Court Opinion

ID: 2997932
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:39:49.616685+00
Date Added: 2024-06-11T15:02:41.195387
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 04-3820
RONALD BELDA,
                                                Debtor-Appellant,
                                v.

MARILYN O. MARSHALL,
                                                 Trustee-Appellee.
                         ____________
         Appeal from the United States District Court for
        the Northern District of Illinois, Eastern Division.
         No. 03 C 8722—Rebecca R. Pallmeyer, Judge.
                         ____________
      ARGUED MAY 6, 2005—DECIDED JULY 26, 2005
                    ____________

 Before KANNE, ROVNER, and WOOD, Circuit Judges.
   KANNE, Circuit Judge. On May 20, 2003, Ronald Belda
filed for bankruptcy under Chapter 13 of the Bankruptcy
Code. His amended reorganization plan, filed on September
2, proposed that Belda would continue to make his student
loan payments of $68.50 per month throughout the 60-
month term of the plan. Because student loan debt is not
dischargable in bankruptcy, the final payments would be
made after the end of the reorganization plan. This would
result in a 62% payment to the Department of Education
during the term of the plan while all other unsecured
2                                               No. 04-3820

creditors would receive less than 10% on their claims. If the
student loans were not treated differently from the other
unsecured debt, all non-priority general unsecured creditors
would receive approximately 35% of the amount due them.
  The trustee objected to the proposed plan, asserting that
the special classification for student loans would violate 11
U.S.C. § 1322(b)(1) (stating that a plan may “designate a
class or classes of unsecured claims, . . . but may not
discriminate unfairly against any class so designated”).
Belda argued that § 1322(b)(1) does not apply to student
loans because the loans are long-term debt under
§ 1322(b)(5) (providing that a plan may “provide for the
curing of any default within a reasonable time and mainte-
nance of payments while the case is pending on any unse-
cured claim or secured claim on which the last payment is
due after the date on which the final payment under the
plan is due”).
   On October 9, 2003, the bankruptcy court affirmed the
proposed plan after finding that § 1322(b)(1) and
§ 1322(b)(5) were “free standing” entitlements and that the
long-term debt provision was not subject to the anti-dis-
crimination provision. On October 24, 2003, the Trustee
filed an appeal in the district court, and on September 30,
2004, the district court reversed the order of the bankruptcy
court that confirmed the reorganization plan. Belda filed his
appeal to this court on October 29, 2004.
  On November 9, 2004, the Trustee filed a motion to
dismiss the bankruptcy case because Belda was in substan-
tial default on his required payments and there was no
replacement plan before the bankruptcy court following the
district court’s reversal of the order confirming the reor-
ganization plan. An order dismissing the bankruptcy case
was entered on November 18, while this appeal was
pending. Belda did not appeal that order. Although the
parties ask us to decide the case on its merits, we find that
the case is moot and must be dismissed.
No. 04-3820                                                 3

  A bankruptcy court retains jurisdiction over cases before
it throughout the term of the plan. This is true because
regardless of the status of any appeals, the court must be
able to protect the rights of the various interested parties
by enforcing the debtor’s performance under the reorganiza-
tion plan and ensuring that the trustee properly adminis-
ters the plan throughout its term. However, upon motion,
the bankruptcy court may order a stay of the bankruptcy
proceedings pending appeal. See Fed. R. Bankr. P. 8005.
Belda admits that he was not current on his plan payments
and did not file an amended Chapter 13 plan after the
district court’s ruling. Because he also did not seek relief
under Rule 8005 or appeal the dismissal of his case, he
concedes that the bankruptcy court “was within its author-
ity to grant the Trustee-Appellee’s motion to dismiss
pursuant to 11 U.S.C. 1307(c).”
   Regardless of the parties’ desire to have this case heard,
“[i]t goes without saying that those who seek to invoke the
jurisdiction of the federal courts must satisfy the threshhold
requirement imposed by Article III of the Constitution by
alleging an actual case or controversy.” City of Los Angeles
v. Lyons, 461 U.S. 95, 101 (1983). “A case is moot when it no
longer presents a live case or controversy.” Tobin for
Governor v. Ill. State Bd. of Elections, 268 F.3d 517, 528
(7th Cir. 2001). Belda’s question regarding the relationship
between the long-term debt provision and the anti-discrimi-
nation provision would have no impact on the parties to this
suit because the claim underlying this appeal has been
dismissed. This case is moot.
  Belda asks us to invoke the exception to the mootness
doctrine which allows cases to be heard when they are
“capable of repetition, yet evading review.” Ill. State Bd. of
Elections v. Socialist Workers Party, 440 U.S. 173, 187
(1979). The Supreme Court has explained that a case is not
moot when: “(1) the challenged action was in its duration
too short to be fully litigated prior to its cessation or
4                                                 No. 04-3820

expiration, and (2) there was a reasonable expectation that
the same complaining party would be subjected to the same
action again.” Weinstein v. Bradford, 423 U.S. 147, 149
(1975). Both prongs of the test must exist before the
exception will apply.
  We find that there is not a reasonable expectation that
Belda will be subjected to the same question again—in fact,
we know that the question did not repeat itself. Belda filed
a subsequent Chapter 13 reorganization plan on December
3, 2004, and proposed to pay all of his unsecured creditors
100% of their claims. There was no special classification for
student loans in the amended plan, and therefore the
relationship between § 1322(b)(1) and § 1322(b)(5) is no
longer at issue.
  The parties argue that we should resolve this question
even though there is not a live controversy at this time. We
cannot issue such an advisory opinion. Although we agree
that it is an interesting question of law, we must wait until
that question is properly before us.
    Because this case is moot, it is DISMISSED.

A true Copy:
        Teste:

                          ________________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit

                     USCA-02-C-0072—7-26-05