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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 St. Clair (Case No. 06-70125) 05/02/2013

The debtor filed a complaint requesting the court determine who held a note, the validity and extent of any secured deed of trust, the current balance of the lien, and to disallow any unauthorized fees and unlawful interest charges, to award attorneys’ fees and costs.  One defendant filed an answer with affirmative defenses and a motion to dismiss for failure to state a claim upon which relief could be granted.  The court found that the complaint simply stated certain legal conclusions unsupported by any allegation of facts constituting the basis for such conclusions.  Accordingly, the court sustained the motion to dismiss but granted leave for the debtor to amend the complaint.

Lee Bank and Trust Co. v. Defore (In re Defore) (Case No. 12-71915; A.P. No. 13-07009) 04/26/2013

Lee Bank and Trust filed an adversary proceeding seeking a determination of non-dischargeability of certain debts owed to it by the debtor pursuant to 11 U.S.C. § 523.  The debtor filed a motion to dismiss which raised three defenses: first, a plea of the Virginia statute of limitations applicable to causes of action for fraud; second, that any claim based on allegedly false financial statements was on its face without merit because the financial statements in question were joint statements of the debtor and his wife although only the debtor was an obligor on the loans made; and third, that the count asserting that the debtor maliciously and intentionally converted some of the collateral is defective because it fails to allege any value for such converted collateral and therefore any cognizable damages resulting from the claimed conversion.  The court overruled the first two and sustained the third but allowed the bank to file an amended complaint to cure the deficiency.

In re Bays (Case No. 11-72355) 04/15/2013

The trustee filed a motion to sell pursuant to section 363.  The court concluded that the circumstances presented, particularly the extremely precarious business and financial situation faced by the involved corporations and the likelihood of an early foreclosure sale of a majority of the substantial assets of several of the corporations, did constitute a sound business reason for their sale before a foreclosure sale took place.  The court approved the motion to sell but with detailed modifications.  The debtor had also filed a motion to abandon, but the court continued that to a further hearing date.

Johnston v. SunTrust Bank (In re Johnston) (Case No. 12-51263; A.P. No. 12-05066) 04/12/2013

The debtors filed a complaint to determine the validity and extent of SunTrust Bank’s lien on the debtors’ residence and to strip said lien from the property.  SunTrust disputed the debtors’ valuation of their residence.  By considering the underlying economic motivations of the parties, the court concluded that in an action to strip a lien from a debtor’s primary residence, a chapter 13 debtor bears the burden to prove he is entitled to prevail.  After reviewing the pleadings and exhibits and considering the testimony given at trial, the court concluded that debtors failed to carry their burden of persuading the court that their residence was worth less than the first lien on the property as of the petition date and thus that the SunTrust debt was not wholly unsecured.  The court thus denied the debtors’ request to strip the second lien deed of trust of SunTrust.

In re Robinette (Case No 11-70557) 04/01/2013

The chapter 13 trustee objected to confirmation of modified plans in two separate cases.  The court thus considered how payments received, pursuant to an existing wage deduction order, in the interval between the time a modified plan is prepared and the date it is actually filed, should be applied – to an existing delinquency under the confirmed plan or the obligations to accrue under the terms of the modified plan.  The court concluded that, although it may be observed that the practical effect of confirmation would be to forgive by implication payments which accrued under the confirmed plans, such a result can be expressly included in a modified plan and where otherwise appropriate confirmed.  The court overruled the trustee’s objections and confirmed the plans.

In re Stamback (Case No. 11-71617) 04/01/2013

The chapter 13 trustee objected to confirmation of modified plans in two separate cases.  The court thus considered how payments received, pursuant to an existing wage deduction order, in the interval between the time a modified plan is prepared and the date it is actually filed, should be applied – to an existing delinquency under the confirmed plan or the obligations to accrue under the terms of the modified plan.  The court concluded that, although it may be observed that the practical effect of confirmation would be to forgive by implication payments which accrued under the confirmed plans, such a result can be expressly included in a modified plan and where otherwise appropriate confirmed.  The court overruled the trustee’s objections and confirmed the plans.

In re S&R Construction Co., Inc. (Case No. 09-70710) 03/13/2013

The court was asked to clarify or amend its previous order concerning a derivative proceeding.  The court noted that a Virginia corporation owns the rights to assert causes of action, a trustee succeeds to those rights when a corporation files bankruptcy, the rights become assets of the estate, and the trustee can then sell (or abandon pursuant to 11 U.S.C. § 554) those assets when administering the estate.  The court concluded that it had the authority to order abandonment and that the order that was entered specifically abandoned the right to prosecute the derivative suit to one of the shareholders, reserving only a portion of the potential proceeds for the estate.

In re Carr (Case No. 12-71316) 03/07/2013

The United States Trustee filed a motion for review of debtor’s attorney’s fees, on the grounds that the attorney prepared and filed, on behalf of the debtor, certain deficient and inaccurate schedules and statements.  During discovery, the United States Trustee filed a motion to compel the production of the engagement agreement between the debtor and the attorney, to which the attorney objected.  The court concluded that that the engagement agreement between the attorney and his client was relevant to the issue of whether “inaccurate schedules and statements” had been filed in this case.  The court thus granted the motion to compel.

In re Randolph (Case No. 12-71417) 03/07/2013

The United States Trustee filed a motion for review of debtor’s attorney’s fees, on the grounds that he prepared and filed, on behalf of the debtor, certain deficient and inaccurate schedules and statements, failed to appear at the debtor’s initial meeting of creditors, and filed an inaccurate Rule 2016 disclosure.  During discovery, the United States Trustee filed a motion to compel the production of the engagement agreement between the debtor and the attorney, to which the attorney objected.  The court noted that the agreement setting forth the terms of counsel’s compensation for services to be rendered in this case was clearly relevant to the allegations.  The court granted the motion to compel.

In re Ludwig (Case No. 12-51167) 2/25/2013

Court sustained the debtor's objection to priority status of claim held by the debtor's former spouse.  Debtor asserted that the claim was not entitled to priority status because the debt stemmed from a property settlement agreement pursuant to their divorce.  Based on evidence presented, the Court could not find that agreement to pay joint debts was in the nature of alimony, maintenance, or support under section 507(a)(1)(A) and thus was not a domestic support obligation as defined in section 101(14A).

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