Stein v. Stubbs (In re Stubbs)

(6th Cir. B.A.P. Mar. 9, 2017)

The Sixth Circuit B.A.P. vacates the bankruptcy court’s orders denying the trustee’s motion for default judgment in the action to revoke the debtor’s discharge. The debtor failed to comply with the court’s order to provide the trustee a copy of her tax return when filed. The appellate court finds the bankruptcy court abused its discretion in denying the trustee’s motion for default judgment where the debtor was properly served with the action and there was no evidence the debtor was not aware of the bankruptcy court’s clear order on the issue. Opinion below.

Judge: Humphrey

Trustee: Sheldon Stein

2017-03-09 – in re stubbs

Author: Matt Lindblom

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

(6th Cir. B.A.P. Feb. 2, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s judgment in favor of the plaintiffs in the nondischargeability action. Collateral estoppel prevented the debtor from defending against the claim that the debt arose from fraud and a willful and malicious injury. A Tennessee state court had entered a default judgment against the debtor that included specific factual findings that established a claim for nondischargeability under 11 U.S.C. §§ 523(a)(2)(A), (a)(4), and (a)(6). Opinion below.

Judge: Opperman

Attorneys for Plaintiffs: Keating, Muething & Klekamp, Joseph E. Lehnert, Brian P. Muething, Jason V. Stitt

Attorneys for Debtor: Hamm, Milby & Ridings, Roger Aaron Hostettler

2017-02-02-in-re-couch

Author: Matt Lindblom

 

Leonard v. RDLG, LLC (In re Leonard)

(6th Cir. Mar. 28, 2016)

The Sixth Circuit affirms the order granting summary judgment to the creditor, finding a debt nondischargeable under 11 U.S.C. § 523(a)(2)(A). Summary judgment was appropriate because the debtor was collaterally estopped from defending against the fraud claim. The creditor had obtained a default judgment against the debtor, post-petition, in another court as a sanction. The court holds that the entry of the default judgment was not a violation of the automatic stay. Opinion below.

Judge: Boggs

Attorney for Debtor: Jonathan Rudman Bunn

Attorney for Creditor: Rayburn, Cooper & Durham, Ross R. Fulton, David J. Fulton

2016-03-28 – in re leonard

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

Blevins v. Herzig (In re Herzig)

(Bankr. W.D. Ky. Oct. 26, 2015)

The bankruptcy court grants the debtor’s motion to vacate the clerk’s entry of default against him in this nondischargeability action. The court considers the standard for vacating an entry of default under Bankruptcy Rule 7055(c) and finds that the debtor met that standard. The plaintiff is not prejudiced by the requested relief, the debtor made a sufficient showing of a potential meritorious defense, and the default was not precipitated by culpable conduct of the debtor. The delay was caused, in part, because the debtor had moved to a new address, and the debtor had acted in a reasonable amount of time to retain counsel. Opinion below.

2015-10-26 – in re herzig

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

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

Keeley v. Grider

(Sixth Circuit Nov. 3, 2014)

The Sixth Circuit affirms the bankruptcy court’s denial of the adversary proceeding plaintiff’s motion to amend the default judgment she obtained nearly a year earlier. The plaintiff had sought a judgment against the debtor for his liability on a promissory note and a declaration that such debt was nondischargeable. The debtor defaulted, and the plaintiff obtained a default judgment entry by the clerk for the amount owed on the note. The plaintiff then sought to amend that judgment to include language declaring the debt nondischargeable. The court affirms the bankruptcy court’s denial of the motion, noting that Civil Rule 60(a) (through Bankruptcy Rule 9024) is appropriate to correct clerical and similar errors in judgments but should not be used to change substantive rights between the parties. Further, because the plaintiff had sought entry of the default judgment by the clerk, the nondischargeability determination could not have been included in the judgment, as the court must enter a default judgment if anything more than an award for a sum certain is sought. Opinion below.

2014-11-03 – keeley v grider

Bankr. N.D. Ind. Opinions – September 2014

The following opinions were recently made available on the website for the Bankruptcy Court for the Northern District of Indiana. I understand that opinions from this Court may be uploaded as “opinions” at different times (sometimes much later than the date they are issued), depending on the particular Judge and office staff. I will continue to check this Court’s website routinely and report on opinions that appear there.

Ind. Dept. of Workforce Dev. v. Hooks (Bankr. N.D. Ind. Sep. 17, 2014)
Ind. Dept. of Workforce Dev. v. Lucio (Bankr. N.D. Ind Sep. 17, 2014)
Ind. Dept. of Workforce Dev. v. Meredith (Bankr. N.D. Ind. Sep. 17, 2014)
Ind. Dept. of Workforce Dev. v. Quaglo (Bankr. N.D. Ind. Sep. 18, 2014) – Denial of the department’s motions for default judgment in nondischargeability actions, alleging debtors inappropriately accepted benefits. The debtors were in default for failure to timely respond to the complaints. However, the complaints failed to set out a prima facie claim of obtaining funds by false representations and thus default judgments were denied. Opinions below.

2014-09-17 – in dept of workforce dev v hooks

2014-09-17 – in dept of workforce dev v lucio

2014-09-17 – in dept of workforce dev v meredith

2014-09-18 – in dept of workforce dev v quaglio

In re Double Tree Lake Estates, LLC (Bankr. N.D. Ind. Sep. 18, 2014) – Denial of the debtors’ motion to quash subpoenas served on non-parties. The court rejects the debtors’ procedural arguments and finds that the debtors failed to show the requested information was irrelevant to the case. Opinion below.

2014-09-18 – in re double tree lake estates, llc

Merritt v. Layne (In re Layne)

(Bankr. E.D. Ky. Sep. 22, 2014)

The bankruptcy court denies the plaintiff’s motion for default judgment in this nondischargeability action. The debtor failed to timely respond to the complaint and was thus in default. However, the court determines that the affirmative evidence presented by the plaintiff to establish his claim was insufficient, and thus the claim is dismissed. The plaintiff established only that the debtor had made a promise to repay a loan and then failed to do so, which does not warrant a nondischargeability judgment. The court also declines to allow the plaintiff another evidentiary hearing to establish the claim. Opinion below.

2014-09-22 – merrit v layne