Penny D. Goudelock, Appellant,
Sixty-01 Association of Apartment Owners, Appellee.
and Submitted February 6, 2018 Seattle, Washington
from the United States District Court for the Western
District of Washington Marsha J. Pechman, Senior District
Judge, Presiding D.C. No. 2:15-cv-01413-MJP
K. Rice (argued), Jones Day, Detroit, Michigan; Nathaniel P.
Garrett, Jones Day, San Francisco, California; Christina L.
Henry, Henry DeGraaff & McCormick P.S., Seattle,
Washington; for Appellant.
Stephen M. Smith (argued), Sound Legal Partners PLLC,
Kenmore, Washington, for Appellee.
Erik Heath, San Francisco, California, as and for Amicus
Curiae National Association of Consumer Bankruptcy Attorneys.
Before: Milan D. Smith, Jr. and Mary H. Murguia, Circuit
Judges, and Eduardo C. Robreno, [*] District Judge.
panel reversed the district court's decision affirming
the bankruptcy court's summary judgment in favor of a
condominium association, which sought in an adversary
proceeding to determine the dischargeability of a
debtor's personal obligation to pay condominium
association assessments that accrued between the date the
debtor filed her Chapter 13 bankruptcy petition and the date
the condominium unit was foreclosed upon.
with the reasoning of the Seventh Circuit in a Chapter 7
case, the panel held that condominium association assessments
that become due after a debtor has filed for bankruptcy under
Chapter 13 are dischargeable under 11 U.S.C. § 1328(a).
The panel concluded that the debt arose prepetition and was
not among exceptions listed in § 1328(a). The panel held
that the Takings Clause was not implicated because the
condominium association retained its in rem
interest. The panel also concluded that equitable arguments
did not override the express provisions of the Bankruptcy
ROBRENO, DISTRICT JUDGE
Penny Goudelock appeals the district court's affirmance
of the bankruptcy court's grant of summary judgment in
favor of appellee, Sixty-01 Association of Apartment Owners
("Sixty-01"). The issue is whether condominium
association ("CA") assessments that become due
after a debtor has filed for bankruptcy under Chapter 13 of
the Bankruptcy Code are discharged upon confirmation of the
plan. We have jurisdiction pursuant to 28 U.S.C. §
158(d)(1). We conclude that such assessments are
dischargeable under 11 U.S.C. § 1328(a) and,
accordingly, reverse and remand.
FACTUAL AND PROCEDURAL BACKGROUND
facts are not in dispute. Goudelock purchased a condominium
unit in Redmond, Washington in 2001. Her deed was subject to
a declaration of covenants and restrictions (the
"Declaration") that was recorded against the
property in 1978. The Declaration provides that Sixty-01, a
CA, may charge property owners assessments for monthly fees
and for maintenance, repairs, and capital improvements.
Declaration grants Sixty-01 two methods for collecting unpaid
assessments. It provides that all unpaid assessments: (1)
constitute a lien on the condominium unit, enforceable
through foreclosure; and (2) create a personal obligation
through which Sixty-01 can bring suit for damages against the
owner of the condominium unit.
stopped paying the CA assessments in 2009 and Sixty-01 sought
to enforce its lien by initiating foreclosure proceedings in
state court. Goudelock moved out of her condominium unit and,
in March of 2011, filed for bankruptcy under Chapter 13. As
part of her Chapter 13 plan, Goudelock surrendered the
condominium unit. Sixty-01 filed a proof of claim attesting
to $18, 780.39 in unpaid CA assessments and noted that they
continued to accrue at a monthly rate of $388.46. Before the
plan was confirmed by the bankruptcy court, Sixty-01 canceled
the foreclosure sale because the mortgage lender paid the
outstanding assessments. The condominium unit sat unoccupied