United States Internal Revenue Service v. Osborne (In re Osborne)

We are to decide a case that arose prior to the enactment of the Bankruptcy Reform Act of 1994, Pub.L. No. 103-394, 108 Stat. 4106 (codified as amended at 11 U.S.C. § 502 (b)(9) (1995)). This new statute specifically provides that a claim may be disallowed if proof of such claim is not timely filed. This amendment to the Bankruptcy Code, however, applies only to eases filed after October 22, 1994, the effective date of the Reform Act. Because this case was filed before that date, we must interpret the statutes, rules and case law that governed proceedings prior to the effective date.

This appeal by the United States from a judgment of the Bankruptcy Appellate Panel of the Ninth Circuit requires us to decide whether the government’s claim for taxes, advanced by the Internal Revenue Service (IRS) in a Chapter 13 proceeding, was timely filed under Rule 3002 of the Bankruptcy Rules. We must decide whether this case is governed by the teachings of In re Tomlan, 102 B.R. 790 , 791-92 n. 1 (E.D.Wash.1989), aff'd per curiam, 907 F.2d 114 (9th Cir.1990), or In re Pacific Atlantic Trading Co. (United States v. Towers), 33 F.3d 1064 (9th Cir.1994). We hold that there is a fundamental…

dissenting:

I believe that this case is controlled by our holding in In re Pacific Atlantic Trading Co., 33 F.3d 1064 (9th Cir.1994), not by the teaching of In re Tomlan, 102 B.R. 790 (E.D.Wash.1989), aff'd per curiam, 907 F.2d 114 (9th Cir.1990). Like this case, Pacific Atlantic turns on former Bankruptcy Code sections 501, 502, and 507, and Bankruptcy Rule 3002; these provisions apply equally in both Chapter 7 and Chapter 13 proceedings. Pacific Atlantic’s holding that section 501 neither imposes its own time limit on the filing of claims nor incorporates the time limit of Rule 3002, is based on the plain meaning of those provisions. I don’t see how we can say otherwise just because this is a Chapter 13 case rather than a Chapter 7 one. I therefore dissent.