Justia Bankruptcy Opinion Summaries

David and Kelli Nilsson, who were divorced, held a half interest in certain property in Reno as tenants in common. After the divorce, Kelli and the parties’ children lived on the property, and David lived elsewhere. Several years later, David filed for bankruptcy. On his schedule of real property assets, David claimed an interest in the Reno property as half-owner with Kelli. David then claimed the property as exempt from inclusion in his bankruptcy estate based in part on the homestead exemption. The bankruptcy trustee (Trustee) objected to the claimed exemption because David did not reside on the Reno property, David did not record a declaration of homestead, and David could not now record a valid declaration of homestead on the property. David responded that he could claim the exemption because his children still lived on the property. The bankruptcy court certified a question to the Nevada Supreme Court without ruling on the Trustee’s objection. The Court answered that a debtor must actually reside on real property in order to claim properly a homestead exemption for that property. View "In re Nilsson" on Justia Law

Appellants Robby and Kim Mowrey appealed the dismissal of their negligence action against Respondent Chevron Pipe Line Co. The district court ruled that because the Mowreys failed to disclose this claim as an asset in their Chapter 7 bankruptcy proceeding, they were judicially estopped from pursuing it against Chevron. In the alternative, the district court ruled that the Mowreys lacked standing as the real party in interest to prosecute their claim because it belonged to the bankruptcy trustee as an asset of the bankruptcy estate. The Mowreys argued on appeal that the district court erred in granting summary judgment. Finding no reversible error, the Supreme Court affirmed.View "Robby Mowrey v. Chevron Pipeline Co." on Justia Law

After Petitioner sold certain properties, he used the proceeds to purchase fractional interests in commercial office buildings. The fractional interests were called Tenants in Common Interests (TICs), and each of the TICs was promoted by a company called DBSI, Inc. DBSI later filed a petition for bankruptcy, and the properties underlying Petitioner's TICs became the subject of foreclosure proceedings. The bankruptcy court determined that many of DBSI's transactions were fraudulent. Petitioner filed a complaint against Cassidy Turley Maryland (Defendant), under whose advice Petitioner acted in purchasing the TICs, alleging that Defendant failed to disclose material facts regarding the investment. The circuit court granted summary judgment for Defendant. The Court of Appeals affirmed in part and reversed in part, holding (1) Petitioner's investment in this case was a "security" for purposes of the Maryland Securities Act; (2) the circuit court erred in determining that Petitioner's claims under the Act relating to fraud and misrepresentation by Defendant were barred by limitations; (3) the court erred in concluding that Petitioner's common law tort claims were time-barred as a matter of law; and (4) the court did not err in deciding to reserve judgment on the admissibility of a bankruptcy examiner's report until it had further information.View "Mathews v. Cassidy Turley Md., Inc." on Justia Law

Earl and Harold Van Sickle appealed, and Hallmark & Associates, Inc., Frank Celeste, William R. Austin, Phoenix Energy, Bobby Lankford, and Earskine Williams, and Missouri Breaks, LLC, cross-appealed an amended judgment that held Missouri Breaks liable to the Van Sickles for unpaid pre-bankruptcy confirmation royalties and awarding the Van Sickles interest and attorney's fees. Upon careful consideration of the trial court record, the Supreme Court concluded the court did not err in holding Missouri Breaks liable under state law for pre-bankruptcy confirmation royalties owed to the Van Sickles. Furthermore, the Court concluded the district court did not abuse its discretion in awarding the Van Sickles attorney's fees and did not err in awarding them simple interest under the statute. View "Van Sickle v. Hallmark & Assoc., Inc." on Justia Law

A judgment debtor challenged the superior court's denial of a Rule 60(b) motion to set aside an order permitting the sale of an airplane seized to execute on the judgment against him. At the time of seizure, the airplane was in the process of being reconstructed and did not have certain identifying information attached to it. Third parties claimed an interest in the seized airplane. After an evidentiary hearing the superior court determined that the judgment debtor had an interest in the airplane and permitted its sale. But at that point the underlying judgment was paid by one of the third parties, and the execution sale did not occur. The judgment debtor, joined by the third parties, filed a Rule 60(b) motion to set aside the order regarding ownership of the airplane. The superior court denied the Rule 60(b) motion and awarded attorney's fees to the judgment creditor and against the judgment debtor and the third-party claimants. Finding no error in the trial court's denial of the motion, the Supreme Court affirmed. View "Schweitzer v. Salamatof Air Park Subdivision Owners, Inc." on Justia Law

An unpaid employee of a closely-held corporation sued the corporation and its president for back wages. The day after the employee filed suit, the corporation filed for Chapter 11 bankruptcy. The bankruptcy court discharged the corporation's debts, and the superior court dismissed the corporation, but the superior court allowed trial to proceed against the president on a veil-piercing theory. A jury found that the corporation was a mere instrumentality of the president, and that the president owed the former employee wages under a bonus agreement. The president appealed the superior court's decision. Upon review, the Supreme Court concluded that the superior court did not err in holding the president liable, and affirmed the superior court's judgment.View "Brown v. Knowles" on Justia Law

Celotex Corporation manufactured and distributed products that contained asbestos. Thousands of asbestos-related claims were filed across the country against Celotex for bodily injury and property damage. In 1990, Celotex filed for Chapter 11 bankruptcy; the Celotex Asbestos Settlement Trust was formed thereafter to process the asbestos claims. As part of the bankruptcy case, Celotex sought a declaratory judgment that it was entitled to insurance coverage for all of the asbestos claims. The bankruptcy court determined that because some of Celotex's bodily injury and property damage excess insurers received inadequate notice of the claims, it barred Celotex from obtaining coverage. The Trust appealed, but the appellate court held that Celotex's duty to give notice to its insurers arose well before the company actually provided notice of the claims. The Trust filed proofs of claim with the Integrity Liquidator seeking coverage for future claims. The Liquidator denied the claims; a special master upheld the denial. The Appellate Division reversed, finding the trial court did not address future claims coverage. The appellate court found that the occurrences of asbestos injuries on which future claims were based were not known at the time of the bankruptcy, therefore, Celotex had no duty to provide reasonable notice. The Liquidator appealed that decision to the Supreme Court. The Supreme Court concluded that under collateral estoppel, the orders entered in the prior federal court proceedings finding one occurrence from which all pending a future claims derived (and that Celotex failed to notify its insurers) barred the proofs of claim filed by the Trust. View "IMO The Liquidation of Integrity Ins. Co. v. Celotex Asbestos Trust" on Justia Law

Wife filed for Chapter 7 bankruptcy relief. Husband did not join in the bankruptcy petition or file a separate petition for relief. Under bankruptcy law, the bankruptcy estate includes all of the marital community property. Wife claimed exemptions for two motor vehicles and property worth over $1,400, all of which was community property. The Trustee filed an objection on the grounds that a debtor spouse may exempt only a single vehicle and property worth no more than $1,000 under Nev. Rev. Stat. 21.090(1), and a non-debtor spouse has no right to claim any exemptions in a debtor spouse's bankruptcy. The U.S. Bankruptcy Court overruled the Trustee's objection, determining that Nevada law allows a debtor to claim motor vehicle and wildcard exemptions on behalf of a non-debtor spouse. The Trustee appealed to the Bankruptcy Appellate Panel, which certified a question to the Nevada Supreme Court. The Supreme Court held that, based on section 21.090(1)(f) and (z)'s plain language, Nevada law does not allow debtors to claim motor vehicle and wildcard exemptions on behalf of their non-debtor spouses, and therefore, a judgment debtor in Nevada is limited to one motor vehicle exemption an other personal property exemptions not to exceed $1,000. View " In re Fox" on Justia Law

This appeal arose from an action filed against the City of Lewiston by Tim Thompson, Janet Thompson, and Thompson's Auto Sales (collectively, Thompson). Thompson filed a claim under the Idaho Tort Claims Act (ITCA), alleging the City negligently designed and installed a storm water drain system on a city street adjacent to Thompson's property, which caused storm water runoff to flow onto Thompson's property and damage it. After suit was filed, Thompson entered bankruptcy proceedings and the bankruptcy trustee, C. Barry Zimmerman, was substituted as Plaintiff in the action. The City moved for summary judgment on the grounds of discretionary immunity and design immunity. The district court denied the motion as to design immunity, but granted the motion on the ground of discretionary immunity. Zimmerman appealed, arguing that the discretionary immunity exception to liability under the ITCA does not grant immunity from liability for damage caused by negligent design and, alternatively, that even if discretionary immunity was considered, it was inapplicable in this case because the City's actions were not discretionary within the meaning of the exception. Upon review, the Supreme Court reversed, finding that the City was not entitled to immunity from liability under any exception to the ITCA. View "Zimmerman v. City of Lewiston" on Justia Law

Fred and Nancy Eagerton petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to enter a judgment as a matter of law in their favor and against SE Property Holdings, LLC, consistent with the Court's mandate in "Eagerton v. Vision Bank," (99 So. 3d 299 (Ala. 2012)). SE Property Holdings, LLC, is the successor by merger to Vision Bank. The underlying suit arose from a loan that the Eagertons personally guaranteed, secured by a mortgage on property within the Rock Creek Tennis Club in Fairhope. The bank declared the original and second loans in default and accelerated balances due under both. The bank sued the primary obligor, and the Eagertons as person guarantors on one of the original loans. The primary obligor declared Chapter 11 bankruptcy. The reorganization plan consolidated the two loans. The obligor eventually defaulted on the terms of the reorganization plan. The bankruptcy was dismissed, the property foreclosed, and the money obtained in the foreclosure sale was applied to the consolidated loan. The Eagertons argued that the Chapter 11 reorganization of the debts of primary obligor (the consolidation of the original loan with the second loan), created a new indebtedness not encompassed by their guaranty contracts. The Eagertons therefore argued that the creation of this new indebtedness, without their knowledge or consent, operated to discharge them from any further obligations under their guaranty contracts. The bank, on the other hand, argued, among other things, that the consolidated loan was a replacement note contemplated by the guaranty contracts and that the Eagertons had waived the material-modification defense. The Supreme Court in "Eagerton v. Vision Bank" concluded that the Eagertons' guaranty contracts were unambiguous; that based on the language in the guaranty contracts the Eagertons did not intend to guarantee any indebtedness other than that indebtedness arising out of the original loan and any extensions, renewals, or replacements thereof; and that, once the Eagertons' original loan was modified pursuant to the Chapter 11 reorganization of Dotson 10s, the Eagertons were at that point discharged from any further obligations under their guaranty contracts. Because the circuit court did not follow the mandate in the Court's prior decision in "Vision Bank," the Supreme Court granted the Eagertons' petition and issued the writ.View "SE Property Holdings, LLC v. Eagerton" on Justia Law