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Opinions

United States Courts Opinions

United States Courts Opinions (USCOURTS) collection is a collaborative effort between the U.S. Government Publishing Office (GPO) and the Administrative Office of the United States Courts (AOUSC) to provide public access to opinions from selected United States appellate, district, and bankruptcy courts.

The District of Nebraska offers a database of opinions for the years 1997 to current, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.

After a trial on the plaintiff’s complaint to except a debt from discharge under § 523(a)(2)(A), the court ruled for the defendant. The plaintiff loaned $500,000 to the debtor to purchase a controlling interest in a bank. For various reasons, the debtor bought only a minority interest, and the transaction took longer than the plaintiff expected. When the debtor filed a Chapter 7 case, the plaintiff filed this adversary proceeding to have the debt declared non-dischargeable.

None of the evidence presented proved that the debtor deliberately and intentionally made a knowingly false representation to the plaintiff for the purpose of deceiving her at the time she made the loan to him. His intent at the time he obtained the funds was key, and at that time, the evidence indicates he did intend to use the money to buy a bank. This lack of fraudulent intent renders the debt dischargeable.

The bankruptcy court granted summary judgment to a creditor holding a judgment debt and excepted the debt from discharge. The state-court judgment was entitled to preclusive effect on the matter of dischargeability, as the elements of § 523(a)(2)(A), (a)(4), and (a)(6) were established by the state-court record. The debtor did not identify any genuine issues of material fact that would preclude summary judgment.

The bankruptcy court granted a preliminary injunction to the SBA to enjoin the debtors from spending the balance of a loan allegedly obtained by fraud.

The debtors obtained a $500,000 Covid hardship loan from the SBA by representing in their application that they were engaged in the business of farming, operating under a confirmed Chapter 12 plan, and would use the loan proceeds as working capital. None of those representations appear to be true. The debtors did not confirm a plan in their previous Chapter 12 case, they do not own any land or equipment and are about to surrender the few head of livestock they have, their only source of income is Social Security, and they have used the loan proceeds for attorney fees, litigation expenses, and personal living expenses.

The court granted the government’s motion to enjoin the debtors from spending the balance of the loan proceeds/cash collateral. The court found that all of the Dataphase factors had been met: the SBA would suffer irreparable harm if the loan proceeds were spent; SBA would suffer greater harm if an injunction wasn’t entered than the debtors would if their access to the funds was limited; the SBA is likely to succeed on its § 523(a)(2)(A) claim to except the debt from discharge; and public policy favors ensuring that the loan process is not abused and public funds are properly utilized.

A creditor’s pre-petition state court action to rescind a warranty deed and to quiet title to real estate as against the debtors was pending when the Chapter 7 bankruptcy case was filed. The creditor filed a proof of claim, but did not object to dischargeability or discharge. The parties stipulated that the creditor’s claim would be estimated at zero for purposes of distribution to unsecured creditors, and the bankruptcy court ordered that the trustee should not pay that creditor’s claim.

Post-discharge, the creditor obtained relief from the automatic stay to pursue an in rem claim against the real estate. He amended his state court claim to, inter alia, remove his request for money damages. The debtors moved to dismiss the state court action on the grounds that the creditor’s claims had been discharged.

The injunction in the discharge statute plainly applies to in personam actions, but not to in rem actions. Under Nebraska statute, a quiet title action is in rem and unaffected by the discharge injunction. However, the creditor’s complaint sought to do more than quiet title. He also asked to rescind a valid deed, which is generally in personam. The fact that the creditor is not seeking the remedy of money damages does not convert his in personam action into an action in rem because the court could potentially award damages in the state court lawsuit. Accordingly, the creditor’s action is barred by the discharge injunction.

The court granted summary judgment to the plaintiff, finding a judgment debt excepted from discharge under § 523(a)(6) because the debtor willfully injured the plaintiff and acted with malice when he purposefully hit the plaintiff multiple times.

The court denied the pro se debtor a discharge under §§ 727(a)(2), (a)(3), (a)(4) and (a)(5), finding after a trial that the debtor misrepresented her true financial position in her schedules and statement of financial affairs. She amended these only after the U.S. Trustee investigated, found discrepancies, and filed a motion to dismiss for bad faith. The discrepancies were material and numerous, and the cumulative effect and nature of the falsehoods demonstrated a pattern of reckless and cavalier disregard for the truth and established the requisite fraudulent intent.

The court also found that the debtor transferred and concealed large amounts of cash and other property both pre-petition and post-petition, with many of the transfers of personal property and cash occurring after she decided to file for bankruptcy. The evidence demonstrated her intent to hinder and delay creditors.

Likewise, the debtor failed to keep adequate financial records, choosing instead to operate on a cash basis and failing to account for how the cash was spent. She also failed to explain the loss or deficiency of her assets.

The court granted summary judgment to the Chapter 7 trustee, avoiding a lien that was noted on a vehicle’s certificate of title after the bankruptcy petition date. The court found the lien to be an unauthorized post-petition transfer and a preference. Because the lien was not timely noted on the title, it did not attach and was not perfected under Nebraska law. The lien was avoided and the creditor ordered to disgorge payments received on it.

The court denied a creditor’s motion for relief from stay to compel debtor’s specific performance of a pre-petition contract to sell her home. The court found the contract to be executory, as neither party had performed as of the petition date, and it was deemed rejected under § 365(d)(1). The creditor’s right to specific performance is a claim in the bankruptcy case, which can be reduced to money damages. Because the debtor has received a discharge, the creditor is enjoined by the discharge injunction from continuing any action to recover the debt as a personal liability of the debtor.

The debtor moved to avoid a judgment lien on her home because it impaired her homestead exemption. The creditor agreed the lien was partially avoidable; the only dispute concerned the home’s value and therefore to what extent the homestead exemption was impaired.

The court heard testimony from each party’s appraisers and found the creditor’s valuation to be supported by the evidence. The court then did the math (amount of judicial lien plus amount of all other liens on the property plus amount of the homestead exemption less the value of the debtor’s interest in the property absent any liens equals the extent of impairment), and avoided some $59,000 of the creditor’s lien.

The court granted summary judgment to the debtors, ordering that a wholly unsecured junior lien on the debtors= residential real estate may be avoided after the debtors complete Chapter 13 plan payments.

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