You are here

Opinions

 

The summaries on this website are summaries of the opinions issued by the judges of the Bankruptcy Court for the Western District of Virginia from October 2004 to date. The opinions may be searched by year, judge, category and chapter. For a more detailed search, enter a keyword in the search box above. This opinion bank, however, is not an exhaustive list of opinions issued by the judges of the Western District. These summaries are not intended to replace other research methods, but may be used as a starting point for your research. These summaries do not contain information as to whether an opinion has been published, appealed or the disposition of any such appeal, or otherwise overruled or affected by subsequent case law or statute. These summaries have been prepared for the convenience of the researcher and in no way constitute an interpretation by the Court of the opinion summarized. Please rely on the opinion not the summary. Please contact Judge Connelly's chambers or Judge Black's chambers regarding any questions or errors.

In re Yellow Poplar Lumber Company, Inc., Case No. 17-70882 (7/15/2019)

In a case proceeding under the Bankruptcy Act of 1898, the Court denied counsel for creditors’ motion to approve attorney’s fees pursuant to the common fund theory seeking payment by unrepresented unsecured creditors of a fee enhancement.  The Court held that that no provision of the Bankruptcy Act or its successor, the Bankruptcy Code, provides a method to award fees in the circumstances of this case under the common fund doctrine from estate assets.

Vanhoozier v. GMS Mine Repair and Maintenance (In re Vanhoozier) Case No. 17-70673; A.P. No. 17-07045 6/19/2018

The Debtor filed a Complaint against his employer seeking an award of costs ($775.00) and attorney's fees ($4,200.00) as a sanction for violation of the automatic stay of 11 U.S.C. § 362.  Noting that the paralegal and the attorney charged the same hourly rate ($200/hour) and billed in quarter hour increments instead of tenth of an hour increments, the Court reduced the paralegal's rate to $100/hour and also reduced her time by one half.   This reduction was also supported by the fact that both the paralegal and attorney performed the exact same task on the exact same date on several occasions.  Counsel's fees were allowed in a limited amount as this was not a complicated matter and counsel could have filed a motion to show cause against the employer without the necessity of filing an adversary proceeding.  No costs were allowed as the matter should have been filed before the case was closed and due to the fact that no filing fees are due from a debtor who files an adversary proceeding.   The Court  allowed only $700.00 in attorney's fees and granted judgment in the total amount of $1,075.00 as a reasonable attorney's fee as a sanction against the employer. Counsel was also prohibited from recovering from the Debtor the filing and reopening fees paid in connection with the case. 

Robbins v. Delafield, et al. (In re Williams)(Case No. 15-71767, A.P. No. 16-07024) 2/12/2018

The United States Trustee filed adversary proceedings against certain parties involved in a multi-jurisdictional law practice seeking disgorgement of attorney's fees, cancellation of fee agreements between the debtors and their attorneys, an injunction against the parties enjoining them from violating 11 U.S.C. §  526, and the imposition of civil penalties and sanctions against the parties.  While the Court expressed concern about the way the multi-jurisdictional law firm conducted its business and the lack of proper oversight of its employees, the Court found the Rule 2016(b) statements were not actionable on the grounds the local partners were not sharing compensation with members of the same law firm.   However, the Court found the law firm was an active participant in promoting and participating in an improper scheme called a "New Car Custody Program" to have consumers' vehicles towed out of state to facilitate the payment of the law firm's attorney's fees and filing fees by the towing company.  The Court ordered disgorgement of attorney's fees received under 11 U.S.C. § 329, with the funds to be paid to the debtor's estates.   Further, under its inherent authority pursuant to 11 U.S.C. § 105(a), the Court sanctioned the "local partner" attorneys by revoking their privileges to conduct and file cases in the Western District of Virginia for one year and eighteen months, respectively, and also monetarily sanctioned them $5,000.00 each. The Court also separately fined the law firm and certain of its members and affiliated persons the sum of $250,000 and revoked the law firm's privilege to conduct and file cases in this District for five years. The managing partner was fined $50,000 personally.  The Court further ordered the towing defendant in default to, among other things, disgorge all funds received from residents of this district in connection with the vehicle recovery program.

Boyd v. New Peoples Bank, (Case No. 08-71119; A.P. No. 16-07008) 11/29/16

Having determined in its Opinion of May 27, 2016 that the Bank violated the discharge injunction, the Court held a hearing as to what sanctions, if any, may be appropriate. The Debtor sought actual damages, attorneys' fees, and punitive damages. As to actual damages, the Debtor sought all payments made to the bank post-discharge, as well as all payments made to insure the property and to maintain electricity and water service to the property post-discharge. The Court determined that payments made voluntarily to the bank on the original note were not recoverable, but payments made under the subsequent renewal notes, which were made in violation of the discharge injunction, were recoverable. The Court further concluded that the insurance and utility costs were not recoverable because they were in rem obligations contained in the deed of trust and the debtor would have been required to pay these costs even had the bank not violated the discharge injunction. The Court thus awarded $11,796.29 in actual damages. As to attorneys' fees, the only evidence presented at the hearing was that the Debtor paid a $5,500 retainer and $586.00 in court reporter fees. No fee agreement or time records were produced, but counsel for the Bank conceded that the $5,500.00 had been fairly earned. Counsel for the debtor requested further opportunity to present evidence of his fees, but the Court denied that request and awarded the debtor $6,086.00 in attorneys' fees and costs. Finally, the Court determined that the Bank did not act with the requisite degree of malevolence to require an award of punitive damages.

In re Futreal et al. (Case No. 15-70886) 11/15/2016

The Court granted the United States Trustee’s Motion for Review of Attorney’s Fees in several cases after an evidentiary hearing. The attorneys and law firm were each sanctioned for civil contempt for failure to pay a fine imposed by this Court’s prior Order.  An attorney and law firm were ordered to disgorge all attorneys’ fees paid by the debtors in the matters before the Court.  Civil penalties were also assessed against the law firm under Section 526(c)(5) as the firm demonstrated a clear and consistent pattern or practice of violating Section 526(a)(1).   The Court held that the attorneys’ fees collected were excessive under 11 U.S.C. Section 329(b).  The Court also voided the contract between the law firm/debt relief agency and the assisted persons as the law firm failed to perform any service that the agency informed an assisted person it would provide under Section 526(a)(1), (c)(1).  The law firm, attorney and any related entities, were also permanently enjoined from practicing before this Court.

In re Futreal (Case No. 15-70886) 05/05/2016

The Court issued a Show Cause for Sanctions against law firm and attorneys in these two cases after hearing on United States Trustee’s Motion for Review of Attorney’s Fees filed in the cases.  Federal court has inherent power to control admission to its bar and to discipline attorneys who appear before it.  The Court imposed sanctions against attorneys and law firm pursuant to that inherent power and authority granted to it under 11 U.S.C. Section 105(a).  The Court found that the parties violated Bankruptcy Rule 9011(b) and transgressed duty of disclosure required by Bankruptcy Rule 2016(b).  The attorneys and law firm were each sanctioned and fined by the Court.

In re Repass (Case No. 15-70885) 05/05/2016

The Court issued a Show Cause for Sanctions against law firm and attorneys in these two cases after hearing on United States Trustee’s Motion for Review of Attorney’s Fees filed in the cases.  Federal court has inherent power to control admission to its bar and to discipline attorneys who appear before it.  The Court imposed sanctions against attorneys and law firm pursuant to that inherent power and authority granted to it under 11 U.S.C. Section 105(a).  The Court found that the parties violated Bankruptcy Rule 9011(b) and transgressed duty of disclosure required by Bankruptcy Rule 2016(b).  The attorneys and law firm were each sanctioned and fined by the Court.

Addison v. U.S. Dep't of Agric. (In re Addison) (Case No. 14-71321; A.P. No. 15-07002) 7/13/2015

The Court, noting the two different schools of thought on this issue, followed Sexton v. U.S. Dep't of Treasury (In re Sexton), 508 B.R. 646 (Bankr. W.D. Va. 2014), a recent decision from the Chief Bankruptcy Judge of this district, and held that the government cannot setoff a prepetition, non-tax debt against the debtor's federal tax refund pursuant to the Treasury Offset Program (26 U.S.C. § 6402), without first obtaining relief from the automatic stay.  In particular, the Court reasoned that the language of 11 U.S.C.

Shaver v. Shaver (In re Shaver) (Case No. 13-51460; A.P. No. 14-05005) 8/5/2014

Court ruled that provisions of a separation agreement wherein Husband agreed to pay certain expenses to the Wife on a monthly basis were nondischargeable under Bankruptcy Code § 523(a)(15).  Specifically, the Court found that the Separation Agreement created a new debt for which the Husband was liable to the Wife, which they then incorporated into the Property Settlement Agreement as part of their divorce.  Accordingly, the Court found that the debt arose in contemplation of divorce, as required by section 523(a)(15).

Dotson v. United Recovery Group (In re Dotson) (Case No. 09-72188; A.P. No. 13-07027) 10/16/2013

The debtor filed a complaint seeking contempt for violation of the discharge injunction and seeking remedies for coercive collection practices in violation of the Fair Debt Collection Practices Act as well as a motion for default judgment.  The court found that it did not have subject matter jurisdiction on the FDCPA claims.  The court further found that the creditor either was aware that the debt had been discharged or proceeded, after being informed that the debtor had a bankruptcy attorney, with a reckless disregard as to whether or not the debtor continued to have any legal liability to pay the debt the creditor was bent on collecting.  The court awarded compensatory damages, punitive damages, and attorney’s fees.

Pages

View all »