Justia Bankruptcy Opinion Summaries

Ariz. Rev. Stat. 33-1126(A)(6) and (7) allow a debtor in bankruptcy proceedings to exempt the cash surrender value of life insurance policies and proceeds of annuity contracts from the bankruptcy estate if the debtor names certain beneficiaries. Ronda Hummel and Joan Tober separately filed Chapter 7 petitions. Hummel claimed the three life insurance policies she owned were exempt, and Tober claimed the annuity she owned as exempt. Both debtors named their adult, non-dependent daughters as beneficiaries. The Chapter 7 Trustees in both cases objected to the claimed exemptions, arguing they did not apply because the named beneficiaries were not dependents of the debtors. The bankruptcy court overruled the Trustees' objection. On appeal, the bankruptcy appellate panel filed a single order for both cases and reversed, holding that the statutes required the named beneficiaries to be dependents for the exemption to apply. The Ninth Circuit Court of Appeals reversed, holding that as a matter of first impression in Arizona, the statutory text does not require a debtor's child to be a "dependent" to qualify for the exemption. Remanded. View "Tober v. Lang" on Justia Law

Plaintiffs commenced an arbitration proceeding against Defendant pursuant to terms of a written agreement between the parties. Eber subsequently filed for Chapter 7 bankruptcy protection, and the arbitration was automatically stayed. Plaintiffs then filed a complaint for determination that debts are nondischargeable and for damages. Thereafter, Plaintiffs filed a motion for relief from automatic stay in the bankruptcy court proceeding and a motion to compel arbitration in the adversary proceeding. Both motions were denied. The bankruptcy court found that Plaintiffs' claims were discharged. The Ninth Circuit Court of Appeals affirmed, holding (1) the district court did not abuse its discretion in denying Plaintiffs' motion to compel arbitration because granting the motion would have conflicted with the underlying purposes of the Bankruptcy Code; and (2) the Court did not need address the denial of Plaintiffs' motion for relief from the automatic stay because the stay had already dissolved before the bankruptcy judge ruled on the motion. View "Ackerman v. Eber" on Justia Law

Pursuant to the Bankruptcy Code, a debtor must file a statement of intention indicating whether she intends to surrender or retain personal property that secures a debt, and if a debtor fails to timely do so, the automatic stay terminates and the property is removed from the estate unless the chapter 7 trustee obtains a determination that the property is of consequential value or benefit to the estate. In this case, Debtor did not file a statement of intention with respect to personal property that was pledged to Creditor, and the chapter 7 Trustee did not seek a determination that the property was of value or benefit to the estate. However, Trustee appealed the bankruptcy court's ruling that 11 U.S.C. 362(h) terminated the automatic stay on all of the debtor's personal property secured by Creditor's claim and not just on personal property scheduled as securing the claim. The Ninth Circuit affirmed and adopted in full the opinion of the Bankruptcy Appellate Panel, holding that under the unambiguous language of section 362(h), all personal property secured by a scheduled debt is released from the automatic stay if a debtor fails to timely file and comply with her statement of intention. View "Samson v. W. Capital Partners, LLC" on Justia Law

This appeal grew out of an adversary proceeding in debtor's Chapter 7 bankruptcy proceedings. The bankruptcy trustee filed a complaint against debtor and her husband, claiming that certain money and property belonged to debtor's bankruptcy estate. The trustee sought turnover to the bankruptcy estate of certain proceedings from the sale of the couple's homestead, a rental property held in the husband's name, and income earned from the rental property. The bankruptcy court rejected all of the trustee's claims and the Bankruptcy Appellate Panel affirmed. The court concluded that the proceeds of the homestead sale belonged to debtor's bankruptcy estate but that the rental property held in the husband's name and the income did not. Accordingly, the court reversed in part and affirmed in part. View "In re: Myrna Jacobson" on Justia Law

This case required the court to determine whether a mortgage company violated Hawaii state law when it did not publicly announce the postponement of a foreclosure sale of property owned by appellant, and if so, to ascertain the proper remedy for that violation. The court held that the lack of public announcement did violate Hawaii's nonjudicial foreclosure statute, and this defect was a deceptive practice under state law. Accordingly, the court affirmed the bankruptcy court's avoidance of the foreclosure sale. However, the court remanded to the bankruptcy court for a proper calculation of attorney's fees and damages under Hawaii Revised Statute 480-13. View "Kekauoha-Alisa, et al. v. Ameriquest Mortgage Co., et al." on Justia Law

The Silar Parties and Counsel appealed the district court's order imposing sanctions on them pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure and the district court's inherent powers. At issue was whether the district court's order was immediately appealable. The court held that the district court's sanctions order was not an appealable final order. Because appellants were unable to satisfy the threshold requirement of appellate jurisdiction, the court dismissed the appeal. View "Klestadt & Winters, LLP, et al. v. Leonard, et al.; Cave LLP, et al. v. Cangelosi, et al.; Silar Advisors, LP, et al. v. Cangelosi, et al." on Justia Law

The State of Nevada filed a parens patriae lawsuit against Bank of America in Clark County District Court, alleging that the Bank misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of the Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. 598.0903-.0999. Nevada also alleged that the Bank violated an existing consent judgment in a prior case between Nevada and several of the Bank's subsidiaries, entered in Clark County District Court. The Bank removed the action to federal district court, asserting federal subject matter jurisdiction as either a "class action" or "mass action" under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), and as arising under federal law, 28 U.S.C. 1331. Denying Nevada's motion to remand, the federal district court concluded that it had jurisdiction over the action as a CAFA "class action," but not as a "mass action," and that it also had federal question jurisdiction because resolving the state claims would require an interpretation of federal law. The court concluded that because parens patriae actions were not removable under CAFA, and the action did not otherwise satisfy CAFA's "mass action" requirements, the district court lacked jurisdiction under CAFA. The court also exercised its interlocutory appellate jurisdiction under 28 U.S.C. 1453(c) to review the district court's determination that it had federal question jurisdiction because the complaint referenced the federal Home Affordable Mortgage Program and the Fair Debt Collection Practices Act (FDCP), 15 U.S.C. 1692 et seq. The court concluded that the district court lacked federal question jurisdiction. Because there was no basis for federal subject matter jurisdiction, the case was remanded to Nevada state court. View "State of Nevada v. Bank of America Corp., et al." on Justia Law

A trustee in Chapter 11 bankruptcy proceedings took possession of Appellant SK Foods, LP's documents, which it had deposited at the its office. Appellants claimed the trustee acted illegally; that the documents should be returned; and that the trustee and his counsel should be removed. The bankruptcy court denied such relief, and the district court affirmed. This appeal raised the issue whether such orders of the bankruptcy court, affirmed by the district court, are final appealable orders under 28 U.S.C. 158(d)(1). Upon review, the Ninth Circuit held that they are not. Accordingly, the Court dismissed the case for lack of jurisdiction. View "In re: SS Farms, LLC, et al v. Bradley Sharp" on Justia Law

This appeal involved Continental's pursuit of a breach of contract claim against Thorpe in Thorpe's Chapter 11 bankruptcy proceeding. The district court affirmed the bankruptcy court's order denying Continental's motion to compel arbitration and disallowing its claim. The court held that the bankruptcy court had discretion not to enforce the arbitration clause at issue and that the bankruptcy court did not abuse its discretion in denying Continental's motion to compel arbitration. The court also held that the bankruptcy court did not abuse its discretion in declining to give Continental further opportunity for discovery and Thorpe could not contract away its right to avail itself of the protections of 524(g) of the Bankruptcy Code. Accordingly, the lower courts correctly disallowed Continental's claim. View "Continental Ins. Co. v. Thorpe Insulation Co." on Justia Law

Chapter 11 debtor, one of more than 50 subsidiaries of MMPI, filed a motion seeking a determination that it and other subsidiaries were not subject to the single asset real estate provisions of the Bankruptcy Code, 11 U.S.C. 101(51B) and 362(d)(3). Creditor filed a cross motion seeking to apply the single asset real estate provisions to debtor. The district court held that debtor should be treated as a single asset real estate debtor because there was no "whole enterprise exception" to the single asset real estate provisions in the plain language of the statute. The court held that there was no error in the district court's approach and no error in the district court's application of section 101(51B). Accordingly, the judgment was affirmed. View "In re: Meruelo Maddux Properties, Inc., et al." on Justia Law