South-Western Legal Studies in Business

Argument Not Developed in Bankruptcy Proceedings May Not Be Made on Appeal
Description Appeals court held that a creditor must advance its arguments during bankruptcy proceedings or it may not raise the arguments on appeal. While a creditor objected to a cigarette allowance for a debtor, the creditor failed to provide a reason for its objection before the bankruptcy court, and so may not raise the argument on appeal.
Topic Bankruptcy
Key Words Chapter 13; Reasonably Necessary Expenses; Arguments; Appeals; Cigarettes
C A S E   S U M M A R Y
Facts Woodman went through Chapter 13 proceedings, leaving Evergreen, an secured creditor, unpaid. After the bankruptcy court confirmed the debtor's plan, Evergreen objected that it did not meet the requirement that a debtor must devote all "disposable income" to their plans for at least three years. In particular, Evergreen objected to Woodman's allowance of $136 per month for cigarettes as a "reasonably necessary" expense. It argued that the money should be devoted to repaying creditors. The bankruptcy court and district court upheld the cigarette expense; Evergreen appealed.
Decision

Affirmed. Evergreen contends that buying cigarettes is counterproductive and self-destructive and so is not reasonable. It contended that unless there was medical evidence that Woodman needed the cigarettes, the expenditure was not justified. Unfortunately, Evergreen failed to make that argument in the courts below. It only objected to the category of expenditure, but did not justify its reasoning. Evergreen cannot now raise arguments it failed to advance in the courts below, so the matter cannot be appealed.

Citation In re Woodman, 379 F.3d 1 (1st Cir., 2004)

Back to Bankruptcy Listings

©1997-2003  SW Legal Studies in Business. All Rights Reserved.