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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 Hurt (Case No. 06-71167) 5/11/2007

The Court granted the debtor's motion to impose the automatic stay pursuant to 11 U.S.C. § 362(c)(4).  The debtor filed two previous cases which were pending before the Court within one year prior to the present case, so the presumption that the debtor did not file the present case in good faith arose.  The debtor has the burden to rebut, by clear and convincing evidence, that he did not file this case in good faith.  The Court examined the totality of the circumstances and found that the evidence is sufficient to rebut the presumption of bad faith in Section 362(c)(4), and that grounds for imposition of the automatic stay exist.

In re Waters (Case No. 06-50309) 5/9/2007

The matter before the Court is a creditor's objection to confirmation of the debtors' Chapter 13 plan on the ground that it does not comply with the provisions of the “hanging paragraph” of 11 U.S.C. § 1325(a)(5).  The Court held that the plain language of the "hanging paragraph" of Section 1325(a)(5) prevents the bifurcation of a secured claim into secured and unsecured portions for the purpose of claims filed by 910 creditors.  As such, the 910 creditor holds only a secured claim, which is treated as fully secured.  The surrender of fully secured collateral satisfies an allowed secured claim in full.  Accordingly, the Court overruled the creditor's objection to confirmation.

In re Danville Emergency Physicians, P.C. (Case No. 06-61306) 04/13/2007

The Court held that for purposes of 11 U.S.C. § 303(b) and based on 11 U.S.C. § 549, a creditor is not a qualifying creditor if (1) it receives a transfer of property of the estate post-petition (2) which transfer is not duly authorized by the Bankruptcy Code or the Court, and (3) the creditor does not give value to the alleged debtor during the gap period that is greater than the value of the transfer.  Further, the Court held that there is no ordinary course of business exception to post-petition transfers made during the gap period following the filing of an involuntary Chapter 7 petition, and that former employees of an alleged debtor are not qualifying employees for purposes of 11 U.S.C. § 303(b)(2).  Overall, the Court denied the motion to dismiss an involuntary petition on the ground that there were not three petitioning creditors because the alleged debtor did not have twelve or more qualifying creditors on the date of petition.

U.S. Trustee v. Arnold (In re Arnold) (Case No. 04-51787; A.P. No. 06-05016) 03/29/2007

The United States Trustee filed a Complaint to deny the debtor's discharge pursuant to 11 U.S.C. §§ 727(a)(2), (a)(4), and (a)(6).  The United States Trustee has the burden of proving the objection to discharge, and must prove each element by a preponderance of the evidence.  The Court found in favor of the debtor on all counts, concluding that the evidence supported the debtor's contention that she relied on the good faith advice of her attorney, and as such, could not be found guilty of intent to hinder, delay, or defraud a creditor or officer of the estate, or of making a fraudulent statement absent rebuttal evidence.  Similarly, the debtor's evidence supported her contention that she was unable to comply with the Court's turnover order because her attorney failed to provide her with the paperwork.

In re Sterling (Case No. 07-60237) 03/26/2007

The Court held that the application of 11 U.S.C. § 109(g)(2) is discretionary rather than mandatory.  Therefore, the Court denied a secured creditor's motion to dismiss and granted the debtor's motion to extend the automatic stay to pay in full all amounts evidencing debt to the secured creditor (or else face foreclosure on the debtor's real property) because (1) debtor wanted to and attempted to oppose the secured creditor's motion for relief from the stay in debtor's prior bankruptcy case, (2) debtor was ill-served by his attorney in debtor's prior bankruptcy case, (3) there is little equity in the real property, and (4) there will be virtually no equity in the real property within four months.

Davis v. ABN AMRO Mortg. Grp. (In re Davis) (Case No. 05-72683; A.P. No. 06-07126) 03/15/2007

The Court (1) denied creditor's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) (and Federal Rule of Bankruptcy Procedure 7012(b)(6)) as to the cause of action for alleged negligence because harm from a completed wrongful foreclosure could exceed any purely contractual measure of damages resulting from such an act, and (2) granted creditor's motion to dismiss as to the cause of action for intentional infliction of emotional distress because, under Ely v. Whitlock, 238 Va. 670 (1989), the claim fails to allege with specificity that the creditor's employees made the foreclosure referral with the specific intent of inflicting emotional distress upon the debtors or that they knew or should have known that such distress was likely to occur.

In re Robinson (Case No. 07-30085) 03/09/2007

The Court denied the debtor's application to quash non-revocable wage assignment against co-debtor because, as held in In re Stovall, 209 B.R. 849 (E.D. Va. 1997), real estate tax obligations are not consumer debts within the meaning of 11 U.S.C. § 1301(a).  In support of this holding, the Court found that (1) it is highly doubtful that Congress, by enacting the co-debtor stay of 11 U.S.C. § 1301(a), intended to shield non-filing tax debtors from answering their own enforceable tax obligations due to the bankruptcy filing of a party jointly liable for any such obligation and (2) allowing a voluntary agreement put into effect before bankruptcy with a non-filing co-debtor, the effectiveness of which does not involve the commencement or continuation of legal process, to remain in effect post-filing is not an affirmative act by the creditor which infringes the co-debtor stay of 11 U.S.C. § 1301(a), even if the real estate tax debt at issue were determined to be a consumer debt subject to such provision.

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