Justia Bankruptcy Opinion Summaries

After the district court reduced Defendant Lindsey Springer's tax assessment to judgment and ordered foreclosure on certain real property, persons who held a mortgage on the property and who had participated in the litigation moved for an award of attorney's fees and expenses against Mr. Springer. The magistrate judge recommended granting the motion in part and awarding to the Cross-Claimants $10,576.56 of the $35,416 requested in fees and expenses. Defendant objected but the district court affirmed. The Tenth Circuit declined to address three of the five issues Defendant raised on appeal as they were precluded by res judicata. However, the Court found one remaining issue persuasive: Defendant contended that the Cross-Claimants waited too long under the Federal Rules of Civil Procedure to seek their fee award. Upon review of the applicable legal authority, the Tenth Circuit concluded that the Cross-Claimants indeed filed their request too late, and the district court abused its discretion in granting even a partial fee award. Accordingly, the Court reversed the district court's judgment and the case was remanded for the district court to deny Cross-Claimants' award for attorney's fees and costs.

Defendants appealed from an order and judgment of the bankruptcy court granting summary judgment on plaintiff's complaint to determine dischargeability pursuant to 11 U.S.C. 523(a)(2)(B). The court held that plaintiff failed to show that it was entitled to judgment as a matter of law under the plain language of the statute where plaintiff had not met several statutory requirements. Accordingly, the court reversed and remanded with instructions to enter judgment for defendants.

Appellants in these consolidated appeals were debtors in their respective chapter 7 cases. Creditor objected to debtors' homestead exemption claims and moved for relief from the automatic stay. Debtors then moved to avoid creditor's judicial liens. The bankruptcy court consolidated all of the motions and all three parties moved for summary judgment. The bankruptcy court overruled creditor's objection to debtors' exemption, denied debtors' motions to avoid creditor's judicial liens, and granted creditor relief from the automatic stay to allow it to foreclose its judicial liens. Debtors appealed. Because the court held that creditor's judicial liens were avoidable, the court reversed the bankruptcy court's decision to deny debtors' motion to avoid its liens. Because the bankruptcy court's order granting relief from the automatic stay was moot, the court dismissed the appeal as to that part of the bankruptcy court's order.

In an action for nondischargeability, creditors appealed from the judgment of the Bankruptcy Court finding that they failed to prove that they were damaged as a result of the fraud allegedly committed by debtor. The court held that the Bankruptcy Court erred in finding that creditors failed to prove that they sustained a loss as a proximate result of debtor's alleged misrepresentations. The court reversed and remanded, concluding that plaintiff offered evidence that they would not have invested any money in the first place, or that they would not have continued to invest funds, had they known of debtor's alleged fraud and that the Bankruptcy Court failed to consider whether Missouri's "out of pocket" measure of damages was applicable.

Carolina Internet Ltd. appealed the entry of default judgment against it in favor of TW Telecom Holdings Inc. for more than three million dollars. During the pendency of this appeal, Carolina Internet filed a voluntary Chapter 11 bankruptcy petition. The Tenth Circuit had previously interpreted the automatic stay provisions in section 362 of the Bankruptcy Code as not preventing a Chapter 11 debtor-in-possession (like Carolina Internet) from pursuing an appeal even f it was an appeal from a creditor's judgment against the debtor. Nine other circuit courts disagreed with the Tenth Circuit's interpretation, holding that a bankruptcy filing automatically stays all proceedings, even appellate proceedings where the debtor has filed an appeal from a judgment entered in a suit against the debtor. The Court overruled its prior interpretation of the automatic stay provisions in the Bankruptcy Code, which prevented it from proceeding with Carolina Internet's appeal of the default judgment against it. This case was stayed pending bankruptcy court proceedings.

Pro se Plaintiff Ronald Nagim appealed the grant of summary judgment in favor of Defendant Equifax Information Services, LLC, Experian Information Solutions, INc. and Transunion, LLC. In 2005, Plaintiff filed for bankruptcy, which discharged some of his credit accounts. Almost four years later, Plaintiff filed a complaint against Defendants, three credit reporting agencies (CRAs), alleging Defendants had violated the Fair Credit Reporting Act (FCRA) by including inaccurate information on Plaintiff’s credit report and improperly depressing his credit scores. This allegedly inaccurate information included an account that was discharged in Plaintiff’s bankruptcy and references to the bankruptcy in general. All three defendants moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure and a magistrate judge held that summary judgment was proper. After a thorough review of the record, the Tenth Circuit concluded Plaintiff "has provided absolutely no competent summary judgment evidence. Accordingly, we affirm the district court’s grant of summary judgment."

This appeal arose from a suit filed by the United States that asked the district court to reduce certain of Defendant-Appellant Jack Wilson’s tax liabilities to judgment, to set aside a fraudulent transfer of real property from Wilson to Defendant Joey Lee Dobbs-Wilson, and to enforce the government’s new liens, as well as one preexisting tax lien, against the real property by ordering a sale. Wilson appealed the district court’s order granting summary judgment to the United States. Wilson argued in his response to the government’s motion for summary judgment and in his cross-motion for summary judgment that Ms. Dobbs-Wilson was not his nominee when he transferred the property to her in 1998 and, as a result, a 1997 lien became invalid when the government mistakenly released it in 2003, after he no longer owned the property. Assuming the validity of Wilson's argument, and after supplemental briefing on the matter, the Tenth Circuit concluded that Wilson failed to demonstrate any injury to him that the Court could redress. Having determined that the Court lacked jurisdiction over his appeal, the case was dismissed.

This case stemmed from the mortgage plaintiff carried on her New York house. In 2001, WaMu acquired the note and mortgage and then assigned it to Fannie Mae. Thereafter, plaintiff's home went into foreclosure, WaMu failed, and the FDIC became its receiver. In 2009, plaintiff brought this action against the FDIC, alleging that WaMu "owned and/or serviced the mortgage," and that it engaged in wrongful conduct in the foreclosure's aftermath. The district court sua sponte dismissed the complaint under Rule 12(b)(1) on the ground that plaintiff lacked standing. Plaintiff appealed and the FDIC argued that the court lacked jurisdiction to hear the appeal because plaintiff's notice of appeal was untimely. The court held that the district court's order ran afoul of Rule 4(a)(5)(C), which limited any extensions to thirty days, meaning that the last permissible day would have been the day before plaintiff filed her notice. The court agreed with plaintiff that the Rule 4(a)(5)(C) time limit was a claim-processing rule, not a jurisdictional bar, and that the FDIC forfeited its timeliness objection. The court reversed the decision of the district court and remanded for further proceedings.

Spencer Committee appealed two orders of the district court: (1) the denial of the Spencer Committee's appeal of the bankruptcy court's confirmation order of the reorganization plan (Plan) by debtor on the grounds of equitable mootness and (2) the denial of the Spencer Committee's motion for a new trial de novo of its fraud claims. The court concluded that, (1) the Spencer Committee appeared before the bankruptcy court and did not obtain a stay, (2) the Plan had been substantially consummated, and (3) the Spencer Committee's requested relief would adversely impact the success of the Plan or the rights of third parties not before the court. Accordingly, on the grounds of equitable mootness, the court affirmed the district court's order granting debtor's motion to dismiss.

This was an appeal from an order of the bankruptcy court overruling debtors' objection to confirmation of their post-confirmation amended Chapter 13 plan. At issue was the extent to which debtors could modify the payments set forth in a confirmed plan. The court agreed with the trustee that when a confirmed plan was modified to reduce payments under 11 U.S.C. 1329(a) due to a substantial change in financial circumstances, the modification must correlate to the change in circumstances. Debtors' proposed reduction in their plan payment from $1,890.00 per month under their original confirmed plan to $100.00 per month was not reflective of their loss of income in the amount of $1,240.00 per month. Therefore, the court affirmed and held that the bankruptcy court did not abuse its discretion in overruling their objection and confirming the plan.