Memorandum of Decision Re: Res Judicata Effect of Chapter 13 Plan
(a) As soon as practicable after completion by the debtor of all payments under the plan . . . the court shall grant the debtor a discharge . . . .
The UEF objects on the grounds that its priority claim has not been paid in full, even though it stood by silently while the plan was confirmed and never, during the three-year life of the plan, sought revocation of confirmation or dismissal of the case. Had the UEF opposed confirmation, the court would not have confirmed the plan. However, once a plan is confirmed it is binding even if it contains improper terms. In re Ivory, 70 F.3d 73, 75 (9th Cir. 1995); In re Pardee, 193 F.3d 1083, 1086 (9th Cir.1999). Had the UEF sought timely revocation of confirmation or made a motion to dismiss the case before Pagano completed his payments, the court would have considered the matter and might have granted relief. However, the UEF did neither. It took no action beyond the filing of its claim, even though it knew that Pagano's payments could never satisfy more than a small percentage of the claim. The UEF cites in support of its position In re Goude, 201 B.R. 275 (Bankr.D.Ore.1996). In that case, the court held that the debtors were not entitled to a discharge even though they had made all of their Chapter 13 plan payments because they had not paid all priority claims in full. That was the same result as the Seventh Circuit reached in In re Escobido, 28 F.3d 34 (7th Cir. 1994). However, Escobido was specifically rejected by both the BAP and the Ninth Circuit in Pardee. 218 B.R. at 926; 193 F.3d at 1086-7. The rule in Goude is not good law in this circuit in light of Pardee. For the foregoing reasons, Pagano's motion for entry of his discharge will be granted. Counsel for Pagano shall submit an appropriate form of order.
Dated: January 15, 2001 ___________________________ Alan Jaroslovsky U.S. Bankruptcy Judge
1. A subsequent contrary ruling by Bankruptcy Judge Newsome has caused this court to question the correctness of that ruling. However, the court need not revisit the issue in light of Pagano's completion of his pla