Dreyfuss

Opinion by Judge MILAN D. SMITH, Jr.; Concurrence by Judge WALLACE.

OPINION

In this bankruptcy appeal, we consider whether section 503 of the Bankruptcy Code, 11 U.S.C. § 503 (b), requires a chapter 7 trustee to provide notice to creditors, and obtain a hearing, before paying taxes incurred by the estate. The Appellee, a chapter 7 trustee, paid the 2005 federal income taxes of a bankruptcy estate without first providing notice to the Appellant, a creditor of the estate, requesting a hearing to determine the appropriate amount of those taxes, or obtaining an order of the bankruptcy court authorizing the payment of those taxes. The Appellant contends that the bankruptcy court erred by approving the Trustee’s Final Report without holding a hearing to determine the appropriate amount of the 2005 federal income taxes, and without approving the payment of those taxes. The Appellee argues that construing the Bankruptcy Code to require trustees to provide notice and obtain a hearing before paying taxes incurred by the estate would conflict with trustees’ other obligations under the Bankruptcy Code and the Internal Revenue Code.

We hold that the plain language of section 503 requires…

concurring:

I concur in the opinion because I agree that the trustee did not follow section 503(b)’s requirement that the payment be made only “after notice and a hearing.” The trustee does not argue that notice was somehow “[in]appropriate in the[se] particular circumstances.” 11 U.S.C. § 102 (1)(A). I write separately, however, to highlight for the court on remand my concerns about the timeliness of Drey-fuss’s objection.

The thrust of Dreyfuss’s argument over the course of this litigation has been that the trustee paid the wrong amount of taxes. The majority opinion, however, focuses instead on Dreyfuss’s alternative argument — that the trustee failed to provide a “notice and a hearing” before making the tax payment. But the opinion does not address the timeliness of Dreyfuss’s original objection in the bankruptcy court.

A party must object within a reasonable time or risk being deemed to have consented to the action to which it objects. Cf. Spaulding v. Univ. of Wash., 740 F.2d 686, 695 (9th Cir.1984) (“Parties should object to a reference to a magistrate or a special master at the time the reference is made or within a reasonable time thereafter” or risk waiving the…