Community Bank, N.A. v. Riffle

08-4440-bk
Community Bank, N.A. v. Riffle

UNITED STATES COURT OF APPEALS
F OR THE S ECOND C IRCUIT
_____________________

August Term, 2008

(Submitted: August 5, 2009 Decided: August 9, 2010)

Docket No. 08-4440-bk

_____________________

COMMUNITY BANK, N.A.,

Appellant,

v.

STEPHEN RIFFLE, LORA RIFFLE,

Appellees.*

_______________________

Before:

POOLER, HALL, and LIVINGSTON, Circuit Judges.

Appeal from the August 15, 2008, judgment of the United States District Court for the

Western District of New York (Siragusa, J.). The district court affirmed the bankruptcy court’s

denial of the motion of Appellant Community Bank, N.A. to, inter alia, confirm the automatic

dismissal of debtor Stephen Riffle’s case pursuant to 11 U.S.C. § 521(i)(1) because, contrary to

the provisions of 11 U.S.C. § 521(a)(1)(B)(iv), Appellees failed to file copies of all payment

advices received by Stephen Riffle within 60 days before the date of the filing of the bankruptcy

* The Clerk of Court is directed to amend the official caption in this case to conform to the
listing of the parties above.
petition. We hold that because Appellees provided information reflecting “payment received”

from Stephen Riffle’s employer in the 60 days prior to the petition, they satisfied the

requirements of § 521(a)(1)(B)(iv). We therefore affirm the judgment of the district court.

________________________

EDWARD Y. CROSSMORE , The Crossmore Law Office, Ithaca, New York, for Appellant.

CHARLES D. TOLBERT, Charles D. Tolbert, P.C., Penn Yan, New York, for Appellees.

PER CURIAM :

Appellant Community Bank, N.A. (“Community Bank”), appeals the August 15, 2008,

judgment of the United States District Court for the Western District of New York (Siragusa, J.).

The district court affirmed the bankruptcy court’s denial of Community Bank’s motion to, inter

alia, obtain an order confirming the automatic dismissal of the bankruptcy case of Stephen Riffle

pursuant to 11 U.S.C. § 521(i)(1) on the grounds that Stephen and Lora Riffle (collectively,

“Appellees”) failed to file copies of all payment advices received by Stephen Riffle within 60

days before the date of the filing of the bankruptcy petition as required by 11 U.S.C.

§ 521(a)(1)(B)(iv). We hold that because Appellees provided information reflecting “payment

received” from Stephen Riffle’s employer in the 60 days prior to the petition, they satisfied the

requirements of § 521(a)(1)(B)(iv). We therefore affirm the judgment of the district court.

I. STATUTORY REQUIREMENTS

Appellees filed a petition for bankruptcy under Chapter 13 of the Bankruptcy Code.

Schedules and statements filed by the Appellees indicated that Community Bank was a fully

secured creditor that held a mortgage on their residence. Prior to the bankruptcy filing, Stephen

Riffle was employed by YB Sales and Distribution. During the 60-day period before the filing,

Stephen Riffle received from his employer four payment advices with respect to his

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compensation. According to the Appellees’ Schedule I of Current Income, Lora Riffle had no

income during this time.

Within the 45-day period for filing “copies of all payment advices or other evidence of

payment received within 60 days before the date of the filing of the petition, by the debtor from

any employer of the debtor,” 11 U.S.C. § 521(a)(1)(B)(iv), the Appellees filed the last payment

advice that Stephen Riffle received during that 60-day period. The advice was dated September

14, 2007, covered the pay period ending September 8, 2007, included Stephen Riffle’s earnings

and deductions for that pay period, and identified his year-to-date earnings and payroll

deductions in various categories. Stephen Riffle claims that he had thrown the other payment

advices away. The Appellees also filed a chart entitled “Sales Earnings Report.” This document

was issued by Stephen Riffle’s employer and showed his gross earnings for each pay period

from January 5, 2007 through August 31, 2007.

After the 45-day period for filing had passed, Community Bank moved to confirm the

automatic dismissal of Stephen Riffle’s petition for failure to file all of the payment advices

received within the 60-day period and, upon dismissal of Stephen Riffle’s petition, to dismiss

Lora Riffle’s petition because she had no income and could not fund a Chapter 13 plan. The

Trustee opposed the dismissal on the grounds that the evidence submitted by the Appellees

represented full compliance with the statutory requirements of 11 U.S.C. § 521(a)(1)(B)(iv).

The bankruptcy court denied Community Bank’s motion to dismiss Stephen Riffle’s case

on the basis that the filed payment advice and sales earning report were “other evidence of

payment” as required under Section 521(a)(1)(B)(iv) and provided year-to-date gross and net

pay, including every category of gross pay and applicable deductions. The court also stated that

it did not “believe that detailed information per pay period with respect to deductions is critical

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under Section 521(a)(1)(B)(iv), as long as the year-to-date evidence, as supplied here by the last

Pay Stub received before the filing of the petition, provides a complete list of the categories of

the deductions from the Debtor’s pay for the sixty-day period in question.” The court

accordingly also denied the motion to dismiss Lora Riffle’s case.

Community Bank appealed to the district court, which affirmed on the opinion of the

bankruptcy court. On appeal to this Court, Community Bank challenges only the district court’s

affirmance of the bankruptcy court’s denial of the motion to dismiss.

II. DISCUSSION

A. Appellate Jurisdiction

Before we can decide whether the bankruptcy court properly denied the motion to

dismiss Stephen Riffle’s case, we must first determine if we have jurisdiction to hear this appeal.

To that end, in advance of oral argument, we ordered the Appellant to submit additional briefing

addressing the basis for our jurisdiction to review the order of the district court, and we directed

the Appellees to submit a response to the Appellant’s submission.

We have previously explained that:

28 U.S.C. § 158 defines jurisdiction over appeals in bankruptcy matters. Although
interlocutory orders of bankruptcy courts may be appealed to the district courts “with
leave of the court,” see 28 U.S.C. § 158(a), the jurisdiction of the courts of appeals
is confined to “appeals from all final decisions, judgments, orders, and decrees” of
district courts sitting in review of bankruptcy courts, id. § 158(d).

Bowers v. Conn. Nat’l Bank, 847 F.2d 1019, 1021 (2d Cir. 1988) (emphasis omitted). In this

case, we need not resolve whether the district court’s judgment, affirming the bankruptcy court’s

denial of a motion to dismiss the Riffle’s bankruptcy petition, was a “final” decision of the

district court within the meaning of 28 U.S.C. § 158(d) that conferred jurisdiction on this Court.

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Regardless of the finality of that decision, jurisdiction was proper by the time this Court heard

the appeal.

When Community Bank filed its notice of appeal of the district court’s judgment on

September 9, 2008, the bankruptcy court had already confirmed the Riffles’ Chapter 13

bankruptcy plan, issuing its order on June 20, 2008. Such a confirmation order is a final order

that may be appealed. See Maiorino v. Branford Sav. Bank, 691 F.2d 89, 91 (2d Cir. 1982)

(suggesting in dicta that such an order is final); cf. In re Layo, 460 F.3d 289, 293 (2d Cir. 2006)

(holding that Chapter 13 order is a final judgment on the merits for preclusion analysis

purposes); In re Am. Preferred Prescription, Inc., 255 F.3d 87, 92 (2d Cir. 2001) (“The

confirmation of a plan in a Chapter 11 proceeding is an event comparable to the entry of a final

judgment in an ordinary civil litigation.”). We have held that “a premature notice of appeal from

a nonfinal order may ripen into a valid notice of appeal if a final judgment has been entered by

the time the appeal is heard and the appellee suffers no prejudice.” Smith ex rel. Smith v. Half

Hollow Hills Cent. Sch. Dist., 298 F.3d 168, 172 (2d Cir. 2002) (per curiam) (internal quotation

marks omitted); accord Swede v. Rochester Carpenters Pension Fund, 467 F.3d 216, 219-20 (2d

Cir. 2006). This rule applies even if the final judgment was not itself appealed. See, e.g., Half

Hollow Hills Cent. Sch. Dist., 298 F.3d at 171 (noting that no appeal was taken from the final

judgment in that case). Assuming that an appeal of the district court’s order in this case would

have been premature had the Riffles’ Chapter 13 plan not already been confirmed, the fact that

the bankruptcy court had entered a final order by the time of the appeal ensured that the appeal

was ripe at the time it was taken, and all the more so by the time it was heard by this Court.

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 In light of the entry of the order confirming the Appellees’ Chapter 13 plan, and because

there will be no prejudice to the Appellees by virtue of our deciding this appeal, we hold that we

have appellate jurisdiction over this matter.

B. Obligations Under 11 U.S.C. § 521(a)(1)(B)(iv)

We exercise plenary review over a district court’s rulings in its capacity as an appellate

court in bankruptcy. See In re Dairy Mart Convenience Stores, Inc., 411 F.3d 367, 371 (2d Cir.

2005). “[W]e independently examine the bankruptcy court's factual determinations and legal

conclusions, accepting the former unless clearly erroneous and reviewing the latter de novo.” Id.

Under 11 U.S.C. § 521(a)(1)(B)(iv), a bankruptcy debtor must, “unless the court orders

otherwise,” file “copies of all payment advices or other evidence of payment received within 60

days before the date of the filing of the petition, by the debtor from any employer of the debtor.”

If a voluntary filer under Chapter 7 or Chapter 13 does not comply with this requirement within

45 days after the filing of the petition, the case is automatically dismissed. 11 U.S.C. §

521(i)(1).1

We have not previously decided what obligations 11 U.S.C. § 521(a)(1)(B)(iv) imposes

upon a debtor, and the statute, to put it mildly, is not a model of syntactical clarity. At least two

grammatically valid readings of the statute are possible, each of which would place a different

requirement on the debtor.

1
11 U.S.C. § 521(i)(1) provides that “[s]ubject to paragraphs (2) and (4) and
notwithstanding section 707(a), if an individual debtor in a voluntary case under chapter 7 or 13
fails to file all of the information required under subsection (a)(1) within 45 days after the date of
the filing of the petition, the case shall be automatically dismissed effective on the 46th day after
the date of the filing of the petition.”

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 “Statutory analysis begins with the text and its plain meaning, if it has one.” Green v.

City of New York, 465 F.3d 65, 78 (2d Cir. 2006) (quoting Gottlieb v. Carnival Corp., 436 F.3d

335, 337 (2d Cir. 2006)). This text lacks a plain meaning. What makes the statute ambiguous is

that it is not clear how the participle “received” functions in context. On one possible reading,

the clause “received within 60 days” could be understood to refer to the compound subject “all

payment advices or other evidence” (with the word “all” modifying both “payment advices” and

“other evidence”). Were we to adopt this reading, which we may call the document-focused

interpretation, the effect would be to require the debtor to turn over all payment advices that he

received in the 60 days leading up to the filing of his bankruptcy petition, or, if he received no

such payment advices, all other evidence he received. On this understanding of the statute, we

would have to conclude that the Riffles failed to comply, because it is undisputed that Stephen

Riffle received some payment advices that he did not file.

A second possible reading would read “received” to modify “payment.” This reading

would thus treat the phrase “of payment received” as a unit that: (1) is modified by the phrase

“within 60 days of before the date of the filing of the petition, by the debtor from any employer

of the debtor”; and (2) so modified, itself modifies the phrase “all payment advices or other

evidence” (with the word “all” modifying “payment advices” but not “other evidence”). This

approach may feel somewhat more awkward than the first, but it is grammatical, and becomes

easily intelligible if one reads “of” as “in respect to,” which is among that preposition’s

definitions. See Webster’s Third New International Dictionary 1565 (2002). Under this

approach, which we may term the payment-focused interpretation, the statute requires a debtor

alternatively to file either (1) “all payment advices . . . of payment received within 60 days

before the date of the filing of the petition,” or (2) “other evidence of payment received within

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60 days before the date of the filing of the petition.” If we adopt this approach, a debtor will be

in compliance so long as he files credible evidence that sets forth all “payment received” from

his employer in the 60 days prior to the petition. This reading has been embraced by the

bankruptcy appellate panel for the Tenth Circuit. See In re Miller, 383 B.R. 767, 770-71 (B.A.P.

10th Cir. 2008). On this interpretation, the Riffles prevail, because, as the bankruptcy court

found, the documents the Riffles filed provided adequate information regarding all payments

from his employer in the required period.

Although neither reading is perfectly satisfying, we conclude that the payment-focused

interpretation is superior. The document-focused interpretation may have the benefit of

requiring less grammatical parsing, but it also makes less sense according to principles of

statutory construction. Under the document-focused approach, where the word “received”

modifies “payment advices or other evidence,” then either type of document also must be

received “from the employer” to satisfy the requirement of the statute. And in that case, it is

unclear what type of “other evidence” — received from an employer and reflective of the same

time period as the payment advice for which it is substituting — would not itself constitute a

“payment advice.” In other words, the document-focused interpretation of the statute seems to

render the term “other evidence” meaningless. See In Re Miller, 383 B.R. at 771; Triestman v

United States, 124 F.3d 361, 376 (2d Cir. 1997) (“[W]e assume that Congress intended that

language which it chose to employ actually was to have meaning; effect must be given, if

possible, to every word, clause and sentence of a statute . . . so that no part will be inoperative or

superfluous, void or insignificant.” (brackets and ellipsis in original)(quoting Consolidated Rail

Corp. v. United States, 896 F.2d 574, 579 (D.C. Cir. 1990))).

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 The term “payment advice,” of course, is not defined in the statute, and it might be

suggested instead that only documents generated contemporaneously with the delivery of

payment constitute payment advices. Cf. Appellant’s Br. at 9 n.3. “Other evidence” then might

include non-contemporaneous documentation of payment generated by an employer at the

debtor’s request (for example, a letter generated by the employer’s accounting department

because the debtor was missing a pay stub). But in that case, there would be no necessary

relationship between the time at which the missing payment advice should have been received

and the time at which the substitute other evidence was ultimately received. That is, the time at

which the documents were received would not ensure that one was a useful substitute for the

other, and the statute’s focus on what documents the debtor happened to receive in the period

immediately prior to his petition would be quite arbitrary. See Troll Co. v. Uneeda Doll Co., 483

F.3d 150, 160 (2d Cir.2007) (“[I]t is an elemental principle of statutory construction that an

ambiguous statute must be construed to avoid absurd results.”)

The payment-focused interpretation, on the other hand, has the benefit of consistency

with the other requirements listed under § 521(a)(1)(B), each of which demands information

about the finances of the debtor at the time of his bankruptcy petition that might be relevant to

the petition. See, e.g., 11 U.S.C. § 521(a)(1)(B)(i) (directing debtor to file “a schedule of assets

and liabilities”); id. at (ii) (requiring “a schedule of current income and current expenditures”);

id. at (v) (requiring “a statement of monthly net income, itemized to show how the amount is

calculated”). To the extent that the text of § 521(a)(1)(B)(iv) is ambiguous, the context of these

surrounding provisions suggests that subsection (iv) also should be read to focus on relevant

information — the actual compensation received by the debtor from his employer immediately

prior to his petition — rather than specific documents. See Natural Res. Def. Council v.

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Muszynski, 268 F.3d 91, 98 (2d Cir. 2001) (“[W]hen determining which reasonable meaning [of

an ambiguous text] should prevail, the text should be placed in the context of the entire statutory

structure.”). The fact that automatic dismissal is mandated only in the event of a failure to file

“all of the information required,” 11 U.S.C. § 521(i)(1) (emphasis added), also suggests a

statutory emphasis on the filing of information relevant to the debtor’s petition, rather than a

requirement for specific documents.

With the “plain language” of the statute being anything but, we are guided by the

foregoing canons to reach the most sensible interpretation. See Green, 465 F.3d at 78 (“Only if

an attempt to discern the plain language fails because the statute is ambiguous, do we resort to

canons of construction.”). The canons favor a conclusion that § 521(a)(1)(B)(iv) is better

interpreted to require disclosure of certain relevant information than to require production of

specific pieces of paper. We accordingly join the Tenth Circuit Bankruptcy Appellate Panel in

holding that: (1) the word “received” in § 521(a)(1)(B)(iv) modifies the word “payment,” and

thus it is the date of receipt of any relevant payment, not the date of receipt of any particular

document, that establishes the debtor’s obligations under the subsection; and (2) a debtor may

satisfy the subsection’s requirements by filing either (a) “copies of all payment advices . . . of

[such] payment received . . . by the debtor from any employer” or (b) “copies of . . . other

[credible] evidence of [such] payment received . . . by the debtor from any employer.” In re

Miller, 383 B.R. at 771.

Community Bank also argues that the Appellees did not meet their obligation under §

521(i)(1) to “file all of the information required under subsection (a)(1).” It contends that:

[t]he Sales Earning Report filed by Mr. Riffle disclosed his gross pay over the four
pay periods in question, but provided no information on net pay or his payroll
withholdings and deductions. The one payment advice filed provided cumulative

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 year to date data on payroll deductions and net pay. However, it was not possible to
extrapolate from that data all of the information contained on the three missing
payroll documents.

The Bankruptcy Code does not require a breakdown of gross and net income on a per-

pay period basis.

As discussed above, under § 521(a)(1)(B)(iv), evidence must be submitted of payment

for the 60-day period prior to the date that the petition is filed. Further, pursuant to

§ 521(a)(1)(B)(v), the debtor must identify monthly net income. Community Bank points to no

language in the Bankruptcy Code that compels a debtor to provide gross and net income on a

per-pay-period basis.

We conclude that by presenting the September 14, 2007 payment advice, which included

Stephen Riffle’s earnings and deductions for that pay period, and identified his year-to-date

earnings and payroll deductions for various categories, and by submitting the “Sales Earnings

Report,” which showed his gross earnings for each pay period from January 5, 2007 through

August 31, 2007, Appellees “create[d] a very clear picture as to the amount of income [the]

[d]ebtor[s] received in the sixty days prepetition,” In re Miller, 383 B.R. at 772, and thus met

their obligations under § 521(a)(1)(B)(iv).

III. CONCLUSION

We affirm the judgment of the district court.

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