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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.

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.

In re Reynolds (Case No. 09-71964) 02/10/2011

            After the debtor had received a discharge, Wells Fargo filed a motion for relief from stay as to certain property of the estate, alleging $14,000 of default on the loan secured by the property.  At the time debtor filed his petition, the property was held by the debtor as the trustee of a trust established by his father.  The debtor’s father died and, pursuant to the trust instrument, a 50% share of the trust was distributed to the debtor.  The debtor opposed the motion for relief, but the trustee did not file a response.  The Court ruled that the debtor lacked standing since the property was property of the chapter 7 estate and the trustee had not yet abandoned the property.  The Court found cause to grant relief from stay.

Hines v. Wolfe (In re Stillwater, Inc.) (Case No. 04-01023) 1/25/2011

The Treasurer of Rockbridge County, Virginia filed an Application for Administrative Expenses, seeking that the value of the real estate taxes that have accrued for 2004-2010 be paid as an administrative expense under 11 U.S.C. § 503(b)(1)(B).  The Court held that only a portion of the accrued real property taxes were allowed as an administrative expense under Section 503(b)(1)(B) because only taxes attaching to the property after the creation of the estate can be assessed against the estate as an administrative expense.  Therefore, the real property taxes on the real property held by the estate for the years 2005-2010 constitute administrative expenses under Section 503(b)(1)(B), but the real property taxes assessed for 2004 does not because the real property was owned by the pre-petition debtor and not the estate as of January 1, 2004, the time the taxes for that year were incurred.

In re Travis (Case No. 08-71735) 01/19/2011

            The debtor’s counsel filed a fee application for services rendered by him to his client in connection with a motion for relief filed by his client’s mortgagee within two weeks after the confirmation of a modified plan.  The chapter 7 trustee objected.  The Court concluded that counsel failed to carry his burden of proving that the legal services performed by him were actually necessary and that the case reflected a pattern of representation that was reactive rather than proactive.  The Court thus denied the fee application.

In re Clinch Mountain Finishing & Logistics Corp. (Case No. 10-72574) 01/13/2011

            The debtor filed a motion for entry of a sale procedures order (a) approving sale of assets free and clear of all liens, encumbrances, and other interests, (b) scheduling a final hearing date, and (c) approving notice and entry of an order approving the sale free and clear of liens, interest, and other encumbrances of certain assets of the corporation.  The United States trustee filed a motion to convert the case to chapter 7 or to dismiss the case.  The Court granted the debtor’s motion upon certain conditions and denied preliminarily the United States trustee’s motion; the Court however continued the motions for a final hearing to take place promptly following either a completed sale of those assets to be sold pursuant to the debtor’s motion or the Court’s determination that the efforts to effect a sale pursuant to that Motion have failed.

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