Recent Cases
Arellano vs. Clark County Collection Service, LLC, ___F3d___, 2017 Westlaw 5505117 (9th Cir.2017)
The Ninth Circuit has held that a debt collector cannot effectively destroy a consumer’s FDCPA claim by acquiring it at an execution sale following a default judgment, because the FDCPA impliedly preempts that strategy. A collection agency obtained a default judgment in state court against a consumer for roughly $800. She filed a separate suit in federal court against the collection agency, claiming that its practices had violated the Fair Debt Collection Practices Act (“FDCPA”). The collection agency then requested the state court to issue a writ of execution against the consumer in the hope of executing on her FDCPA…
In re Gibson, ___BR___12-81186 (Bankr. C.D. Ill. March 5, 2018)
A developing issue, in Chapter 13 cases with confirmed Chapter 13 plan, is whether or not the Chapter 13 debtor is still eligible to receive a Chapter 13 discharge, despite the fact that the Chapter 13 debtor fails to make payments direct to creditor(s) (usually secured creditors) that are required to be made, direct to the creditor(s) by the Confirmed plan. Courts are Split on whether or not a Debtor should be denied a Chapter 13 discharge, where the debtor fails to make direct payments to creditors that the confirmed Chapter 13 plan requires the debtor to make. In In…
Heller Ehrman LLP v. Davis Wright Tremaine LLP (California Supreme Court, decision issued 3/5/18)___Cal.4th___ ; case S236208
California Supreme Court Kills the Jewel Doctrine on a Certified Question the so called “JewelDoctrine” has now been formally rejected in New York and California. Washington, D.C. is next. The handwriting was on the wall, but now it’s official in California, and probably everywhere else: Profits earned on unfinished hourly business after a law firm dissolves are not property of the “old” firm and can be retained by the new firm that completes the work. This question got answered in the Heller Ehrman bankruptcy case. Answering a certified question from the Ninth Circuit, the California Supreme Court held on March…
U.S. Bank NA v. The Village at Lakeridge LLC, 15-1509 (US Supreme court, decided March 5, 2018)
U.S. Bank NA v. The Village at Lakeridge LLC, 15-1509 (US Supreme court, decided March 5, 2018)-bankruptcy decision, held that insider status was reviewed for clear error on appeal, because mainly a factual issue. Rather than clarifying standard of review on appeal, this US Supreme Court decision muddies the water regarding standard of review when a fact/law mixed question is reviewed on appeal. Because usually, fact/law mixed questions are reviewed de novo. But here there was a fact law mixed question reviewed for clear error, which is the standard of review for fact decisions below, NOT the standard of review…
In re McGinness, ___BR___ (Bankruptcy Court ED Tenn 3/2/18), case 17-14746
Yet another decision in the many court decisions that show there is still no still No Uniform Test for when a debtor can Bifurcate debtor’s secured vehicle loan into secured and unsecured pieces, in Chapter 13, versus having to Pay the Total Amount owed as Secured, in debtor’s Chapter 13 plan, even where the fair market value of the vehicle is far less than the total amount owed: Courts are groping to define ‘personal use’ (versus non personal use) because Congress didn’t define that term in the Bankruptcy Code. One of these days, the courts will develop a uniform, coherent…
Merit Mgmt. Group, LP v. FTI Consulting, Inc., ___ U.S. ___, ___ S. Ct. ___
Merit Mgmt. Group, LP v. FTI Consulting, Inc., ___ U.S. ___, ___ S. Ct. ___, 2018 WL 1054879 (No. 16-784 February 27, 2018), the United States Supreme Court held in an unanimous opinion that the safe harbor provision of Bankruptcy Code (the “Code”) section 546(e) does not prohibit the avoidance of a transfer which passes through one or more financial institutions (acting merely as “conduits”) prior to being received by the intended recipient (where the transfer is made “through” a financial institution rather than “to” a financial institution).
In re Charles Frederick Biehl, Ch. 7 Case No. 6:13-bk-26277-MH (Bankr. C.D. Cal. Jan. 16, 2018)
In re Charles Frederick Biehl, Ch. 7 Case No. 6:13-bk-26277-MH (Bankr. C.D. Cal. Jan. 16, 2018), the United States Bankruptcy Court for the Central District of California rejected a trustee’s request to revoke abandonment of real property when the trustee received an offer to purchase the property more than one year after the abandonment became effective. Moral of this case: Once property is abandoned out of the “bankruptcy estate”, back to the debtor, a bankruptcy Trustee cannot “un-abandon” the property, to get the property back into the bankruptcy estate.
Mission Product Holdings Inc. v. Tempnology LLC (In re Tempnology LLC)
Mission Product Holdings Inc. v. Tempnology LLC (In re Tempnology LLC), ___F3d___, (1st Cir. Jan. 12, 2018)(Circuit case #16-9016 ): The 1/12/2018 decision of the US Court of Appeals for the First Circuit, in In re Tempnology, deepens the split between federal Circuits regarding whether or not a bankruptcy debtor “rejecting” a trademark license, per 11 USC 365, prevents the licensee (creditor) from continuing to use the trademark license, per 11 UDC 365(n): Pointedly disagreeing with the Seventh Circuit, the First Circuit deepened an existing split by adopting the Fourth Circuit’s conclusion in Lubrizol and holding that rejection of a…
In re Addison, ___BR___ (Bankruptcy. Court E.D.N.Y., 2018)
Held, individual chapter 7 debtor is entitled to deduct payments for two motor vehicles; IRM is helpful but not controlling. In a complicated opinion the court addressed the binding and non-binding use of the Internal Revenue Manual guidelines for allowable expenses, and other resources to determine how much the debtor may deduct for motor vehicles. “Pending before the Court is the United States Trustee’s motion to dismiss the chapter 7 bankruptcy case of Barry Addison, solely as a presumed abuse case pursuant to 11 U.S.C. § 707(b)(2). The UST asserts that Debtor, an above-median income, single-person-household debtor, improperly claimed certain…
In re Marino (Ocwen Loan Servicing v. Marino), ___BR___, 2017 WL 6553691 (appeals Nos. 16-1229, 16-1238) (B.A.P. 9th Cir. Dec. 22, 2017)
In re Marino (Ocwen Loan Servicing v. Marino), ___BR___, 2017 WL 6553691 (appeals Nos. 16-1229, 16-1238) (B.A.P. 9th Cir. Dec. 22, 2017). BAP upheld Bankruptcy Court ordering Ocwen, the servicer for mortgage company, to pay $119,000 in monetary sanctions to bankruptcy debtors, Christopher and Valerie Marino, for Ocwen’s violation of debtors’ bankruptcy discharge, by Ocwen’s continuous confusing contact with the discharged debtors by the mortgage servicer was appropriately sanctioned at $1,000 per violation notwithstanding the servicer’s formulaic and contradictory disclaimers in some of the correspondence. Debtors, Christopher and Valerie Marino, surrendered their real property in their chapter 7 bankruptcy. After…