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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.

Edwards v. B&E Transport, LLC (In re Edwards), Case No. 18-62164, A.P. No. 19-06026 09/25/2019

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 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.

In re Price, Case No. 18-71260 (7/3/2019)

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.

Tolbert v. Young (In re Young), Case No. 18-71543; A.P. No. 18-07045 (6/17/19)

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).

Clevinger v. Buchanan General Hospital (In re Clevinger), Case No. 18-71263, A.P. No. 19-07008 (6/13/19)

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).

In re Anderson, Case No. 19-70011 (6/10/2019)

Chapter 7 Debtor claimed an exemption in real property owned as tenants by the entireties with his non-filing spouse, to which the Chapter 7 Trustee objected.  In response to that objection, the Debtor sought an order compelling the Trustee to abandon the property as burdensome or of inconsequential value to the estate. The property was subject to at least two IRS tax liens, so the Trustee sought to sell the property for the benefit of the IRS citing United States v. Craft, 535 U.S. 274 (2002), after negotiating a “carve out” of a portion of the sale proceeds for the benefit of the Debtor’s unsecured creditors under 11 U.S.C. § 363(h).  The Court held that the Debtor may exempt the property held as tenants by the entireties under 11 U.S.C. § 522 where a tax lien has attached to the property for liabilities owed only by the individual debtor and overruled the Trustee’s objection.  The Court then ordered the Trustee to abandon the property as any proposed sale of the property – which was over-encumbered by a deed of trust and IRS tax liens – would not benefit general unsecured creditors and would instead create significant harm to the co-owner of the property.

Woodford v. Capital Bank, NA (In re Woodford), Case No. 18-71300; A.P. No. 19-07003 5/1/2019

The Debtor filed an adversary proceeding against Capital Bank alleging the Bank violated the Equal Credit Opportunity Act when it required her then husband to execute a deed of trust on their principal residence.  The Debtor, as president of a company, executed a Note and commercial guaranty for the benefit of the Bank.  Without making any inquiry as to the Debtor’s individual creditworthiness, the Debtor alleges the Bank violated the anti-discrimination provisions of the Act by requiring her husband to execute the deed of trust as collateral securing the loan for which she applied on behalf of her company.  The Court held that the deed of trust at issue was not a "credit instrument" within the scope of the regulations implementing the Act and dismissed the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

In re Hoffman (13-60831) 03/15/2019

Following receipt of a discharge and closing of her chapter 13 case, the debtor obtained a disability discharge of her student loans.  The unsecured, student loan creditors then refunded funds that had been disbursed to the student loan creditors by the chapter 13 trustee pursuant to the debtor’s chapter 13 plan.  The chapter 13 trustee moved to reopen the case to redistribute these funds to the other general unsecured creditors.  The debtor objected to the proposed distribution and requested that the funds be returned to her.  The debtor also moved to file an amended plan to decrease the base gross and to provide for the funds to be returned to her.  The Court granted the motion to reopen.  The Court ruled that the trustee had to disburse the funds to the other general unsecured creditors and that the debtor could not modify her plan pursuant to section 1329.

In re Dyer (18-62156) 03/01/2019

Before the debtor filed a chapter 7 petition, CLMG Corporation filed an unlawful detainer action against the debtor as to a property it had purchased at a foreclosure sale.  Later, after the debtor had filed his chapter 7 petition, CLMG, which was not in any way noticed of the bankruptcy case, obtained a judgement for possession.  Once CLMG discovered the pending case, it filed a motion to annul the automatic stay so that the judgment for possession would not be void.  Based on the facts of the case, the Court granted the motion.

Scott v. SunTrust Bank, N.A. (In re Runnymede Capital Management, Inc.), Case No. 17-61506, A.P. No. 18-06025 02/22/2019

The chapter 7 trustee filed a complaint against SunTrust Bank, N.A. to avoid and recover certain transfers by the debtor into accounts held by the bank.  SunTrust moved to dismiss the complaint as failing to state a claim on which relief can be granted and for failing to plead fraud with specificity pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b), respectively.  The Court denied the motion to dismiss.

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