Recent Cases
Law Violates the Due Process Rights of Landlords
On 8/12/21, in Chrysafis v. Marks, 594 US ___ (2021), the US Supreme Court granted an Injunction, to block a New York state Anti-Eviction Law from being enforced against Landlords, because Law Violates the Due Process Rights of Landlords to be paid rent by tenants of the landlords. The decision granted the injunction blocking enforcement of a New York anti-eviction law, because the US Supreme Court found that a key provision allowing tenants to attest to their pandemic-related hardship in order to prevent eviction violates landlords’ due process. Copy of dUS Supreme Court’s Order granting injunction is attached as pdf.
In TransUnion LLC v. Ramirez,___US___(June 2021), the US Supreme Court Substantially Restricts Ability To Sue In Federal Court For violations by credit reporting agencies and creditors of various federal statutes protecting consumers, regarding credit reporting (Fair Credit Reporting Act), debt collection (Fair Debt Collection Protection Act), and creditors phoning consumers (Telephone Consumer Protection Act)
On June 25, 2021, the Supreme Court of the United States held that a plaintiff must suffer a concrete injury resulting from a defendant’s statutory violation to have Article III standing to pursue damages from that defendant in federal court. The Court also held that plaintiffs in a class action must prove that every class member has standing for each claim asserted and for each form of relief sought. Justice Kavanaugh wrote the majority opinion, which was joined by Chief Justice Roberts as well as Justices Alito, Gorsuch, and Barrett. Justice Thomas, often considered the Court’s most conservative member, wrote…
In re Dockins, ___BR___ (Bankr. W.D.N.C. June 4, 2021)
In re Dockins, ___BR___ (Bankr. W.D.N.C. June 4, 2021), bky case no. 20-10119, holds that, unlike IRAs, Debtors keep inherited 401(k)s because inherited 401(k)s are NOT property of the Debtor’s bankruptcy estate: In the decision, Bankruptcy Judge Hodges explains exemptions never come into play with inherited 401(k)s because inherited 401(k)s aren’t estate property in the first place,. In Clark v. Rameker, 573 U.S. 122 (2014), the Supreme Court held that individual retirement accounts inherited before bankruptcy are not exempt and belong to creditors. It follows, does it not, that a debtor cannot keep a 401(k) inherited before bankruptcy? Answer: Wrong.…
Best v Ocwen Loan Servicing, LLC
BEST v. OCWEN LOAN SERVICING, LLC, 2021 WL 2024716 (Cal Court of Appeal, May 21, 2021), appeal E074386, certified for partial publication: Finding that prior authority to the contrary had been overruled by subsequent United States Supreme Court and state court decisions, a California Court of Appeal recently held that California’s Rosenthal Act (similar to but broader than the federal Fair Debt Collection Practices Act (FDCPA)) can apply to a nonjudicial foreclosure. Best v Ocwen Loan Servicing, LLC,.
Sandford Landress v. Cambridge Land Co. II LLC (In re Cambridge Land Co. II LLC), 20-1110 (B.A.P. 9th Cir. April 2, 2021)
BAP Says Undisclosed Assets Revest in the Debtor After Dismissal of Bankruptcy case, but Not After Closing of bankruptcy case. If bankruptcy case is closed as fully administered, only scheduled assets are abandoned back to debtor, per 11 USC 350: If a case is dismissed, all assets revest in the debtor and nothing remains in the bankruptcy estate, not even undisclosed assets. Unscheduled, undisclosed property is treated altogether differently when a case was dismissed compared to what happens if the case was closed, as the Ninth Circuit Bankruptcy Appellate Panel explained in an April 2 opinion. If the case was…
In re Innerline Engineering, Inc.
In re Innerline Engineering, Inc., 6:21-bk-11349-WJ (Bankr. C.D. Cal. Mar. 31, 2021) Bankruptcy Court DENIED motion of bankruptcy debtor Innerline Engineering, Inc., which moved Bankruptcy Court to extend the debtor’s time to file debtor’s bankruptcy schedules, in the emergency SubV (Chapter 11 bankruptcy, 11 USC 1181 to 11 USC 1195 is the “SubchapterV part of Chapter 11): The United States Bankruptcy Court for the Central District of California (Judge Wayne Johnson) denied the motion of Chapter 11 debtor and debtor-in-possession Innerline Engineering, Inc., that moved to extend the time for Innerline Engineering to file its case initiation documents (schedules, etc),…
Gaske v. Satellite Restaurants Inc. Crabcake Factory USA (In re Satellite Restaurants Inc. Crabcake Factory USA), ___BR___ (Bankr. D. Md. March 19, 2021), bky case no. 21-00012 holds that Corporate Debtors in Subchapter V May Discharge 11 USC 523(a)
Only individuals in subchapter V of chapter 11 are barred from discharging debts found to be nondischargeable under Section 523(a). The first court to grapple with the new issue, Bankruptcy Judge Maria Ellena Chavez-Ruark of Greenbelt, Md., decided that corporate debtors in subchapter V of chapter 11 may discharge debts that would not be discharged under Section 523(a). In other words, according to Judge Ruark, only individual debtors in subchapter V are unable to discharge debts that are found to be excepted from discharge under Section 523(a). Before bankruptcy, more than a dozen former employees filed a wages and hours…
Educational Credit Management Corp. v. Goodvin, ___BR___ (US District Court Kansas 3/17/21) appeal from bankruptcy court to US District Court #20-1247
Many Bankruptcy Judges (here a bankruptcy judge in Kansas, affirmed on appeal by US District Court in Kansas) looked for and found way to discharge student loan debt, even though the wording of 11 USC 523(a)(8) only allows discharging student loan debt that is federal or federally insured (which is almost all student loan debt) if it would be an UNDUE hardship on the borrower (or the borrower’s dependents) if the borrower was required to repay the student loan debt, over the borrower’s whole working life. Decision turned on 2 things: (1) Inability to Cover Accruing Interest Was Pivotal on…
Kaiser et al v. Cascade Capital, LLC et al.
Kaiser et al v. Cascade Capital, LLC et al. , ___ F3rd.___, 2021 DJDAR 2171 (9th Circuit Court of Appeals, 3/11/21. This case holds that threatening to sue, or suing, a person or entity which owes a debt which is time barred t, constitutes a violation of the federal Fair Debt Collection Practices Act (“FDCPA”). This is a BIG change in the law: For decades, debt collectors have sued on time barred debts, and have claimed that a debt being time barred is an affirmative defense, which the person owing the debt must plead in the person’s answer, and prove,…
Tingling v. Educational Credit Management Corp. ___F.3d___ (In re Tingling), 20-757 (2d Cir. March 11, 2021)
Second Circuit Reaffirms the Strictures of Brunner case re. under what circumstances can student loan debts be discharged in a bankruptcy case Second Circuit insinuates that “undue hardship” and the Brunner test are synonymous. In 1987 when it handed down Brunner v. N.Y. State Higher Educ. Servs. Corp. (In re Brunner), 831 F.2d 395 (2d Cir. 1987), the Second Circuit claims to have anticipated legislative intent 10 years later when Congress adopted the current iteration of Section 523(a)(8), the statute that makes student loans nondischargeable except when the debtor suffers “undue hardship.” The debtor owed about $60,000 in student loans.…