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.
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Title: Rushton v. Adams (In re Payless Bldg. & Remodeling, Inc.) | Date: Jun-12-1980 | Status: UNPUBLISHED (Judge Mabey) | Case(s): 79-0107
Title: Burkehart v. Polychronis (In re Polychronis) | Date: Jun-3-1980 | Status: UNPUBLISHED (Judge Mabey) | Case(s): 79-0032
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.
Title: 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) | Date: Jun-2-1980 | Status: PUBLISHED (Judge Mabey) | Case(s): 78-1291, 79-0603
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.
Title: Child v. Nilsson (In re Nilsson) | Date: May-16-1980 | Status: UNPUBLISHED (Judge Mabey) | Case(s): 76-0633
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).
Title: Dickey v. Neal (In re Neal), 3 B.R. 330 (Bankr.D.Utah) | Date: Mar-31-1980 | Status: PUBLISHED (Judge Mabey) | Case(s): 78-0526
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.
Title: Robinson v. Novinski-Durando (In re Van Wyck) | Date: Feb-12-1980 | Status: UNPUBLISHED (Judge Mabey) | Case(s): 78-0324 and -0325
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.
Title: 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 | Date: Jan-18-1980 | Status: PUBLISHED (Judge Mabey) | Case(s): 79-1214, -1223, -1261, -1266, -1265, -1267, -1280, and -1347
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.
Title: Thomsen v. Davies (In re Davies) | Date: Jan-11-1980 | Status: UNPUBLISHED (Judge Mabey) | Case(s): 78-0723
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)).
Title: Kuehne v. Huff (In re Huff), 1 B.R. 354 (Bankr.D.Utah) | Date: Nov-29-1979 | Status: PUBLISHED (Judge Mabey) | Case(s): 78-0672
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.
Title: Neve-Welch Enters., Inc. v. Twelves (In re Tri-Power Elecs., Inc.) | Date: Nov-29-1979 | Status: UNPUBLISHED (Judge Mabey) | Case(s): 79-0467
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.