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.
The Court held that under In re JKJ Chevrolet, 26 F.3d 481 (4th Cir. 1994), if the funds remaining in a bankruptcy estate are insufficient to satisfy all of the claims of a particular class, the funds are to be divided among the claimants of the class on a pro rata basis.
The court denied the creditor's motion to alter or amend a judgment under Fed. R. Bankr. P. 9023 (applying Fed. R. Civ. P. 59) because at trial, the creditor did not raise the arguments or present the evidence (an accounting of principal, interest, and costs) in the motion. Further, the court held that even if the creditor had provided the statutory basis under 20 U.S.C. § 1091(b)(1) for its request for costs at trial, those costs would have been denied because the creditor did not act prudently as required under C.F.R. 682.410(a)(5)(iii) and the failure to act in a prudent manner during the pendency of the bankruptcy case was the cause of the decision to incur the costs.
The Court sustained an unsecured creditors' objection to counsel for trustee's fee application by limiting counsel for trustee's fees under 11 U.S.C. § 330, which determines whether compensation requested in a fee application is reasonable.
The Court held that debtor's claims for malicious prosecution and abuse of process in state court are not property of the bankruptcy estate under 11 U.S.C. § 541(a) because their factual basis occurred post-petition and thus the claims are not sufficiently rooted in pre-petition conduct, and that debtor's claims for tort of outrage, tortious interference with a business relationship, defamation, and negligent investigation and misrepresentation in state court are property of the estate under 11 U.S.C. § 541(a) because the facts supporting such claims all took place before the commencement of the bankruptcy case and thus the claims are sufficiently rooted in pre-petition conduct. Further, the Court found that Segal v. Rochell, 382 U.S. 375 (1966) has not been superseded by the passage of the Bankruptcy Code, and that bankruptcy law rather than state law determines whether a debtor's interest is property of the estate.
The debtor requested a discharge of his student loan debt for undue hardship pursuant to 11 U.S.C. § 523(a)(8), and in a previous decision, the Court denied the discharge. The decision was appealed to the District Court for the Western District of Virginia and remanded back to the bankruptcy court. On remand, this Court, applying Brunner v. New York State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987), again denied discharge of the debtor's student loan. The Court found that although the debtor was diagnosed with paranoid schizophrenia and tested HIV positive, the debtor did not put forth any evidence supporting a nexus between the debtor's health conditions and his failure to make student loan payments. Further, the debtor has failed to show that he has made a good faith attempt to repay his student loans because, despite having an income cushion which would cover his payments under an income contingent repayment plan, the debtor has refused to consider and apply for student loan payments under the income contingent plan.
Court granted defendants' motion to dismiss, in part, under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Plaintiffs filed adversary proceeding to determine dischargeability of certain debts under section 523(a)(2), (a)(4) and (a)(6) arising out of renovation and construction services. Court held that a simple breach of contract claim was not excepted from discharge pursuant to any of the referenced sections and dismissed the breach of contract count of the plaintiff's complaint. Court denied defendants' motion regarding the fraud count as it appeared that the plaintiffs could establish the necessary elements for a finding of nondischargeability under section 523(a)(2)(A). Court also denied the motion as to alleged violations of the Virginia Consumer Protection Act as the plaintiffs' complaint alleged sufficient facts to support actual fraud, false misrepresentation and willful and malicious injury.
Court granted defendants' motion to dismiss, in part, under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Plaintiffs filed adversary proceeding to determine dischargeability of certain debts under section 523(a)(2), (a)(4) and (a)(6) arising out of renovation and construction services. Court held that a simple breach of contract claim was not excepted from discharge pursuant to any of the referenced sections and dismissed the breach of contract count of the plaintiff's complaint. Court denied defendants' motion regarding the fraud in the inducement count as it appeared that the plaintiffs could establish the necessary elements for a finding of nondischargeability under section 523(a)(2)(A).
The Court dismissed the Movant's motion for specific performance of a settlement agreement. The remedy of specific performance is an equitable one and must be brought by an adversary proceeding pursuant to Federal Rule of Bankruptcy Procedure 7001(7). An adversary proceeding must be commenced by the filing of a complaint, not by the filing of a motion, so there is a procedural defect here. In addition, the Movant seeks specific performance from the non-debtor spouse, over whom the Court has no personal jurisdiction.
The Court sustained Chapter 13 Trustee's objection to debtors' plan and denied confirmation of such plan because (1) the above-median income debtors' plan does not pay enough money for the benefit of unsecured creditors to satisfy the requirements of 11 U.S.C. § 1325(b) and 11 U.S.C. § 707(b)(2), and (2) Official Bankruptcy Form 22C ("B22C") incorrectly overstates the amount of the Chapter 13 Trustee's commission. Further, the Court held that adequate protection payments under 11 U.S.C. § 1326(a)(1)(C) due to the secured creditors during both the pre-confirmation and post-confirmation stages of a case take precedence over the payment by the Chapter 13 Trustee of any compensation payable under the terms of the plan to debtors' counsel and over any other claim against the Chapter 13 plan payments. The Court also held that the effective date of the plan for purposes of 11 U.S.C. § 1325(b)(1) is the date of the final hearing on plan confirmation, and that the amount determined from B22C is the starting point, not both the starting and ending point, in determining the correct minimum obligation of a Chapter 13 debtor under a confirmable plan.
The Court held that, as in In re Wood, 173 F.3d 770 (10th Cir. 1999), abandonment under 11 U.S.C. § 554(c) is not automatically reversed upon the reopening of a case, and that it may, under Rule 60(b), grant relief from an order closing a bankruptcy case and from its effect. Specifically, the Court held that the inadvertent filing of a no-asset report by the Chapter 7 trustee is sufficient for purposes of vacating the closing of a bankruptcy case to the extent that it caused the statutory abandonment of an asset which served as collateral for a debt.