You are here
Opinions
| Case Title | Date & Status | Case Number(s) | Judge & PDF | Summary | |
|---|---|---|---|---|---|
|
Warner v. Warner (In re Warner), 5 B.R. 434 (Bankr.D.Utah)Long v. Long (In re Long) (Internal Ref: Opinion 23) |
Aug-7-1980 PUBLISHED |
80-0024 |
Judge Mabey |
In a case subject to the Bankruptcy Act and a case subject to the Bankruptcy Code, the court considered the collateral estoppel effect of a divorce decree on the issue of "alimony, maintenance or support," as well as whether the court should consider the parties' financial circumstances subsequent to entry of the decree, concluding that what constitutes alimony, maintenance or support for purposes of non-dischargeability is a matter of federal law, although a duty of support is dependent on state law. Bankruptcy courts must look behind the language used in the decree to determine whether a provision is actually in the nature of support. Moreover, bankruptcy courts must consider whether an award in the nature of support is still reasonably necessary for support at the time of discharge in bankruptcy. | |
|
In re Patio Springs, Inc., 6 B.R, 428 (Bankr.D.Utah) (Internal Ref: Opinion 22) |
Jul-30-1980 PUBLISHED |
78-0008 |
Judge Mabey |
With respect to a chapter XI debtor's redemption right, the court held that the 60-day extension period in Bankruptcy Act § 11(e) begins to run on the date debtor is adjudicated a bankrupt, not on the date of filing the chapter XI petition, despite Bankruptcy Act § 378(a)(2) and Bankruptcy Rule 122, which require that, upon adjudication, a case be treated "as far as possible" as if adjudication took place on the date the chapter XI proceeding was commenced. | |
|
Barker v. Stacey (In re Stacey) (Internal Ref: Opinion 21) |
Jul-17-1980 UNPUBLISHED |
78-0307 and -0308 |
Judge Mabey |
In rejecting a challenge to its jurisdiction made by the sellers of real property to debtors, the court found that debtors were in possession of the property and were equitable owners of it, and that a state court forfeiture action filed by sellers less than a month prior to initiation of debtors' bankruptcy had not advanced beyond the initial pleadings and had not changed debtors' property rights and, therefore, it could exercise summary jurisdiction over the property that was the subject of the parties' uniform real estate contract. | |
|
Hoskins v. Hoskins (In re Hoskins) (Internal Ref: Opinion 20) |
Jul-14-1980 UNPUBLISHED |
79-0074 |
Judge Mabey |
In an adversary action filed by debtor's ex-wife, in which it was not clear from the parties' divorce decree what amount of an award to plaintiff was intended to be alimony, maintenance or support, the court determined, based on Brown v. Felsen, 442 U.S. 127 (1979), that it was not bound by the decree because the issue of non-dischargeability under § 17 of the Bankruptcy Act is a federal law question on which the court has exclusive jurisdiction. While characterization of certain debts under state law may be relevant to the dischargeability determination, such characterizations are not binding on the issue of dischargeability in bankruptcy. Although a clear state court record indicating that an award was intended as support would be both admissible and highly relevant, there was no such clear record in this case. The matter would therefore need to be tried in the bankruptcy court. | |
|
Kesler v. Wilkins (In re Fashion Bowling Lanes) (Internal Ref: Opinion 19) |
Jul-10-1980 UNPUBLISHED |
76-0837 |
Judge Mabey |
In a case involving two trust deeds on debtor's real property, payments made on the first trust deed by both debtor and the second trust deed holder, funds in a "reserve account" set up to cover taxes, assessments, and insurance on the property, foreclosure of the second trust deed, transfer of the foreclosed interest, and a sale in the bankruptcy of personal property relating to debtor's previous operation of a bowling alley, the court was required to determine the respective rights of the bankruptcy trustee and the transferees from the second trust deed holder to funds in the reserve account. The court held that the amount of money in the reserve account, on the date title to the real property transferred to second trust deed holder pursuant to the foreclosure, was personal property of the debtor, and was therefore estate property. However, taxes paid on the property for the year in which debtor lost title were prorated, based on the date on which ownership transferred, and that amount was subtracted from those funds, and a 3-year prospective insurance premium paid from the account prior to the change in ownership was also prorated, and was added to the amount that was considered to be estate property. The court also ruled that a personal property sale in the bankruptcy did not include the reserve account funds. | |
|
Fisher v. Smith (In re Mrs. J.G. McDonald's Chocolate Co.) (Internal Ref: Opinion 18) |
Jul-10-1980 UNPUBLISHED |
78-0739 |
Judge Mabey |
In an adversary action seeking to avoid, as preferences, certain payments made to defendant, the court considered defendant's request for change of venue to the bankruptcy court in Georgia. The court noted that, although different elements for determining proper venue were not applied to adversary actions and bankruptcy cases, or to different types of bankruptcy cases, certain elements could be given more or less weight based on those facts. Finding no real difference in the inconvenience to the parties that would result from retention or venue change, the court determined that any recovery from defendant would necessarily take place in Georgia, that defendant had little or no contact with this district, that he owned and ran a small business in Georgia, and was already litigating a different matter in that forum, all of which weighed in favor of that jurisdiction. Therefore, defendant had met his burden of proving that a venue transfer was required by the "interests of justice" and the relative "convenience of the parties." | |
|
Tunex, Inc. v. Harrington (In re Tunex, Inc.) (Internal Ref: Opinion 17) |
Jul-2-1980 UNPUBLISHED |
79-0272 |
Judge Mabey |
Debtor filed an action against defendants, husband and wife, for damages and an injunction based on termination of a license agreement. The complaint and two summonses were sent to the parties' home, by mail, in an envelope addressed to both parties, and the return receipt was signed by wife. Defendants claimed lack of personal jurisdiction. The court held that Bankruptcy Rule 704(c) does not limit service by mail to only when authorized by state or federal law, as does Civil Procedure Rule 4. However, Rule 704(c)(1) does require service by mail to be made on "an individual," which the court ruled meant that each party must be separately served with a copy of the summons, complaint, and notice. As husband had not been separately served under the rule, the court held that it lacked in personam jurisdiction over him, whether or not he had actual notice. Service had been proper on wife, and the court held that it had both in personam and subject matter jurisdiction with respect to debtor's claims against her. | |
|
Cole Assocs., Inc. v. Howes Jewelers, Inc. (In re Cole Assocs., Inc.), 7 B.R. 154 (Bankr.D.Utah)Cole Assocs., Inc. v. Jensen Jewelers, Inc.Cole Assocs., Inc. v. London Star, Ltd. (Internal Ref: Opinion 16) |
Jun-23-1980 PUBLISHED |
80-0017, -0016, and -0019 |
Judge Mabey |
Debtor filed complaints against three of its creditors seeking to recover property held by them. Each of the defendant creditors asserted that the property was held pursuant to a perfected security interest securing a debt owed them by debtor. Each creditor also moved that venue of their case be transferred to their home state. Prior to considering whether change of venue was appropriate under 28 U.S.C. § 1475, the court determined that venue was proper in its jurisdiction, under 28 U.S.C. § 1473(a), because the bankruptcy case was pending there. The court noted that the party seeking change of venue has the burden of establishing cause for change of venue, and the decision is typically based on practicalities that relate to efficient and inexpensive resolution of the issues. However, in bankruptcy cases, the courts also give significant weight to factors that may affect the remedial purposes of bankruptcy laws. On the facts before it, the court determined that retention of venue in all three cases was appropriate, and that on consideration of bankruptcy factors, retention was compelling. The most significant of such factors was the economic administration of the estate, which the court found weighed heavily in favor of retention. | |
|
Rushton v. Adams (In re Payless Bldg. Remodeling, Inc.) (Internal Ref: Opinion 15) |
Jun-12-1980 UNPUBLISHED |
79-0107 |
Judge Mabey |
Trustee sought to avoid two payments debtor had made to defendant, within four months of bankruptcy, as preferential under 11 U.S.C. § 96. The payments were to repay a loan defendant made to debtor that was not secured. The court found, based on the parties' stipulated facts, that both payments satisfied all of the elements of a preference under the statute. The court focused on whether the payments had depleted the estate, which would not be the case if the loan had been secured. Since the loan was not secured, the payments were not made in exchange for release of a secured interest, which would prevent depletion of the estate. In addition, the court noted that the facts before it would not support an equitable lien, whether or not such liens remained valid to defeat § 96. | |
|
Burkehart v. Polychronis (In re Polychronis) (Internal Ref: Opinion 14) |
Jun-3-1980 UNPUBLISHED |
79-0032 |
Judge Mabey |
Plaintiff filed a negligence complaint against debtor in state court on the last day of the limitations period. Debtor subsequently filed a bankruptcy petition, listing plaintiff as a creditor. Plaintiff filed a complaint in the bankruptcy case, alleging non-dischargeability of her claim under 11 U.S.C. § 35a(8). Debtor moved for summary judgment, asserting plaintiff's claim was barred by the statute of limitations. The court disagreed, concluding that plaintiff's claim was based on her timely filed state complaint, and that it had jurisdiction to litigate that claim or grant relief from stay to allow plaintiff to continue litigating it in state court. The fact that her state claim was based on negligence was irrelevant, since jurisdiction to determine the dischargeability of that claim was exclusively in the bankruptcy court. Based on plaintiff's preference, the court retained the case for both the amount and the dischargeability of her claim. | |
|
Rushton v. Dean Evans Chrysler-Plymouth (In re Solar Energy Sales Servs., Inc.), 4 B.R. 364 (Bankr.D.Utah)Styler v. Utah State Emps. Credit Union (In re Alvillar) (Internal Ref: Opinion 13) |
Jun-2-1980 PUBLISHED |
78-1291, 79-0603 |
Judge Mabey |
The court considered the circumstances of two cases with respect to creditors' claimed entitlement to equitable liens on motor vehicles. Concluding that the circumstances of each case were insufficient to warrant equitable relief from the perfection requirements of Utah Code Ann. § 41-1-80, et seq., the court denied relief to both creditors and determined that the trustee's interest in the vehicles was superior. | |
|
Child v. Nilsson (In re Nilsson) (Internal Ref: Opinion 12) |
May-16-1980 UNPUBLISHED |
76-0633 |
Judge Mabey |
Plaintiffs filed an action against debtor in state court, and debtor thereafter filed his chapter XIII petition without listing plaintiffs as creditors. Creditors did not become aware of the bankruptcy filing until after the deadline for filing claims had expired. Debtor filed an untimely motion to amend his schedules to add plaintiffs as creditors, which the court denied. The court then ruled that 11 U.S.C. § 93n was not a mandatory limitation of filing claims as held by some courts, and that equitable relief could be given to creditors, in the form of an extension of the proof of claim filing deadline, under exceptional circumstances. Finding such circumstances, the court determined plaintiffs' claim to be non-dischargeable under 11 U.S.C. § 35(a)(3). | |
|
Dickey v. Neal (In re Neal), 3 B.R. 330 (Bankr.D.Utah) (Internal Ref: Opinion 11) |
Mar-31-1980 PUBLISHED |
78-0526 |
Judge Mabey |
Plaintiffs filed a non-dischargeability complaint against debtor, a contractor hired to build their house. The court ruled in favor of debtor, finding that debtor's receipt of payments from plaintiffs that he did not apply to a construction loan secured by the home did not amount to fraud or false pretenses. The court further found that there was no fiduciary relationship between the parties, and dismissed the complaint. | |
|
Robinson v. Novinski-Durando (In re Van Wyck) (Internal Ref: Opinion 10) |
Feb-12-1980 UNPUBLISHED |
78-0324 and -0325 |
Judge Mabey |
Plaintiffs loaned money to debtors for the purchase of a mobile home from a third party. Although the seller held valid title, debtors did not retitle the mobile home in their own names. Plaintiffs asserted that this failure meant that debtors had no interest in the mobile home when they filed their petition. The court disagreed, finding that the Utah statute "deeming" title not to have passed until a new certificate is issued to the new owner did not render the purchase invalid as between the parties. Therefore, the debtors owned the mobile home at the time of filing and trustee could succeed to that interest to the extent it was not subject to a perfected security interest. The court reaffirmed its prior ruling to the effect that plaintiff's security interest was unperfected. | |
|
In re Iacovoni, 2 B.R. 256 (Bankr.D.Utah)In re SnelsonIn re MaternIn re MontoyaIn re CartwrightIn re BishopIn re EppersonIn re Love (Internal Ref: Opinion 9) |
Jan-18-1980 PUBLISHED |
79-1214, -1223, -1261, -1266, -1265, -1267, -1280, and -1347 |
Judge Mabey |
In reviewing several chapter 13 plans proposed for confirmation by debtors, the court described the factors to consider in determining the 11 U.S.C. § 1325(a)(3) requirement that a plan be proposed in "good faith." The court held that good faith requires that the debtor propose a legitimate or substantial repayment of unsecured claims, which depends on the debtor's specific circumstances. Debtors are not required to make their "best effort," but are required to make a "good faith effort" to render meaningful repayment. The specific circumstances that should be considered include debtor's budget, potential future income and payment prospects, amount of debt and proposed percentage of payment, and the nature of debts sought to be discharged. A plan that proposes to make no payments to unsecured creditors cannot be confirmed. | |
|
Thomsen v. Davies (In re Davies) (Internal Ref: Opinion 8) |
Jan-11-1980 UNPUBLISHED |
78-0723 |
Judge Mabey |
Plaintiff, who was convinced by debtor to purchase a significant amount of fine silver as an investment, filed suit against debtor after debtor lost all the silver while it was on loan to him by plaintiff. Noting the disparity between the parties' knowledge and experience, the court held that debtor had obtained the silver from plaintiff by false pretenses and false representations, with intent to deceive, which included reckless and knowing omission of material facts, under circumstances requiring disclosure. Therefore, plaintiff's claim was non-dischargeable under § 17a(2) of the Bankruptcy Act (11 U.S.C. § 35a(2)). | |
|
Kuehne v. Huff (In re Huff), 1 B.R. 354 (Bankr.D.Utah) (Internal Ref: Opinion 6) |
Nov-29-1979 PUBLISHED |
78-0672 |
Judge Mabey |
In creditor's non-dischargeability action under 11 U.S.C. § 35a(2), the court held that creditor bore the burden of proving each element of the claim by clear and convincing evidence. | |
|
Neve-Welch Enters., Inc. v. Twelves (In re Tri-Power Elecs., Inc.) (Internal Ref: Opinion 7) |
Nov-29-1979 UNPUBLISHED |
79-0467 |
Judge Mabey |
Plaintiff brought its own merchandise and sales people to debtor's business to participate in debtor's "close-out sale." All proceeds of the sale were deposited into debtor's account with bank, and debtor thereafter authorized bank to issue a cashier's check to plaintiff in the amount of plaintiff's sale proceeds. Debtor then filed bankruptcy and bank stopped payment on the cashier's check. Plaintiff filed a complaint in the bankruptcy for reclamation, and debtor responded that its obligation to plaintiff had been satisfied by bank's issuance of the check. The court agreed, noting that plaintiff's remedy must be sought from bank, the drawer and drawee of the check. The complaint was dismissed. | |
|
Harris v. Fed. Emps. Credit Union (In re Moore) (Internal Ref: Opinion 5) |
Nov-6-1979 UNPUBLISHED |
79-0020 |
Judge Mabey |
Trustee sought to set aside credit union's execution and subsequent sale of debtor's vehicle as a preference under 11 U.S.C. § 96b. The court held that delivery of the vehicle to credit union pursuant to the execution, at a time when credit union was not aware of debtor's insolvency, created a lien, or "transfer," under 11 U.S.C. § 96a(2), which precluded superior liens. Trustee's complaint was dismissed. | |
|
Assocs. Commercial Corp. v. Green (In re Humphries), 1 B.R. 82 (Bankr.D.Utah) (Internal Ref: Opinion 4) |
Oct-1-1979 PUBLISHED |
78-0342 |
Judge Mabey |
Recognizing that the exclusive way to perfect a lien on a motor vehicle in Utah is to obtain a notation of the lien on the certificate of title, the court nonetheless found that an equitable exception to such a rule, set forth in Commerce Bank v. Chambers, 519 F.2d 356 (10th Cir. 1975), applied to the facts presented. In Commerce Bank, the Circuit concluded that, if creditor has done all that was required of it to perfect a lien, it should not be penalized by the debtor's failure to obtain a notation on the title, under a statute similar to Utah's that made it the buyer's responsibility to obtain a new title. In the case before it, the court held that creditor had expended significant effort in its attempt to get debtor to register its lien, including providing all necessary information needed to do so. Therefore, creditor's lien was perfected, and its complaint for reclamation of the vehicle was granted. | |
|
Styler v. Scharf (In re Metal Tech Mfg., Inc.) (Internal Ref: Opinion 3) |
Sep-17-1979 UNPUBLISHED |
78-0655 |
Judge Mabey |
The court considered the merits of creditor's statutory right to reclaim property sold to debtor, pursuant to Utah Code Ann. § 70A-2-702(2), in light of § 67c(1)(A) of the Bankruptcy Act. Since creditor's lien was not perfected, her claim was dependent upon the Utah statute, which the court held violated § 67c(1)(A), and trustee's lien was therefore superior. | |
|
Rental Elecs., Inc. v. SSC Corp. (In re SSC Corp.) (Internal Ref: Opinion 1) |
May-31-1979 UNPUBLISHED |
78-0516 |
Judge Mabey |
Creditor's security interest in leased collateral delivered to debtor in Utah was held to be unperfected under Utah law because (1) when the collateral entered Utah, it was not yet subject to a perfected lien in California, so the 4-month grace period under Utah Code Ann. § 70A-9-103(1)(d) did not apply, and (2) creditor's subsequent perfection in California was ineffective in Utah, under § 70A-9-103(1)(c), as creditor was always aware that the collateral would be located in Utah. | |
|
Twelves v. Prod. Credit Assoc. (In re Indian Springs Farm Ranch, Inc.) Mason v. Prod. Credit Assoc. (In re River Bottom Equip. Leasing Co.) (Internal Ref: Opinion 2) |
May-31-1979 UNPUBLISHED |
77-0062 and -0063 |
Judge Mabey |
Creditor sold collateral to debtor and properly filed a financing statement under Utah Code Ann. § 70A-9-402. Debtor later filed a bankruptcy petition, and trustee filed a complaint seeking determination of all parties' interests in the collateral. Creditor asserted that its financing statement made its lien superior to that of the trustee, and the court considered whether creditor's description of the property in its financing statement was sufficient, under Utah Code Ann. § 70A-9-110, to "reasonably identify" what was covered. The court determined that a description of collateral that makes identification possible, upon reasonable inquiry, would be sufficient under the statute, and that a description of the collateral in the security agreement would be highly relevant to that issue. After the court determined which items of property held in storage were subject to creditor's lien, it determined that Utah law was unclear as to whether creditor could first foreclose on personal property and then on real property in a separate action, concluding that nothing in the statutes precluded separate actions. |
