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Bankruptcy Year In Review 2014

By Dennis Wickham

San Diego County Bar Association

February 17, 2015

UNITED STATES SUPREME COURT

Clark v Rameker,

573 U.S. ___, ___ S.Ct., L.Ed.2d ___ (2014)

Funds in an inherited IRA are not “retirement funds” exempt under 11 U.S.C. section 522(b)(3)(C).

Executive Benefits Ins. Agency v. Arkinson

573 U.S. ___, ___ S.Ct., L.Ed.2d ___ (2014)

Bankruptcy court’s judgment in core “Stern” claim may follow the statutory provision for review of non-core claims (proposed findings/conclusions subject to de novo review by the district court.

Law v. Siegel

573 U.S. ___, ___ S.Ct., L.Ed.2d ___ (2014)

Exempt property is really exempt under 11 U.S.C. section 522(k). A bankruptcy court may not surcharge or deny an exemption based on the debtor’s inequitable conduct.

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Deitz v Ford

760 F.3d 1038 (9th Cir 2014)

Bankruptcy court may enter final monetary judgment in complaint alleging debt is excepted from discharge.

Haag v. Northwestern Bank

584 Fed. Appx. 620 (9th Cir. 2014)

Debtor denied discharge for placing cash in safe deposit box and transferring funds to spouse pre-petition.

Hawkins v. Franchise Tax Board

769 F.3d 662 (9th Cir. 2014)

Specific intent is required to find a debtor’s tax liabilities are excepted from discharge for a willful attempt to evade or defeat taxes. (Extravagant lifestyle is not enough.)

In re Icenhower

757 F.3d 1044 (9th Cir. 2014)

Bankruptcy court had jurisdiction to adjudicate unauthorized postpetition transfer affecting real property in Mexico.

Mastro v. Rigby

764 F.3d 1090 (9th Cir. 2014)

Bellingham (consent allows entry of final judgment by bankruptcy court over stern claims) is binding in Ninth Circuit. Appeal of fraudulent conveyance judgment cannot be dismissed based on defendant’s flight from jurisdiction.

In re MERS

754 F.3d 772 (9th Cir. 2014)

Upholds dismissal of multi-district challenge to foreclosures of trust deeds within MERS system because none of the plaintiffs alleged lack of default, tender, or excuse from tender.

In re The Mortgage Store, Inc.

773 F.3d 990 (9th Cir. 2014)

Liability as an initial transferee is based on the dominion test rather than control.

In re Mwangi

764 F.3d 1168 (9th Cir. 2014)

Bank’s administrative freeze on debtor’s account (pending guidance from Trustee, abandonment, or running of time to object to exemption) is not a violation of the automatic stay.

Schultze v. Chandler

765 F.3d 945 (9th Cir. 2014)

Malpractice action against counsel for Official Creditors Committee is a core proceeding.

In re Schwartz-Tallard

765 F.3d 1096 (9th Cir. 2014)

Debtor may recover as damages the attorney’s fees incurred on creditor’s appeal of the order finding a violation of the automatic stay.

Shapiro v Henson

739 F.3d 1198 (9th Cir. 2014)

Trustee can seek “turnover” of funds no longer in debtor’s possession or control.

Snowden v Check Into Cash of Washington

769 F.3d 651 (9th Cir. 2014)

Pay day lender’s conditional settlement offer did not work to avoid punitive damages for violation of automatic stay.

 

BANKRUPTCY APPELLATE PANEL FOR THE NINTH CIRCUIT COURT OF APPEALS

In re Dale

505 B.R. 8 (9th Cir. BAP 2014)

Inheritance received more than 180 days after filing petition but prior to confirmation of Chapter 13 plan is property of the Chapter 13 estate.

In re Dingley

514 B.R. 591 (BAP 9th Cir. 2014)

Civil contempt against debtor for failure to pay discovery sanctions is not a violation of the automatic stay.

In re Elliott

523 B.R. 188 (BAP 9th Cir. 2014)

Exemption cannot be denied on grounds that the debtor acted in bad faith.

In re Huh

506 B.R. 257 (BAP 9th Cir. 2014)

Agent’s fraud may be imputed to the debtor-principal if the debtor knew or should have known of the fraud even without active participation.

In re Makosian

506 B.R. 273 (BAP 9th Cir. 2014)

Bonus received by employee debtor during Chapter 11 case reverted to debtor on conversion to case under Chapter 7.

In re Neff

505 B.R. 255 (BAP 9th Cir. 2014)

One year period for transfer under section 727(a)(2)(A) is not subject to equitable tolling.

In re Rivera

511 B.R. 643 (BAP 9th Cir. 2014)

Debt owed to county for some costs of incarceration of minor son is a nondischargeable domestic support obligation, and collection does not violate automatic stay.

 

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Heller Ehrman LLP v Davis Wright Tremaine (In re Heller Ehrman)

___ B.R. ___ (N.D.Cal. 2014)

Trustee for dissolved law firm had no property interest in hourly fee matters pending at time of its dissolution, for which law firm's former partners had any duty to account.

 

UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

In re Scoggins

517 B.R. 206 (Bankr. E.D.Cal. 2014)

Guidelines for when Chapter 7 Trustee’s fees will be reduced for “extraordinary circumstances” requiring detailed fee applications when the fees exceed $10,000; in which the fees exceed the amount available to pay creditors; and in cases involving short sales and carve outs.

 

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

In re Arellano

517 B.R. 228 (Bankr. S.D.Cal. 2014 Taylor)

Bankruptcy court cannot deny debtor’s request to amend his exemption schedule to exempt previously undisclosed assets under Law v Siegel.

In re Pugh

522 B.R. 277 (Bankr. S.D.Cal. 2014 Mann)

California exemption for “Head of Household” satisfied where custody of minor child is shared with ex-spouse.

 

CALIFORNIA

CCP Section 701.680(e)

Preserves equitable right of redemption following judicial sale/foreclosure for creditor/purchaser misconduct.

California Bank & Trust v DelPonti

232 Cal.App.4th 162 (2014)

Guarantor’s waiver of statutory defenses does not waive equitable defenses such as unclean hands.

Feresi v The Livery LLC

182 Cal.App.4th 169 (2014)

If a security interest is perfected in breach of a fiduciary duty, equitable principles may give priority to an earlier unperfected interest.

First California Bank v. McDonald

231 Cal.App.4th 550 (2014)

Agreement by secured lender and one co-borrower to a short sale barred deficiency judgment against co-borrower (who did not consent to sale) under one form of action rule.

Stine v. Dell’Osso

230 Cal.App.4th 834 (2014)

Wrongdoer’s unclear hands are not imputed to successor fiduciary.

US Bank N.A. v. Yashouafar

232 Cal.App.4th 639 (2014)

Prepayment fee construed to require payment and not mere acceleration upon a default.

CAL State Bar Ethics Opinion 2014-191

Attorney may represent debtor in simple, no asset Chapter 7 and simultaneously represent a creditor of the debtor

April 13th, 2015  |  Categories: Business Insolvency & Creditors’ Rights