The Bankruptcy Law Firm, Prof. Corp.
In Heritage Pac. Fin., LLC v. Montano (In re Montano)
In Heritage Pac. Fin., LLC v. Montano (In re Montano), __ B.R. __, 2013 WL 5890681 (9th Cir. BAP Nov. 1, 2013), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit held that California’s anti-deficiency statutes barred the successor to a mortgage lender from obtaining a nondischargeability judgment for a purportedly fraudulently induced loan against a borrower who misrepresented his financial condition. Specifically, the successor could not enforce the loan against the borrower despite the borrower’s alleged misrepresentations in his loan application because: (1) the loan was for less than $150,000, (2) the loan was secured by residential real property,…
Bellingham Oral Argument Recap: Bankruptcy and the Slippery Slope
The Supreme Court’s recent strong record of confining bankruptcy judges within a tight sphere of power seemed a bit shaky on Tuesday, but mainly because the Court spent significant time looking beyond bankruptcy law, according to a SCOTUSBlog analysis of Tuesday’s oral argument in Executive Benefits Insurance Agency v. Arkison (In re Bellingham) currently before the Supreme Court. Concerns about the impact that a decision in a chapter 7 case may have on the ranks of federal magistrate judges, and even on arbitrators who keep a lot of private disputes out of courts, were evident during the argument on In…
Alakozai v. Citizens Equity First Credit Union (In re Alakozai)
Alakozai v. Citizens Equity First Credit Union (In re Alakozai), 499 BR 698 (9th Cir. BAP 10/2/13). The Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") affirmed the bankruptcy court’s order in the debtor’s sixth bankruptcy case granting a lender relief from stay to continue with its state court unlawful detainer action. The BAP found that the lender’s foreclosure on the debtor’s real property during the fifth case did not violate the automatic stay and was not void because the lender’s relief from stay order in the debtor’s fourth bankruptcy case was effective as to the property. Facts Mohamed Alakozai…
US Supreme Court to hear and decide 2 appeals in two different bankruptcy cases
The United States Supreme Court has granted “certiorari” on two bankruptcy cases, meaning that the United States Supreme Court will hear and decide the the appeals of the following 2 bankruptcy cases, in the Court’s 2013-2014 session The two cases are the appeals of (1) Law v. Siegel, which questions whether the court may use its general equitable authority under §105 of the Bankruptcy Code to surcharge a debtor’s exempt assets, and (2) Executive Benefits Insurance Agency v. Arkison (In re Bellingham), which will address the bankruptcy court’s authority to adjudicate Article III matters. Whenever the US Supreme Court rules…
adrozny vs. Bank of New York Mellon
Zadrozny vs. Bank of New York Mellon, 2013 Westlaw – – (9th Cir. 2013): Applying Arizona law, the Ninth Circuit has held that a foreclosing creditor need not produce the original promissory note before pursuing nonjudicial foreclosure. [See immediately below]. Facts: A married couple executed a note and deed of trust in favor of a lender. The deed of trust authorized the lender to transfer the note and authorized MERS (Mortgage Electronic Registration Systems, Inc.) to act as the nominee on behalf of the lender. MERS ultimately transferred the rights to the note and trust deed to an assignee. The…
Beware of Breadth of Attorneys Fees Clauses in Contracts
Maynard vs. BTI Group, Inc., 2013 Westlaw 2322608 (California Court of Appeals 2013): Facts: An individual owned a retail business and retained a broker to help her sell it. Although the business was sold, the purchaser soon filed a bankruptcy petition, leaving a portion of the purchase price unpaid. Supposedly, the broker failed to obtain security from the purchaser, despite the seller’s instructions to do so. Following the purchaser’s default, the seller brought suit against the broker, asserting claims for breach of contract and negligence. She prevailed on her negligence claim but not on her contract claim. The trial court…
Wellness International n Network, Ltd. v. Sharif, ___F.3d___, 2013 Westlaw 4441926 (7th Circuit 2013)
SUMMARY: In Wellness International n Network, Ltd. v. Sharif, ___F.3d___, 2013 Westlaw 4441926 (7th Circuit 2013) , disagreeing with the Ninth Circuit, the Seventh Circuit has held that a debtor’s objection to a bankruptcy court’s constitutional authority to enter a final judgment cannot be waived. Facts: After a creditor obtained a judgment against a debtor, the debtor filed a Chapter 7 bankruptcy petition. The creditor then brought an adversary complaint seeking to block his discharge and seeking a declaratory judgment that a trust administered by the debtor was actually his alter ego. As the result of discovery violations, the court…
Recent 9th Circuit Court of Appeals Decision re Judicial Estoppel
Recent 9th Circuit Court of Appeals Decision re Judicial Estoppel: Usually, where a debtor fails to list (schedule) a claim/cause of action/lawsuit in which debtor is plaintiff, and in which other persons/entities are defendants, the punishment is that the debtor is NOT allowed to pursue that claim, after the bankruptcy case is over (debtor is estopped to pursue claim after bankruptcy, because debtor failed to schedule the existence of the claim, in debtor’s bankruptcy schedules. However, in Ah Quin v. County of HI, F.3d, 2013 DAR 9634 (9th Cir. 7/25/13), the 9th Circuit Court of Appeals held that the Debtor/plaintiff…
Anti-Deficiency Protection, on Purchase Money DOT Residential Loans, Expanded by new CA statute signed into law on 7/11/13 by governor, to Include Short Sale Done with DOT Lender Consent, not Just Non-Judicial Foreclosure Sale by Lender
SUMMARY On July 11, 2013 Governor Brown signed into law SB 426 which expands the anti-deficiency language in Code of Civil Procedure ("C.C.P.") sections 580b and 580d by expressly prohibiting not only: (i) a deficiency judgment against the borrower in connection with either a "purchase money" deed of trust covered under C.C.P. §580b or following a non-judicial foreclosure of a deed of trust covered under C.C.P. §580d, but now also (ii) any liability for any deficiency in the foregoing situations. However, SB 426 expressly recognizes the right of a lender to collect any such deficiency from any additional collateral held…
Creditors–DON’T BE LATE
Creditors–DON’T BE LATE–Creditor Being a Few MINUTES Late in Filing Creditor’s Nondischargeability Adversary Proceeding against Debtor, in Debtor’s Bankruptcy Case, Resulted in Complaint being Thrown Out, as AFTER DEADLINE. In Anwar v. Johnson, ___ F.3d.___, 2013 DJDAR 8725 (9th Cir. 7/3/2013). Same reasoning would apply to cause Bankruptcy Court to have to throw out a creditor’s, trustee’s, or US Trustee’s Complaint seeking to deny the debtor any discharge, if filed after the deadline that the Bankruptcy Code sets for filing “nondischargeability” or “denial of discharge” complaints. There are certain excuses that may excuse untimely filing of Complaint, but none of…