Justia Bankruptcy Opinion Summaries

The government appeals the bankruptcy court's decision regarding the interest due from defendant for the taxable year 1998. In this case, the tax court never reached the issue of defendant's interest owed on the 1998 tax deficiency. Therefore, the bankruptcy court erred in deferring to the tax court for its calculation of the interest on defendant's underpayment for 1998. Accordingly, the court reversed the district court's judgment affirming the bankruptcy court. The court remanded for further proceedings. View "United States v. Beane" on Justia Law

Plaintiffs filed for bankruptcy in 2011 and agreed that they would surrender their house to discharge their mortgage debt. At issue is whether a person who agrees to “surrender” his house in bankruptcy may oppose a foreclosure action in state court. The court affirmed the bankruptcy court's grant of Citibank's motion to compel surrender in the bankruptcy court because the word “surrender” in the bankruptcy code, 11 U.S.C. 521(a)(2), requires that debtors relinquish their right to possess the property. Therefore, the bankruptcy court had the authority to compel plaintiffs to fulfill their mandatory duty under section 521(a)(2) not to oppose the foreclosure action in state court. The court denied as moot the motion to strike. View "Failla v. Citibank, N.A." on Justia Law

Plaintiff appealed the district court's order affirming eight rulings of the bankruptcy court. The court concluded that the bankruptcy court did not err in holding an evidentiary show-cause hearing where plaintiff received notice of the civil contempt allegations against him and the bankruptcy court gave plaintiff the opportunity to testify, submit evidence, and rebut the allegations of civil contempt at his show-cause hearing; plaintiff's due process rights were not violated when the bankruptcy court conducted a show-cause hearing on his civil contempt without appointing plaintiff an attorney; the bankruptcy court did not err by imposing coercive and compensatory civil contempt sanctions; and the bankruptcy court had subject matter jurisdiction over the allegations of civil contempt against plaintiff and the authority to enter a final order, not merely a proposed judgment, finding plaintiff in civil contempt. The court affirmed the judgment of the district court in all respects except as to the amount of the fee award. The court remanded for the bankruptcy court to award a fee based on the work the Trustee performed pursuant to Appellee Mitchell’s motion for contempt, and to determine whether the Trustee may pursue its adversary claim at this late date. View "Gowdy v. Mitchell" on Justia Law

After confirmation of debtor's Chapter 13 bankruptcy plan, he received notice that his work-related travel reimbursement would be withheld at the request of the DOR for the payment of a domestic support obligation (DSO). Because the DOR attempted to intercept a payment to debtor after confirmation of his plan, the bankruptcy court found the DOR in contempt for violating the bankruptcy court’s confirmation order and awarded attorney’s fees to debtor as a result. The district court affirmed the bankruptcy court’s order of contempt and award of attorney’s fees. This case involves the interplay between two sections of the Bankruptcy Code: 11 U.S.C. 362 and 1327. The court concluded that, while the text of section 326(b)(2)(C) appears to permit DSO collection efforts post-petition, the legislative history lacks any suggestion that Congress intended the exception to abrogate the binding effect of section 1327(a). Rather, a plain reading of section 1327(a) makes clear that the binding effect of a confirmed plan encompasses all issues that could have been litigated in debtor's case - including whether the DOR could intercept debtor's reimbursement payment. Accordingly, because debtor's plan fell silent on the issue of whether the DOR could intercept debtor's reimbursement payment, the DOR was prohibited from taking such action. Therefore, the court affirmed the judgment. View "FL Dep't of Revenue v. Gonzalez" on Justia Law

In Crawford v. LVNV Funding, LLC, the court held that a debt collector violates the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e, when it files a proof of claim in a bankruptcy case on a debt that it knows to be time-barred. The district court in these cases interpreted the Crawford ruling as having placed the FDCPA and the Bankruptcy Code in irreconcilable conflict. The court concluded that, although the Code allows all creditors to file proofs of claim in bankruptcy cases, the Code does not at the same time protect those creditors from all liability. A particular subset of creditors - debt collectors - may be liable under the FDCPA for bankruptcy filings they know to be time-barred. Therefore, the court found no irreconcilable conflict between the FDCPA and the Code. The court reversed and remanded. View "Johnson v. Midland Funding, LLC" on Justia Law

Plaintiff filed suit alleging that the Florida Supreme Court unlawfully denied her application to become a member of the Florida Bar in violation of federal bankruptcy law and her right to due process. The district court dismissed the complaint. The Florida Supreme Court denied plaintiff admission to the Bar based on her lack of candor and refusal to repay her financial obligations. The court concluded that the district court lacks subject matter jurisdiction over plaintiff's 11 U.S.C. 525(a) claim; sovereign immunity bars plaintiff's due process claim because the Florida Supreme Court is a department of the State of Florida; and the Ex Parte Young exception is not applicable in this case. Accordingly, the court affirmed the judgment. View "Uberoi v. Supreme Court of Florida" on Justia Law

In entertaining defendants' Fed. R. Civ. P. 50(b) motion for judgment as a matter of law after a jury trial, the district court applied the filing deadline found in the Federal Civil Rules and thus found the motion timely. The court disagreed and held that when trying a case arising under title 11 of the United States Code, a district court (just like a bankruptcy court) must apply the filing deadline found in the Federal Rules of Bankruptcy Procedure when addressing a Rule 50(b) motion. The court vacated the district court's order granting defendants relief and remanded with instructions to reinstate the jury's award because, under the Federal Bankruptcy Rules, defendants' Rule 50(b) post-trial motion was untimely. Fed. R. Bankr. P. 9015 requires that such motions be filed no later than 14 days after entry of judgment. In this case, defendants filed their renewed motion 28 days after the entry of judgment. View "Rosenberg v. DVI Receivables XIV, LLC" on Justia Law

Debtor declared bankruptcy in 2011 and sought to discharge his federal income tax liability for tax years 2000 through 2003. Debtor had filed Forms 1040 for those tax years many years late, and only after the IRS had issued notices of deficiency and had assessed the amount of taxes he owed. The bankruptcy court determined that debtor's tax debts were nondischargeable and granted the government's motion for summary judgment. The court assumed, without deciding, that Congress did not intend to include filing deadlines when it required, in the hanging paragraph, that tax returns comply with “applicable filing requirements.” Even making that assumption, however, the court held that debtor's late-filed Forms 1040 do not qualify as tax returns under the Beard test because they do not evince an honest and reasonable effort to comply with the tax law. Consequently, debtor's tax debts for tax years 2000 through 2003 are debts for tax obligations with respect to which no return was filed, and they are not dischargeable in bankruptcy pursuant to 11 U.S.C. 23(a)(1)(B)(i). Accordingly, the court affirmed the judgment. View "Justice v. United States" on Justia Law

Twenty-one months after plaintiff filed an employment discrimination case against US Steel, she filed a Chapter 7 bankruptcy petition. When U.S. Steel learned of the bankruptcy case - that plaintiff's Chapter 7 petition had not disclosed the employment-discrimination claims she was pursuing and that the Chapter 7 Trustee was treating the bankruptcy as a “no asset” case and had filed a Report of No Distribution with the bankruptcy court - it moved the district court alternatively to dismiss the case or for summary judgment. The district court concluded that the doctrine of judicial estoppel as formulated in Burnes v. Pemco Aeroplex, Inc., and Robinson v. Tyson Foods, Inc., controlled its decision. The court concluded that New Hampshire v. Maine did not govern the district court's application of judicial estoppel in this case. Therefore, the court rejected plaintiff's argument that the district court erred in failing to give the New Hampshire factors appropriate weight and concluded that the district court did not abuse its discretion in barring her claims on the basis of judicial estoppel. Further, the court concluded that the district court did not err in applying Eleventh Circuit precedent, namely Burnes and Robinson, where the bankruptcy court in those cases accepted the debtor's failure to disclose as property of the bankruptcy estate claims the debtor was litigating in federal district court. Accordingly, the court affirmed the judgment. View "Slater v. US Steel Corp." on Justia Law

This appeal concerns whether a Georgia statute exempts the assets in a health savings account (HSA) from inclusion in a bankruptcy estate. The court certified the following questions to the Supreme Court of Georgia: (1) Does a debtor’s health savings account constitute a right to receive a “disability, illness, or unemployment benefit” for the purposes of O.C.G.A. 44-13-100(a)(2)(C)? (2) Does a debtor’s health savings account constitute a right to receive a “payment under a pension, annuity, or similar plan or contract” for the purposes of O.C.G.A. 44-13-100(a)(2)(E)? (3) Is a debtor’s right to receive a payment from a health savings account “on account of illness [or] disability” for the purposes of O.C.G.A. 44-13-100(a)(2)(E)? View "Mooney v. Webster" on Justia Law