Crawford v. Vanwinkle (In re Vanwinkle)

(Bankr. E.D. Ky. Dec. 27, 2016)

The bankruptcy court dismisses the creditor’s non-dischargeability complaint under 11 U.S.C. § 523(a)(2)(A) and (a)(6). The creditor conceded that the debt was based on a breach of contract claim. However, the creditor alleged the debt was converted to a non-dischargeable debt based on the debtor’s post-judgment efforts to avoid collection. The court finds that the creditor failed to state a claim in part because the alleged behavior did not result in the debt sought to be declared non-dischargeable. Opinion below.

Judge: Schaaf

Attorneys for Plaintiff: DelCotto Law Group PLLC, Laura Day DelCotto

Attorney for Defendant: Michael B. Baker

2016-12-27-in-re-vanwinkle

Author: Matt Lindblom

Hager v. Maynard (In re Maynard)

(Bankr. E.D. Ky. Nov. 1, 2016)

The bankruptcy court grants the debtor’s motion for summary judgment in this 11 U.S.C. § 523(a)(6) nondishargeability action. The plaintiff alleged the debtor willfully and maliciously injured the plaintiff, but failed to offer any evidence that would create a material factual dispute as to the debtor’s intent with respect to actions that gave rise to a prepetition judgment against the debtor. The court finds summary judgment in favor of the debtor is appropriate. Opinion below.

Judge: Wise

Attorney for Plaintiff: Noah R. Friend Law Firm, PLLC, Noah R. Friend

Attorney for Debtor: Daryle M. Ronning, James P. Pruitt, Jr.

Author: Matt Lindblom

2016-11-01-in-re-maynard

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

In re Mustafa

(Bankr. E.D. Ky. September 14, 2016)

Debtor obtained a personal loan from bank to buy a Mercedes at a car auction and represented to the loan officer that the car was for personal and family use. The day debtor received the loan proceeds he leased the car to his used car business, which then sold the car to debtor’s friend, an out of state resident. Debtor failed to satisfy the bank loan with the sales proceeds. Instead, his business used the proceeds to pay its debts. Also, the business never transferred title to the car to debtor’s friend in order to hide the fact that the car had been sold. Debtor continued to make a few loan payments to the bank, but eventually quit and filed Chapter 13, which is when the bank learned that the car had been sold. The bank filed a dischargeability action and the court found that debtor made material misrepresentations to obtain a consumer loan and never intended to use the car for personal use. Thus, the debt, including attorney’s fees, was nondischargeable pursuant to both §523(a)(2) and (a)(6). Also, debtor’s plan, in which he proposed to surrender the vehicle to the bank, was not confirmed and was found lacking in good faith since, among other things, the car was currently located out of state in a repair shop subject to a $10,000 mechanics lien. Opinion below.

Judge: Schaaf

Attorney for Debtor: Tom Bunch

Attorney for Creditor: Greg Pavey and Jessica Middendorf

Author: Robert Imperial

2016-09-14-in-re-mustafa

Federal Insurance Company v. Woods (In re Woods)

(Bankr. W.D. Ky. Sep. 16, 2016)

The bankruptcy court grants in part the plaintiffs’ motion for summary judgment in this nondischargeability action. The court denies the motion as to the amount of damages. The debtor admitted to committing the fraud and embezzlement while employed by the plaintiff car dealer. Thus, the court finds that the elements in 11 U.S.C. 523(a)(6) are satisfied, as the undisputed facts established that the debt arose from the willful and malicious injury by the debtor. However, Kentucky’s statute of repose for fraud claims creates an issue as to how much of the loss can be attributed to acts committed within the ten-year repose period. Opinion below.

Judge: Stout

Attorney for plaintiffs: Stoll Keenon Ogden PLLC, Adam Mastin Back

Attorney for debtor: Lowen & Morris, Jan C. Morris

Author: Matt Lindblom

2016-09-16-in-re-woods

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

HIJ Industries, Inc. v. Roy (In re roy)

(Bankr. E.D. Ky. Mar. 21, 2016)

The bankruptcy court denies the debtor’s motion to dismiss the complaint seeking to deny the debtor a discharge under 11 U.S.C. § 727(a)(2)(A) or alternatively to except the creditors claim from discharge under § 523(a)(6). The debtor argued that the creditor failed to state a claim because the complaint only alleged that the debtor caused injury to his own business rather than to the creditor itself. The court disagrees, holding the debtor’s actions to remove property from his business could be the basis for a claim under § 523(a)(6). The debtor also argued that the creditor failed to plead the requisite intent for § 727(a)(2), but the court disagrees and denies the motion to dismiss. Opinion below.

Judge: Wise

Attorney for Debtor: John M. Simms

Attorney for Plaintiff: Tricia A. Shackelford

2016-03-21 – in re roy

Author: Matt Lindblom

Irvin v. Faller (In re Faller)

Irvin v. Faller (In re Faller)

(Bankr. W.D. Ky. Mar. 17, 2016)

In this nondischargeability action, the bankruptcy court denies the plaintiff’s motion for summary judgment as to the 11 U.S.C. § 523(a)(6) claim based on defamation and grants the motion as to the § 523(a)(6) claim based on abuse of process. The court analyzes the prepetition state court judgment to determine whether the requisite willful and malicious injury for § 523(a)(6) was established such that collateral estoppel prevented the defendant from defending against the claims in this action. Because the defamation judgment was not clear as to whether the false information was published with knowledge of it being false or published with a reckless disregard for the truth, the defendant was not collaterally estopped from arguing 523(a)(6) did not apply to this claim. On the other hand, the judgment as to the abuse of process was clear that the defendant acted with the requisite intent for § 523(a)(6). Opinion below.

Judge: Lloyd

Attorney for Plaintiffs: Kerrick Bachert PSC, Scott A. Bachert

Attorney for Defendant: McClain Dewees, PLLC, Michael W. McClain

2016-03-17 – in re faller

Author: Matt Lindblom

Phi Air Medical, L.L.C. v. Holskey (In re Holskey)

(Bankr. W.D. Ky. Feb. 16, 2016)

The bankruptcy court finds the debt non-dischargeable under § 523(a)(4) and (6). The debtor’s minor son was transported by helicopter to a hospital after an injury. The transport company billed the debtor’s insurance company, and the insurance company sent the reimbursement check to the debtor for transfer to the transport company. The debtor used the funds for other purposes. The court finds the debtor’s explanations inconsistent and holds that the facts support a finding that the debt is based on embezzlement and/or larceny and that the debtor caused a willful and malicious injury to the creditor. Opinion below.

2016-02-16 – In re holskey

Author: Matt Lindblom