Justia Bankruptcy Opinion Summaries

Reynal Caldwell appeals the grant of summary judgment in favor of his ex-wife, Theresa Caldwell Lavender, and her attorney Alan E. DeWoskin and his law firm. Caldwell also appeals the denial of his motion for summary judgment. The court concluded that the district court erred in granting summary judgment to DeWoskin and Lavender based on the Rooker-Feldman doctrine because Caldwell's claims challenge the actions taken by DeWoskin and Lavender in seeking and executing state contempt orders, rather than the state court orders themselves. The court remanded to the bankruptcy court to determine whether Caldwell’s claims are precluded based on the state court’s determination that the automatic stay did not bar its contempt proceedings. View "Caldwell v. Dewoskin" on Justia Law

The Chapter 7 trustee appeals from the bankruptcy court’s judgment and order in favor of Sunset Cove on issues of turnover and preference. The bankruptcy appellate panel (BAP) concluded that the posting of the execution application and order on the boat slip at issue was sufficient as a notice of levy and created a valid lien on the boat slip under Missouri law. The sheriff’s failure to give required notice to the debtor did not invalidate the levy or the lien. In this case, the trustee did not present to the bankruptcy court any evidence of prejudice to the debtor or the estate as a result of the lack of notice. Accordingly, the BAP affirmed the bankruptcy court's judgment. View "Rouse v. Sunset Cove Condo." on Justia Law

Blake Roussel and LuAnne Deere formed Clear Sky, LLC d/b/a Exit First Choice Realty - an Exit Realty brokerage franchise - in Conway, Arkansas. Deere and Clear Sky subsequently filed suit against Roussel for breach of fiduciary duty, fraud, breach of contract, and violations of Arkansas law. A jury found in favor of plaintiffs and awarded plaintiffs money judgments. Roussel then filed for Chapter 7 bankruptcy, and Clear Sky and Deere filed an adversary proceeding against Roussel, requesting that the bankruptcy court declare the entire state court judgment nondischargeable under 11 U.S.C. 523(a)(4) and 523(a)(6). The court concluded that the district court did not err in concluding that the Judgment Debt is nondischargeable under section 523(a)(6) where the facts show that Roussel acted willfully and he knew that consequences were certain, or substantially certain, to result from his conduct. The court also concluded that apportionment is inappropriate here because Deere’s breach-of contract-claim is deeply intertwined with the breach-of-fiduciary-duties claim by Deere and Clear Sky. Accordingly, the court affirmed the judgment. View "Roussel v. Clear Sky Properties, LLC" on Justia Law

Debtor appealed the bankruptcy court's order denying her request to discharge her student loan for undue hardship pursuant to 11 U.S.C. 523(a)(8). The BAP concluded that, under the totality of the circumstances, the record demonstrates that debtor has sufficient income to make the $42 student loan payment and the bankruptcy court did not clearly err in so finding. The BAP also considered other relevant facts and circumstances, concluding that debtor failed to prove that she lacks the present ability to make payments on her student loans and her claim of undue hardship must fail. Accordingly, the BAP affirmed the judgment. View "Hurst v. Southern Arkansas Univ." on Justia Law

Civic Partners appealed the bankruptcy court's order dismissing its chapter 11 bankruptcy case. Northwest Bank holds a mortgage against the Promenade and an assignment of rents to secure a promissory note executed by Civic Partners. The City also holds a mortgage against the Promenade to secure a promissory note executed by Civic Partners. Main Street leases and occupies the majority of the space in the Promenade. The BAP concluded that the original lease, not the amended lease, controls Civic Partners' relationship with Main Street. In keeping with its earlier rulings, the bankruptcy court did not consider the possibility that Civic Partners might be able to propose a confirmable plan predicated on the original lease. This is a relevant factor that should be given significant weight in determining whether to dismiss Civic Partners' chapter 11 case. Accordingly, the BAP reversed the bankruptcy court's order dismissing Civic Partners' chapter 11 bankruptcy case and remanded for further proceedings. View "Civic Partners Sioux City, LLC v. Main Street Theatres" on Justia Law

Plaintiff filed suit against Midland under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e, alleging that Midland violated the FDCPA by filing a proof of claim on a time-barred debt. The district court dismissed for failure to state a claim. The court declined to extend the FDCPA to time-barred proofs of claim, concluding that an accurate and complete proof of claim on a time-barred debt is not false, deceptive, misleading, unfair, or unconscionable under the FDCPA. The court explained that the bankruptcy code provides for a claims resolution process and these protections against harassment and deception satisfy the relevant concerns of the FDCPA. Accordingly, the court affirmed the district court's judgment. View "Nelson v. Midland Credit Mgmt." on Justia Law

Attorney James Robinson, Attorney Elbert Walton, and Critique Services, LLC appealed the district court's affirmance of the bankruptcy court's judgment on debtor's motion to disgorge attorney's fees. The court concluded that the district court did not clearly err in determining that, assuming that debtor's claim was property of her Chapter 7 bankruptcy estate, the Trustee abandoned the property. The court also concluded that Appellant's motion to recuse was untimely pursuant to 28 U.S.C. 455(a); even if the motions to recuse were timely, Appellants have not demonstrated that Judge Rendlen’s impartiality might reasonably be questioned; the bankruptcy court did not err in docketing debtor's pro se complaint as a motion to disgorge attorney's fees; Critique Services had been properly served and discovery requests were properly directed to it; debtor's claim is not moot; because settlement in this case was never completed, the bankruptcy court retained authority to order debtor to accept discovery and to sanction Appellants for failing to comply with the court’s orders; and Appellants were not entitled to benefit from the doctrine of unclean hands. Finally, the court concluded that the bankruptcy court did not abuse its discretion by imposing significant sanctions on Appellants, including civil penalties and suspension. Accordingly, the court affirmed the judgment. View "Critique Services, LLC v. Steward" on Justia Law

Claimants appealed from the bankruptcy court's orders where the bankruptcy court found the division in contempt and imposed sanctions against the division for willful violation of the discharge injunction in attempting to collect on a support debt after the debtors obtained a discharge. The BAP concluded that this case does not fall within the domestic relations exception to federal jurisdiction and thus the bankruptcy court had jurisdiction to determine the division’s claim; the BAP declined to consider the comity issue because it was raised for the first time on appeal; and the bankruptcy court erred in holding the division in contempt for willful violation of the discharge injunction because the discharge injunction does not apply to domestic support obligations under 11 U.S.C. 523(a)(5) and 1328(a). Accordingly, the BAP reversed the judgment. View "Missouri v. Spencer" on Justia Law

The trustee for PCI and eight associated special-purpose entities (SPEs) filed Chapter 11 bankruptcy petitions in the aftermath of Thomas Petters' Ponzi scheme. The bankruptcy court consolidated the bankruptcy estates of PCI and the SPEs “for all purposes substantive and administrative.” Lenders to PCI and the SPEs appealed. The district court dismissed, holding the Lenders did not have standing to appeal the consolidation order because they were not “persons aggrieved.” The court concluded that the district court did not abuse its discretion in declining to estop the trustee from asserting that the Lenders are not persons aggrieved; having held that the persons aggrieved doctrine survives the 1978 amendments to the Bankruptcy Code, the court declined to reconsider the doctrine; and the district court did not err in dismissing the Lenders under the persons aggrieved doctrine. In this case, the Lenders’ interests here are not central to the bankruptcy process, and allowing them to appeal the bankruptcy court’s order would completely undermine the rationale behind the standard and bring bankruptcy proceedings to a grinding halt. Accordingly, the court affirmed the judgment. View "Opportunity Finance, LLC v. Kelley" on Justia Law

Debtors Mathew and Marilynn held title to real property as joint tenants with Marilynn's parents. After debtors filed for bankruptcy, and Marilynn's parents died, the Trustee notified debtors that he intended to sell the real estate and a pickup truck Marilynn and her father owned as joint tenants. The Trustee maintained that the right of survivorship made the bankruptcy estate the sole owner. The court concluded that the Bankruptcy Appellate Panel did not err in affirming the sale of the real property and pickup because the joint tenancies remained intact through creation of the bankruptcy estate and therefore the bankruptcy estate included the joint tenancies. Accordingly, the court affirmed the judgment. View "Peet v. Checkett" on Justia Law