At page 365 Chapter 13 debtor lacks standing to pursue avoidance action because "statutory language of § 548 expressly confers avoidance powers exclusively on the trustee.26 citing cases
- Peters v. Libert Land Holdings 16 LLC, No. 18-08327 (Bankr. D. Neb. Apr. 23, 2019).“to the extent that the debtor could have exempted such property under subsection (g)(1) of this section if the trustee had avoided such transfer”
- Kalesnik v. HSBC Bank USA, Nat'l Ass'n (In re Kalesnik), 571 B.R. 491 (Bankr. D. Mass. 2017).The later requirement is inapplicable as the transfer was not in the personalty of a type described in § 522(f)(1)(B). 2009 WL 4344434 at *5; see also Hansen v. Green Tree Serving, LLC (In re Hansen), 332 B.R. 8, 13 (10th Cir. BAP 2005); L…
- Michael McCarthy v. Brevik Law, No. 13-6042 (8th Cir. BAP Oct. 28, 2013).Therefore, a debtor has standing to bring an avoidance action under § 522(h) when: (1) the debtor’s transfer of property was involuntary; (2) the debtor did not conceal the property; (3) the trustee did not attempt to avoid the transfer; (…
- McCarthy v. Brevik Law (In re McCarthy), 501 B.R. 89 (8th Cir. BAP 2013).LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (8th Cir. BAP 1997) (citing DeMarah v. United States (In re DeMarah), 62 F.3d 1248, 1250 (9th Cir.1995), for the five-part test).
- Mouton v. Toyota Motor Credit Corp. (In re Mouton), 479 B.R. 55 (Bankr. E.D. Ark. 2012).(only the trustee has avoidance power under § 548)
- Smith v. One West Bank, FSB (In Re Smith), 459 B.R. 571 (Bankr. M.D. Penn. 2011).Co. v. Miller & Smith Holding Co., Inc., 14 F.3d 213 , 220 (4th Cir.1994); In re Hansen, 332 B.R. 8, 11 (10th Cir. BAP 2005); In re Merrifield, 214 B.R. 362, 365 (8th Cir. BAP 1997).
- Owens v. United States (In Re Owens), 379 B.R. 558 (Bankr. W.D. Pa. 2007).See Realty Portfolio, Inc. v. Hamilton (In re Hamilton), 125 F.3d 292, 297 (5th Cir.1997); LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (8th Cir. BAP 1997).
- PW Enter., Inc. v. North Dakota (In Re Racing Servs., Inc.), 363 B.R. 911 (8th Cir. BAP 2007).LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (8th Cir. BAP 1997). 1 While this statement is technically true, it ignores the Eighth Circuit Court of Appeals’ acknowledgment that creditors may be able to assert avoidance actions w…
- St. Francis Cnty. Farmers Ass'n v. Wright (In Re Wright), 353 B.R. 627 (Bankr. E.D. Ark. 2006).In re Merrifield, 214 B.R. 362, 365 (8th Cir. BAP 1997) (emphasis in original); In re Lauer, 98 F.3d 378 , 388 (8th Cir.1996).
- Quad City Bank v. Chapman (Chapman Lumber Co.), 343 B.R. 217 (Bankr. D. Iowa 2006).“The Eighth Circuit has determined that the statutory language of § 548 expressly confers avoidance powers exclusively on the trustee.” In re Merrifield, 214 B.R. 362, 365 (8th Cir. BAP 1997) (emphasis in original); In re Lauer, 98 F.3d 37…
Show 16 more citing cases
- Hansen v. Green Tree Servicing, LLC (In Re Hansen), 332 B.R. 8 (10th Cir. BAP 2005).(Trustee has exclusive avoidance power under § 548.)
- Wood v. Mize (In Re Wood), 301 B.R. 558 (Bankr. W.D. Mo. 2003). (holding that a Chapter 13 debtor had no standing to assert the powers of the trustee under 11 U.S.C. § 548)
- Ryker v. Current (In Re Ryker), 301 B.R. 156 (D.N.J. 2003).In re Merrifield, 214 B.R. 362, 365 (8th Cir. BAP 1997) (citing In re DeMarah, 62 F.3d 1248 (9th Cir.1995)). 2 .
- Montoya v. Boyd (In Re Montoya), 285 B.R. 490 (Bankr. D.N.M. 2002). (Section 548 confers avoidance powers exclusively on the trustee)
- Bell v. Instant Car Title Loans (In Re Bell), 279 B.R. 890 (Bankr. N.D. Ga. 2002). (Chapter 13 debtor lacks standing to pursue avoidance action because "statutory language of § 548 expressly confers avoidance powers exclusively on the trustee.)
- Myers v. Household Fin. Corp., III (In Re Myers), 262 B.R. 445 (Bankr. N.D. Ind. 2001).See, e.g., In re DeMarah, 62 F.3d 1248, 1250 (9th Cir.1995); In re Merrifield, 214 B.R. 362, 365 (8th Cir. BAP 1997).
- Kildow v. EMC Mortg. Corp. (In Re Kildow), 232 B.R. 686 (Bankr. S.D. Ohio 1999). In re Bennett, 35 B.R. 357, 359 (Bankr.N.D.Ill.1984); Realty Portfolio, Inc. v. Hamilton (In re Hamilton), 125 F.3d 292, 298 (5th Cir.1997); LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (8th Cir. BAP 1997); Compton v. Compton (In…
- Kieffer v. Riske (In Re Kieffer-Mickes, Inc.), 226 B.R. 204 (8th Cir. BAP 1998). LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (8th Cir. BAP 1997).
- Cambridge Tempositions, Inc. v. Cassis (In Re Cassis), 220 B.R. 979 (Bankr. D. Iowa 1998).(finding Chapter 13 debtor lacked standing to bring § 548(a) avoidance action)
- Sharon Denise Wade v. Midwest Acceptance, No. 97-6080 (8th Cir. BAP Apr. 6, 1998).However, § 522(h) of the Bankruptcy Code, when read in conjunction with § 522(g), allows a debtor to avoid prepetition preferential transfers for the benefit of the debtor if the property would have been exempt and was not voluntarily tran…
- Wade v. Midwest Acceptance Corp. (In Re Wade), 219 B.R. 815 (8th Cir. BAP 1998).However, § 522(h) of the Bankruptcy Code, when read in conjunction with § 522(g), allows a debtor to avoid prepetition preferential transfers for the benefit of the debtor if the property would have been exempt and was not voluntarily tran…
- Lane v. Barney (In Re Lane), 646 F. App'x 641 (10th Cir. 2016).(a debtor that lacks standing to take action in the bankruptcy court also lacks standing on appeal)
- Robb v. Harder (In re Robb), 534 B.R. 354 (8th Cir. BAP 2015).See LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (8th Cir. BAP 1997).
- Jessica Robb v. Janice Harder, No. 15-6003 (8th Cir. BAP July 16, 2015).See LaBarge v. Brenda (In re Merrifield), 214 B.R. 362, 365 (B.A.P. 8th Cir. 1997).
- Ferris v. DeVos, No. 19-00080 (Bankr. E.D.N.C. July 9, 2020).See, e.g., LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 365 (B.A.P. 8th Cir. 1997); Hollar v. United States, 174 B.R. 198, 203 (M.D.N.C. 1994); Montoya v. Boyd (In re Montoya), 285 B.R. 490, 494 (Bankr.
- Smoot v. Swann Hill Condo. Unit Owners Ass'n (In Re Smoot), 237 B.R. 875 (Bankr. D. Md. 1999).(recognizing that “the Code allows debtors to avoid transfers in limited circumstances)
At page 364 noting lack of a comparable provision applicable Chapter 13 debtors as 11 U.S.C. §§ 1107 (a), 12038 citing cases
- In re LaRosa Greenhouse, LLP, 565 B.R. 304 (Bankr. D.N.J. 2017).Wis. 2014) (chapter 12 debtor is charged with performing the duties of a trustee); In re Merrifield, 214 B.R. 362, 364 (8th Cir. BAP 1997); In re Molnar Bros., 200 B.R. 555, 558 (Bankr.
- Huskey v. Citimortgage, Inc. (In re Huskey), 479 B.R. 827 (Bankr. E.D. Ark. 2012).(�While we acknowledge that some courts have allowed Chapter 13 debtors to exercise the trustee’s avoidance powers, we think those cases are inconsistent with the bankruptcy code.)
- Carrasco v. Richardson (In Re Richardson), 311 B.R. 302 (Bankr. S.D. Florida 2004).(noting lack of a comparable provision applicable to Chapter 13 debtors as 11 U.S.C. §§ 1107 (a), 1203)
- Houston v. Eiler (In Re Cohen), 305 B.R. 886 (9th Cir. BAP 2004).E.g., LaBarge v. Benda (In re Merrifield), 214 B.R. 362, 364-65 (8th Cir. BAP 1997); Wood, 301 B.R. at 562 ; In re Redditt, 146 B.R. 693, 701 (Bankr.S.D.Miss.1992).
- In Re Binghi, 299 B.R. 300 (Bankr. S.D.N.Y. 2003). (noting lack of a comparable provision applicable Chapter 13 debtors as 11 U.S.C. §§ 1107 (a), 1203)
- Montgomery v. Dennis Joslin Co. II Ex Rel. Seasons Mortg. Grp. Inc. (In Re Montgomery), 262 B.R. 772 (8th Cir. BAP 2001).In re James, 257 B.R. 673, 676 (8th Cir. BAP 2001); In re Wade, 219 B.R. 815, 819 (8th Cir. BAP 1998); In re Merrifield, 214 B.R. 362, 364-365 (8th Cir. BAP 1997).
- Myrtle M. Montgomery v. Dennis Joslin Co. II, No. 01-6007 (8th Cir. BAP June 15, 2001).In re James, 257 B.R. 673, 676 (B.A.P. 8th Cir. 2001); In re Wade, 219 B.R. 815, 819 (B.A.P. 8th Cir. 1998); In re Merrifield, 214 B.R. 362, 364-365 (B.A.P. 8th Cir. 1997).
- Gardner v. Tyson (In Re Gardner), 218 B.R. 338 (Bankr. E.D. Pa. 1998).See Hollar v. United States, 174 B.R. 198, 202-03 (M.D.N.C.1994); In re Merrifield, 214 B.R. 362, 364-65 (8th Cir. BAP 1997); In re Radziunas, Bankr.
Other citing cases
- Eicher v. Mid Am. Fin. Inv. Corp., 702 N.W.2d 792 (Neb. 2005).
- In Re Steck, 298 B.R. 244 (Bankr. D.N.J. 2003).
v.
LaBARGE, Plaintiff, v. John BENDA, Defendant-Appellee
The debtor, Caryn Merrifield, appeals an order of the bankruptcy court [1] denying her request to avoid a pre-petition transfer pursuant to 11 U.S.C. § 548. Since we conclude that the debtor lacks standing, we dismiss her appeal.
BACKGROUND
The debtor filed a Chapter 13 case on April 9, 1996. On February 10, 1997, she filed a complaint against John Benda, alleging that her pre-petition transfer to him of a condominium unit was fraudulent in fact under 11 U.S.C. § 548(a)(1), and was for less than reasonably equivalent value under § 548(a)(2). The bankruptcy court granted the motion of John V. LaBarge, the trustee, to join the proceeding as a plaintiff. At trial, the debtor withdrew the allegation that the transfer was fraudulent in fact and pursued only her claim that the transfer was for less than reasonably equivalent value. The bankruptcy court found that the transfer was for reasonably equivalent value and entered judgment for the defendant. The debtor has appealed but the trustee has not. We dismiss the appeal because the debtor lacked standing to avoid the transfer and therefore lacks standing to pursue this appeal.
DISCUSSION
Statutory Standing
In this appeal, the debtor invokes 11 U.S.C. § 548 as the basis for avoiding her pre-petition transfer of a condominium unit. Section 548 of the Bankruptcy Code expressly confers avoidance powers on trustees. 11 U.S.C. § 548. [2] Therefore, we must preliminarily determine whether a debtor enjoys standing to bring an avoidance action under § 548.
While Chapter 11 and Chapter 12 debtors in possession enjoy the powers of a trustee, [3] with one limited exception, the Bankruptcy Code contains no provision conferring avoidance powers on debtors. “There is no specific statutory provision generally authorizing Chapter 13 debtors to exercise trustees’ avoidance powers.” Hamilton v. Realty Portfolio, Inc. (In the Matter of Hamilton), 125 F.3d 292 (5th Cir.1997). [4]
While we acknowledge that some courts have allowed Chapter 13 debtors to exercise the trustee’s avoidance powers, see Freeman v. Eli Lilly Fed. Credit Union (In re Freeman), 72 B.R. 850 (Bankr.E.D.Va.1987); Ottaviano v. Sorokin & Sorokin (Matter of Ottaviano), 68 B.R. 238 (Bankr.D.Conn.1986); Einoder v. Mount Greenwood Bank (In re Einoder), 55 B.R. 319 (Bankr.N.D.Ill.1985); In re Boyette, 33 B.R. 10 (Bankr.N.D.Tex.1983), we think those cases are inconsistent with the Bankruptcy Code.
[*365] The Eighth Circuit has determined that the statutory language of § 548 expressly confers avoidance powers exclusively on the trustee. See Nangle v. Lauer (In re Lauer), 98 F.3d 378, 388 (8th Cir.1996) (“Section 548 by its terms provides that certain transfers by the debtor prior to bankruptcy may be voided only by ‘the trustee.’ ”) (emphasis added); Saline State Bank v. Mahloch, 834 F.2d 690, 694 (8th Cir.1987) (holding that “only the trustee or debtor in possession can invoke the avoidance powers ____”); see also Realty Portfolio, Inc. v. Hamilton (In re Hamilton), 125 F.3d 292, 296 (5th Cir.1997) (“There is no specific statutory provision generally authorizing Chapter 13 debtors to exercise trustees’ avoidance powers.”); Hansen v. Finn (In re Curry & Sorensen, Inc.), 57 B.R. 824, 827 (9th Cir. BAP 1986) (holding that § 548 actions “may only be asserted by a trustee____”). Where Congress has promulgated specific rules about who can exercise avoidance powers and under what circumstances, it is not within the province of courts to confer those powers on others.
§ 522(h)
Despite section 548’s reservation of avoidance powers solely to trustees, the Code allows debtors to avoid transfers in limited circumstances. In re Hamilton, 125 F.3d at 297 (“Congress has specifically authorized narrow exceptions to the general rule that Chapter 13 debtors lack standing to exercise the strong-arm powers of Chapter 13 trustees.”). 11 U.S.C. § 522(h) permits a debtor to avoid a transfer of the debtor’s property “to the extent that the debtor could have exempted such property under subsection (g)(1) of this section if the trustee had avoided such transfer____” 11 U.S.C. § 522(h).
In DeMarah v. United States (In re DeMarah), 62 F.3d 1248 (9th Cir.1995), the Ninth Circuit articulated a five-part test to determine whether a debtor may exercise avoidance powers under § 522(h). Under the test, a debtor may avoid the transfer if: (1) the debtor’s transfer of property was involuntary; (2) the debtor did not conceal the property; (3) the trustee did not attempt to avoid the transfer; (4) the debtor seeks to exercise an avoidance power enumerated under § 522(h); and (5) the transferred property could have been exempted if the trustee had avoided the transfer under the provisions of § 522(g). Id. at 1250.
In this case, the debtor fails to satisfy the first, third and final DeMarah factors since she voluntarily transferred the condominium unit, the trustee attempted to avoid the transfer and the debtor would not have been able to exempt the unit if the transfer were successfully avoided. Therefore, § 522(h) does not give the debtor standing to avoid the transfer.
Standing to Appeal
Since the debtor lacked standing to bring the avoidance action, she also lacks standing to appeal the decision of the bankruptcy court. In order to have appellate standing, courts require that a party make an independent showing that he or she is aggrieved by the challenged order. McGuirl v. White, 86 F.3d 1232, 1234 (D.C.Cir.1996); Travelers Ins. Co. v. H.K Porter Co., Inc., 45 F.3d 737, 741 (3d Cir.1995); Lopez v. Behles (In re Am. Ready Mix, Inc.), 14 F.3d 1497, 1500 (10th Cir.1994), cert. denied, 513 U.S. 818, 115 S.Ct. 77, 130 L.Ed.2d 31 (1994); In re El San Juan Hotel, 809 F.2d 151, 154 (1st Cir.1987); Cosmopolitan Aviation Corp. v. New York State Dep’t of Transp. (In re Cosmopolitan Aviation Corp.), 763 F.2d 507, 513 (2d Cir.1985). In adopting the “person aggrieved” standard, courts have substantially followed the limitation on standing established under section 39(c) of the former Bankruptcy Act. [5] In re Am. Ready Mix, Inc., 14 F.3d at 1500. An aggrieved party is defined as one who is “directly and adversely affected pecuniarily by the order of the bankruptcy court.” Fondiller v. Robertson (In re Fondiller), 707 F.2d 441, 443 (9th Cir.1983). Thus, a party is a person aggrieved if an order “diminishes their property, increases their burdens, or impairs their rights.” General Motors Acceptance Corp. v. Dykes (In re Dykes), 10 F.3d 184, 187 (3d Cir.1993); In re Fondiller, 707 F.2d at 442.
[*366] In this ease, the bankruptcy court judgment had no negative effect on the debt- or’s pecuniary interests, nor did it diminish her property, increase her burdens or impair her rights. If the transfer were avoided, Merrifield would gain nothing. Returning the condominium unit to the estate might increase the amount received by Merrifield’s creditors, but it would not provide any benefit to her. Therefore, she is not a person aggrieved for purposes of appealing the order.
CONCLUSION
We conclude that Merrifield did not have standing to pursue the avoidance action and lacks standing to appeal the bankruptcy court’s judgment. We therefore dismiss Merrifield’s appeal.
. The Honorable Barry S. Schermer, United States Bankruptcy Judge for the Eastern District of Missouri.
. Section 548 provides, in pertinent part:
(a) The trustee may avoid any transfer of an interest of the debtor in property ... that was made ... on or within one year before the date of the filing of the petition, if the debtor voluntarily or involuntarily—
(2)(A) received less than a reasonably equivalent value in exchange for such (B)(1) was insolvent on the date that such transfer was made ... or became
11 U.S.C. § 548(a)(2)(A) & (B)(1).
. 11 U.S.C. § 1107(a) provides that "a debtor in possession shall have all the rights ... and powers, and shall perform all the functions and duties ... of a trustee____” 11 U.S.C. § 1203 provides that "a debtor in possession shall have all the rights ... and powers, and shall perform all the functions and duties ... of a trustee...."
.11 U.S.C. § 1303 authorizes debtors to exercise certain powers otherwise reserved for the trustee. Section 1303 provides that "[s]ubject to any limitations on a trustee under this chapter, the debtor shall have, exclusive of the trustee, the rights and powers of a trustee under sections 363(b), 363(d), 363(e), 363© and 363(1), of this title.” 11 U.S.C. § 1303. A Chapter 13 debtor who is engaged in business also has some of the trustee’s rights and powers under § 363(1) and § 364. Notably, section 548 powers are not among the enumerated powers.
. 11 U.S.C. § 67(c) (1976) (repealed 1978).