Juett v. Casciano (In re Casciano)

(6th Cir. B.A.P. Jan. 11, 2016)

The B.A.P. reverses the bankruptcy court’s determination that, for purposes of 11 U.S.C. § 523(a)(6) the debtor did not “willfully” cause an injury to the plaintiff when he punched the plaintiff in the face. The bankruptcy court incorrectly required that the plaintiff prove that the debtor intended to cause the specific harm that resulted. Further, while self-defense may negate a finding of “malicious” conduct under that Code section, the bankruptcy court failed to analyze the facts under the applicable law on self-defense. Finally, the court holds that references to the Debtor’s conviction by a plea of nolo contendere are inadmissible in the non-dischargeability action. Opinion below.

2016-01-11 – in re casciano

Author: Matt Lindblom

Panther Petroleum, LLC v. Couch (In re Couch)

(Bankr. E.D. Ky. Jan. 7, 2016)

The bankruptcy court grants summary judgment in favor of the plaintiff, finding the plaintiff’s claims are non dischargeable under 11 U.S.C. § 523(a)(2)(A) and (a)(6). The plaintiff obtained a default judgment against the debtor in a Tennessee state court, in which the debtor participated until discovery. Prior to entry of the default judgment, the debtor filed bankruptcy but failed to give notice to the plaintiff. After the bankruptcy case was closed, the plaintiff learned of the bankruptcy for the first time and then filed the adversary proceeding. The court holds that § 523(a)(3) is satisfied because the plaintiff did not have timely notice of the bankruptcy filing. The court then holds that, based on the state court judgment, collateral estoppel prohibits the debtor from defending against the claims. Opinion below.

2016-01-07 – panther petroleum v couch

Author: Matt Lindblom

CMCO Mortgage, LLC v. Hill

(Bankr. W.D. Ky. Nov. 2, 2015)

The bankruptcy court grants the creditor’s motion for summary judgment in this nondischargeability action. The creditor had obtained a default judgment against the debtor in state court, after the debtor ceased participating in that litigation. The default judgment contained specific findings of fact that satisfied the elements of 11 U.S.C. § 523(a)(6), which applies to claims for conduct causing a “willful and malicious injury.” The court holds that collateral estoppel applies and summary judgment is appropriate. Opinion below.

2015-11-02 – cmco mortgage v hill

Author: Matt Lindblom

Cornerstone Industries Corp. v. Kaufman (In re Kaufman)

(Bankr. W.D. Ky. Aug. 6, 2015)

The bankruptcy court enters summary judgment in favor of the plaintiff, holding a $1.8 million claim arising from a state court judgment non-dischargeable. The state court judgment has preclusive effect, and the jury’s findings establish the requisite elements under § 523(a)(2) and (a)(6). The court discusses the applicability of § 523(a)(4) but because the jury may not have defined the term “fiduciary” the same as the bankruptcy code, the court states it is not convinced the plaintiff is entitled to summary judgment under that particular section. Opinion below.

2015-08-06 – cornerstone industries v kaufman

Author: Matt Lindblom

Gerard v. Gerard

(7th Cir. Mar. 12, 2015)

The Seventh Circuit reverses the bankruptcy court’s decision applying issue preclusion in favor of the plaintiff in this nondischargeability action. Prepetition, the plaintiff obtained a state court slander of title judgment against the debtor. The plaintiff then filed the nondischargeability action under 523(a)(6) and argued to the bankruptcy court that the jury findings precluded the debtor from defending against the claim. The bankruptcy court held preclusion applied and the district court affirmed. The court reverses, holding the jury findings indicate that the jury determined that the debtor either acted with the requisite intent or acted negligently. Thus, issue preclusion should not apply and the plaintiff must prove the requisite intent in the adversary proceeding. Opinion below.

2015-03-12 – gerard v gerard

Author: Matt Lindblom

Consolidated Brokers Corporation, LLC v. Buchanan (In re Buchanan)

(Bankr. S.D. Ind. Mar. 2, 2015)

The bankruptcy court enters a nondischargeability judgment in favor of the creditor. The court first holds that a prior state court judgment does not have preclusive effect as to nondischargeability under § 523(a)(4) and (6), in part because it was entered as a discovery sanction rather than on the merits. The court ultimately holds that debts arising from converted checks and larceny committed with respect to a loan check are nondischargeable, while other debts were dischargeable. Attorney fees arising out of the debtor’s embezzlement and larceny were also nondischargeable. Opinion below.

2015-03-02 – consolidated brokers v buchanan

Author: Matt Lindblom

Go Wireless, Inc. v. Lehrmitt (In re Lehrmitt)

(Bankr. W.D. Ky. Jan. 27, 2015)

The bankruptcy court enters summary judgment in favor of the creditor, holding the debt owed to it is nondischargeable under § 523(a)(2), (4), and (6). The creditor had obtained a default judgment against the debtors in California state court, which judgment recited that the debtors had obtained funds from the creditor by fraud. The Full Faith and Credit Statute, 28 U.S.C. § 1738, as interpreted by the Sixth Circuit Court of Appeals precludes the debtors from defending against the findings in the state court judgment. Section 105 does not give the bankruptcy court authority to modify the otherwise non-dischargeable debt. Opinion below.

2015-01-27 – go wireless v lehrmitt

Author: Matt Lindblom

The Bank of Kentucky, Inc. v. Nageleisen (In re Nageleisen)

(Bankr. E.D. Ky. Dec. 30, 2014)

The bankruptcy court denies the bank’s motion for judgment on the pleadings. The bank initiated an adversary proceeding against the debtor, seeking a declaratory judgment that the bankruptcy estate did not have an interest in certain real property and seeking a judgment that the debt owed to the bank was non dischargeable under 11 U.S.C. § 523(a)(6). A prepetition state court judgment against the debtor held that the debtor did not have legal title to one parcel and the debtor scheduled the other parcel as being titled in the name of a partnership. The bankruptcy court holds that the pleadings do not establish that the estate has no interest in the property, even if legal title is held by others (i.e., the estate could have a possessory interest). The bankruptcy court also finds that the state court judgment does not preclude the debtor’s defense of lack of fraudulent intent. The court must predict how the Kentucky Supreme Court would rule on the preclusive effect of the state court judgment’s alternative statements regarding a fraudulent transfer. The court holds that the conclusory alternative statement should not be a bar to the defense. Opinion below.

2014-12-30 – bank of ky v nageleisen