Chapter 7 debtors are not obligated to turnover to chapter 7 trustee funds that debtor's bank paid postpetition to honor checks debtors wrote prepetition.
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Title: Rupp v. Wood (In re Wood) | Date: Oct-1-2010 | Status: UNPUBLISHED (Judge Mosier) | Case(s): 09-2482
A chapter 7 trustee is not entitled to a default judgment on his complaint objecting to debtor's discharge under § 727 and seeking a money judgment against the debtor unless his complaint contains specific factual allegations which constitute a legitimate cause of action. Mere conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief may be granted.
Title: In re Bowen | Date: Oct-1-2010 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 98-28722
Creditor in Chapter 7 case filed a motion for relief from this Court's sanctions order pursuant to Fed. R. Bankr. P. 9024 and Fed. R. Civ. P. 60(b) or, alternatively, to alter or amend the order or grant a new hearing pursuant to Fed. R. Bankr. P. 9023 and Fed. R. Civ. P. 59. Although creditor's motion was timely filed under Rule 59, the facts germane to the motion, the arguments of counsel and the testimony at the hearing on the motion first required analysis under Rule 60. Creditor argued that its paralegal mishandled debtors' motion for sanctions and, as a result, the matter was not given the attention it required. Balancing the circumstances surrounding creditor's failure to respond to debtors' sanctions motion, the Court concluded that this mishandling constituted excusable neglect for the purpose of Rule 60(b). The Court also concluded that creditor's timely filed Rule 59 motion raised concerns requiring a new hearing on debtors' motion.
Title: In re Cranmer | Date: Jun-29-2010 | Status: PUBLISHED (Judge Thurman) | Case(s): 10-22994
In this chapter 13 case, the Court held that social security income must be included in calculation of projected disposable income under § 1325(b)(1)(B) even though social security income is not included in the calculation for the means test on Official Form 22C and any calculations using that form. In addition, the Court held the Debtor could not exclude part of the social security income by creating a line item expense on Schedule J. Furthermore, the Debtor did not propose the plan in good faith when he excluded part of his social security income from the projected disposable income calculation. Accordingly, the Court denied confirmation of the plan.
Title: In re Duffin | Date: Apr-12-2010 | Status: PUBLISHED (Judge Mosier) | Case(s): 09-28879
Under U.C.A. § 78B-5-505(1)(a)(xiii) in the absence of a creditor's levy or execution, proceeds or avails of insurance policies are exempt. Because the Trustee's rights and powers as a hypothetical creditor under § 544 are based on hypothetical events Section 544(a)(2) is inapplicable to U.C.A. § 78B-5-505(1)(a)(xiii). In the absence of express Congressional intent the Trustee's rights and powers as a hypothetical creditor under § 544 may not be used to limit state law exemptions provided for and allowed by Congress in § 522.
Title: In re Roger Bryner | Date: Mar-10-2010 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 08-26804
The Court ruled that in a chapter 13 case, the mother of two minor children has standing to represent their interests with respect to a proof of claim filed by the putative trustee of a trust for their benefit. The Court further ruled that on a motion to reconsider a ruling on a proof of claim, the Court will consider factors outlined in a rule 60(b) type motion, i.e. mistake, inadvertence, surprise or excusable neglect, reiterating the holding of the U.S. Supreme Court in Pioneer Investment Services v. Brunswick 507 U.S. 380 that excusable neglect is a somewhat elastic concept. Finally, the Court ruled that a trustee of a trust may only be represented by an attorney with respect to contested matters before the Court.
Title: In re Underhill | Date: Mar-1-2010 | Status: PUBLISHED (Judge Mosier) | Case(s): 09-30745
Chapter 13 debtor filed three bankruptcy petitions within a one year period and the automatic stay did not go into effect in the third case. The debtor proposed a plan that would cure his prepetition default on a secured claim. The secured creditor objected to confirmation arguing: (1) the presumption under § 362(c)(4)(D) establishes that the debtor's petition was not filed in good faith and the plan can not be confirmed, and (2) confirming the chapter 13 plan that proposes to cure the debtor's prepetition default with the debtor is a de facto reinstatement of the automatic stay and impermissibly circumvents the statutory scheme established by Congress to reinstate the automatic stay. The court held; (1) the presumption under § 362(c)(4)(D) is limited in application to § 362(c)(4)(B), (2) even if there is no automatic stay in effect the court may confirm a chapter 13 plan that cures a prepetition default on a secured claim, and (3) if a secured creditor objects to confirmation the chapter 13 debtor has the burden to establish that his petition was filed in good faith and the plan is proposed in good faith. The debtor failed to carry his burden on these issues and confirmation was denied.
Title: Jubber v. Search Market Direct (In re Paige) | Date: Aug-19-2009 | Status: PUBLISHED (Judge Thurman) | Case(s): 06-02299
In this adversary proceeding, the chapter 11 Trustee sued multiple defendants seeking to recover and/or quiet title to an Internet domain name, <freecreditscore.com> (the “Domain Name”). The Court found that the Trustee was entitled to recover the domain name from a third party under 11 U.S.C. § 362 where yet another third party surreptitiously acquired the rights to the Domain Name, and purportedly sold it while the Debtor clandestinely and without Trustee's or Court's approval tried to sell the same post petition. The Court concluded that the post-petition transfers of the Domain Name violated the automatic stay under § 362 and, as such, §549 was inapplicable. The Court also determined that the Trustee and a co-plaintiff had standing to prosecute the adversary proceeding under the terms of a confirmed plan, and that the same conferred a benefit on the estate.
Title: Rupp v. Ayres (In re Fabbro) | Date: Jul-29-2009 | Status: PUBLISHED (Judge Thurman) | Case(s): 07-2002
In this adversary proceeding, the Court considered allegations of fraud asserted by the Chapter 7 Trustee against a number of defendants who participated pre-petition in an alleged short sale of the Debtor's residence. A realtor who specializes in short sales convinced the Debtor to proceed with a listing by producing a sham buyer for the residence and convincing the Debtor's lenders to discount their claims. All the while, and without the knowledge of the Debtor or her lenders, the realtor and his business associates were marketing the property to a third party who had money and financing to buy the home for approximately $100,000 more than the short sale offer. After the sale to the third party closed, the Debtor was induced to sign the documents necessary for the alleged short sale. The Court found fraud, fraudulent transfer under both state and federal law, and negligence, and allowed for an additional hearing for determination of punitive damages.
Title: In re Hughes, In re Ulloa | Date: Jul-17-2009 | Status: UNPUBLISHED (Judge Mosier) | Case(s): 08-24736, 08-29072
Chapter 13 debtors' confirmed chapter 13 plans required debtors to pay their tax refunds into their plan. Debtors sought to modify their plans to permit them to retain their tax refunds. Held: Prepetition tax refunds are property of the bankruptcy estate and should be considered in §1325(a)(4) liquidation analysis. Agreement to pay tax refunds into plan eliminates need for §1325(a)(4) liquidation analysis of tax refunds for confirmation. Debtors must demonstrate a legitimate reason to modify their confirmed chapter 13 plan and any modification must satisfy §1325(a)(4) liquidation analysis, including value of prepetition tax refunds.