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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.

Johnson v. IRS (In re Johnson) (Case No. 15-70541; A.P. No. 21-07009) 5.2.22

This matter was before the Court on cross motions for summary judgment regarding whether or not the Debtor's 2005 and 2006 tax debts were non-dischargeable. The IRS assessed liability under 26 U.S.C. Section 6020(b). 11 U.S.C. Section 523(a) excepts from discharge debts for taxes in which a return is required but not filed. Section 523(a)(*) defines return to exclude returns made by the IRS under Section 6020(b). The Debtor did not file a return in either 2005 or 2006 and the IRS' assessment of those tax liabilities under Section 6020(b) precludes the Debtor from receiving a discharge as to these debts. The Court found the debt to be non-dischargeable and granted summary judgment in favor of the IRS.

In re Ross (Case No. 20-50885) 11/22/2021

A debtor, who is both a farmer and a school principal, claimed a $10,000 exemption in farming equipment pursuant to Virginia Code section 34-26(7). The chapter 7 trustee objected, arguing that exemptions claimed under Virginia Code section 34-26(7) are limited to a debtor’s primary or principal occupation or trade. Because the language of the statute does not limit the exemption to a debtor’s primary or principal occupation or trade, the Court overruled the trustee’s objection.

Bell v. Department of Education (In re Bell) (Case No. 19-50991; A.P. No. 20-05001) 09/01/2021

The debtor filed a complaint requesting that the Court determine that repayment of his student loan debt was an undue hardship for him, and therefore, under Bankruptcy Code section 523(a)(8), his student loan debt should not be excepted from discharge. The Court found that the debtor met the three prongs of the Brunner test to show that repayment of the student loan debt would impose an undue hardship on him. Accordingly, the Court entered an order discharging the debtor’s student loan debt.

In re Taylor (Case No. 09-72532) 7/21/2021

Pro se Debtors’ motion to hold creditor, its principal and its attorney in violation of 11 U.S.C. § 524(a) was denied as there was no evidence of any violation of the discharge injunction when the lender exercised its rights under the loan documents and applicable state law and proceeded in rem against the Debtors’ property. Under the Rooker-Feldman doctrine, the Court also held that it could not review state court judgments to the extent the Debtors were challenging the actions of a state court.

Kaltschmidt v. Shannon (In re Shannon) (Case No. 18-61757; A.P. No. 20-06025) 02/04/2021

The plaintiff filed a motion for summary judgment in this adversary proceeding seeking to except the debtor’s debt owed to the plaintiff from discharge under section 523.  The plaintiff based his motion for summary judgment on a collateral estoppel theory, relying on a Montana state court’s judgment which had found the defendant liable for fraud, constructive fraud, and breach of fiduciary duty.  The Court found that the elements for collateral estoppel on the plaintiff’s 523(a)(2)(A) count were satisfied and thus granted judgment as a matter of law in the plaintiff’s favor.

Thomas v. Midland Funding LLC (In re Thomas) (Case No. 16-50612; A.P. No. 17-05010) 10/28/20

The defendants filed a motion for partial summary judgment, asking the Court to grant summary judgment in its favor on three issues.  Specifically, the defendants contended that Fair Debt Collection Practices Act claims related to the filing of proofs of claim are precluded by the Bankruptcy Code and Rules, that the amended proofs of claim that the defendants filed are in compliance with Rule 3001, and that the defendants are not subject to sanctions for their noncompliance with the Federal Rules of Bankruptcy Procedure.  The Court denied the motion for partial summary judgment.

In re Wetter (Case No. 19-71010) 10.14.20

Chapter 7 Debtor filed a motion to convert his case to one under Chapter 11 so that he could amend his petition to elect Subchapter V status.  The Trustee and two creditors objected to the conversion.   Citing Marrama, the Court noted that a debtor should not be able to convert his case when conversion would result in immediate dismissal or reconversion.  After analyzing the recent cases of In re Trepetin and In re Seven Stars on the Hudson Corp., along with the deadlines imposed by Sections 1188(a) and 1189(b), the Court noted that it sees no reason why a delayed conversion to Subchapter V cannot occur when the Section 1189(b) plan filing deadline can be extended by the Court, when no party objects to such conversion.  However, in this case, the Debtor has been evasive and misleading about the true nature of his involvement with an LLC owned as tenants by the entirety with his spouse and gave conflicting information as to ownership and transfer dates to the Trustee, the United States Trustee and two different lenders. If converted to Chapter 11 and Subchapter V elected, this Court would decline to extend the time for the Debtor to file a plan under Section 1189(b) given the Debtor’s conduct.  Because the Debtor would immediately run afoul of Section 1112(b)(4)(J) if the motion to convert were granted and the election made, the Court denied the motion to convert.  

Scott v. Decker (In re Decker) (Case No. 17-50297; A.P. No. 19-05006) 09/30/2020

The chapter 7 trustee filed a complaint against the chapter 7 debtor and his company seeking, among other requests, turnover of postpetition transfers of property of the estate.  The parties agreed that all of the stock of the debtor’s S Corporation became property of the estate at filing, but the defendants disagreed with the trustee over whether the transferred property was property of the estate.  The defendants asserted that the property at issue fell within the “earnings exception” in section 541(a)(6).  Ruling on cross motions for summary judgment, the Court held that the amounts transferred attributable to services preformed prepetition and certain shareholder distributions were property of the estate.  The Court granted judgment as a matter of law in favor of the trustee.

In re Rosenberger (Case No. 20-50093) 09/29/2020

A creditor filed a motion to dismiss the debtor’s case, claiming that the debtor was not eligible to be a debtor under chapter 12.  Specifically, the creditor argued that the debtor did not qualify as a “family farmer” under section 101(18) because the debtor was not “engaged in a farming operation” and her gross income did not meet the 50 percent gross income test of section 101(18)(A).  Based on the evidence presented, the Court found that the debtor was engaged in a farming operation at the time she filed her petition.  Additionally, the Court ruled as a matter of law that the Tax Code’s definition of “gross income” informs the Bankruptcy Code’s definition of “gross income” under section 101(18) for purposes of determining whether to include social security income in the calculation of “gross income.”  Based on an interpretation of the Tax Code’s definition of “gross income,” the Court found that more than 50 percent of the debtor’s gross income was received from the farming operation for the taxable year preceding the filing of her petition.  Accordingly, the Court held that the debtor was a “family farmer” eligible to proceed as a debtor under chapter 12 and denied the motion to dismiss.