Calloway Cleaning & Restoration, Inc. v. McFarland (In re McFarland)

(Bankr. E.D. Ky. Feb. 20, 2018)

The bankruptcy court enters summary judgment in favor of the debtors in this nondischargeability action. Following a Christmas Eve fire at the debtors’ home, they entered into a contract with the plaintiff to restore the property. The contract provided that the plaintiff would take insurance proceeds as compensation for the work. A dispute arose, and the debtors used the insurance proceeds for other expenses. The plaintiff argued that the debt is non-dischargeable under 11 U.S.C. § 523(a)(2) and (4). The court disagrees, finding the creditor failed to present evidence sufficient to establish the necessary intent under § 523(a)(2) or to establish a “fiduciary capacity” under § 523(a)(4). Opinion below.

Judge: Wise

Attorneys for Creditor: Frost Brown Todd LLC, Patricia K. Burgess; Michael E. Nitardy

Attorney for Debtors: Michael L. Baker

2018-02-20 – in re mcfarland

Author: Matt Lindblom

Feldman v. Pearl (In re Pearl)

(Bankr. E.D. Ky. Sep. 29, 2017)

The bankruptcy court enters judgment in favor of the debtor in this nondischargeability action. The plaintiff sought a judgment under 11 U.S.C. § 523(a)(2), (4), and (6). The plaintiff alleged that the debtor wrongfully received distributions from the business entity controlled jointly by the debtor and the plaintiff. The court finds the plaintiff failed to present evidence sufficient to support the claims under § 523. Opinion below.

Judge: Wise

Attorneys for Plaintiff: Michael B. Baker, William R. O’Bryan, Jr.

Attorney for Defendant: Stuart P. Brown

2017-09-29 – in re pearl

Author: Matt Lindblom

Haire v. Padgett (In re Padgett)

(Bankr. W.D. Ky. Sep. 1, 2017)

The bankruptcy court finds in favor of the debtor in this nondischargeability action. The creditor’s claim was based on missing restaurant equipment following the termination of a real property lease to the debtor. The court finds the creditor failed to present evidence establishing that the debtor was responsible for the loss. The elements of §§ 523(a)(2), (4), and (6) were not satisfied. Opinion below.

Judge: Fulton

Attorneys for Debtor: Farmer & Wright, PLLC, Todd A. Farmer

Attorney for Creditor: Steve Vidmer

2017-09-01 – in re padgett

Author: Matt Lindblom

 

Savino v. Dodd (In re Dodd)

(Bankr. S.D. Ind. July 14, 2017)

The bankruptcy court denies the creditor’s motion for summary judgment in this nondischargeability action under 11 U.S.C. § 523(a)(2), (4), and (6). The creditor argued the debtor should be collaterally estopped from defending based on a prepetition judgment entered against the debtor. The court concludes that the issues were not “fairly and fully litigated” in the state court, and thus summary judgment based on collateral estoppel is not appropriate. Opinion below.

Judge: Moberly

Attorneys for Plaintiff: Blackwell, Burke & Ramsey, P.C., David M. Bullington, Jason R. Burke

Attorneys for Debtor: Halcomb Singler, LLP, Erika K. Singler

2017-07-14 – in re dodd

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

Hunt v. Spencer (In re Spencer)

(Bankr. S.D. Ind. Feb. 24, 2017)

The bankruptcy court denies the plaintiff’s motion for summary judgment in this nondischargeability action under 11 U.S.C. §§ 523(a)(2), (4), and (6). The plaintiff argued that a state court judgment collaterally estopped the debtor from defending against the claims. The court holds that the findings in the state court judgment are insufficient to prevent the debtor from asserting a defense in this action. Opinion below.

Judge: Carr

Attorney for Plaintiff: Mulvey Law LLC, Joseph L. Mulvey

Attorney for Debtor: Mercho Caughey & DeLay, Tarek Elias Mercho

2017-02-24-in-re-spencer

Author: Matt Lindblom

Cardwell v. Hester (In re Hester)

(Bankr. W.D. Ky. Oct. 11, 2016)

The bankruptcy court holds that the plaintiff’s claim is non-dischargeable under 11 U.S.C. §§ 523(a)(2), (4), and (6). The plaintiff and the debtor started a pawn business together. Shortly after it began operating the debtor was arrested on drug charges. The parties then gave conflicting testimony regarding various claims that arose in favor of the plaintiff against the debtor, including for a loan to post bond and theft from the plaintiff. The court finds that the plaintiff’s testimony was more credible and enters judgment in favor of the plaintiff. Opinion below.

Judge: Stout

Attorney for Debtor: Cooley & Offill, Robert A. Cooley, Jesse E. Offill

Attorney for Plaintiff: Steven L. Boling

2016-10-11-in-re-hester

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

Direct Capital Corporation v. Steele (In re Steele)

(Bankr. S.D. Ind. April 11, 2016)

The bankruptcy court enters judgment in favor of the debtors in this nondischargeability action under 11 U.S.C. § 523(a)(2), (4), and (6). The debtors signed a guaranty on a debt incurred by their business and secured by equipment. The debtors then left the company, and filed their chapter 7 petition. The creditor was unable to locate the collateral and filed this action. Because the debtors signed the guaranty with the appropriate authority, there was no misrepresentation or fraud in the inducement. There was also no evidence to show a fiduciary relationship between the parties, and there were no facts to support a claim of larceny. There was insufficient evidence to show that the debtors’ failure to maintain knowledge of the location of the collateral constituted a willful and malicious injury. Opinion below.

Judge: Lorch

Debtors: Pro Se

Attorney for Creditor: Lohmeyer Law Offices, Steven S. Lohmeyer

2016-04-11 – in re steele

Author: Matt Lindblom

Estate of Stanley Cora v. Jahrling (In re Jahrling)

(7th Cir. Mar. 18, 2016)

The seventh circuit affirms the lower courts’ decisions finding the debt nondischargeable under 11 U.S.C. § 523(a)(4), because the debt arose from the debtor’s “defalcation while acting in a fiduciary capacity.” The debtor was an Illinois attorney that represented the plaintiff when he sold his home. The plaintiff spoke only Polish, and the attorney relied on the buyer’s attorney to translate. The sale price was far below market price and the one term the plaintiff required, a life-estate interest in a portion of the property, was not included. The plaintiff obtained a pre-petition state court judgment for the loss. The seventh circuit explains that defalcation does not require deliberate wrongdoing, but fault greater than negligence is required. In this case, the applicable standard was met. Opinion below.

Judge: Hamilton

Attorneys for Plaintiff: Bert J. Zaczek

Attorneys for Debtor: Golan & Christie, LLP, Robert R. Benjamin, Beverly A. Berneman, Anthony J D’Agostino

2016-03-18 – in re jahrling

Author: Matt Lindblom