Spradlin v. Wrigley’s 7-711, Inc. (In re Licking River Mining, LLC)

(Bankr. E.D. Ky. June 21, 2017)

The bankruptcy court grants the defendant’s motion to dismiss the trustee’s complaint, which sought to avoid transfers from debtors to the defendant. The complaint failed to state a claim, in part because the defendant could not be deemed an “insider” of the debtor. The court additionally finds that the complaint contains insufficient facts to support various other claims. Opinion below.

Judge: Wise

Attorneys for Trustee: Bingham Greenbaum Doll LLP, Claude R. Bowles, Jr., Daniel J. Donnellon, James R. Irving, April A. Wimberg

Attorneys for Defendant: Stites & Harbison, PLLC, Brian H. Meldrum, Brian R. Pollock

2017-06-21 – in re licking river mining

Author: Matt Lindblom

In re Pace

(B.A.P. 6th Cir. June 20, 2017)

The Sixth Circuit B.A.P. holds that 11 U.S.C. § 522(f)(2)(C) does not preclude avoidance of mortgage deficiency judgment liens. Rather, based on the plain meaning of the statute, that section simply makes clear that entry of a judgment in a foreclosure action does not convert the underlying mortgage agreement into a judicial lien that may be avoided. Here, the bankruptcy court denied the debtor’s motion to avoid a deficiency judgment lien following a real property foreclosure action, stating that § 522(f)(2)(C) bars avoidance of a foreclosure deficiency judgment lien. The B.A.P. analyzes conflicting case law from multiple jurisdictions and reverses the bankruptcy court.

Judge: Wise

Attorney for Debtor: T. Robert Bricker

Author: Matt Lindblom

2017-06-20 – in re pace

Levin v. Paige (In re Stein)

(S.D. Ind. June 2, 2017)

The district court denies the defendant’s motion to withdraw the reference in this fraudulent conveyance action. The defendant answered the complaint, requesting a jury trial and noting that he does not consent to adjudication by the bankruptcy judge. The district court acknowledges that the bankruptcy court lacks authority to conduct a jury trial without express consent of all parties. However, the district court holds that immediate transfer is not necessary. The bankruptcy court may handle all pretrial matters, and the case can be transferred to the district court if a jury trial becomes necessary. Opinion below.

Judge: Pratt

Attorneys for Trustee: Rubin & Levin, PC, James E. Rossow, Jr. John M. Rogers

Attorney for Defendant: Jeffrey O. Meunier

2017-06-02 – in re stein

Author: Matt Lindblom

Kendrick v. Rister (In re Rister)

(Bankr. E.D. Ky. May 18, 2017)

The bankruptcy court grants the defendant’s motion for judgment on the pleadings in this vehicle lien avoidance action. The debtor entered into a sale contract for purchase of the vehicle on the day before the petition was filed, but the certificate of title was not transferred to the debtor until after the petition was filed. Accordingly, the court finds that the vehicle is not property of the estate and the complaint should be dismissed. The court permits the trustee a period of time in which to file an amended complaint based on the trustee’s assertion that the estate may include rights under the sale contract. Opinion below.

Judge: Wise

Attorney for Trustee: Michael B. Baker

Attorneys for Defendants: Steiden Law Offices, Eric A. Steiden; Frost Brown Todd LLC, Paige Leigh Ellerman, Adam J. Webb; Aaron J. Nash; Patricia L. Johsnon

2017-05-18 – in re rister

Author: Matt Lindblom

Edmondson v. Gordon (In re Gordon)

(6th Cir. B.A.P. May 18, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s contempt order, but remands the matter for the limited purpose of providing the debtor sufficient notice and an opportunity to be heard on the issue of whether monetary sanctions were reasonable. The debtor sold property of the estate in direct violation of the bankruptcy court’s order. The bankruptcy court held the debtor in contempt and awarded the trustee his attorney fees as a sanction. However, the hearing notice for the contempt order did not make clear that monetary sanctions could be entered against the pro se debtor. Opinion below.

Judge: Opperman

Appellant: Pro Se

Attorney for Appellee: Thompson Burton PLLC, Phillip G. Young, Jr.

2017-05-18 – in re gordon

Author: Matt Lindblom

Midland Funding, LLC v. Johnson

(U.S. Sup. Ct. May 15, 2017)

The Supreme Court holds that a creditor did not violate the Fair Debt Collection Practices Act when it filed a proof of claim on a debt that was barred from collection by the applicable statute of limitations. The proof of claim made clear that the limitations period had passed. The decision resolves a split among the circuits on the question of whether such a filing constituted “false,” “deceptive,” “misleading,” “unconscionable,” or “unfair” conduct under the act. The court reasons that while the claim may not be enforceable, it is nevertheless a “claim” under the bankruptcy code. It is not a false or misleading statement, but it can be disallowed based on its unenforceability. Similarly, the court reasons that the filing was not unconscionable or unfair, as there are protections built into the bankruptcy process that minimize risk to the debtor. Opinion below.

Justice Breyer

2017-05-15 – in re midland funding

Author: Matt Lindblom

Stroud v. Parker (In re Parker)

(Bankr. W.D. Ky. May 12, 2017)

The bankruptcy court enters summary judgment against the debtor holding the debt nondischargeable pursuant to 11 U.S.C. § 523(a)(4). The plaintiffs inherited a judgment against the debtor that was based on the debtor’s theft of the decedent’s property. The plaintiffs were the proper parties to bring the claim, as the decedent’s estate assigned the judgment to them, and the requirements of § 523(a)(4) were satisfied. Opinion below.

Judge: Lloyd

Attorneys for Plaintiffs: Crain – Schuette Attorneys, Amanda Lisenby Blakeman

Attorney for Debtor: Alicia C. Johnson

2017-05-12 – in re parker

Author: Matt Lindblom