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 granted, under 28 U.S.C. § 152(d)(2)(I), the debtors' motion for direct appeal to the United States Court of Appeals for the Fourth Circuit of an order sustaining creditor's objection to debtors' Chapter 13 plan on the grounds that it improperly provided for the bifurcation of creditor's claim into a secured claim and an unsecured claim because there is no controlling decision of the Fourth Circuit.
The Court granted, in part, the United States Trustee's motion to dismiss the case with prejudice and to bar future filings insofar as it sought to prohibit any new bankruptcy petition filing by the debtor within twelve months of the date of entry of the dismissal order for this case and to impose, under 11 U.S.C. § 349(a), the condition that any new case commenced thereafter shall be with prejudice as to the debtor's liability for incurred filing fees in the current case and the two preceding cases. Furthermore, the Court ordered that no automatic stay shall arise in any case filed in the Court after such twelve month period, but within ten years of the date of such dismissal order, unless and until all fees incurred by reason of any such filing shall have been paid in full or the debtor shall have obtained from the Court an order waiving the payment of such fees.
The Court denied the debtor's motion to reinstate case because the debtor failed to meet the debtor's burden of proof in establishing "mistake, inadvertence, surprise, or excusable neglect" or "any other reason justifying relief" under Federal Rule of Civil Procedure 60(b)(1), (6), respectively, and Federal Rule of Bankruptcy Procedure 9024.
The Court held that, as held in In re Witt, 113 F.3d 508 (4th Cir. 1997), the term "real property" in 11 U.S.C. § 1322(b)(2) includes mobile homes, despite mobile home being personal property under state tax law (Va. Code § 58.13503(6)). Therefore, the Court held that debtors were prohibited from modifying (and in particular, bifurcating) a secured creditor's claim arising from a lien on the debtors' mobile home.
Reversed by Ennis v. Green Tree Servicing, LLC (In re Ennis), 558 F.3d 343 (4th Cir. 2009).
The Court granted a motion to award compensation and reimbursement of attorney's fees based on the lodestar method and the factors promulgated in Johnson v. Ga. Highway Express, Inc, 488 F.2d 714, 717-19 (5th Cir. 1974) and adopted by the Fourth Circuit in Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir 1978).
The Court held that, as held in The Bank of New York, Tr. of the Oakwood Acceptance Corp. REMIC Trust 1994-1 v. Leake (In re Wuerzberger), 284 B.R. 814 (Bankr. W.D. Va. 2002), Virginia's titling statutes and version of Article 9 of the Uniform Commercial Code do not require an assignee to refile a financing statement to preserve its reflected status or to amend a certificate of title to reflect its name as a condition of perfection because, so long as no new liens are created by an assignment, the world is properly on notice of the lien and could readily ascertain the nature of the lien even if the assignee's name does not appear on the title. Therefore, the Court sustained a creditor's objection to the confirmation of debtor's Chapter 13 plan based on debtor's treatment in the Chapter 13 plan of such creditor's claim as an unsecured claim rather than as a secured claim.
Secured creditor filed an adversary proceeding against Benefit Plan Administrators ("BPA") to recover damages resulting from an alleged breach of contract in BPA's administration of the Debtor's employee insurance program. The secured creditors asserted that BPA failed to process claims through a stop loss insurance provider as required under the Third Party Administration Agreement Contract. BPA moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). The Court found that the Third Party Administration Agreement did not mention any requirement to process claims through a stop loss insurer. Accordingly, the Court granted BPA's motion to dismiss.
The Court held that a Georgia state court judgment was nondischargeable under 11 U.S.C. § 524(a)(4). The Court, relying on In re Ansari, 113 F.3d 17 (4th Cir. 1997) and In re Uwimana, 274 F.3d 806 (4th Cir. 2001), concluded that defalcation occurs when a fiduciary fails to properly account for funds or money held in a fiduciary capacity. Further, it is sufficient for a finding of defalcation if the funds are missing due to negligence or an innocent mistake on the part of the fiduciary. In the case of defalcation, once a plaintiff has shown that the defendant serves or served in a fiduciary capacity and that money or other property entrusted to the fiduciary for the benefit of the plaintiff is missing, the burden shifts to the defendant to properly account for the missing property.
The defendant used assets in a Trust to fund business ventures owned by himself and his family. The evisceration of the Trust was due to willful and deliberate conduct of the Defendant in his capacity as a trustee, which was calculated and intended to cause harm and loss to the plaintiff. The defendant did not adequately explain his decision to invest trust assets in his own high-risk small businesses. Accordingly, the Court held that the Georgia state court judgment was nondischargeable under 11 U.S.C. § 524(a)(4).
The Court granted, in part, a creditor's motion for relief from the automatic stay under 11 U.S.C. § 362(a) by (1) enabling creditor to subpoena documents, at creditor's expense, from the Chapter 7 trustee that creditor cannot obtain by other means, (2) permitting creditor to conduct discovery against insiders of debtor (officers and directors), (3) not requiring the Chapter 7 trustee to respond to any interrogatories or any subpoena for deposition, and (4) not permitting creditor to commence or continue any act to obtain possession of or exert control over either property of debtor or of the estate.
Regarding an insurance payout from a policy held by the debtor on an automobile destroyed post-petition, the Court granted the debtor’s motion to disburse insurance proceeds, denied creditor’s motion to direct the Chapter 13 trustee to pay insurance proceeds to secured creditor, and denied the creditor’s motion for relief from stay because (1) the Chapter 13 trustee is the loss payee on the insurance policy, (2) the insurance policy is property of the estate under 11 U.S.C. § 541(a) because it was held pre-petition, (3) the creditor failed to establish that it has a perfected security interest in the insurance policy or its proceeds, (4) as held in American Bankers Ins. Co. v. Maness (In re Houska), 101 F.2d 358 (4th Cir. 1996), casualty insurance proceeds upon property are proceeds of the insurance policy rather than proceeds of the insured property, and (5) the insurance payout should be limited to the unpaid balance of the creditor’s secured claim according to the terms of the confirmed Chapter 13 plan rather than paid to the full extent of the unpaid balance on the contract.