In response to a certified question from a bankruptcy court, the Arizona Supreme Court held that a recorded judgment lien attaches to homestead property where the judgment debtor has equity in excess of the $150,000 exemption under Arizona law.

In addition, given the uncertainty of the law that prompted the certified question, the Court denied the bank’s request for attorney’s fees.

The U.S. Court of Appeals for the Fifth Circuit recently rejected a borrower’s objections to a bankruptcy court’s jurisdiction and held that the doctrine of res judicata barred the borrower’s claim objection as it was ultimately based on the alleged impropriety of the creditor’s claim from a prior bankruptcy.

A copy of the opinion in BVS Construction v. Prosperity Bank is available at: Link to Opinion.

The U.S. Court of Appeals for the Second Circuit recently held that property in which a debtor’s dependent son lived part-time with his father qualified for the so-called homestead exemption contained in section 522(d)(1) of the Bankruptcy Code, regardless of state law.

Over the past year, bankruptcy filings have increased. We are projecting 768,000 filings by the end of the 2019 year — 61% of the filings as chapter 7, 37% as chapter 13, and 2% as chapter 11 and 12 filings. This is a 2% increase from the prior year. Commercial filings are at 5,542 filings compared to 5,108 in 2018.

Increased Filings in Commercial Sector, Especially Retail, Medical and Transportation

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a trial court judgment holding a bank and its principal in contempt and sanctioning them for violating a bankruptcy discharge injunction, based on the findings in a parallel state court proceeding.

In so ruling, the Eighth Circuit held that the state court judgment did not preclude the bankruptcy court’s ability to enforce its own orders.

The District Court of Appeal for the Second District of Florida recently affirmed an order involuntarily dismissing an action to foreclose a second mortgage which secured a home equity line of credit.

In so ruling, the Appellate Court upheld the trial court’s holding that the promissory note for the relevant home equity line of credit was not admissible into evidence because it was nonnegotiable, and thus, not a self-authenticating instrument.

Following rulings from other appellate courts in other appellate districts, Florida’s Third District Court of Appeal recently reversed a trial court’s order involuntarily dismissing a mortgagee’s foreclosure against a borrower holding that the mortgagee’s witness from its current mortgage servicer laid a sufficient foundation at trial to admit business records from a prior mortgage servicer necessary to prove a default under Florida’s business records exception to hearsay.

The U.S. District Court for the Northern District of Illinois recently held that a title insurer may exclude coverage under the exception for defects “created, suffered, assumed, or agreed to by the insured claimant” without intentional or wrongful conduct by the insured. 

In so ruling, the Court also held that the Illinois statute for bad faith denial of coverage by insurers did not apply to title insurers.

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a mortgage loan borrower’s federal Fair Debt Collection Practices Act and related state law claims because the defendant mortgagee was not a “debt collector” as defined by the FDCPA.

In so ruling, the Court also rejected the borrower’s allegations that the monthly statements the mortgagee sent to the borrower after her bankruptcy discharge were impermissible implied assertions of a right to collect against her personally.

The U.S. Court of Appeals for the Ninth Circuit recently held that if a creditor wishes to participate in the distribution of a debtor’s assets under Chapter 13, it must timely file a proof of claim, and the debtor’s acknowledgment of the debt owed to the creditor does not relieve the creditor of this affirmative duty.

A copy of the opinion is available at: Link to Opinion.