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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 Tony Gee's, Inc. (Case No. 12-61015) 7/20/2012

A creditor filed a motion seeking an order declaring that a lease between the Debtor and the creditor had been terminated or, in the alternative, to compel the Debtor to accept or reject the lease by a date certain.  The Debtor had entered into a five-year commercial lease where it operated a restaurant, but sublet the premises without permission approximately two-and-a-half years into the lease.   In addition, the Debtor did not pay rent when due and thus defaulted under the lease prior to the Debtor filing for Chapter 11.

The Court found that the Debtor defaulted under the terms of the lease by failing to pay rent when due and by subletting the premises without the consent of the creditor.  However, the Court determined that the lease was not terminated pre-petition notwithstanding the fact that the Debtor was in default since the creditor did not provide adequate notice of termination per the terms of the lease.  The Court further determined that, pursuant to § 365(d)(4)(A), the Debtor is allowed 120 days from the petition date (or sooner if a plan has been confirmed) in which to assume or reject the unexpired lease or the lease will be deemed rejected.  The Court set the 120-day deadline for accepting or rejecting the lease and required that, if the Debtor accepts the lease, it must cure all defaults under the lease by 7 days following the deadline.

In re Nittany Enterprises, Inc. (Case No. 11-70779) 07/06/2012

Claimants, who were customers of the debtor and who had purchased memberships in the franchisor of the debtor, filed proofs of claim seeking refunds of their membership fees after the debtor closed the local showroom.  The chapter 7 trustee objected.  The court considered three issues: (i) whether there was a material breach of contract so as to give the claimant a claim as defined by the Bankruptcy Code; (ii) even if there was a material breach leading to a claim, whether the claimed amount is the quantum of the claimants’ damage; and (iii) whether the claims were entitled to priority.  The court found that there was no material breach when the local showroom was closed, because there were other locations and the opportunity to shop on the Internet and there was no evidence to support a right to payment in the form of a refund of the membership fee.  The court thus disallowed the claims.

White v. FIA Card Services (In re White) (Case No. 11-60956-LYN; A.P. No. 12-06016) 05/29/12

The Debtor filed a complaint to avoid a judgment lien of East Bay Funding, LLC. East Bay did not answer the Debtor’s complaint and subsequently, the Debtor filed a motion for default judgment. Case law provided that entering a default judgment is a matter of the court’s discretion. The facts pleaded by the Debtor did not support the relief requested because no exceptions which would allow for lien avoidance applied. Accordingly, the motion for default judgment was denied.

Goldstein v. PHC-Martinsville, Inc. (In re Huffman) (Case No. 09-60343; A.P. No 11-06095) 05/29/2012

The debtor allegedly sustained an injury in a hospital, and she filed for chapter 7 bankruptcy but did not schedule the claim and eventually received a discharge.  The chapter 7 trustee brought the personal injury action in the reopened bankruptcy case.  The defendant, which was the owner of the hospital, filed two motions, one to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and one to abstain pursuant to 11 U.S.C. § 1334(c)(2) from hearing the matter in the federal courts.  The court denied both motions.  The defendant filed a motion to reconsider pursuant to Federal Rule of Bankruptcy Procedure 9023 and 9024.  The court denied the motion to reconsider.

In re West (Case No. 12-60595) 5/29/2012

The Court denied a motion for relief seeking permission to repossess a vehicle.  The debtors' daughter financed a vehicle; the debtors did not sign the contract.  However, the vehicle was titled in the name of the female debtor and the debtors' daughter.  The male debtor's name was not placed on the title.   The Court held that the vehicle was property of the estate under Section 541(a).  As the debtor was not legally obligated to make any payments to the creditor, the creditor had no claim against the debtor under Section 101.  The creditor also argued lack of adequate protection.  However, the Court held that the creditor had no interest in the debtor's interest in the vehicle and thus had no interest that lacked adequate protection.  The Court further found that the Debtor had equity in the vehicle and that relief was not appropriate under Section 362(d) and that there was no basis for relief under Section 362(a).

Foster v. Wynne (In re Foster) (Case No. 12-60619; A.P. No. 12-06047) 5/22/2012

The matter before the Court is a motion to abstain from hearing the complaint removing two lawsuits from state court.  The Court determined that the factors that a court should weigh when considering discretionary abstention and remand are the same.  The Court weighed twelve factors, citing to Eastport Assoc. v. Los Angeles, 935 F.2d 1071, 1075-76 (9th Cir. 1991) : (1) the effect or lack thereof on the efficient administration of the estate if a Court recommends abstention [or remand], (2) the extent to which state law issues predominate over bankruptcy issues, (3) the difficulty or unsettled nature of the applicable law, (4) the presence of a related proceeding commenced in state court or other nonbankruptcy court, (5) the jurisdictional basis, if any, other than 28 U.S.C. § 1334, (6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case, (7) the substance rather than form of an asserted ‘core’ proceeding, (8) the feasibility of severing state law claims from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the bankruptcy court, (9) the burden of [the bankruptcy court's] docket, (10) the likelihood that the commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties, (11) the existence of a right to a jury trial, and (12) the presence in the proceeding of non-debtor parties.  The Court determined that the twelve factors weighed in favor of remanding the case to state court.

In re Foster (Case No. 12-60619) 5/22/2012

Debtor filed a notice of removal, seeking to remove two lawsuits pending before the Lynchburg Circuit Court.  A notice of removal is to be brought by way of adversary complaint pursuant to Federal Rule of Bankruptcy Procedure 7001(10).  The Court abstained from hearing the removed matter and dismissed the notice of removal in the present case because it was not brought by way of adversary proceeding, and was therefore procedurally defective. 

In re Foster (Case No. 12-60619) 5/22/2012

The Court granted a creditor's Motion for Relief, determining that interests in property are determined under state law unless some federal law requires a different result.  Here, property that the debtor occupied had been determined to be the property of another.  Because the real property is not property of the debtor, it is not property of the estate, so the automatic stay does not apply with respect to that property.  However, litigation against the debtor regarding the property is subject to the automatic stay, and the Court found sufficient cause to grant relief from stay because the state court litigation is on the verge of conclusion, predominantly involves state law issues, and would promote judicial economy.  Accordingly, the Court granted relief from the automatic stay.

Gavin v. McGowan (In re Gavin) (Case No. 10-62822; A.P. No. 11-06071) 04/17/2012

Defendant filed a motion, under Federal Rule of Civil Procedure 59, for a new trial or to alter or amend the judgment in favor of the debtors which disallowed his claim.  The court denied the motion, because the new evidence proffered by the defendant was available prior to trial, was not admissable, and did not provide a basis for altering the judgment.

Gavin v. McGowan (In re Gavin) (Case No. 10-62822; A.P. No. 11-06071) 04/17/2012

Defendant moved, pursuant to Federal Rule of Civil Procedure 52(b), to amend or make additional findings of fact in the memorandum accompanying the judgment in favor of the debtors which disallowed the defendant’s claim.  The court denied the motion, among other reasons, because Rule 52 does not provide for reconsideration of findings of fact by the trial court.

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