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

Spradlin v. Khouri (In re Bruner)

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

The bankruptcy court grants the defendants’ motion to dismiss the trustee’s action to avoid the transfer of $50,000 to the defendant law firm. The trustee had previously brought an action seeking turnover of the funds and lost. That decision was appealed to the B.A.P. The bankruptcy court here holds that res judicata bars the avoidance action because the prior action resulted in a final decision on the merits, the current case was between the same parties, the issues in the current action were litigated or should have been litigated in the prior action, and there was an identify of the causes of action. Opinion below.

2016-03-07 – in re bruner

Author: Matt Lindblom

Harris v. Deutsche Bank National Trust Company (In re Harris)

(S.D. Ind. Feb. 8, 2016)

The district court affirms the bankruptcy court’s decision holding that the debtor was collaterally estopped from challenging the amount of the mortgage lender’s claim. The lender had obtained judgment in a prepetition state court foreclosure action, in which the debtor had presented the same arguments regarding the loan balance calculation. The district court finds that the doctrine of collateral estoppel applies and the claim amount could not be re-litigated in the bankruptcy. Opinion below.

2016-02-08 – in re harris

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

Richardson v. Caswell (In re Caswell)

(Bankr. W.D. Ky. Mar. 25, 2015)

The bankruptcy court grants the plaintiff’s motion for summary judgment in this nondischargeability action. The plaintiff obtained a jury verdict against the debtor in state court based on a claim of fraud in selling to the plaintiff worthless stock. The bankruptcy court holds that the state court judgment precludes the debtor from defending against the plaintiff’s allegations under § 523(a)(2)(A). Opinion below.

2015-03-25 – richardson v caswell

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

Rinaldi v. HSBC Bank USA, N.A. (In re Rinaldi)

(7th Cir. Feb. 11, 2015)

The Seventh Circuit affirms the bankruptcy court’s dismissal of the debtors’ adversary claims against the mortgage holder and the bankruptcy court’s order sanctioning the debtor’s attorney for frivolous court filings. The debtors asserted fraud, breach of contract, tortious interference, and related claims against the mortgage holder, all of which were dismissed by the bankruptcy court. The debtors appealed, and the district court affirmed. The debtors appealed to the circuit court and then dismissed their bankruptcy case, stating they intended to now bring the dismissed claims in state court. The attorney filed numerous motions that the district court held were frivolous, rambling, and not compliant with court rules. The court entered an order holding that any further frivolous filings would result in an award of sanctions. The attorney then filed a motion to withdraw as counsel and intervene as a party in the case. The court allowed the withdraw but held she had no standing to intervene, and then entered the sanctions order. The Seventh Circuit holds that it will not dismiss the appeal for mootness but instead affirms the orders below, including the award of sanctions. Opinion below.

2015-02-11 – in re rinaldi

A second opinion was issued on the same day, sanctioning the same attorney for behavior in a foreclosure case. That opinion can be found here:

2015-02-11 – in re nora

Author: Matt Lindblom

Haffey v. Deutsche Bank Trust Company, As Trustee For The 2007 QS-10 Trust (In re Haffey)

(Bankr. E.D. Ky. Feb. 2, 2015)

The bankruptcy court grants the defendant’s motion to dismiss the adversary complaint seeking a declaratory judgment that the defendant’s mortgage was invalid. The defendant argued and the bankruptcy court holds that the complaint was barred by the doctrine of res judicata. The parties had litigated the issue to judgment in a prior action before the district court. Opinion below.

2015-02-02 – haffey v deutsche bank

Author: Matt Lindblom