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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 Fugate (Case No. 09-63133) 04/28/2011

            The debtors filed a chapter 13 petition and subsequently converted to a chapter 7.  After conversion, the United States trustee filed a motion to dismiss the debtors’ case under 11 U.S.C. § 707(b)(1) as an abuse of the provisions of chapter 7.  Agreeing with an earlier decision issued by Judge Krumm, the Court concluded that the plain language of 707(b) only applies to cases filed under chapter 7 and that cases converted to chapter 7 from another chapter do not fall within the scope of that subsection.

In re Circle T Pipeline, Inc. (Case No. 11-70556) 04/27/2011

            The debtor filed an application to employ counsel, and the United States trustee objected, pointing to a number of provisions in the original attorney-client retainer agreement entered into by the debtor and counsel, which the United States trustee argued disqualified counsel from serving as debtor’s counsel under 11 U.S.C. § 327.  The Court considered the disinterestedness of counsel, counsel’s disclosure of all connections, the attorney fee retainer, an attorney’s ethical obligations, provisions of the employment agreement, and counsel’s prior representation of a creditor of the debtor.  The Court conditionally approved the employment application.

In re Girgenti (Case No. 10-62312) 04/11/2011

The debtors objected to a claim in the amount of $76,000.  According to the proof of claim, the $76,000 claim is a priority claim for child support.  The debtors scheduled the claim at $0 and the debtors' amended plan also estimates the claim at $0.  The claim objection states that the child support issue is on appeal, and therefore, the amount is contingent, unliquidated, and disputed.  The Court held that the fact that a claim is contingent or unliquidated is not a basis for disallowing the claim.  Pursuant to 11 U.S.C. § 502(c)(1), the debtors are required to estimate the claim, as failure to do so would unduly delay the administration of the case.  Therefore, the Court overruled the debtors' claim objection.

In re Hamilton (Case No. 10-60532) 04/11/2011

The debtors objected to the secured status of a creditor’s claim because the debtors have no equity in the property.   The creditor asserts in the proof of claim that the claim is fully secured by a truck and a motorcycle.   The Court found that no statutory basis was given for the debtors’ objection to the secured portion of the claim, but it appears that the debtors are asserting that the claim should be bifurcated into a secured portion (equal to $0) and an unsecured portion equal to the amount of the claim.  However, according to the debtors, the fair market value of the collateral is greater than the amount of the claim.  Therefore, the claim is fully secured and the objection is overruled.

In re Perkins (Case No. 10-63148) 03/31/2011

            The chapter 7 trustee moved for the turnover of funds held in the debtor’s bank account.  The funds were deposited prior to the filing of the petition.  The debtor argued that the trustee was not entitled to the funds on the grounds that they were wages designated for expenditures on Schedules I and J and that the debtor spent the funds prior to the filing of the motion.  The Court concluded that the funds were not funds which were subject to garnishment and thus not partially exempt under Virginia Code § 34-29.

            Section 34-29 of the Virginia Code only applies to earnings that are subject to garnishment.  The funds were not earnings subject to garnishment because they were not the subject of a judicial or equitable proceeding.  Because the funds were not the subject of garnishment on the date of petition, the chapter 7 trustee’s objection to the debtor’s claim of exemption under Section 34-29 was sustained.

In re Renier (Case No. 07-61602) 03/21/2011

            The debtor had filed a motion seeking sanctions for violation of the automatic stay.  Prior to the Court taking the matter under submission, the parties appeared and represented that they had reached an agreement and would submit a consent order, which was entered on the docket.  The consent order prohibited the parties from engaging in certain acts and contained a provision for liquidated damages in the amount of $30,000 for violation of the order.  Subsequently, the debtor filed a motion to enforce a consent order.  The Court, however, concluded that it did not have subject matter jurisdiction over the initial motion which gave rise to the consent order and that it therefore did not have jurisdiction to entertain the motion to enforce.  The Court vacated the consent order and dismissed the motion to enforce for lack of subject matter jurisdiction.

Mortgage Electronic Registration Systems, Inc. v. Rector (In re Rector) (Case No. 09-62669; A.P. No. 10-06011) 03/11/2011

            Mortgage Electronic Registration Systems, Inc. (“MERS”) filed a complaint in state court seeking to impose a first-priority equitable deed of trust on real property owned by the debtors, who then filed a chapter 13 petition. The state court complaint was removed to the Court. The chapter 13 trustee intervened seeking to avoid the lien created by the deed of trust in favor of MERS, because he asserted that the security interest of MERS was not properly perfected and was therefore avoidable under 11 U.S.C. § 544.  MERS and the Chapter 13 trustee each filed a motion for summary judgment.  The Court determined that whether MERS would have prevailed in the action to impose an equitable deed of trust was not relevant to the resolution.  The Court determined that if it had not been granted an equitable deed of trust, the trustee could have avoided MERS’ security interest under 11 U.S.C. § 544(a)(3).  The Court further found that if it had been granted an equitable deed of trust, the trustee could avoid the perfection of the security interest under 11 U.S.C. § 547(b) and then avoid MERS’ security interest under 11 U.S.C. § 544(a)(3).  Accordingly, the Court granted the trustee’s motion for summary judgment.

In re Reynolds (Case No. 09-71964) 2/25/2011

Injunction motion denied as much of the relief sought had already been rendered moot by this Court's prior decision and order and remaining relief sought was not available pursuant to a Rule 9014 motion and ought to be advanced as adversary proceeding.  Rule 4008(a) does not authorize the Court to enlarge the time to file a reaffirmation agreement subsequent to a discharge having been granted when no request for such enlargement was made prior to entry of the discharge order.

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