(Leslie Rooney and Judy C. King v. Brian Robert Martin), Adversary Proceeding No. 12-2110; Docket No. 6. (In Chapter 7 case, Plaintiffs sought summary judgment on complaint seeking ruling that certain obligations set forth in divorce decree and award of attorney's fees were excepted from discharge. Court granted judgment ruling that obligations were nondischargeable under either 11 U.S.C. Section 523(a)(5) as a domestic support obligation, or under Section 523(a)(15) as incurred in the course of the dissolution of the parties' marriage relationship. Attorney's fees award also held excepted from discharge under Section 523(a)(15)).
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Opinions
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Judge Robert E. Brizendine (Retired)
Case No. G11-23744-REB, (Richard J. Steffy v. State of Arkansas ex rel., Dustin McDaniel, Attorney General), Adversary Proceeding No. 12-2041; entered on 2012-11-21; Docket No. 20. (In Chapter 7 case, Defendants filed motion for partial summary judgment on Plaintiff-Debtor's complaint seeking determination of dischargeability concerning claims for restitution and civil penalties arising in state court litigation. Court decided Defendants' pursuit of its claims came within exception to automatic stay under 11 U.S.C. Section 362(b)(4) in the enforcement of state consumer protection laws. Court also decided Defendants entitled to preclusive effect on their claim pertaining to civil penalties as awarded, and same were excepted from discharge under 11 U.S.C. Section 523(a)(7). Court further determined that portion of award relating to restitution was not excepted from discharge.
Honorable James R. Sacca
Court denied Plaintiff's motion for default judgment seeking a judgment of nondischargeability under Code Section 523(a)(2)(A) because Plaintiff wholly relied on the presumption of fraudulent intent under 523(a)(2)(C) but did not allege sufficient facts--specifically, that the debt was a consumer cash advance under an open end credit plan--to invoke that presumption, and Plaintiff did not allege any other facts to satisfy the elements of fraud.
Court denied Debtor's motion to dismiss because (1) Plaintiff did not fail to join a necessary party--Plaintiff acquired original lender's rights by virtue of a company merger--and (2) Plaintiff alleged sufficient facts related to Debtor's lack of intent to pay for credit card debts incurred to state a claim for fraud under Code Section 523(a)(2); however, the Court recognized that Plaintiff's theories based on implied misrepresentations, objective intent to pay, and credit card kiting do not state a claim under 523(a)(2).
Court denied Plaintiff's motion for summary judgment seeking nondischargeability due to alleged (1) fraud under Code Section 523(a)(2)(A) and/or (2) willful and malicious injury under 523(a)(6) because (1) Plaintiff did not show sufficient facts to support a fraud claim and merely relied on a state court judgment which did not address the fraud issue specifically and (2) questions of fact remained regarding whether Debtor's action of tearing up a check made out to him and Plaintiff jointly constituted a willful and malicious injury.
Honorable Mary Grace Diehl (Recall)
The Court granted Plaintiff’s Motion to Amend Complaint seeking nondischargeability. Plaintiff sought to assert new facts and clarify facts with regards to a particular piece of property. Because Defendants had already filed an Answer, Plaintiff needed leave of the Court or written consent of Defendants to amend its Complaint. The Court held that pursuant to the liberal standard favoring amendments under Rule 15, and the lack of undue delay, bad faith, undue prejudice, or futility, the amendment would be allowed. Furthermore, the amended Complaint would relate back to the original, so as to not be time-barred. The Court held that the amendment arose out of the same conduct, transaction, or occurrence as the original pleading. The Court found it important that the amendment sought to state new facts rather than new claims, and that the new facts served to render prior allegations more definite and precise.
Plaintiff’s motion for judgment on the pleadings was granted, finding that the debt owed to Plaintiff was non-dischargeable under section 523(a)(8)(A)(ii). Each required element of the statute was satisfied on the pleadings. The court ruled on three legal issues. First, the enrollment contract and alternative payment terms constituted a loan based on common law. Second, section 523(a)(8)(A)(ii) does not impose a higher education benefit requirement. The Court also determined that a non-dischargeable debt does not require that the Debtor personally obtain the educational benefit of the loan. The Court addressed the merits of Plaintiff’s motion after finding that the motion for judgment on the pleadings had been properly served and granting Plaintiff’s motion for reconsideration.
The Court accepted Debtors’ certificate of exigent circumstances and deferred Debtors’ pre-petition credit counseling requirement, finding that section 109(h)(3)(A) was satisfied. Acknowledging the split in authority regarding the 7-day period referenced in the statute in section 109(h)(3)(A)(ii), the Court found that Debtors’ efforts to seek the pre-petition counseling satisfied the statutory requirement, relying on the reasoning in In re Giambrone, 365 B.R. 386 (Bankr. W.D.N.Y. 2007).
Paul M. Skillings, v. Bank of America, N.A. et al (In re Skillings), AP 12-5380, Doc. #14 11/06/2012
The Court granted Defendant’s motion to dismiss Plaintiff’s complaint. Plaintiff’s complaint alleged that his property was taken from him by Defendant by an illegal foreclosure and also amounted to a fraudulent transfer. Plaintiff made other claims against Defendant relating to his loan and the foreclosure. The Court dismissed the complaint for lack of subject matter jurisdiction. This proceeding did not arise under Title 11 because Plaintiff’s claims related to property which was not property of the bankruptcy estate, as Defendant foreclosed on the property seven months prior to the bankruptcy filing. Plaintiff’s claims were based on state law and non-bankruptcy federal law. There was also no related to jurisdiction under the Pacor test because resolution of the issues surrounding non-estate property could have no conceivable effect on the bankruptcy estate. Because the Court did not have subject matter jurisdiction over any claims, there could also be no supplemental jurisdiction. Relying on Supreme Court precedent, the Court held that the foreclosure sale was not a fraudulent transfer because the price received at the foreclosure was deemed to be the reasonably equivalent value.
(Topic: Trustee. Subtopic: Court will not compel Trustee to investigate and pursue objection to discharge);