property of the estate, on confirmation or at a later time, in the debtor or in any other entity....”
The Trustee argues that Tran could have sought variance from the terms of the mandatory plan and did not do so. However, given the practical realities of plan confirmation Tran had little choice except to adopt the dictated language of the mandatory plan even though under the Bankruptcy Code he had a right to provide that his home revested in him on confirmation. Had he been completely free to exercise his rights under the Bankruptcy Code from the beginning, he would not have needed the consent of the Trustee or the court to refinance his home, nor would the Trustee have any rights to the proceeds.
I believe that the bankruptcy court in this case understood that Tran had little practical ability to deviate from the language of the mandatory plan and therefore did not commit fraud when he dismissed his case after obtaining the refinancing order. Tran was merely working as best he could within a restrictive system to obtain those rights which were granted to him by Congress in the Bankruptcy Code. I therefore fully concur in affirming the decision of the bankruptcy court that Tran is entitled to the proceeds of his refinance.

. Section 1325(a) of the Bankruptcy Code provides that the court shall confirm a Chapter 13 plan if six conditions are met. Being on a court-approved form is not one of the conditions.