The U.S. Court of Appeals for the Ninth Circuit recently reversed the dismissal of a Fair Debt Collection Practices Act claim arising out of a non-judicial foreclosure. The Ninth Circuit ruled that section 1692f(6) of the FDCPA applies to non-judicial foreclosure activity.

A copy of the opinion in Dale Dowers v. Nationstar Mortgage, LLC is available at: Link to Opinion.

(S.D. Ind. Mar. 31, 2017)

The district court affirms the bankruptcy court’s ruling in favor of the debtor in the nondischargeability action. The NLRB argued its claim against the debtor should be denied under 11 U.S.C. § 523(a)(6). The court holds that the prepetition administrative ruling finding the debtor acted out of “antiunion animus” did not necessarily satisfy the requisite intent required under § 523(a)(6). Collateral estoppel did not apply. Opinion below.

Judge: Barker

Attorneys for NLRB: Dalford D. Owens , Jr., William R. Warwick

The Supreme Court of Indiana recently confirmed a mortgagee’s ability to seek an in rem judgment against property for which there was an outstanding lien balance after the borrowers obtained a discharge of their Chapter 7 bankruptcy.

In so ruling, the Court distinguished the difference between an in rem and in personam judgment, and rejected the borrowers’ unsupported argument that the debt was paid in full by the time the mortgagee initiated foreclosure proceedings against the borrowers.

The U.S. Court of Appeals for the Fifth Circuit recently held that the collection of garnished wages earned during the 90 days prior to the filing of a bankruptcy petition is an avoidable transfer, even if the garnishment was served before the 90-day preference period.

The ruling creates a potential split with the Second, Seventh, and Eleventh Circuits, with the Fifth Circuit joining with the Sixth Circuit on the issue.

(Bankr. E.D. Ky. Mar. 24, 2017)

The bankruptcy court grants in part and denies in part the defendant’s motion to dismiss in this fraudulent and preferential transfer avoidance action. The trustee’s amended complaint failed to state claims based on certain transfers, but did state a preferential transfer claim.

Judge: Wise

Attorneys for Trustee: Bingham Greenebaum Doll LLP, Claude R.Bowles, Jr., Daniel J. Donnellon, Alex S. Rodger

Attorneys for Defendant: Ross M. Bagley, Gideon Cashman, Eric M. Fishman, Adam R. Kegley

(6th Cir. Mar. 20, 2017)

The Sixth Circuit affirms the bankruptcy court’s order denying the debtor’s claim for an exemption under 11 U.S.C. § 522(d). The real property was fully encumbered by secured claims and thus the debtor had no equity in the property. The court applies its prior decision in In re Baldridge. The trustee also argued that the debtor’s appeal was moot under 11 U.S.C. § 363(m) and other authority but failed to meet the trustee’s burden on the issue. Opinion below.

Judge: Merritt

Attorney for Debtor: Gary Boren

The bankruptcy court denies the defendants’ motion to dismiss, with the exception of one claim for equitable subordination against one of the defendants. The complaint filed by the trustee asserted counts for veil piercing, fraud and fraudulent transfer, preference avoidance, breach of fiduciary duty, and a demand for accounting and turnover. Opinion below.

Judge: Moberly

Attorney for Trustee: Mark A. Warsco

Attorneys for Defendants: Alerding Castor Hewitt LLP, Michael J. Alerding, Julia E. Dimick, Mitchell Alan Greene, Anthony Frederick Roach; Abraham Murphy

The U.S. Court of Appeals for the Fourth Circuit recently held that certain deposits and wire transfers into a bankrupt debtor’s personal, unrestricted checking account in the ordinary course of business were not “transfers” under § 101(54) of the Bankruptcy Code, affirming the district court’s and bankruptcy court’s entry of summary judgment in favor of the bank in an adversary proceeding brought by the bankruptcy trustee.

(7th Cir. Mar. 13, 2017)

The Seventh Circuit affirms the district court’s dismissal of the appeal. The debtor failed to appeal the bankruptcy court’s order within the 14-day period set forth in Bankruptcy Rule 8002(a)(1). The court discusses authority holding that courts do not have equitable powers to contradict bankruptcy statutes and rules. Opinion below.

Judge: Easterbrook

Attorney for Debtor: Randy Joseph Netzer

Attorney for Appellee: Sean Michael Murphy

(Bankr. W.D. Ky. Mar. 9, 2017)

The bankruptcy court grants the secured creditor’s motion for stay relief because it was inadequately protected as a result of there being insufficient funds to make the first payment to the creditor under the confirmed Chapter 12 plan. Opinion below.

Judge: Lloyd

Atttorneys for the Debtor: Kaplan & Partners LLP, James Edwin McGhee, III, Charity Bird Neukomm

Attorneys for Creditor: Andrews Law Firm, PLLC, Ashley Sanders Cox