The Chapter 13 Trustee and PNC Bank moved to dismiss the Debtor's Chapter 13 case because his secured debts exceeded the $1,149,525 limit imposed by § 109(e). The Court found, despite the Debtor's objections, that the motions were timely, PNC had standing to file proofs of claim, and those claims were prima facie valid. Following the § 109(e) analysis prescribed by Kanke v. Adams (In re Adams), 373 B.R. 116 (B.A.P. 10th Cir. 2007), the Court reviewed the Debtor's schedules and PNC's proofs of claim and found that the facial amount of his debts surpassed the statutory threshold. The Court held that neither a dispute over liability on the debts nor the Debtor's assertion of offsets against PNC rendered his debts unliquidated, and the Court ruled that the debt limit of § 109(e) did not violate the Debtor's due process rights. The Court therefore dismissed the Debtor's case.
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Title: In re Cannon | Date: Dec-11-2013 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 13-24366
Title: In re Cotant, In re Davidson | Date: Sep-16-2013 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 13-34235, 13-34268
Debtors filed a request for "special notice," through which all pleadings would be served personally on the Debtors in addition to their counsel. The Chapter 13 Trustee objected, which did not serve as a bar to confirmation. The Court held that Debtors did not have standing because there was no injury in fact nor certainly impending injury. Alternatively, the Court held that denying the special notice request would not violate the Debtors' rights to due process or equal protection.
Title: In re Evans | Date: Aug-23-2013 | Status: UNPUBLISHED (Judge Mosier) | Case(s): 11-35963
Debtor filed a chapter 13 plan, which was neither novel or complex. The plan provided for payment of a prepetition arrearage to an oversecured creditor. A dispute arose between debtor and creditor over the amount of the prepetition arrearage and, at the court's urging, the parties negotiated a settlement. After reaching the settlement, creditor filed a motion under § 506(b) for allowance of postpetition attorney's fees in the amount of $24,647.50. Debtor objected arguing that the fees sought by creditor were unnecessary, that creditor did not act reasonably or prudently and the time expended by creditor"s counsel was excessive, not adequately described, and that many services were duplicative. The Court found that § 506(b) awards were controlled by federal law and that a lodestar approach to allowance of a § 506(b) claims should be followed using a two step approach: 1) were the services were necessary to protect the creditor's legitimate interests ?; and 2) were the fees sought for the legal services reasonable? The Court allowed some, but not all of the fees requested and applied nine factors to weigh the necessity and the reasonableness of the fee request.
Title: In re Jensen | Date: Jul-26-2013 | Status: PUBLISHED (Judge Thurman) | Case(s): 12-33826
Chapter 13 Debtors commenced voluntary contributions to wife's retirement plan less than three months prior to the date of petition and deducted such contributions as an expense on their Form 22C. The Chapter 13 Trustee objected to confirmation of Debtors' Plan, arguing that Debtors were not contributing all of their projected disposable income to the repayment of unsecured creditors as required by § 1325(b). The Trustee also objected on the grounds that beginning voluntary retirement contributions so close to the petition date showed that the Debtors were not proceeding in good faith. The Court concluded that voluntary contributions to qualified retirement plans are not disposable income as long as they are being made as of the date of petition, adopting the reasoning of the Sixth Circuit Bankruptcy Appellate Panel in Burden v. Seafort (In re Seafort), 437 B.R. 204 (B.A.P. 6th Cir. 2010). Turning to the issue of good faith, the Court held that this and other cases involving voluntary contributions to qualified retirement plans must be subjected to a good faith analysis. The Court applied the totality of the circumstances test and found that, on the facts of the case, the Debtors were not proceeding in bad faith.
Title: In re Kealamakia | Date: Jul-9-2013 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 12-31822
As a matter of first impression, the Court considered a creditor's motion to dismiss a chapter 7 case for bad faith under § 707(a). The creditor argued that "cause" for dismissal under § 707(a) encompassed a debtor's bad faith, and that the Court should dismiss this case because the facts showed that the debtor was not acting in good faith. In support of its position, the creditor pointed to the three bankruptcy cases the debtor had been in during a period of under four years, inconsistencies in information placed on the various Statements of Financial Affairs and Schedules and what it considered a dearth of creditors. The Court determined that a chapter 7 case may be dismissed for lack of good faith. However, applying the factors found in In re O'Brien, from the bankruptcy court of the W.D.N.Y., the Court found under a totality of circumstances that the evidence did not support dismissal.
Title: In re Cornia | Date: Apr-29-2013 | Status: UNPUBLISHED (Judge Marker) | Case(s): 13-22364
A creditor in a chapter 13 case moved to lift the automatic stay on a parcel of real property held in trust. The creditor argued that cause existed to lift the stay under § 362(d)(1) because the property was not part of the debtor's estate and because the debtor had no contractual relationship with the creditor with respect to the property. The Court denied the creditor's motion, holding that under Utah law the debtor was a beneficiary of the trust and had an equitable interest in the property, which was included in the estate by § 541(a)(1). The Court then concluded that an equitable interest in the property was sufficient to claim a homestead exemption in the property, and that a lack of a contractual relationship between the debtor and the creditor was not cause to lift the stay.
Title: In re Wensel | Date: Apr-5-2013 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 12-30207
The debtors' proposed plan failed to provide for all projected disposable income as required by § 1325(b)(1)(B), particularly tax refunds received during the applicable commitment period. Pursuant to Skougard, 438 B.R. 738 (Bankr. D. Utah 2010), tax refunds in excess of $1,000 or up to $2,000, if a debtor receives certain tax credits, are surrendered to the Trustee. The debtors proposed to include an annualized amount on Schedule I for tax refunds and retain all refunds over the course of the plan. However, the Court noted the debtors' employment had changed prior to filing and the annualization of tax refunds skewed the refund amount. Additionally, because of the difficulty in predicting actual tax liabilities the Court found that the current practice was more accurate and fairer to all parties and did not allow annualization of tax refunds.
Title: In re Tejal Investment | Date: Dec-12-2012 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 12-28606
The Court granted a creditor's motion for relief from stay on the debtor's real property pursuant to 11 U.S.C. § 362(d)(2) and (d)(4)(B). The parties stipulated that debtor did not have equity in the property. Under the second prong of § 362(d)(2), the Court found that the debtor failed to meet its burden of proof in establishing that the property was necessary to an effective reorganization because the proposed plan was “essential for an effective reorganization that is in prospect” given the debtor's financial circumstances. United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 375-76 (1988). The Court also granted relief under § 362(d)(4)(B), concluding that the Debtor's filing of two cases – one on the eve of receivership and one of the eve of foreclosure – was enough to constitute a “scheme” to delay or hinder creditors that involved multiple bankruptcy filings affecting such property, especially where the Debtor did not show a change in financial circumstances between the filings.
Title: In re Kofford | Date: Dec-4-2012 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 12-29134
The Court concluded that a chapter 13 plan could not be confirmed where the Debtor was proposing to deduct on Line 55 of the Form 22C the actual contractual monthly amounts due under 401(k) repayment loans where the repayments would conclude before the end of the 60-month plan. The Court found that requiring the Debtor to prorate the amount of her retirement loan payments over the 60-month plan term for the purposes of Line 55 of the Form 22C “is the only way to ensure that the amount required to repay the loan (and only the amount required to repay the loan) will be excluded from the disposable income calculation.” In re Novak, 379 B.R. 908, 911 (Bankr. D. Neb. 2007). In addition, the Court found that the Debtor should provide for step-increases in plan payments at the maturity of each of the Debtor's retirement loans.
Title: In re Krantz | Date: Nov-29-2012 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 10-28557
The chapter 7 debtors brought a motion to avoid a creditor's judgment lien 19 months after their petition date, after the property to which the judgment lien was fixed had been transferred out of and back into the debtors' possession, and after the creditor had obtained unopposed relief from stay. The Court found that the debtors had standing to avoid the lien as § 522(f) serves to undo the “fixing” of a lien, and so a court looks to the time period the lien fixed to determine a debtor's interest in the property. The Court determined that the date of the filing of the § 522(f) motion is irrelevant to the standing analysis, and postpetition transfers have no bearing on the debtor's standing to avoid a judgment lien. The Court declined the creditor's request to abstain from ruling on the § 522(f) motion. The Court also declined to deny the Debtors' motion on the basis of laches. The Court found that the debtors lacked diligence in bringing their § 522(f) motion and that the creditor suffered some prejudice when its motion for relief from stay went unopposed and it pursued state court action. The Court determined that an appropriate equitable remedy would be to require the Debtors to compensate the creditor for reasonable attorneys fees and costs the creditor incurred in pursuing state court relief.