Antoinette Dumont v. Ford Motor Credit Company

Opinion by Judge O’SCANNLAIN; Dissent by Judge GRABER.

We must decide whether the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 allows a consumer in bankruptcy to retain personal property subject to a security interest by continuing to make payments under his contract.

I

Antoinette Dumont purchased a car in 2003 from Ford Motor Credit Company (“Ford”). The loan agreement contained a clause stating that Dumont would be in default if she was involved in a bankruptcy proceeding, also known as an “ipso facto” clause. 1 Dumont filed for Chapter 7 bankruptcy protection in 2006, subsequent to the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), Pub.L. No. 109-8, 119 Stat. 23. The vehicle was listed on the bankruptcy petition as having a value of $5,800. At the time, she owed $8,288 on it and was making payments of $335.78 per month. In her Bankruptcy Statement of Intentions, Dumont stated that she would retain the car and continue to make monthly payments.

Ford’s attorney e-mailed Dumont’s attorney, asking that Dumont reaffirm the debt. Her attorney declined the offer. It is not clear from the record what the terms of…

dissenting:

I respectfully dissent.

May a bankruptcy debtor “ride through” bankruptcy — retaining possession of her motor vehicle, so long as she continues to make regular loan payments; or must the debtor instead invoke one of the three options described in 11 U.S.C. § 521 (a)(2)(A)? Because of confusing and contradictory statutory text, courts have struggled for decades to discern congressional intent on the answer to that simple question. Indeed, before the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), the circuit courts were split five to four. Five circuits — including ours — had held that the ride-through option was available to debtors, while four circuits had held that it was not. See Maj. op. at 1109 & nn. 5-6 (collecting cases). The disagreement at the circuit court level represented only the tip of the iceberg. In scores of cases, district courts, bankruptcy appellate panels, and bankruptcy courts had weighed in on the debate, 1 as had commentators.

The dispute centered on the text of 11 U.S.C. § 521 (2) (2004), which BAPCPA re-designated as § 521(a)(2). Like many courts and commentators, we held that the text of §…

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In the Matter of: ANTOINETTE 

DUMONT,

Debtor, No. 08-60002

ANTOINETTE DUMONT,  BAP No. SC-07-1155-BaMoD Appellant,

OPINION

v.

FORD MOTOR CREDIT COMPANY,

Appellee.  Appeal from the Ninth Circuit Bankruptcy Appellate Panel Baum, Montali, and Dunn, Bankruptcy Judges

Argued and Submitted May 5, 2009—Pasadena, California

Filed September 15, 2009

Before: Alfred T. Goodwin, Diarmuid F. O’Scannlain, and Susan P. Graber, Circuit Judges.

Opinion by Judge O’Scannlain; Dissent by Judge Graber

13405 13408 DUMONT v. FORD MOTOR CREDIT

COUNSEL

Michael G. Doan, Doan Law Firm, Carlsbad, California, argued the cause for appellant-debtor and filed briefs. DUMONT v. FORD MOTOR CREDIT 13409 Randall P. Mrocynski, Cooksey Toolen Gage Duffy & Woog, Costa Mesa, California, argued the cause for the appellee and submitted a brief.

Tara Twomey, National Association of Consumer Bankruptcy Attorneys, San Jose, California, submitted a brief on behalf of amicus curiae National Association of Consumer Bankruptcy Attorneys. With her on the brief was Cynthia…