Debtors filed an adversary complaint seeking relief from defendant's Idaho state court judgment against them, alleging errors and fraud in the Idaho trial proceedings. Defendants' judgment had been affirmed on appeal, and debtors' federal district court lawsuit alleging breach of the parties' contract by defendants was resolved in defendants' favor, based on the principle of res judicata. The bankruptcy court ruled that some of debtors' claims merely alleged errors that could have been corrected on appeal, which did not provide a sufficient basis for a fraud claim that would justify the relief they sought. The court also ruled that debtors' single fraud claim was not sufficiently specific to form a basis for relief and that, even if it had been specific, the claim made was in the nature of intrinsic fraud, while the relief sought required extrinsic fraud.
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Title: Catmull v. Van Orden (In re Catmull) | Date: Mar-31-1984 | Status: UNPUBLISHED (Judge Clark) | Case(s): 83PC-0961
Title: In re Zuspan | Date: Mar-31-1984 | Status: UNPUBLISHED (Judge Clark) | Case(s): 83C-2216
Creditor met with debtors, prepetition, at their home and sold them vinyl siding pursuant to a payment plan that was apparently secured by a mortgage. After debtors' petition was filed, creditor filed a motion seeking a declaration that its claim was secured and requesting relief from stay, which debtors opposed. The court held that the rescission notice given by creditor to debtors at the time of the sale did not comply with the notice required by 15 U.S.C. § 1635(a) and 12 C.F.R. § 226.23(b), which govern rescission of consumer credit transactions. Because the notice was defective, the court held that, pursuant to the express wording of § 1635(a), debtors' rescission right had never expired. The court considered debtors' response to creditor's motion to be a sufficient written notice of the exercise of their right to rescind the sale agreement. Finally, the court held that, although creditor had violated § 226.23(c) by showing up to install the siding on the day after the contract was signed. that subparagraph of the regulation did not provide a basis upon which the transaction could be rescinded. Since return of the siding would be impractical, the court ordered that creditor held an unsecured claim for the reasonable value of the siding, less any payments already made by debtors.
Title: In re Cook, 38 B.R. 870 (Bankr.D.Utah) | Date: Mar-30-1984 | Status: PUBLISHED (Judge Clark) | Case(s): 83C-0198
Bank held a perfected security interest in a car purchased by debtors less than 6 months prior to filing their chapter 13 petition. Debtors' plan provided for payment of bank's claim and fixed its value at $6,975. The court approved the plan, but reserved the issues of how, and on what date, the car should be valued. The court held that the car should be valued "as of or close to the effective date of the plan," noting that the proper date will ordinarily be the date of the confirmation hearing in a chapter 13 case. The court further held that the car should be valued in the amount creditor would receive if they were allowed to sell the collateral, which in this case was best represented by the NADA wholesale/average trade-in value as of the date of confirmation. The court specifically rejected the assertion by both parties that the car be valued at debtors' replacement cost.
Title: In re Flygare | Date: Mar-22-1984 | Status: UNPUBLISHED (Judge Clark) | Case(s): 80C-1330
The court considered debtors' objections, asserting untimeliness under former Rule 13-302(e)(2), to three secured claims and one unsecured claim. The court denied debtors' objections to the secured claims because the rule used in the objection related only to unsecured claims, and the claims were timely under Rule 13-302(e)(1), which applies to secured claims. The court granted debtors' objection to the unsecured claim, which had been filed on the day of the fourth meeting of creditors, as the rule required it to be filed within 6 months of the date of the first meeting of creditors.
Title: In re Friendly Valley Condos. & Shopping Ctrs., Inc. | Date: Mar-12-1984 | Status: UNPUBLISHED (Judge Clark) | Case(s): 83C-0598
In considering numerous requests for protective orders, the court indicated that the policy of the federal and bankruptcy rules with respect to discovery is to allow as wide a scope as possible for obtaining germane facts, unless a clear legal argument is made to the contrary. Although the court denied most of the requests for protection, it allowed one creditor to withhold production of a "secret document" until sometime during an upcoming deposition, quashed two subpoenas served on potential deponents, and ordered the parties to allow 30 days to produce documents in response to a request for production that was served with a notice of deposition.
Title: In re IML Freight, Inc., 37 B.R. 556 (Bankr.D.Utah) | Date: Mar-7-1984 | Status: PUBLISHED (Judge Clark) | Case(s): 83C-1950, -1951, -1952
Rejection of chapter 11 debtor's collective bargaining agreements with various unions was approved by the court, after which trustee, in his discretion, entered into new collective bargaining agreements with the unions. Trustee subsequently sought to reject those postpetition agreements, pursuant to 11 U.S.C. § 365. The court held that trustee's postpetition agreements were not "executory contracts" subject to § 365, and denied trustee's motion.
Title: In re Dalby, 38 B.R. 107 (Bankr.D.Utah) | Date: Feb-20-1984 | Status: PUBLISHED (Judge Clark) | Case(s): 82C-2533
On creditor's objection to chapter 13 debtor's proposed plan, the court weighed the good faith factors identified in Flygare v. Boulden (In re Flygare), 709 F.2d 1344 (10th Cir. 1983), and concluded that the 35-month plan, which allocated only 40% of debtor's monthly surplus to repaying 30% of unsecured debt, 96% of which consisted of student loans that would be nondischargeable in a chapter 7, had not been proposed in good faith.
Title: In re Ashby, 36 B.R. 976 (Bankr.D.Utah) | Date: Jan-25-1984 | Status: PUBLISHED (Judge Clark) | Case(s): 83C-1156
Chapter 13 debtor filed his state tax return, which indicated a refund owed, prior to filing his petition. While awaiting his tax refund, debtor signed a wage assignment with ORS to cover his child support debt. ORS later received debtor's tax refund from the state and applied it to debtor's support debt, and debtor applied for an order to show cause against it. In response, ORS admitted that it had violated the automatic stay by accepting and offsetting debtor's tax refund, and tendered a check to debtor for the full amount of the refund. The court then deemed the turnover issue to be moot, and considered only the issues of civil contempt and recovery. ORS asserted it was not in contempt, as its actions did not involve gross misconduct, bad faith, or willful and malicious intent, The court rejected that assertion, explaining that civil contempt is remedial and, therefore, the defendant's intent is irrelevant. ORS was found in contempt and was ordered to pay debtor's costs and attorney's fees.
Title: In re Burrow, 36 B.R. 960 (Bankr.D.Utah) | Date: Jan-25-1984 | Status: PUBLISHED See 113.pdf (Judge Clark) | Case(s): 81A-2636
The court held here, as it did in 113.pdf, that the IRS violated the automatic stay in debtors' chapter 13 case by freezing their account, and that it was liable for that violation as civil contempt. The court ordered the IRS to release debtors' tax refund and to pay the costs and fees debtors incurred in attempting to obtain that refund from the IRS.
Title: In re Warden, 36 B.R. 968 (Bankr.D.Utah) | Date: Jan-25-1984 | Status: PUBLISHED See 114.pdf (Judge Clark) | Case(s): 82C-3089
Chapter 13 debtors listed the IRS as a priority creditor for prepetition taxes, and IRS received notice of debtors' filing from the court. The IRS froze debtors' account. Debtors filed a tax return for the year in which their petition was filed, which showed an overpayment of their taxes. Shortly thereafter, the court confirmed debtors' plan, of which the IRS had notice and did not object. The confirmation order provided that the IRS tax claim listed by debtors would be paid in full, and that debtors would pay some of the proceeds from their tax return to trustee for the benefit of creditors. When debtors did not receive their refund from the IRS, they obtained an order to show cause from the court. The IRS objected to the order, indicating that it had not violated the automatic stay, and that it had authorized payment to debtors of all but approximately $92 of the refund that had been frozen. Debtors received that payment from the IRS, and the IRS requested that the stay be modified to allow it to offset its claims against debtors' refund. The court issued a new show cause order, after which it held that, even if the IRS could have met the requirements for offset, its right to offset had been extinguished by confirmation of debtors' plan. As such, the IRS violated the stay under 11 U.S.C. § 362(a)(6) by retaining debtors' refund, and could be held in civil contempt for that violation. The court ordered the IRS to pay debtors the remainder of their refund, as well as the costs and attorney's fees that debtors incurred in their attempts to obtain the IRS' release of it.