Justia Bankruptcy Opinion Summaries

Debtor appealed a bankruptcy court order holding that the funds in his health savings account (HSA) were not excluded from the bankruptcy estate pursuant to 11 U.S.C. 541(b)(7)(A)(ii) and were not exempt. The bankruptcy appellate panel (BAP) held that an HSA was not a health insurance plan regulated by state law and, therefore, the HSA was not excluded from the bankruptcy estate by section 541(b)(7)(A)(ii). The BAP also concluded that section 522(d)(10)(C) and (11)(D) exemptions did not apply in this instance where the funds in the HSA could be used for purposes other than "disability, illness, or unemployment" and also could be used for purposes other than "personal bodily injury." Further, these exemptions applied only to a debtor's "right to receive" the stated benefits but, in this instance, debtor had already received the money from his employer and there was no longer a "right to receive" the funds that are already in the account. Accordingly, the BAP affirmed the judgment of the bankruptcy court. View "Leitch v. Christians" on Justia Law

Debtors filed a Chapter 13 bankruptcy petition and later, in an amended schedule, claimed as exempt an unliquidated personal injury claim. On appeal, debtors challenged the Bankruptcy Appellate Panel's (BAP) decision affirming the bankruptcy court's ruling that the holding in In re Benn compelled the conclusion that debtors' unliquidated personal injury claim could not be exempted from their bankruptcy schedules. The court concluded, however, that unless In re Benn was overruled en banc or by the Supreme Court, it remained binding precedent, and was directly applicable to the issues in this case. Accordingly, the court affirmed the judgment. View "Abdul-Rahim, et al. v. LaBarge, Jr." on Justia Law

Debtor filed for chapter 7 bankruptcy and then converted her case to one under chapter 13. J&M objected to debtor's homestead exemption in her chapter 7 case, but did not similarly object after she converted to chapter 13. The bankruptcy court entered an order confirming debtor's chapter 13 plan and debtor filed a motion to avoid J&M's judicial lien. The court affirmed, holding that debtor was entitled to claim her homestead exempt in her bankruptcy case; that J&M's judicial lien impaired her exemption; and that the bankruptcy court properly applied Kolich v. Antioch Laurel Veterinary Hospital in computing the extent to which the lien impaired debtor's exemption. View "J&M Securities, LLC v. Moore" on Justia Law

Debtor appealed the bankruptcy court's order denying her Motion to Set Aside Compromise. The bankruptcy appellate panel affirmed the judgment of the bankruptcy court, concluding that debtor failed to meet her burden to show a pecuniary interest to establish her standing to object to the trustee's Motion to Compromise or to pursue this appeal. View "Peoples v. Radloff" on Justia Law

A bankruptcy court ordered that the Laurel Avenue house be vacated and authorized U.S. Marshals to physically remove plaintiff, the debtor's son, from the home. On appeal, plaintiff challenged the dismissal of his suit, which alleged, inter alia, that his constitutional rights were violated when the house, its contents, and his person were searched and seized. The court found no error in the dismissal of plaintiff's 42 U.S.C. 1983 claim against the federal defendants where he did not allege a Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics action in the amended complaint, nor did he seek to amend to add the claim; plaintiff's section 1983 claim failed against the city and the city's officers where plaintiff failed to set forth sufficient facts to show a direct causal link between the city's policy or custom and the alleged violation of his constitutional rights; the district court did not err in dismissing his tort claims against the trustees under the doctrine established in Barton v. Barbour, which established that an equity receiver could not be sued without leave of the court that appointed him; and because the dismissal of plaintiff's federal claims was proper, the court found no abuse of discretion in the district court's decision to decline supplemental jurisdiction over the remaining state law claims. Accordingly, the court affirmed the judgment. View "Alexander v. Hedback, et al." on Justia Law

Debtor appealed from a bankruptcy court order confirming her Chapter 13 plan over her objection. Debtor filed her model form Chapter 13 plan using the mandatory model form and inserted certain non-standard language in paragraph 10, a blank paragraph labeled "Other." The trustee objected based on the non-standard language. The court concluded that the bankruptcy court properly denied confirmation of her first amended plan because debtor conceded that one or more of her proposed additions were appropriately rejected; the model plan form did not infringe upon a debtor's substantive rights; the bankruptcy court did not issue a blanket rejection of a debtor's ability to include language in paragraph 10; instead, the bankruptcy court considered the specific proposed language and rejected it as, among other things, inconsistent, confusing, and contrary to the Bankruptcy Code; and, therefore, the court affirmed the order. View "McIntosh v. LaBarge, Jr., et al." on Justia Law

Debtor appealed from the bankruptcy court's order finding that her prepetition claim against her former spouse for alimony was property of her bankruptcy estate, and ordering her to turn that claim over to the trustee. The bankruptcy appellate panel (BAP) concluded that debtor had not shown that the right to alimony payments was different from any other stream of payments someone could have been ordered to pay to her under South Dakota law. Therefore, the BAP concluded that it fit within the broad definition under 11 U.S.C. 541(a)(1), and was not expressly excluded by section 541(b) or (c)(2). Thus, it was property of the estate, subject to any exemptions debtor could have under South Dakota law. Accordingly, the BAP affirmed the bankruptcy court's order. View "Mehlhaff v. Allred" on Justia Law

Appellant, a creditor of the debtor corporation, appealed a decision of the Bankruptcy Appellate Panel (BAP) affirming the bankruptcy court's denial of his motion to determine claims. The bankruptcy court granted appellant's subsequent motion to reopen the case, agreeing with the state court that appellant's claims were precluded and denied his motion to determine claims. The BAP affirmed the bankruptcy court on a different ground, reasoning that the bankruptcy court lacked subject-matter jurisdiction to consider appellant's motion. Because the court must accord the state court's judgment preclusive effect under 28 U.S.C. 1738, the court affirmed the decision of the bankruptcy court. View "Cawley v. Celeste, et al" on Justia Law

This was an appeal of the bankruptcy court's order granting debtor's motion to dismiss an adversary proceeding as untimely. Prior to debtor's bankruptcy filing, plaintiffs filed a complaint against debtor asserting various state law claims including intentional torts. The Bankruptcy Appellate Panel (BAP) concluded that since there was no deadline to file a complaint under 11 U.S.C. 523(a)(3)(B), plaintiffs had the right to proceed with their complaint to try to prove that they held a debt of a kind described in section 523(a)(6). Therefore, the BAP reversed the bankruptcy court's order granting the motion to dismiss. View "Hathorn, et al v. Petty" on Justia Law

This appeal arose from a dispute regarding the existence, validity, and priority of liens of three lenders on a piece of equipment that was owned by the debtor, and the proceeds from the sale in bankruptcy of that equipment. The Bankruptcy Appellate Panel (BAP) concluded that the bankruptcy court correctly held that BOW held a senior security interest in the equipment and the grant of summary judgment to BOW to NBKC's claims for equitable relief based on mutual mistake was proper. Accordingly, the BAP affirmed the judgment of the bankruptcy court. View "Bank of the West v. National Bank of Kansas City" on Justia Law