You are here

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.

Rosen v. Texas Guaranteed Student Loan Corp. (In re Rosen) (Case No. 23-61235; A.P. No. 24-06016) 03/25/2025

The debtor filed a complaint requesting that the Court determine that excepting his student loan debt from discharge imposes an undue hardship on him and his spouse, and thus under Bankruptcy Code section 523(a)(8), his student loan debt should not be excepted from discharge. The Court found that the debtor met the three prongs of the Brunner test to show that repayment of the student loan debt imposes an undue hardship on him. Accordingly, the Court entered an order discharging the debtor’s student loan debt.

In re Yellow Poplar Lumber Company, Inc. (Case No. 17-70882) 1.22.25

An involuntary Chapter VII bankruptcy petition was filed against Yellow Poplar Lumber Company, Inc. under the Bankruptcy Act of 1898. The case was closed and then later reopened when the bankruptcy estate received proceeds from gas wells on property Yellow Poplar had an interest in at the time of its bankruptcy. The Trustee was left with $422,857.12 in unclaimed funds, which were transmitted to the Clerk of this Court. The issue before the Court is which version of Section 66 of the Bankruptcy Act applied: the 1956 version or the version in effect when the bankruptcy case was pending. The statute, as amended in 1956, provided that unclaimed funds were not subject to escheat under the laws of any state. The State of South Carolina asserted that under the pre-1956 version the funds are subject to escheat back to individual States where deceased shareholders who left no heirs were located. While Yellow Poplar went bankrupt in 1928, the natural gas royalties that give rise to the unclaimed funds did not manifest themselves until many decades after the case was closed. Since the funds did not exist prior to 1956, and therefore could not have escheated to any state prior to the date of amendment, the Court held that the 1956 amendment to Section 66 applies. As the unclaimed funds are not subject to escheat, the Court denied the State of South Carolina’s motion to pay the unclaimed funds into the registry of the court and then transfer the case and the funds back to the District of South Carolina.

Beavers v. City of Radford Treasurer (In re Beavers) (Case No. 24-70598; A.P. No. 24-07018) 11/06/2024

Debtors filed complaint for violation of automatic stay alleging creditor continued collection efforts against Debtors for pre-petition debt after filing, which they alleged caused them harm. Court construed complaint as request for damages for violation of discharge injunction of 11 U.S.C. § 524(a). Court found that creditor violated the discharge injunction and ordered the creditor to pay the Debtor’s actual damages in the amount of attorney’s fees incurred, but did not award additional damages to the Debtors as their allegations of time spent on the case were overly speculative and they did not present any evidence of lost wages as a result. Nor did the Court award emotional damages as that is not an appropriate item of damages for civil contempt. Court found no egregious or vindictive conduct on the part of the creditor and also did not award punitive damages.

In re Arnold (Case No. 23-61057) 08/26/2024

In this case, the Chapter 7 Debtor filed a motion to impose sanctions against a creditor alleging that the creditor violated the automatic stay and the discharge injunction by making 50 or more collection calls to the Debtor and his family members. The Debtor failed to redeem the collateral or enter into a reaffirmation agreement regarding the vehicle, so the Court found that the timing of the creditor’s action in the case was more appropriately governed by the discharge injunction than the automatic stay. The Court held that the Debtor failed to meet his burden of proof that the creditor violated the discharge injunction as the evidence showed that the creditor was not trying to coerce the Debtor to make a payment he did not want to make or attempting to collect a debt from the Debtor as a personal liability, but instead was calling when the payments were either due or late to determine if the Debtor wanted to perform under his contract to stave off repossession. Therefore, the Court denied the motion with a word of caution to the creditor that there comes a point where the sheer volume of calls tips a legitimate inquiry as to intent into coercive behavior.

Brown v. Goldman Sachs Bank USA (In re Brown) (Case No. 23-70426: A.P. No. 24-07009)

This adversary proceeding was brought by two debtors as a class action against Goldman Sachs Bank seeking damages for alleged violations of the automatic stay. Goldman Sachs responded by filing a motion to compel arbitration asserting that the debtors signed agreements with the creditor that contained enforceable provisions requiring such claims to be arbitrated. The debtors assert that their claims are constitutionally core claims that stem from their bankruptcies and that the bankruptcy court has discretion to retain the claims. While the Court recognized the federal policy favoring arbitration, it also recognized the competing considerations between the Federal Arbitration Act and the Bankruptcy Code. The Fourth Circuit has stated that the party seeking to prevent enforcement of an arbitration agreement must show that Congress has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue. One factor that the Court considers in determining this intent is whether an inherent conflict exists between arbitration and the statute’s underlying purposes. Finding that there was an inherent conflict between the Federal Arbitration Act and the Bankruptcy Code provision at issue in this case, the Court denied Goldman Sachs Bank’s motion to compel arbitration. The Court found that the claims were constitutionally core as the logical outgrowth of the authority giving rise to the Bankruptcy Code itself. Further, the Court exercised its discretion to maintain the claims in this case before the bankruptcy court as being more consistent with the goals of the Bankruptcy Code as the automatic stay is one of the fundamental debtor protections under the Code.

In re Hayes (Case No. 23-61366) 03/07/2024

The debtor filed a chapter 13 case pro se. This case was his sixth bankruptcy case and the fourth case in eighteen months. The debtor filed many documents with the Court regarding an ongoing dispute he had with the mortgage company; however, he did not pay the filing fee and failed to file the required schedules, statements, and chapter 13 plan. Based on this failure to fulfill his duties under the Bankruptcy Code, the Court found cause to dismiss the case. In addition, based on the debtor’s conduct in this case and his prior cases, both the chapter 13 trustee and the U.S. Trustee filed motions to dismiss the case with conditions. In dismissing the case, the Court conditioned the dismissal with a bar on refiling for a period of 365 days.

In re Poullath (Case No. 23-61057) 03/07/2024

The chapter 13 trustee objected to the debtor’s use of Virginia Code § 34-13, and that section’s reference to unused exemption amounts under Virginia Code § 34-4, to claim an exemption in personal property not used as her primary residence. The Court declined to read prohibitive language into the Virginia Code that was not present. Because Virginia Code § 34-13 by its terms permits a householder in Virginia to claim an exemption in personal property up to the value of any unused portion of the exemption to which she is entitled to claim under Virginia Code § 34-4, the Court found that the debtor was entitled to claim an exemption under Virginia Code § 34-13 in her personal property. The Court thus overruled the chapter 13 trustee’s objection.

In re Smith (Case No. 23-70619) 1/18/24

In this case, the City of Roanoke scheduled and held a judicial tax sale on real property. Unknown to the City at the time, the sale was held just a few minutes after the Debtor filed for bankruptcy. The City asserted that pursuant to Virginia Code Section 58.1-3974 the Debtor lost her equitable right of redemption on the day prior to the scheduled judicial sale, therefore the Debtor had no legal or equitable interest in the property at the time of the bankruptcy filing. The Court distinguished this case from an earlier opinion, In re Whitlow, a case where the debtor filed her petition days after the sale had taken place. The Court held that the property still belonged to the Debtor legally and equitably at the time her case was filed as the sale had not begun by the time the Debtor filed her petition. Therefore, the sale was conducted in violation of the automatic stay.

Advancial Federal Credit Union v. Cruz (In re Cruz) (Case No. 23-70483; A.P. No. 23-07020) 12.26.23

The Court denied the Chapter 13 Trustee’s motion to intervene in an adversary proceeding filed by a creditor seeking determination of nondischargeability of credit card debt arising from an alleged internet scam. The Trustee asserted he has an interest in the outcome of the adversary proceeding due to his trustee duties under Section 1302(b); that he has an interest in the success of each debtor’s case and that allowing him to intervene would not prejudice or unduly delay the plaintiff’s rights. The Court held that the Trustee did not have a right to intervene under Rule 24(a)(2) as he did not demonstrate a significantly protectable interest in the adversary proceeding. The Court further held that the Trustee did not demonstrate a basis for permissive intervention under Rule 24(b)(1)(B). Finally, the Court held that Federal Rule of Bankruptcy Procedure 6009 did not support intervention.

In re Dobson (Case No. 23-60148) 09/29/2023

The debtors filed a joint chapter 11 petition and elected to proceed under subchapter V of chapter 11. The U.S. Trustee moved to convert the case to chapter 7 pursuant to section 1112(b) of the Bankruptcy Code. At trial, after counsel for the U.S. Trustee completed his presentation of evidence, counsel for the debtors requested the Court grant judgment on partial findings pursuant to Federal Rule of Civil Procedure 52(c). The Court found that the U.S. Trustee had not shown cause under section 1112(b) to convert the case and granted the debtors’ Rule 52(c) motion.

Pages

View all »