Oaks v. Miller (In re Miller)

(Bankr. E.D. Ky. Dec. 6, 2016)

The court enters judgment declaring the state court judgment nondischargeable under 11 U.S.C. §523(a)(2)(A). The debtor represented to the plaintiff that he needed a loan to expand his construction business. The plaintiff loaned the debtor $62,000 based on this representation, but the debtor used the money to purchase vending machines that were disposed of within eight months. The debtor did not repay the loan, and the plaintiff obtained a judgment against him for the loan balance, interest, and punitive damages. The bankruptcy court finds the debt non-dischargeable, with the exception of certain attorney fees. Opinion below.

Judge: Schaaf

Attorney for Plaintiff: John E. Hinkel, Jr.

Attorney for Defendant: John M. Simms

2016-12-06-in-re-miller

Author: Matt Lindblom

Zadeh v. Nelson (In re Nelson)

(Bankr. E.D. Ky. Nov. 15, 2016)

The Court grants the debtor’s motion to dismiss the nondischargeability action. The debtor’s ex-spouse sought to declare nondischargeable a state court judgment awarding him his overpayment of child support. However, he failed to timely serve the summons and complaint under Bankruptcy rule 7004(e), the statute of limitations barred the claim to the extent it sought relief under § 523(a)(2)(A), and the Rooker-Feldman doctrine prevented the bankruptcy court from ruling on the issue because multiple state courts had already done so. Opinion below.

Judge: Wise

Plaintiff and Defendant: Pro Se

2016-11-15-in-re-nelson

Author: Matt Lindblom

Akeley v. Hudson (In re Hudson)

(Bankr. W.D. Ky. Aug. 2, 2016)

The bankruptcy court denies the debtor’s motion to dismiss the nondischargeability action and denies the plaintiff’s cross-motion for summary judgment. The plaintiff’s claims under 11 U.S.C. § 523(a)(2)(A), (4), and (6) were based on allegations that the debtor misrepresented his intent with respect to a transaction in which the plaintiff transferred his ownership interest in a business in exchange for a promissory note from the debtor. The court finds that the plaintiff stated claims under the above sections and that there were genuine issues of fact that precluded summary judgment. Opinion below.

Judge: Lloyd

Attorney for Plaintiff: Dinsmore & Shoal, John M. Spires

Attorney for Debtor: Fauver Law Office, PLLC, Shannon Renee Fauver

2016-08-02 – in re hudson

Author: Matt Lindblom

Halpin v. Hardy (In re Hardy)

(Bankr. E.D. Ky. July 8, 2016)

The bankruptcy court holds the debt is dischargeable. The debtor sold a television to the plaintiffs, claiming it was a “high definition” television. The plaintiffs disputed that characterization and obtained a judgment in state court for the purchase price plus punitive damages. However, the court finds that the plaintiffs failed to meet their burden of proof in showing the requisite elements of § 523(a)(2)(A). Opinion below.

Judge: Schaaf

Attorneys for Plaintiffs: Thomas D. Bullock, James Ross Stinetorf, DelCotto Law Group PLLC, Laura Day DelCotto, Dean A. Langdon

Attorneys for Debtors: Getty & Childers, PLLC, J.D. Kermode

2016-07-08 – halpin v hardy

Author: Matt Lindblom

Huskey International Electronics, Inc. v. Ritz

(U.S. Sup. Ct. May 16, 2016)

The Supreme Court resolves a split among the circuits as to whether 11 U.S.C. § 523(a)(2)(A), which in part excepts from discharge debts obtained by actual fraud, requires a false representation to a creditor or is applicable to other forms of fraud that do not require a false representation. The Court holds that a false representation is not required. The debtor caused an entity he controlled to transfer funds to other debtor-controlled entities while the transferor entity owed a significant debt to the creditor. The Court explains that “actual” in “actual fraud” means the fraud must be fraud that is not merely implied fraud or fraud in law. “Fraud” has historically encompassed a broad variety of activities, including the transfer of assets that hinders a creditor’s ability to collect a debt. The debtor argued that a narrower interpretation should be applied because the broader interpretation created overlap with other dischargeability provisions. The debtor also argued that effecting a fraudulent conveyance does not cause the debtor to “obtain” a debt and thus the narrower interpretation is correct. The Court rejects both arguments, based largely on statutory construction, and remands for a determination of whether the debtor here “obtained” a debt because it owned interests in the entities receiving the fraudulent conveyances. The dissent is consistent with the debtor’s argument that a fraudulent conveyance does not cause the transferor to obtain debt by actual fraud. Opinion below.

Majority Opinion: Justice Sotomayor

Dissenting Opinion: Justice Thomas

2016-05-16 – huskey international electronics v ritz

Author: Matt Lindblom