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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.

P.A. Plymouth, Inc. v. Benefit Plan Adm'rs, Inc. (In re P.A. Plymouth, Inc.) (Case No. 03-03350; A.P. No. 07-07032) 09/28/2007

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.

Hartman v. Barrientos (In re Barrientos) (Case No. 05-63448; A.P. No. 07-06064) 09/25/2007

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).

In re Talbott, Inc. (Case No. 06-61919) 09/06/2007

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.

In re Dotson (Case No. 05-71314) 08/30/2007

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.

In re Meadows (Case No. 06-62050) 08/24/2007

Relying on the “hanging” paragraph in §1325(a), the Court overruled a creditor's objection to plan confirmation and held that a debtor may surrender collateral in full satisfaction of a claim when the value of the collateral is less than the amount of the claim.   The creditor contends that the Court erred in overruling its objection and requested certification to take a direct appeal to the Court of Appeals pursuant to Section 1233. Because the Court's order involved a question of law as to which there is no controlling decision of the United States Court of Appeals for the Fourth Circuit or the Supreme Court of the United States, the Court granted the creditor's motion for certification.

In re Phillips (Case No. 07-71045) 08/20/2007

The Court denied the debtors' application for waiver of the Chapter 7 filing fee pursuant to 28 U.S.C. § 1930(f) because the debtors have not proven by a preponderance of the evidence that they are unable to pay the normal filing fee in installments, especially given the debtors' excess of income over expenses and the debtors' expenses for cell phones, satellite TV service, and a Christmas Club account.

United States Trustee v. Khan (In re Khan) (Case No. 06-60648; A.P. No. 06-06074) 08/16/2007

The Court denied the debtor's discharge based on the United States Trustee's complaint objecting to entry of discharge because the debtor failed to divulge information about the loss or deficiency of his assets to which his creditors are entitled under 11 U.S.C. § 727(a)(5), and the debtor failed to maintain corporate books and records or to provide the location of any such records under 11 U.S.C. § 727(a)(3) thereby preventing the United States Trustee from ascertaining the corporation's true value and the true financial condition of the debtor.

In re Moore (Case No. 07-60231) 07/31/2007

The Court held that (1) under 11 U.S.C. § 727(b), a Chapter 7 discharge discharges the debtor from all debts that arose before the date of the order for relief under Chapter 7, (2) under 11 U.S.C.  § 348(a), the conversion of a case from a case under one chapter to a case under another chapter constitutes an order for relief, but does not change the date of the order for relief, and (3) an award made pursuant to a division of property is not in the nature of alimony, maintenance, or support and thus is not a domestic support obligation under 11 U.S.C. § 507(a)(7) entitled to priority status.

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