Recent Cases
Frates v. Wells Fargo Bank, N.A. (In re Frates)
Frates v. Wells Fargo Bank, N.A. (In re Frates), 507 B.R. 298, 2014 WL 982851 (9th Cir. BAP March 13, 2014)–The United States Bankruptcy Appellate Panel for the Ninth Circuit (the "BAP") ruled in a published decision that service under Federal Rule of Bankruptcy Procedure ("FRBP") 7004(h) governs service on an insured depository institution of a motion to avoid a judgment lien against the debtors’ real property under Bankruptcy Code section 522(f) ("Code section 522(f)") rather than the service provisions of California Code of Civil Procedure ("CCP") section 684.010, which applies to proceedings affecting judgment. It also ruled that including…
FDIC v. Siegel (In re Indymac Bancorp, Inc.), ___F.3d___ (9th Cir. 4/21/14)
FDIC v. Siegel (In re Indymac Bancorp, Inc.), ___F.3d___ (9th Cir. 4/21/14): The U.S. Court of Appeals for the Ninth Circuit ("Ninth Circuit") recently affirmed the decision of a district court finding that a $55 million tax refund paid to a bank holding company on account of losses suffered by a defunct subsidiary constituted an asset of the holding company’s bankruptcy estate. Though this decision gives some insight into the Ninth Circuit’s thinking on this issue, the decision is NOT binding authority, because it is an “unpublished” decision. Unpublished decisions can be cited in briefs, but must be identified as…
Goldstein V. Diamond (In Re Diamond), 8TH CIR. 2014
The Eighth Circuit Court of Appeals recently ruled that a creditor which wants to file a “nondischargeability” complaint against a debtor, brought pursuant to 11 USC §523(a)(3)(B) is not required to move to reopen the underlying bankruptcy case, and get the underlying bankruptcy case re-opened, before filing the 523(a)(3)(B) nondischargeability adversary proceeding. The 8th Circuit reasoned that the bankruptcy court’s jurisdiction arises from § 1334 and does not terminate simply because a bankruptcy case is closed. A 523(a)(3)(B) adversary proceeding can be brought by a creditor where the creditor was NOT properly scheduled, in the debtor’s bankruptcy schedules, and so…
It’s hard to get a Court to Change an Already Entered Order: Tevis v. Burkart, et al. (In re Tevis)
It’s hard to get a Court to Change an Already Entered Order: Tevis v. Burkart, et al. (In re Tevis), Case No. EC-13-1211-KiKuJu (9th Cir. BAP Jan. 30, 2014), the Ninth Circuit Bankruptcy Appellate Panel affirmed an order of the bankruptcy court denying a chapter 13 debtor’s motion for relief from a prior order under Fed. R. Civ. P. 60(d)(3), demonstrating the high burden to satisfy the grounds of Rule 60(d)(3) and holding that the bankruptcy court did not abuse its discretion in denying the motion. The decision is “not for publication”, meaning it has no precedential value, only persuasive…
In re SW Boston Hotel Venture, LLC
In re SW Boston Hotel Venture, LLC, ___F.3d___, 2014 Westlaw 1399418 (1st Cir. 2014):The First Circuit Court of Appeals held that bankruptcy courts may choose to use a flexible approach when selecting a “measuring date” for the accrual of an over secured creditor’s right to postpetition interest, and the value assigned to the property during the creditor’s relief from stay motion is not necessarily binding at later stages of the bankruptcy case. Facts: A lender held a first priority mortgage on a hotel and related properties. A few months after the borrower’s Chapter 11 filing, the lender moved for relief…
Gray1 CPB, LLC vs. SCC Acquisitions, Inc
Gray1 CPB, LLC vs. SCC Acquisitions, Inc., ___ CA3d___, 2014 Westlaw 1388697 (California State Court Court of Appeals 2014): A California appellate court has held that once a judgment creditor has accepted a cashier’s check from a judgment debtor, the creditor no longer has the right to collect post-judgment attorneys’ fees. Comment: Take the money!! A judgment creditor should ALWAYS accept full payment of the judgment, if the judgment debtor sends it to judgment creditor. Lucky (and rare) judgment creditor who gets paid judgment, without struggling to collect the judgment. Unless the attorneys fees claim is a very large claim,…
Law v. Siegel, Chapter 7 Trustee
Law v. Siegel, Chapter 7 Trustee, __ U.S. __, 134 S.Ct. 1188, 2014 WL 813702 (March 4, 2014): The Supreme Court of the United States held that a bankruptcy court exceeded the limits of its authority by imposing a surcharge on a debtor’s homestead exemption to pay for a chapter 7 trustee’s litigation fees and costs incurred in avoiding a fraudulent lien against estate property created by the debtor. In a unanimous opinion written by Justice Scalia, the Court held that a bankruptcy court cannot exercise its authority under 11 U.S.C. § 105(a) or its inherent equitable powers in contravention…
Menjivar v. Wells Fargo Bank, N.A.
Menjivar v. Wells Fargo Bank, N.A. (9th Cir. BAP January 28, 2014)(Unpublished): The United States Bankruptcy Appellate Panel (the "BAP") upheld a bankruptcy court’s dismissal of the debtors’ claims against Wells Fargo Bank ("WFB") without leave to amend. The claims sought to invalidate a trust deed against the debtors’ residence relating to a refinance transaction. The BAP found that: (1) any amended allegations in regard to the fraudulent transfer claims were preempted as inconsistent with the Home Owners’ Loan Act of 1933 ("HOLA"); (2) the actual fraudulent transfer allegations improperly focused on the transferee’s intent; and (3) the constructive fraudulent…
Fowler vs. U.S. Bank, N.A., 2014 Westlaw 850527 (District Court S.D. Tex. 2014)
Facts: Two homeowners facing foreclosure filed an action against their mortgage lender under the Truth in Lending Act (“TILA”), alleging a variety of violations. One of the plaintiffs’ theories was that the mortgage had been assigned and that the assignee had failed to inform the borrowers of the assignment. The lender moved to dismiss the complaint, arguing that the borrowers themselves had disputed whether the assignment had actually taken place. Reasoning: Although the court dismissed some of the plaintiffs’ claims, the court upheld the claim under 15 U.S.C.A. §1641(g), enacted in 2009, which provides that “not later than 30 days…
Law v. Siegel (In re Law)
Law v. Siegel (In re Law), No. 12-5196, 571 U.S. __ (United States Supreme Court 3/4/14): In a unanimous decision authored by Justice Scalia, the Supreme Court found that a bankruptcy court may not surcharge the homestead exemption as a result of the debtor’s misconduct. The bankruptcy court found that the debtor created a fictional loan "to preserve his equity in his residence beyond what he was entitled to exempt" by perpetrating "a fraud on his creditors and the court." That court surcharged the debtor’s $75,000 homestead exemption to reimburse the trustee’s attorney fees. The surcharge was upheld on appeal…