Waldron v. Brown (In re Waldron), No. 15081 (11th Cir. August 4, 2008) (click here to download opinion).
Debtors were in an auto accident after the confirmation of their Chapter 13 plan, but before they had completed payments. Debtors settled a claim against the other driver for $25,000, which was deemed as exempt. They also pursued claims against an insurer, but contended that any proceeds from that claim would not be estate property.
The Waldrons argue that, upon confirmation, “all of the property of the bankruptcy estate ‘revested’ in the Waldrons by operation of Section 1327(b)” and Mr. Waldron’s claims, which are not part of the Waldrons’ plan, did not become property of the estate. The trustee responds that Mr. Waldron’s claims are property of the estate under section 1306(a).
The 11th Circuit held that proceeds are estate property pursuant to 11 U.S.C. §1306.
We conclude, based on the plain language of section 1306(a), that Mr. Waldron’s claims are property of the estate. Mr. Waldron acquired his claims for underinsured-motorist benefits after the commencement of the Waldrons’ bankruptcy case but before their case was dismissed, closed, or converted. Section 1306(a) does not mention the confirmation of the debtor’s plan as an event relevant to what assets are property of the estate, see Sec. Bank v. Neiman, 1 F.3d 687, 689–91 (8th Cir. 1993), and section 1327(b) does not address assets acquired after confirmation. Section 1327(b) does not, as the Waldrons argue, automatically vest in the debtor assets acquired after confirmation. “If Congress had intended for confirmation to so dramatically affect the expansive definition of property of the estate found in [section] 1306, it knew how to draft such a provision.” ….
We are not alone in our reading of sections 1306(a) and 1327(b). The First Circuit also has concluded that assets acquired after confirmation are property of the estate. Barbosa v. Soloman, 235 F.3d 31, 36–37 (1st Cir. 2000). … Numerous district and bankruptcy courts have reached the same conclusion. See, e.g., United States v. Harchar, 371 B.R. 254, 268 (N.D. Ohio 2007)