Recent Cases
Coker v. JP Morgan Chase Bank, N.A., ___Cal.___
Coker v. JP Morgan Chase Bank, N.A., ___Cal.___, 2015 Westlaw —– (Supreme Court of the State of California, 2015.): The California Supreme Court held that a lender holding a residential purchase money obligation cannot obtain a deficiency from a borrower, even though the property was sold at a short sale and even though the borrower waived her antideficiency protection. Secured lender could not collect the deficiency owed after short sale of residence, from borrower. FACTS: The owner of a residence encumbered by a purchase money deed of trust arranged for a "short sale," under which the proceeds of the sale…
Eden Place LLc v. Perl (In re Perl)
Eden Place LLc v. Perl (In re Perl) ___F.3d___ (9th Cir. 1/8/16) (9th Cir. Appeal number14-70039): Creditor did NOT violate bankruptcy stay when creditor had law enforcement officers evict debtor, post-petition, from real property debtor was occupying, which had previously belonged to debtor, but which debtor no longer owned, at time debtor filed bankruptcy. Held mere fact that bankruptcy debtor had possession of a real property did NOT mean that new owner violated stay by having debtor evicted. The new owner of the real property had purchased debtor’s real property at a nonjudicial foreclosure sale held pre-petition (before debtor filed…
In re Free
In re Free, … BR… (9th Cir. BAP 12/17/15) BAP case number WW-14-1395-JuKiF: Good decision for debtors. Debtors filed a chapter 7 and received their discharge. The discharge released them from personal liability on two wholly-unsecured junior liens that encumbered their real property. Before the chapter 7 was closed, Debtors file a chapter 13 intending to strip off the two junior liens in the in the chapter 13 plan. Trustee moved to dismiss, arguing they were ineligible for chapter 13 because their debt exceed the 109(e) limits. The bankruptcy court agreed. On appeal the BAP reversed, holding in personam liability…
Kostecki v. Sutton (In re Sutton)
Kostecki v. Sutton (In re Sutton)___BR___ (9th Cir. BAP 12/3/15) (not for publication) (BAP case number EC014-1204-JuFD) held that a case-terminating sanction may not be imposed absent bad faith or consideration of a more moderate penalty, such as a continuance.
Inst. of Imaginal Studies v. Christoff (In re Christoff) (B.A.P. 9th Cir., 2015)
Inst. of Imaginal Studies v. Christoff (In re Christoff) (B.A.P. 9th Cir., 2015): Held that debtor who was contractually obligated to pay a student loan, but did not actually receive funds, could discharge that contract obligation. May be case of first impression. Facts: Meridian is a for-profit California corporation which operates a private university licensed under California’s Private Post Secondary Education Act of 2009, Cal. Educ. Code § 94800, et seq. If a graduate of Meridian fulfills other post-graduate requirements, the graduate may obtain a license from California to practice as an independent, unsupervised psychologist. Debtor applied for admission to…
In re Penrod, ___F.3d ___, 2015 Westlaw 5730425 (9th Cir. 2015)
In re Penrod, ___F.3d ___, 2015 Westlaw 5730425 (9th Cir. 2015): The Ninth Circuit has held that a Chapter 13 debtor was entitled to recover $245,000 in fees from a secured lender because she defeated a $7,000 portion of the lender’s claim. [.] FACTS: A consumer borrowed $32,000 to buy a car worth $25,000. The difference ($7000) was used to pay off the “negative equity” in her old vehicle. Less than two years later, she filed a Chapter 13 petition. The lender asserted a secured claim for $26,000, the amount she still owed on the loan. The debtor proposed a…
Ezra v. Seror (In re Ezra)
Ezra v. Seror (In re Ezra), 537 B.R. 924 (B.A.P. 9th Cir. 2015): The Ninth Circuit Bankruptcy Appellate Panel ruled that res judicata barred an appellant, who had raised one state law limitations argument at trial in defense of a trustee’s fraudulent conveyance action, from raising a related but different limitations defense for the first time on appeal. Appellant could not raise the second limitations defense, for the first time on appeal, because an appellate court will not consider such an argument first raised on appeal, except under circumstances not present in the case. The court also decided that the…
HSBC Bank v. Blendheim (In re Blendheim)
HSBC Bank v. Blendheim (In re Blendheim), ___F.3d ___, 2015 WL 5730015 (9th Cir. Oct. 1, 2015). 9th Circuit Court of Appeals joins Fourth Circuit, and Eleventh Circuit, in holding that a Chapter 13 debtor can strip from secured, to unsecured, a completely underwater junior DOT loan, owed on debtor’s primary residence, in a "Chapter 20" bankruptcy case. "Chapter 20" is bankruptcy slang for a debtor first filing a Chapter 7 bankruptcy case, and receiving a discharge of unsecured debt in that Chapter 7 bankruptcy case, and then soon thereafter filing a Chapter 13 bankruptcy case (7 + 13 +…
Coyle v. United States (In re Coyle)
Coyle v. United States (In re Coyle), 524 B.R. 863 (Bankr. S.D.Fla., 2015) addresses issues regarding whether a tax can be dischargeable, per 11 USC 523(a)(1), when the debtor’s tax return for that tax is filed later than when it was due, but is filed more than 2 years before debtor files bankruptcy. In Coyle, the taxpayer filed his tax returns later than they were due, and filed the tax returns after the IRS had already assessed the taxes. In Coyle, the bankruptcy for the Southern District of Florida avoided following the so called McCoy rule (McCoy rule prevents late…
In re Gatewood, a new case, by 8th Circuit BAP, and 11st Circuit Crawford case, disagree
In re Gatewood, a new case, by 8th Circuit BAP, and 11st Circuit Crawford case, disagree: In Gatewood, a Bankruptcy Appellate Panel for the Eighth Circuit has held that a proof of claim filed by a creditor on an out-of-statute debt is not a violation of the Federal Fair Debt Collection Practices Act. The debtors had urged the court to follow the Eleventh Circuit’s holding in Crawford v. LVNV Funding, LLC, 738 F.3d 1254 (11th Cir. 2014), which said debt-collector creditors who file a time-barred proof of claim in a Chapter 13 bankruptcy case engage in deceptive, misleading, unconscionable, or…