Drew Nomellini v. Irs ( 2018 )

FILED
NOT FOR PUBLICATION
DEC 28 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: DREW NOMELLINI, No. 17-17212
______________________________
D.C. No. 5:15-cv-04122-EJD
DREW NOMELLINI,
Appellant, MEMORANDUM*
v.
UNITED STATES INTERNAL
REVENUE SERVICE,
Appellee.
Appeal from the United States District Court
for the Northern District of California
Edward J. Davila, District Judge, Presiding
Submitted December 18, 2018**
San Francisco, California
Before: CALLAHAN, N.R. SMITH, and MURGUIA, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Drew Nomellini appeals the district court’s order, affirming the bankruptcy
court’s grant of the IRS’s motion to dismiss and denial of Nomellini’s motion for
summary judgment. We affirm.
Confirmation of a Chapter 13 bankruptcy plan vests the property of the
estate in the debtor “free and clear of any claim or interest,” unless otherwise
provided for in the plan. 11 U.S.C. § 1327(c). “Claim” refers to debts that would be
discharged under § 1328, while “interest” refers to any liens or interests that would
be unaffected by a discharge. Brawders v. Cty. of Ventura (In re Brawders), 503
F.3d 856, 872 (9th Cir. 2007). Generally, a secured creditor’s lien will “pass
through bankruptcy unaffected, regardless whether the creditor holding that lien
ignores the bankruptcy case, or files an unsecured claim when it meant to file a
secured claim, or files an untimely claim after the bar date has passed.” Id. at 867-
68. For a debtor to avoid a creditor’s lien or otherwise modify the creditor’s in rem
rights, the debtor’s confirmed plan must do so explicitly and provide the creditor
with adequate notice that its interests may be impacted. Id. at 873. Any ambiguity
in the plan will be interpreted against the debtor. Id. at 867.
Here, the IRS debt was secured by a perfected pre-petition lien attached to
Nomellini’s real property. Nomellini’s confirmed Chapter 13 bankruptcy plan
recognized the IRS’s secured claim. The plan did not avoid the tax lien. In fact, it
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made no reference to the IRS’s tax lien nor did it make any indication of
Nomellini’s intent to avoid that lien.1 Because the plan did not explicitly avoid the
IRS’s tax lien nor otherwise attempt to modify the IRS’s in rem rights, that lien
passed through bankruptcy unaffected and remained in full force and effect at the
time Nomellini sought to sell his home. Per the stipulated agreement between
Nomellini and the IRS, the home was sold free and clear, and the tax lien attached
to the proceeds of the sale. The district court did not err in affirming the
bankruptcy court’s decision that the IRS was entitled to have the remaining debt
fully paid from the sale proceeds.
Additionally, the bankruptcy court did not err in allowing the IRS to
facilitate the collection of its lien by filing an amended claim. Nomellini entered
into a stipulated agreement with the IRS that the sale proceeds would be held in
escrow pending the court’s determination of the continued validity and extent of
the tax lien. When the bankruptcy court determined that the IRS’s tax lien had
passed through bankruptcy unaffected, the court allowed the IRS to amend its
claim to the full remaining unpaid debt. Allowance of the amended claim was not
reviewed separately, but rather treated as a ministerial matter to allow the
1
Significantly, the confirmed plan explicitly stated Nomellini’s intent to
value and avoid the liens of two other creditors. However, the IRS tax lien was not
mentioned.
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bankruptcy trustee to disperse funds in accordance with the bankruptcy court’s
order. Nomellini does not argue that allowance of the amended claim was an
improper procedural vehicle; instead, Nomellini again argues that the IRS is not
entitled to payment beyond what it was provided in the confirmed plan. However,
because we have already determined that the IRS is entitled to the full value of the
lien, this argument is unavailing.
AFFIRMED.
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