Bankr. N.D. Ind. Opinions – January 2015 to April 2015

Hernandez-Gutierrez v. Montgomery (Bankr. N.D. Ind. Jan. 30, 2015) – Court denies motion for summary judgment in 11 U.S.C. § 523(a)(2)(A) action.

2015-01-30 – hernandez-gutierrez v montgomery

Leffler v. Orthopaedics Indianapolis, Inc. (Bankr. N.D. Ind. Feb. 6, 2015) – Court denies motion to dismiss in action seeking judgment for violation of automatic stay and the discharge injunction.

2015-02-06 – leffler v orthopaedics indianapolis

Bradley v. Klein (Bankr. N.D. Ind. Feb. 9, 2015) – Court denies motion for default judgment without prejudice due to lack of evidence of proper service.

2015-02-09 – bradley v klein

Keybank N.A. v. Stackhouse (Bankr. N.D. Ind. Feb. 18, 2015) – Court denies plaintiff’s motion for summary judgment on non-dischargeability claim under 11 U.S.C. § 523(a)(6) and request for denial of discharge under § 727(a)(4).

2015-02-18 – keybank v stackhouse

In re Marion (Bankr. N.D. Ind. Mar. 10, 2015) – Court denies trustee’s motion to extend deadline to object to debtor’s claimed exemptions.

2015-03-10 – in re marion

In re Farwell (Bankr. N.D. Ind. Mar. 12, 2015) – Court dismisses Chapter 13 case with sanctions and 180-day filing bar where debtor had filed four petitions in about 15 months, each of which were dismissed for failure to meet statutory requirements to be a debtor.

2015-03-12 – in re farwell

In re Gonzalez (Bankr. N.D. Ind. Mar. 16, 2015) – Court denies Chapter 7 debtor’s request for waiver of the credit counseling requirement.

2015-03-16 – in re gonzalez

Schroeder v. American Education Services (Bankr. N.D. Ind. Mar. 17, 2015) – Court denies motion to dismiss or alternatively for summary judgment in adversary proceeding.

2015-03-17 – schroeder v american education services

Chamberlin v. 1st Source Bank (Bankr. N.D. Ind. Mar. 17, 2015) – Court grants summary judgment in adversary proceeding to determine priority of mortgages on debtor’s residence. The Rooker-Feldman doctrine bars relitigating priority issue decided by state court prepetition.

2015-03-17 – chamberlin v 1st source bank

Indiana v. Taylor (Bankr. N.D. Ind. Mar. 31, 2015) – Court grants default judgment against debtor and declares debt non-dischargeable under 11 U.S.C. § 523(a)(2)(A).

2015-03-31 – indiana v taylor

Foreman v. JPMorgan Chase Bank, N.A. (Bankr. N.D. Ind. Apr. 22, 2015) – Court grants debtors’ motion for default judgment and grants a hardship discharge of student loan debt.

2015-04-22 – foreman v jpmorgan chase bank

Vendramin v. Henry (Bankr. N.D. Ind. Apr. 30, 2015) – Court dismisses nondischargebility action after trial where plaintiff failed to establish the debtor owed a debt to the plaintiff.

2015-04-30 – venderamin v henry

Wellness International Network, Ltd. v. Sharif

(U.S. Sup. Ct. May 26, 2015)

The Supreme Court holds that certain claims entitled to Article III adjudication (i.e. Stern claims) may be decided by bankruptcy judges when the parties knowingly and voluntarily consent to such adjudication. Such consent does not have to be express. Here, the creditor filed a non-dischargeability complaint that included a count requesting a declaratory judgment that a trust was the alter-ego of the debtor. The bankruptcy court entered judgment against the debtor on that count (as well as the non-dischargeability counts). The debtor’s answer conceded that the action was a core proceeding and requested judgment in his favor on all counts. The Supreme Court remands to the Seventh Circuit to decide whether the debtor gave the requisite knowing and voluntary consent to entry of the final judgment by the bankruptcy court. Opinion below.

2015-05-26 – wellness international network v sharif

Author: Matt Lindblom

Harris v. Viegelahn

(U.S. Sup. Ct. May 18, 2015)

The Supreme Court holds that post-petition debtor wages held by the Chapter 13 trustee after the debtor converts to Chapter 7 should be returned to the debtor rather than distributed to creditors in accordance with the Chapter 13 plan. There was a split on this issue between the Fifth and Third Circuits, with the Fifth Circuit holding the funds were properly distributed to creditors under the plan following conversion. So long as the debtor does not convert to Chapter 7 in bad faith, such funds should be returned to the debtor. Opinion below.

2015-05-18 – harris v viegelahn

Author: Matt Lindblom

1756 W. Lake Street LLC v. American Chartered Bank

(7th Cir. May 15, 2015)

The Seventh Circuit affirms the order granting summary judgment to the defendant lender in the adversary proceeding. The debtor sought to avoid the lender’s affiliate’s recording of a deed following the debtor’s default on the loan. The debtor had agreed to place the deed in escrow in exchange for the lender forbearing on its right to foreclose on the property. When the debtor defaulted again, the deed was recorded. The debtor argued that the property was worth $1.7 million, while the loan balance was only $1.5 million. Thus, the debtor argued it did not receive reasonably equivalent value. The Court disagrees, finding the additional security served as consideration for forbearance. Opinion below.

2015-05-15 – 1756 w lake street llc v am chartered bank

Author: Matt Lindblom

In re Pajian

(7th Cir. May 11, 2015)

The Seventh Circuit holds that Bankruptcy Rule 3002(c)’s proof of claim deadline applies to both secured creditors and unsecured creditors. The secured lender had filed its proof of claims months after the deadline in this Chapter 13 (90 days after meeting of creditors). The lender argued that Rule 3002(c) applied only to unsecured creditors. The bankruptcy court agreed and allowed the claim. The Seventh Circuit recognizes the split of authority on the issue but ultimately concludes that the deadline applies to all creditors. A secured creditor does not lose its lien but is barred from asserting the claim in bankruptcy if the deadline is missed. Opinion below.

2015-05-11 – in re pajian

Author: Matt Lindblom

Boone County Utilities, LLC v The Branham Corporation (In re Boone County Utilities, LLC)

(Bankr. S.D. Ind. May 8, 2015)

In this declaratory judgment action, the bankruptcy court grants partial summary judgment in favor of the Chapter 11 debtor. The debtor’s plan had been confirmed ten years prior to this action and the plaintiff brought the action to attack certain provisions of that plan. The bankruptcy court interprets its prior orders in the bankruptcy case and ultimately rules in favor of the debtor, as well as finds sanctions against the plaintiff are appropriate. Opinion below.

2015-05-08 – boone county utilities v the branham corporation

Author: Matt Lindblom

Buridi v. KMC Real Estate Investors, LLC (In re KMC Real Estate Investors, LLC)

(S.D Ind. May 8, 2015)

The district court affirms the bankruptcy court’s confirmation of the Chapter 11 plans. The appellant made numerous objections, including an objection that the plan’s provisions giving four individuals ownership interests in the debtor-hospital violated federal healthcare statutes. The district court rejects the appellant’s arguments and affirms confirmation. Opinion below.

2015-05-08 – buridi v kmc real estate investors

Author: Matt Lindblom

Irvin v. Faller

(W.D. Ky. May 7, 2015)

The district court denies the adversary proceeding defendant’s motion to withdraw the reference. The plaintiffs obtained a state court judgment against the defendant before the defendant filed his Chapter 7 petition. The plaintiffs then commenced the adversary proceeding to have the judgment declared non-dischargeable. The court first concludes that the motion was not timely filed, as it was filed nearly a year after the adversary complaint and after substantial briefing in the bankruptcy court. The court also concludes that the defendant failed to show cause for a discretionary withdraw of the reference because the non-dischargeability action was a core proceeding and the defendant was not entitled to a jury trial. Opinion below.

2015-05-07 – irvin v faller

Author: Matt Lindblom

MERV Properties, LLC v. Friedlander (In re MERV Properties, LLC)

(Bankr. E.D. Ky. May 4, 2015)

The bankruptcy court denies the plaintiff’s motion for default judgment and dismisses the action against the individual defendant. The plaintiff attempted to serve the complaint and summons on the defendant by mailing them to “the place where the individual regularly conducts a business or profession,” pursuant to Bankruptcy Rule 7004(b). The plaintiff then waited until well after the 120-day deadline to effect service and moved for default judgment. The court finds that service was not effective because the defendant did not regularly conduct business at the address at the time of the attempted service, and the plaintiff could not establish good cause for meeting the 120-day service deadline. Thus, the Court declined to extend the period for effecting service.

In a second opinion entered the same day, the Court granted motions for summary judgment in favor of the other defendants. Claims of fraud, breach of fiduciary duty, and related claims against the individual defendants were not supported by evidence and dismissed. Claims against the bank defendant were analyzed under Article 3 of Kentucky’s UCC and also dismissed. Opinions below.

2015-05-04 – merv properties v friedlander1

2015-05-04 – merv properties v friedlander2

Author: Matt Lindblom

Bullard v. Blue Hills Bank

(U.S. Sup. Ct. May 4, 2015)

The Supreme Court holds that an order denying confirmation of a Chapter 13 plan is not a final order that the debtor can immediately appeal. The debtor submitted a Chapter 13 plan that split the mortgage holder’s claim into a secured claim and an unsecured claim. The debtor proposed to pay only a small portion of the unsecured claim and to pay the secured claim in full but long after the plan period. The bankruptcy court declined confirmation, and the debtor appealed to the BAP for the First Circuit. The BAP first ruled that it was not a final order but then nevertheless reviewed the interlocutory appeal under 28 U.S.C. § 158(a)(1). The BAP affirmed. The debtor then sought review in the Court of Appeals, which recognized there was a split among the circuits on the issue of whether an order denying confirmation was a final appealable order. It ultimately sided with the majority. The court dismissed for lack of jurisdiction because it was not a final order from the bankruptcy court and the BAP had not certified the appeal. The debtor then appealed to the Supreme Court. The Court holds that an order denying confirmation is not a final order subject to appeal, as there is no conclusion to a “proceeding” at that point. The debtor can submit a revised plan and the status quo remains the same in the interim. On the other hand a dismissal following denial of confirmation or confirmation itself does alter the status quo and thus concludes the “proceeding.” Opinion below.

2015-05-04 – bullard v blue hills bank

Author: Matt Lindblom