The Debtor filed an objection to a proof of claim filed by the Debtor’s business partner disputing that the Debtor was liable to the creditor for any amount for reimbursement of various sums, including capital contributions made in a joint venture arrangement, unpaid real estate taxes, attorney’s fees, improperly taken commissions, and other matters related to a real estate investment. The claim arose out of a largely undocumented joint venture between the Debtor and the creditor, which soured over time. The arrangement was that the creditor would provide most of the funds to purchase and renovate properties and the Debtor would provide her experience to rehabilitate and maintain the properties. The objection to claim was sustained in part and overruled in part. This is a fact specific opinion discussing the burden of proof on objections to claims and the Virginia Uniform Partnership Act. Certain portions of the claim were allowed, and others will be paid upon the sale of the real estate or upon settlement of the partnership accounting and were thus disallowed in the Debtor’s bankruptcy case.
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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.
Debtor’s complaint in this adversary proceeding alleged that certain notes made by the Debtor to a creditor were time barred under the applicable statute of limitations. The creditor asserted that the proper statute of limitations to apply was the six year statute of limitations under Va. Code Ann. § 8.3A-118 and not the five year period under Va. Code Ann. § 8.01-246 as argued by the Debtor. The Court agreed that the proper statute of limitations to apply was § 8.3A-118, which provides - “an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date.” The Court held that the Complaint failed to allege facts to establish the claims at issue were time barred.
This matter came before the Court on a motion to enforce a settlement agreement to resolve a disputed claim and require the Trustee to present the settlement for Court approval under Rule 9019. The Trustee asserted that the settlement agreement was only tentative as it was subject to conditions precedent that were not satisfied. The Court found that the parties had entered into a binding settlement agreement. However, a further hearing would be needed for the Court to approve the settlement agreement as fair and equitable and in the best interests of the estate.
The female Debtor filed a motion for contempt against a creditor for violation of the automatic stay. The Court found that creditor willfully violated the automatic stay of 11 U.S.C. § 362(a) as the creditor had notice of the bankruptcy when he sent the female Debtor an email threatening to take criminal action if she did not pay him the money she owed, as well as repeated calls after notice of the bankruptcy. The Court awarded the Debtor $170.00 in actual financial loss damages. The Court also found sufficient evidence of egregious or vindictive conduct to award the female Debtor $500.00 in punitive damages.
The Debtors filed a motion for default judgment seeking damages against a creditor for violation of the automatic stay. The Court found that the creditor willfully violated the automatic stay of 11 U.S.C. § 362(a) by seeking to collect the balance owed for pre-petition services after receiving notice that the Debtors filed bankruptcy. The Court awarded the Debtors $300.00 in lost work time damages and attorneys’ fees in the amount of $1,875.00. However, the Court found that there was insufficient evidence to award the Debtors damages for emotional distress.
The debtor filed a chapter 13 petition, scheduling a creditor secured by the debtor’s motorcycle. Two days after filing, the creditor’s agent came to the debtor’s house to repossess the motorcycle. The debtor’s husband informed the creditor during the repossession that the debtor had filed bankruptcy and that the automatic stay prohibited the repossession. Nonetheless, the creditor repossessed. Subsequently, the debtor’s husband met with the creditor to ask that the motorcycle be returned and again informed the creditor of the automatic stay. The creditor refused. The debtor’s counsel also contacted the creditor asking for return of the vehicle and informing of the automatic stay. The creditor again refused to return the vehicle. The debtor filed a complaint seeking actual damages, punitive damages, and attorney’s fees. Following an evidentiary hearing, the Court found a violation of the automatic stay and entered judgement against the creditor for actual damages, punitive damages, and attorney’s fees.
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.
The Trustee filed an objection to a claim that was filed late. The claimant then filed a motion to extend time to file the claim asserting that, because the Debtor provided an incorrect address for the claimant when she filed her petition, the claimant received delayed notice of the filing and of the section 341 meeting of creditors and should be allowed to file her claim late pursuant to Rule 3002(c)(6). The post office discovered the mistake and put the incorrectly addressed notice in the claimant’s post office box such that she received the notice prior to the first meeting of creditors. The claimant appeared at the section 341 meeting of creditors, but did not file her proof of claim until almost five months after receiving notice. The issue before the Court is whether the Debtor’s failure to include a correct address for the claimant warrants an extension of time for the claimant to file her proof of claim under Rule 3002(c)(6). The Court held that the Claimant had sufficient notice giving her a reasonable time to file her proof of claim. Therefore, the Court sustained the Trustee’s objection to the claim and denied the claimant’s motion to file the claim late.
Pro se creditor filed an adversary proceeding objecting to the dischargeability of a debt owed by the Debtor and alleging that the Debtor made false oaths on his bankruptcy schedules and tax returns. At issue is whether damages arising from an alleged breach of contract and costs of repair of damages to property are excepted from discharge under 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(6) and whether the Debtor made false statements pursuant to 11 U.S.C. 727(a)(4)(A) thereby justifying a denial of discharge. The Court held that the creditor failed to show by a preponderance of the evidence that any of the Debtor’s actions justify denial of discharge related to the allegations that the debt was “obtained by false pretenses, a false representation, or actual fraud.” The Court also denied the creditor’s claim that the debts were “for willful and malicious injury by the debtor to another entity or to the property of another entity.” The Court found that the Debtor acted neither maliciously nor with willful intent to damage structures and items in the residence. Minor damages were a result of mere wear and tear or negligent upkeep and other damage did not meet the test to be declared non-dischargeable. Finally, the Court held that the Debtor’s failure to disclose certain income on his schedules was an inadvertent omission of non-material issues that did not meet the standard to deny the Debtor a discharge under Section 727(a)(4)(A).
The Debtor claimed as exempt on Schedule C garnished funds as an avoidable preference pursuant to Virginia Code § 34-4 and then filed a complaint seeking to avoid and recover what he claimed was a preferential transfer to the judgment creditor under 11 U.S.C. §§ 542 and 547. The creditor argued that the transfer of funds occurred outside the 90-day preference period. Following In re Wilkinson, 196 B.R. 311 (Bankr. E.D. Va. 1996), the Court found that the relevant transfer date for the purpose of § 547(b) was the date that the garnishment lien attached to the Debtor’s wages under Virginia law. In this case, the petition was filed on September 24, 2018; therefore the 90-day preference period began on June 26, 2018. The creditor filed the garnishment summons on February 27, 2018, pursuant to which the creditor’s lien attached to the Debtor’s wages paid between March 26, 2018 and May 11, 2018. The Debtor thus earned his wages and his employer paid those withheld funds to the General District Court, all prior to the start of the 90-day preference period. Therefore, the Court denied the Debtor’s request to recover the funds under § 547(b).