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Case Title Date & Status Case Number(s) Judge & PDF Summary

Loveridge v. The Ark of Little Cottonwood (In re Perry)


(Internal Ref: Opinion 481)

Sep-26-2005

PUBLISHED

05-2183

Judge Thurman

PDF icon 481.pdf

Chapter 7 Trustee sought to avoid a pre-petition use of a credit card to pay the Defendant Creditor. The Trustee alleged that the Debtor's use of credit pre-petition was avoidable as either a preference under § 547 or a fraudulent transfer under § 548. At issue in this case was whether use of credit, on its own, constitutes "a transfer of an interest of the debtor in property."The Court held that credit is not an interest of the debtor in property because credit is not property of the estate under § 541(a)(1). Citing to Begier v. IRS, 496 U.S. 53 (1990), the Court held that an interest of the debtor in property follows the standard for deciding whether credit is property of the estate. The Court held that credit is not property of the estate because it does not reduce to liquidity for creditors. Accordingly, the Court granted summary judgment in favor of the defendant and dismissed the complaint.

In re Hopkins


(Internal Ref: Opinion 480)

Jul-19-2005

UNPUBLISHED

03-40481

Judge Thurman

PDF icon 480.pdf

In a contested matter, the Court considered the application of Utah's anti-deficiency statute, §57-1-32 Utah Code, the scope of issues presented in a pre-trial order and the qualifications of a creditor corporate officer to render opinion testimony on real property. The Court ordered the matter to proceed as an adversary proceeding and overruled the multiple objections of the Debtor to the creditor's proof of claim asserting a secured claim on two parcels of real property. The Debtor's son owned a construction company and convinced his mother, the Debtor, to take out a loan to finance a Model Home for the business. To secure the loan, the Debtor pledged both the Model Home and her personal residence. The son's business failed and neither he nor his business paid the Creditor on the loan. As a result, the Creditor commenced foreclosure actions on both the Model Home and the Debtor's residence. In response, the Debtor filed for chapter 13 relief. Among other claims, the Debtor alleged that the Creditor failed to properly advise her as to the consequences of signing the trust deed on her residence. The creditor obtained relief from stay as to the Model home early in the case. While the sale resulted in a loss, the Creditor did not amend its proof of claim or commence other action to assert a deficiency. The Debtor then argued that Utah's Anti-Deficiency Statute (§57-1-32) prevented the Creditor from asserting a deficiency.The Court found that the Debtor had been properly apprised of the terms of the trust deeds, that she voluntarily and knowingly signed the trust deed on her home and found no inappropriate conduct on the part of the Creditor in closing on the loan with the Debtor or that the Creditor committed any other improper act. In addition, the Court determined as a matter of law that §57-1-32 did not require the Creditor to amend its proof of claim or commence other action following the foreclosure on the Model Home to allow it to assert a deficiency, and as such, the Creditor maintained a security interest in the Debtor's residence. In addition to affecting jurisdiction, §57-1-32 requires that the Court determine the fair market value of a property at the date of its sale before a judgment for any deficiency may be rendered. The Debtor argued that the pre-trial order did not specifically preserve this issue for trial and thus the Court could not take evidence of the fair market value of the Model Home. The Court overruled this objection, finding that parties had stipulated in the pre-trial order that there was a question as to whether the Creditor was "prevented from enforcing its rights against the Debtor because of...'anti-deficiency law.'" In so doing, the Court determined that such issue was broad enough to allow the Court's inquiry into the fair market value of the Model Home. Finally, the Court found that the vice-president of the corporate Creditor was sufficiently qualified as an owner to give an opinion of value of the Model Home.

Love v. Norman (In re Norman)


(Internal Ref: Opinion 479)

Jun-6-2005

UNPUBLISHED

03-2092

Judge Thurman

PDF icon 479.pdf

After a three day trial, the Court ruled that the Defendant was liable for damages in excess of $1.0 million which were determined to be non-dischargeable pursuant to 11 U.S.C. 523(a)(4), where the Defendant defalcated while acting as a fiduciary and embezzled assets in a trust. The Court also awarded sanctions against the Defendant for improper delay of trial. The Plaintiff, who is the Defendant's brother, commenced an adversary proceeding against his sister while acting as successor trustee of their father's estate. The Defendant had taken physical control of her aged father, moved him from California to Utah, and convinced him to sign documents naming her as trustee of his estate. Thereupon, the Defendant spent virtually all of the cash and securities in the trust for her own benefit, except some modest living expenses for her father, over a period of approximately two years. In addition, she encumbered and or sold all of the real properties of the father for substantially her own benefit to the exclusion of her father. In so ruling the Court followed the Tenth Circuit BAP's definition of embezzlement in Cousatte v. Lucas , 300 B.R. 526 (10th Cir. BAP 2003).The Court declined to find fraud pursuant to 11 U.S.C. 523(a)(2) because there was no evidence of the Plaintiff's reliance on statements by the Defendant. The Court also declined to find willful and malicious injury pursuant to §523(a)(6) because adequate evidence of maliciousness was not presented.. Finally, the Court sanctioned the Defendant for attorneys fees for improperly seeking a continuance on the eve of trial when she purportedly needed additional time for discovery, and, once given that time, she undertook no further discovery.

Troff v. State of Utah (In re Troff)


(Internal Ref: Opinion 478)

Jun-6-2005

UNPUBLISHED

04-2491

Judge Clark

PDF icon 478.pdf

After granting Debtor's motion for Partial Summary Judgment and denying the State's motion for Summary Judgment, the State appealed and filed a motion for a stay pending appeal. In denying the State's motion for stay pending appeal, the Court pointed out that the factors to be considered in determining a stay pending appeal motion are: (1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will suffer irreparable injury unless the stay is granted; (3) whether granting the stay will result in substantial harm to the other parties to the appeal and; (4) the effect of granting the stay upon the public interest. The Court found that the State had not satisfied the requirements for a stay pending appeal even under the more liberal standards announced in Prairie Band of Potawomi Indians v. Pierce, 253 F.3d 1234 (10th Cir. 2001), and that a stay pending appeal would not be granted.

Official Committee of Unsecured Creditors v. Sanchez (In re Simon Transportation Services)


(Internal Ref: Opinion 475)

May-16-2005

UNPUBLISHED

04-2255

Judge Clark

PDF icon 475.pdf

The Court dismissed defendant's third-party complaint based upon a lack of jurisdiction. Defendant to a preference action under § 547 and brought a third-party complaint against insurance company arguing that if defendant were required to return funds received from the debtor as a preference, then insurance company would be liable to defendant under the uninsured motorist clause of defendant's insurance policy. The court found that the dispute between defendant and insurance company to be outside the Court's "related to" jurisdiction and dismissed without prejudice to refile before a court of competent jurisdiction.

FreeLife International v. Butler (In re Butler)


(Internal Ref: Opinion 474)

Apr-15-2005

UNPUBLISHED

04-3012

Judge Boulden

PDF icon 474.pdf

The Plaintiff brought a motion for summary judgment on its third claim for relief seeking to have declared nondischargeable contempt judgments issued by a state trial court totaling more than $900,000. The state court contempt judgments encompassed civil penalties assessed against the Debtors for contempt sanctions and attorney fees. The Plaintiff argued that the monetary sanctions imposed upon the Debtors by the state court are nondischargeable under § 523(a)(7) because they were fines or penalties which, even though not payable to a government entity, were for its benefit and in furtherance of vindicating the dignity and authority of the court. The Debtors claimed the contempt judgments fell outside the exception to discharge because they were not payed directly to a governmental unit as the statute requires. The Court acknowledged that there are good policy arguments favoring an exception to discharge which would uphold a court's authority to impose sanctions and not allow a party to circumvent that authority through a bankruptcy filing. However, the Court ultimately decided that the better-reasoned approach is to rely upon the plain meaning of the statute and declined to follow non-controlling case law from other jurisdictions which expands the exception to civil sanctions. The Court found that § 523(a)(7) does not except from discharge the debts arising from a civil penalty payable directly to a creditor imposed on the Debtors by a state court.

Mathai v. Warren (In re Warren)


(Internal Ref: Opinion 473)

Mar-29-2005

UNPUBLISHED

04-2671

Judge Boulden

PDF icon 473.pdf

Plaintiff creditors filed a complaint against the Debtors seeking denial of discharge under 11 U.S.C. §727(a)(2)(A) and (4)(A) for the Debtors' conduct prior to filing bankruptcy. In anticipation of filing a chapter 7 petition, the Debtors generated $90,000 in cash by selling many of their assets, some at fire-sale prices. The Debtors then utilized the funds to purchase exempt assets and prepay future living expenses. Upon completion of all the pre-bankruptcy transactions, the Debtors had no realizable assets that could be liquidated to repay their over 6,000 creditors. When the Debtors filed their bankruptcy papers, they did not list some of the sales and expenditures, and only added some of the omitted transactions after they were discovered by the Plaintiffs. The Debtors excused their conduct by describing it as their desperate attempt to provide post-petition food and housing for themselves and their five children, and justified their failure to list the various transactions merely as an unfortunate, unintentional oversight. The Plaintiffs asserted in their complaint that the pre-bankruptcy activity was a calculated scheme by the Debtors to engage in an extraordinary, deliberate, and sustained selling frenzy and spending spree designed to hinder, delay, or defraud their creditors and then hide their actions through a false oath on their bankruptcy papers. The Court was struck by the Debtors' animosity toward the Plaintiffs and determined that the Debtors would do just about anything to prevent their assets from falling into the Plaintiffs' possession. The Debtors abused pre-bankruptcy planning because their purpose was to place assets out of reach of the Plaintiffs. The Court rejected the excuse, under § 727(a)(4)(A), that the Debtors were too busy, did not understand, were forgetful, or simply were inadvertently mistaken in their answers submitted in their Statement of Financial Affairs and Schedules. Instead, the Court concluded that the Debtors attempted to use up all their assets so that the Plaintiffs would receive nothing, and they intended to hide the transactions in their bankruptcy papers. The Court found that the Plaintiffs carried their burden of proof and denied the Debtors' discharge under both §727(a)(2)(A) and (4)(A).

Chase Manhattan Mortgage Corporation v. Bird (In re Hiseman)


(Internal Ref: Opinion 472)

Mar-23-2005

PUBLISHED

04-2515

Judge Thurman

PDF icon 472.pdf

This proceeding involved interpretation of Utah's constructive and inquiry notice law regarding the recording of a bank's trust deed in the tract and grantor/grantee indices. The Court was called upon to determine whether the bank's trust deed was avoidable pursuant to 11 U.S.C. § 544(a)(3) and whether there were facts that gave rise to placing the chapter 7 Trustee on constructive or inquiry notice of the same.The Court ruled on cross motions for summary judgment that the Trustee lacked constructive and inquiry notice of the Plaintiff's trust deed because it incorrectly described the location of the Debtors property. Under Utah law, liens must be accurately described in recorded instruments and placed in the tract index maintained by each county recorder to give constructive notice. Here, although the trust deed was recorded, the legal description referred to property miles away from the Debtor's property and was recorded against another tract of land. Although the county recorder maintained a grantor/grantee index, the Court determined that the recording of the trust deed in that index did not constitute constructive notice of the existence of the Plaintiff's trust deed in furtherance of the legislative intent to interpret land titles strictly. Further, there were no facts that suggested that anyone should investigate further regarding the existence of the Plaintiff's trust deed and accordingly, the Trustee was not on any inquiry notice regarding the existence of the trust deed.

In re Shaw


(Internal Ref: Opinion 471)

Mar-4-2005

UNPUBLISHED

03-30305

Judge Boulden

PDF icon 471.pdf

Following the debtors' receipt of a Chapter 7 discharge in a no-asset case, a creditor filed suit against the debtors in state court seeking to collect damages resulting from the post-petition destruction of a leased vehicle the debtors failed to surrender as specified in their statement of intent. Despite the debtors' efforts to raise discharge in bankruptcy as a defense in the state court action, the creditor continued to prosecute the debtors because, it asserted, the damages to the vehicle occurred post-petition and were not discharged in the debtors' bankruptcy. As a result, the debtors filed a motion for sanctions against the creditor for willful violation of the discharge injunction imposed by 11 U.S.C. § 524. The Court found that a debt arising from a lease of personal property which is rejected by the Chapter 7 trustee but the personal property is retained by the debtors, despite material default, is nonetheless discharged under the Code. The creditor's state court action is therefore a violation of the discharge injunction. The Court found that the debtors are entitled to recover compensatory damages of actual attorney fees and costs incurred in answering the creditor's complaint in the state court action and in bringing this motion before the Court but was not entitled to punitive damages as there was no evidence supporting the request.

In re Olson


(Internal Ref: Opinion 470)

Mar-1-2005

UNPUBLISHED

04-23551

Judge Thurman

PDF icon 470.pdf

United States Trustee brought a Motion to Dismiss Case Pursuant to § 707(b). The Court denied the motion, finding that the U.S. Trustee had not met the burden of showing substantial abuse. Specifically, the Court held that expenses incurred in caring for 1) a daughter who had become unexpectedly pregnant and 2) a puppy with severe medical conditions that were unknown at the time of acquiring the dog did not constitute abuse or bad faith.

Equity Trader-1 v. Cox (In re Equity Trader-1)


(Internal Ref: Opinion 469)

Jan-28-2005

UNPUBLISHED

02-2472

Judge Clark

PDF icon 469.pdf

The Court was faced with competing motions for summary judgment regarding issues of whether assignments or the sale of certain consumer accounts owned by the debtor and purported to be assigned or sold to one of the principal creditors in debtor's Ponzi scheme were effective. The Court ruled that as a matter of law, a document that does not identify specific accounts and refers to the creditor as an investor and not as a purchaser does not effectively assign an account and does not transfer ownership. A facsimile transmission that is labeled "For information only - Not a Legal Document" has no legal force or effect.

Jones v. Homecomings Financial Network and Residential Funding Corporation (In re Jones)


(Internal Ref: Opinion 468)

Jan-24-2005

UNPUBLISHED

04-2636

Judge Thurman

PDF icon 468.pdf

Defendants sought an order dismissing Counts 3-12 and 14 in the Plaintiff's Complaint for failure to state a claim upon which relief can be granted because, Defendants argued, the applicable statutes of limitation created a complete bar to Plaintiffs' recovery on those claims. Defendants further argued that the Wrongful Foreclosure claim was not ripe because Defendants had not conducted a foreclosure sale, and that the Objection to the Proof of Claim was not ripe because Defendants had not filed a proof of claim in this case. The Court found that 1) Debtor's wife could not utilize § 108(a) because she is not a debtor in this bankruptcy case; 2) Debtor himself could not utilize § 108(a) because that section was meant to benefit solely trustees or debtors in possession; 3) Debtor is not afforded the benefits of § 1640(e) because it is inapplicable to this case; and 4) Debtor's objection to proof of claim is unripe because neither Defendant had filed a proof of claim in this case. Accordingly, the Defendants' Motion to Dismiss Counts 3 through 12 and Count 14 of Plaintiffs' Complaint was granted.

In re Norton, 2005 WL 150641 (Bankr.D.Utah)


(Internal Ref: Opinion 467)

Jan-21-2005

PUBLISHED

04-22581

Judge Boulden

PDF icon 467.pdf

Debtor's case was dismissed with prejudice barring the discharge of the Debtor's current debts in any future bankruptcy case under § 349(a) after the Debtor filed nine unsuccessful Chapter 13 petitions. The Court found that the Debtor's defiant and abusive conduct established “cause” under § 349(a). The opinion also distinguishes § 349(a) from other Bankruptcy Code provisions that allow for dismissal, and specifically examines what type of debtor misconduct warrants a “for cause” dismissal with prejudice under § 349(a) as allowed under Frieouf v. United States (In re Frieouf), 938 F.2d 1099 (10th Cir. 1991), cert denied, 502 U.S. 1091 (1992).

Olsen Properties v. Geneva Steel (In re Geneva Steel)


(Internal Ref: Opinion 464)

Jan-4-2005

UNPUBLISHED See 465.pdf

04-2804

Judge Clark

PDF icon 464.pdf

This adversary proceeding came before the court on motions by debtor/defendant to dismiss and by plaintiff for summary judgment. Debtor entered into a postpetition contract with defendant USM to demolish its steel mill site and salvage scrap metals, among other things. USM entered into an agreement with plaintiff to sell to it certain salvaged items. Debtor declared its contract with USM to be in default and refused access to the items that had been sold by USM to plaintiff. On the countering motions, the court found that plaintiff’s complaint stated its claims sufficiently to satisfy the standard needed to avoid dismissal. The court also found that fact issues regarding ownership precluded summary judgment. Both motions were therefore denied. This case was heard together with 465.pdf, a related case.

Olsen Properties v. Geneva Steel (In re Geneva Steel)


(Internal Ref: Opinion 466)

Jan-4-2005

UNPUBLISHED Duplicate of 464.pdf

04-2804

Judge Clark

PDF icon 466.pdf

This opinion was inadvertantly filed twice. See 464.pdf for summary.

Texas Iron & Metals Co. v. Geneva Steel (In re Geneva Steel)


(Internal Ref: Opinion 465)

Jan-4-2005

UNPUBLISHED See 464.pdf

04-2803

Judge Clark

PDF icon 465.pdf

This adversary proceeding came before the court on motions by debtor/defendant to dismiss and by plaintiff for summary judgment. Debtor entered into a postpetition contract with defendant USM to demolish its steel mill site and salvage scrap metals, among other things. USM entered into an agreement with plaintiff to sell to it certain scrap iron and steel that it had salvaged. Debtor declared its contract with USM to be in default and refused access to the scrap metal that had been sold by USM to plaintiff. On the countering motions, the court found that plaintiff’s complaint stated its claims sufficiently to satisfy the standard needed to avoid dismissal. The court also found that fact issues regarding ownership of the scrap metal precluded summary judgment. Both motions were therefore denied. This case was heard together with 464.pdf, a related case.

In re Burningham


(Internal Ref: Opinion 463)

Dec-10-2004

UNPUBLISHED

04-24586

Judge Boulden

PDF icon 463.pdf

The United States Trustee brought a motion seeking disgorgement of fees and fines against petition preparer for assisting a pro se chapter 7 debtor to complete her petition, schedules and statement of financial affairs. The following issues were determined: First, it is a violation of § 110(g) for a petition preparer to collect a debtor's filing fee even if made payable to the U.S. Bankruptcy Court; however, in this case, the violation was sufficiently remedied and only a nominal sanction of $1 was issued. Second, the fee charged by the petition preparer is reasonable for the services rendered pursuant to § 110(h)(2). Third, there is insufficient evidence that the petition preparer received an additional $100 cash paid by the debtor as alleged by the United States Trustee and although the petition preparer did not report the courier fee on his Disclosure of Compensation, he remedied the problem by discontinuing the practice of using a courier and no fraud was perpetrated against the Court for either omission; however, the Court required disgorgement of the $20 courier fee to the debtor as required by the Code. Finally, based on the facts presented, no violation for the prohibition of practicing law without a licence for the petition preparer's explanation of the chapters of bankruptcy and no violation for filling out the schedules and statement of financial affairs. However, the Court did find that allowing a software program to select state exemptions for a debtor constitutes the unauthorized practice of law in violation of § 110(k).While the Court determined that the petition preparer violated some portions of § 110, it pointed out that the petition preparer made a tremendous effort to bring his company into compliance with the Bankruptcy Code and local practice which was a mitigating factor in issuing sanctions.

In re Smith


(Internal Ref: Opinion 461)

Nov-22-2004

UNPUBLISHED

03-36469

Judge Thurman

PDF icon 461.pdf

Upon a motion brought by the United States Trustee, the Court ruled on dismissing a chapter 13 case with prejudice to the Debtors receiving any discharge on their scheduled debts pursuant to §349(a) of the Bankruptcy Code. The Court ruled that Debtors who had filed eight bankruptcy petitions over the preceeding nine years including chapter 7 petitions in 1995 and 2001 where discharges were obtained and had filed chapter 13 petitions in 1996, 1997, 1998, 2000, 2002 and 2003 where no significant activity or confirmation of plan had occured; who had failed to make any pre-confirmation plan payments except for the initial payment to the Trustee in the present case and were otherwise delinquent a total of five pre-confirmation payments to the Trustee in the present case, should have their case dismissed with prejudice from receiving any discharge for the debts listed on their schedules.The Court reviewed the history of §349(a) of the code going back to the Chandler Act of 1898 and determined that such history coupled with the plain meaning of that section all direct that a case may be dismissed with this type of prejudice under egregious facts. The Court adopted the Flygare (In re Flygare, 709 F.2d 1344 (10th Cir. 1983) for badges of bad faith as a beginning point of analysis. The Court further concluded that this type of dismissal with prejudice was consistent with the Tenth Circuit's decision in Frieouf (In re Frieouf, 938 F. 2d 1099, (10th Cir. (1991) which forbade denial to bankruptcy court access for more than 180 days, but authorized denial of discharge of scheduled debts for cause.

In re Boyce


(Internal Ref: Opinion 462)

Nov-18-2004

PUBLISHED 317 B.R. 165 (Bankr.D.Utah)

04-24409

Judge Clark

PDF icon 462.pdf

United States Trustee filed a motion under 11 U.S.C. § 110, seeking fines or disgorgement of fees from a bankruptcy petition preparer ("BPP"). The court found that BPP's $195 fee was not excessive, and that BPP did not engage in the practice of law by responding to debtor’s basic questions about bankruptcy, or by using software to create debtor’s schedules and statements. In the alternative, the court found that BPP did not engage in unauthorized practice of law because he closely associated himself with a licensed attorney. However, the court joined the majority rule in finding that BPP violated § 110(g)(1) by accepting debtor’s filing fee in the form of a money order payable to the court. For that violation, BPP was fined $1.00.

In re Villegas


(Internal Ref: Opinion 460)

Oct-5-2004

UNPUBLISHED

03-40485

Judge Thurman

PDF icon 460.pdf

The Court was presented with the issue of whether private school tuition was a reasonably necessary expense for chapter 13 Debtors where they were not paying their creditors 100% in their plan. The Court analyzed section 1325(b) of the Bankruptcy Code which requires that all income, less expenses that are reasonably necessary for the maintenance or support of the Debtors or their dependents be contributed to the plan. The Court determined that private school expenses are presumptively not reasonably necessary, but that such presumption can be rebutted by a showing of compelling circumstances. Such circumstances in this case included evidence that the children of the Debtors had always attended private schools, that the Debtors perceived that such education was superior to the local public schools, that the Debtors had voluntarily reduced expenses in other areas, that the vehicles of the Debtors were at least ten years old and that the Debtors were living with relatives to reduce living expenses. Finally, the Debtors had proposed a 55 month plan rather than a minimum 36 month plan, returning 32% to their creditors. Under these specific circumstances, the Court determined that the Debtors had shown compelling circumstances and the Court confirmed the Debtors'

State Farm Fire and Casualty Company v. Edie (In re Edie)


(Internal Ref: Opinion 459)

Sep-7-2004

PUBLISHED

03-2449

Judge Boulden

PDF icon 459.pdf

Plaintiff insurance company filed a nondischargeability action under 11 U.S.C. §523(a)(6) to except a California state court default judgment from the debtor's discharge. The debtor admitted she intentionally started a fire in the home of the plaintiff's insured but claimed her intent was limited to a desire to burn shirts hanging in a closet, not to destroy the entire home. The debtor further defended her actions by claiming she was not able to foresee the potential and likely consequences of her conduct due to a mental defect or illness from which she suffered at the time she started the fire. The plaintiff filed a summary judgment motion claiming the debtor's admission of intent to start the fire and application of collateral estoppel to the previously obtained default judgment left no material issue of fact to be determined at trial. The court granted summary judgment and determined California's collateral estoppel doctrine applies to default judgments and barred the debtor from presenting new defenses not raised in the state court litigation. The court also found that even absent the application of collateral estoppel, the debtor's admission of intentionally igniting a fire to the plaintiff's insured's property amounts to a willful and malicious injury to the plaintiff and the defendant did not offer any evidence to support a defense of mental impairment.

In re Cluff, In re Medina


(Internal Ref: Opinion 458)

Aug-23-2004

PUBLISHED

03-32779, 03-39152

Judge Boulden

PDF icon 458.pdf

The Debtors sought disallowance of certain unsecured claims because creditors failed to attach sufficient documentation under Bankruptcy Rule 3001(c). The Court overruled the Debtors' objections because (1) Bankruptcy Rule 3001(c) does not create an independent ground to disallow claims; (2) failure to comply with the documentation requirements in Bankruptcy Rule 3001(c) is an evidentiary defect that only deprives a claim of its prima facie validity; and (3) failure to comply with Bankruptcy Rule 3001(c) merely results in the claimant having the burden of proof if an objection to the claim is filed, but that objection must meet or surpass the evidence set forth in the claim. The Debtors' objections were found insufficient because many of the claims were entitled to prima facie validity and the Debtors did not rebut that presumption with sufficient evidence. The Debtors' objections to proofs of claim not entitled to prima facie validity were overruled because the Debtors did not come forward with any evidence that was of equal force to that contained in the claim to rebut the allegations made in the proofs of claim.

In re GloBill.com


(Internal Ref: Opinion 457)

Aug-18-2004

UNPUBLISHED

04-26754

Judge Boulden

PDF icon 457.pdf

A motion to dismiss or suspend case under 11 U.S.C. §305(a)(1) was filed by parties claiming ownership and/or control of the debtor. The moving parties raised the question of whether or not the filing of the debtor's petition by the person allegedly in control of the debtor at the time of filing, was authorized. The questions of control and ownership of the debtor were the subject of extensive litigation which was being pursued prior to filing in California litigation. The court determined it was in the best interest of the creditors of the estate and the debtor to dismiss the case pursuant to §305.

In re Bushman


(Internal Ref: Opinion 456)

Jun-10-2004

UNPUBLISHED

01-26116

Judge Boulden

PDF icon 456.pdf

The debtors filed a motion for partial reconsideration to reopen a sanctions hearing to present evidence regarding actual and punitive damages that was not presented in a prior sanctions hearing. The court determined that the debtors' failure to present evidence regarding damages at the sanctions hearing was not due to mistake or inadvertence or any other reason allowed under Federal Rule Civil Procedure 60(b) but was part of counsel's calculated litigation strategy and the motion for reconsideration was denied.

Quality Press v. Heidelberg Print Finance Americas (In re Quality Press)


(Internal Ref: Opinion 455)

Apr-28-2004

UNPUBLISHED

03-2446

Judge Thurman

PDF icon 455.pdf

The Court granted summary judgment in favor of creditor Heidelberg against the Debtor, Quality Press. A Chapter 11 Plan had been confirmed for the same Debtor in 1994, granting Heidelberg secured creditor status. Heidelberg's financing statement lapsed years later and subsequently it filed a new financing statement. Thereafter, the Debtor filed the current bankruptcy case. The Debtor challenged the effectiveness of Heidelberg's lien under several theories. The Court determined that the filing of the new financing statement without the signature of the Debtor following the lapse was allowed under 70A-9a-509 of the Revised Utah Article 9. The Court next determined that the description of the collateral in the new financing statement as "All of Debtor's Equipment" adequately described the several pieces of printing equipment secured in favor of the creditor and that such was not seriously misleading or overbroad. The Court also determined that the "plain meaning" of the 1994 Plan did not enjoin Heidelberg from filing the financing statement after the earlier statement had lapsed. Finally, the Court determined that the Heidelberg's §1111(b) election in the prior bankruptcy did not bar it from the possibility of seeking a deficiency in the current case.

In re Leigh


(Internal Ref: Opinion 454a)

Apr-27-2004

UNPUBLISHED

03-33764

Judge Thurman

PDF icon 454a.pdf

At a confirmation hearing on debtor's chapter 13 plan, the court asked the trustee to submit a memorandum regarding treatment of a tax refund received by debtors, which was at least partially attributable to the Earned Income Credit. Debtors were directed to respond to trustee's memorandum once it was filed, which they failed to do. The court ruled that tax refunds must be disclosed by debtors to the chapter 13 trustee and included as projected disposable income in their plan, even where some portion of the refund is attributable to EIC. The court concluded that debtors' failure to do so meant that their plan failed to comply with 11 U.S.C. § 1322(b)(1), and could not be confirmed.

In re Leigh


(Internal Ref: Opinion 477)

Apr-27-2004

UNPUBLISHED See 454a.pdf

03-33764

Judge Thurman

PDF icon 477.pdf

This decision was inadvertantly filed out of order. See 454a.pdf for summary.

In re Harmsen


(Internal Ref: Opinion 454)

Apr-13-2004

UNPUBLISHED

03-33637

Judge Boulden

PDF icon 454.pdf

One of the debtor's creditors filed an involuntary chapter 7 petition against him as a single petitioning creditor under 11 U.S.C. §303(b)(2) seeking adjudication in an attempt to collect upon a foreign judgment. The debtor responded to the involuntary petition claiming he had more than eleven holders of claims and the involuntary petition filed by a single petitioner was therefore improper. The petitioning creditor challenged whether the alleged debtor's listed holders of claims were eligible under §303, asserting some entities could not be counted because they were insiders or subject to voidable transfers under §§547, 548, or 549. The court found it unnecessary to reach the determination of the required number of qualifying petitioners because the petitioner could not prove that the alleged debtor was not generally paying his debts as they became due and dismissed the petition.

Troff v. State of Utah (In re Troff)


(Internal Ref: Opinion 452a)

Mar-8-2004

UNPUBLISHED

04-2491

Judge Clark

PDF icon 452a.pdf

Debtor brought an adversary seeking a ruling that a state court restitution order was discharged in the debtor's Chapter 7 bankruptcy proceeding. In 1997, the Debtor was ordered to pay $239,969 in restitution by the Third District Court for the State of Utah. When debtor filed for Chapter 7 relief, the debtor properly listed the State of Utah in his schedules and statements and received a Chapter 7 discharge. It was uncontested that all restitution payments received by the State were turned over to the victim of the crime. The Court found that under § 523(a)(7), because the restitution payments were turned over to the victim, the restitution payments were not to and for the benefit of a governmental unit and because the restitution payments were compensatory for actual pecuniary loss, the state ordered restitution was discharged in debtor's Chapter 7 bankruptcy.

Troff v. State of Utah (In re Troff)


(Internal Ref: Opinion 476)

Mar-8-2004

UNPUBLISHED See 452a.pdf

04-2491

Judge Clark

PDF icon 476.pdf

This decision was inadvertantly filed out of order. See 452a.pdf for summary.

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