Stephen W. Beyerlein and Belinda A. Beyerlein

1:06-bk-11278Nmb29 gen 2007

Testo completo

1The preface to the RLCDCA states that it is “[a]n Act to clarify the treatment of certain
charitable contributions under title 11, United States Code.” S.4044. 	The complete text of the
RLCDCA is as follows:
SECTION 1. SHORT TITLE.
This Act may be cited as the `Religious Liberty and Charitable Donation
Clarification Act of 2006'.
SEC. 2. TREATMENT OF CERTAIN CONTRIBUTIONS IN BANKRUPTCY.
Section 1325(b)(3) of title 11, United States Code, is amended by inserting `,
other than subparagraph (A)(ii) of paragraph (2),' after `paragraph (2)'.
Pub. L. No. 109-439, 129 Stat. 3285, (2006).
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: 	STEPHEN W. BEYERLEIN and 	No. 13-06-11278 MA
BELINDA BEYERLEIN,
Debtors.
ORDER GRANTING UNITED STATES TRUSTEE’S MOTION UNDER
FED. R. BANKR. P. 9023 AND 9024 ASKING THIS COURT TO ALTER OR AMEND
ITS DECEMBER 19, 2006, ORDER DENYING CONFIRMATION OF THESE
DEBTORS’ CHAPTER 13 PLAN, AND FOR OTHER RELIEF
THIS MATTER is before the Court on the Motion Under Fed. R. Bank. P. 9023 and
9024 Asking this Court to Alter or Amend its December 19, 2006, Order Denying Confirmation
of These Debtors’ Chapter 13 Plan, and for Other Relief (“Motion to Alter or Amend Order”),
filed by the United States Trustee for Region 20. 	The Motion to Alter or Amend requests the
Court to alter or amend its Order Denying Confirmation of Debtors’ Chapter 13 Plan with Leave
to Amend (“Order”) entered December 19, 2006 in light of the enactment of Pub. L. No. 109-
439, 129 Stat. 3285, (2006), titled the Religious Liberty and Charitable Donation Clarification
Act of 2006 (“RLCDCA”), which the President of the United States signed into law on
December 20, 2006.1
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The Court’s Order determined that the plain language of 11 U.S.C. § 1325(b)(3)
precludes above-median income debtors from deducting charitable contributions from their
disposable income calculation. The RLCDCA amends 11 U.S.C. § 1325(b)(3) to provide that
charitable contributions can be included as part of the reasonable and necessary expenses for
above-median income debtors when calculating such debtors’ disposable income. 	The United
States Trustee argues that because the stated purpose of the RLCDCA is to clarify, rather than
alter, existing law, it should apply to this case that was pending as of the date of enactment of the
RLCDCA. The Chapter 13 Trustee requests the Court to deny the Motion, countering that
despite its title, the RLCDCA constitutes a substantive change to the law as it existed when this
Court made its decision, so that the presumption that statutes have only prospective effect and
will be given retroactive effect only if there is affirmative legislative direction to do so ought to
apply. See Kaiser Aluminum and Chemical Corp v. Bonjorno, 494 U.S. 827, 833, 108 L.Ed.2d
842, 110 S.Ct.1570 (1990).
After considering the Motion to Alter or Amend Order and the response thereto in light
of the RLCDCA and the standards regarding retroactive application of newly enacted federal
statutes, the Court finds that RLCDCA applies to pending cases. Accordingly, the Court will
grant the Motion to Alter or Amend Order.
DISCUSSION
Rule 9023, Fed.R.Bankr.P. makes Rule 59 of the Federal Rules of Civil Procedure
applicable to bankruptcy proceedings. 	A motion filed pursuant to Rule 59 Fed.R.Civ.P. must be
filed within ten days of the date of entry of the order or judgment. Rule 59(b), Fed.R.Civ.P.
The Motion to Alter or Amend Order was filed within ten days of the date of entry of the Court’s
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Order and is, therefore, governed by Rule 59, Fed.R.Civ.P. 	Appropriate grounds for granting
relief under Rule 59, Fed.R.Civ.P. include “an intervening change in controlling law.” 	See
Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10 th Cir. 2000) (“Grounds warranting a
motion to reconsider include (1) an intervening change in the controlling law . . .”); In re
Sunflower Racing, Inc. v. Mid-Continent Racing & Gaming Co., 223 B.R. 222, 223 (D.Kan.
1998).
In this case, pending legislation addressing the issue decided by this Court was signed
into law the day after the Court entered its Order. 	The RLCDCA does not include an effective
date, nor does it include specific language providing that the RLCDCA shall apply to all pending
cases. Thus, there is no clear indication within the language of the RLCDCA that Congress
intended for the statute to apply to pending cases. Cf. DeVargas v. Mason & Hanger-Silas
Mason Co., Inc., 911 F.2d 1377 (10th Cir. 1990) (in determining whether a newly enacted statute
applies retroactively to pending cases, the court must “look to congressional intent” and “‘where
the congressional intent is clear, it governs.’”)quoting Kaiser Aluminum & Chemical Corp. v.
Bonjorno, 494 U.S. 827, 828, 108 L.Ed.2d 842, 110 S.Ct.1570, 1577 (1990).
In Landgraf v. USI Film Products, 511 U.S. 244, 128 L.Ed.2d 229, 114 S.Ct. 1483
(1994), the Supreme Court examined the “apparent tension” between two general rules
articulated by the Supreme Court in Bradley v. School Board of City of Richmond, 416 U.S. 696,
40 L.Ed.2d 476, 94 S.Ct. 2006 (1974), and Bowen v. Georgetown University Hospital, 488 U.S.
204, 102 L.Ed.2d 493, 109 S.Ct. 468 (1988) concerning the effect of intervening changes in the
law as a result of a newly enacted statute that does not specify its temporal reach. Landgraf, 511
U.S. at 264. 	In Bradley, the Supreme Court articulated the general rule that “a court is to apply
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the law in effect at the time it renders its decision.” Bradley, 416 U.S. at 711. In Bowen, the
Supreme Court iterated the long-standing axiom that “[r]etroactivity is not favored in the law.”
Bowen, 488 U.S. at 208. 	Landgraf acknowledges that “prospectivity remains the appropriate
default rule . . . . [b]ecause it accords with widely held intuitions about how statutes ordinarily
operate” but also finds that “[e]ven absent specific legislative authorization, application of new
statute passed after the events in suit is unquestionably proper in may situations.” Landgraf, 511
U.S. at 272 and 273. 	Whether a newly enacted statute, in fact, operates retroactively (requiring
only prospective application absent clear congressional intent to the contrary) “comes at the end
of a process of judgment concerning the nature and extent of the change in the law and the
degree of connection between the operation of the new rule and a relevant past event.”
Landgraf, 511 U.S. at 270.
In this case, although RLCDCA was enacted after the Debtors filed their petition and
after the Court issued its Order, application of the RLCDCA to this pending case does not appear
to be retroactive insofar as the events in the suit are ongoing as part of the Debtors’ repayment
plan over the life of the bankruptcy proceeding. Cf. Landgraf, 511 U.S. at 280 (“When a case
implicates a federal statute enacted after the events in suit the court’s first task is to determine
whether Congress has expressly prescribed the statute’s proper reach.”) (emphasis added). Thus,
clearly the RLCDCA would apply to any unconfirmed chapter 13 case that was filed prior to its
enactment, since the RLCDCA would be the law in effect as of the time the Court would
consider confirmation. 	Bradley, 416 U.S. at 711. 	In other words, the law in effect as of the
time the conduct (i.e., the debtors’ attempt to confirm a plan based on a calculation of disposable
income) would be the RLCDCA. 	In addition, the nature of the change in the law is premised
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upon Congress’ determination that the RLCDCA was needed to “fix a mistake” and that by
enacting the Bankruptcy Abuse Prevention and Consumer Protection Act, Congress never
intended to interfere with debtors’ tithing and charitable contribution practices. See 152
Cong.Rec. H8812-13 (2006) (floor speech of Cong. Sensenbrenner: “[t]he clear intent of that act
[BAPCPA] was not to disturb the rights of debtors to continue to make charitable contributions
or to tithe pursuant to the 1998 [RLCDA] act.” floor speech of Cong. Conyers: “Let’s fix this
mistake.”).
It follows, then, that because the Court’s Order remained interlocutory pending the
outcome of the Motion to Alter or Amend, it is appropriate for the Court to apply the RLCDCA
to this pending matter. See Rule 8002(b), Fed.R.Bankr.P.; In re American Freight System, Inc.,
153 B.R.316, 319 (noting that “[w]hen a timely motion to alter or amend or reconsider is filed,
the time for appeal runs from the entry of the order denying that motion.”). Furthermore, the
Order denied confirmation of Debtors’ plan with leave to file an amended plan. 	Thus, because
the Debtors retained their right to amend their plan, application of the RLCDCA to this pending
case does not “impair rights a party possessed when he acted, increase a party’s liability for past
conduct, or impose new duties with respect to transactions already completed” because the
confirmation process has not been finally adjudicated. Landgraf, 511 U.S at 280. The Court,
therefore, concludes that application of RLCDCA to this pending case is appropriate.
WHEREFORE, IT IS HEREBY ORDERED that the Motion to Alter or Amend is
GRANTED. 	Because the parties stipulated at the final hearing on confirmation that all issues
other than the scope of 11 U.S.C. § 1325(b)(3) were resolved, it is appropriate to confirm the
Debtors’ plan.
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WHEREFORE, IT IS HEREBY ORDERED that the parties submit an order confirming
plan consistent with this Order.
__________________________________________
MARK B. McFEELEY
United States Bankruptcy Judge
COPY TO:
Alice Nystel Page
Attorney for the United States Trustee
PO Box 608
Albuquerque, NM 87103
Lisa A. Tracy
Attorney for the United States Trustee
Office of the General Counsel
Executive Office for the United States Trustee
20 Massachusetts Ave., NW, Rm. 8122
Washington, DC 20530
Ron Holmes
Attorney for Debtors
112 Edith NE
Albuquerque, NM 87102
Kelley L. Skehen
Chapter 13 Trustee
625 Silver Ave. SW, Suite 350
Albuquerque, NM 87102
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