The court granted summary judgment to the debtor’s former spouse, finding the debt owed by the debtor to equitably divide the parties’ property pursuant to the divorce decree is excepted from discharge under § 523(a)(15). The non-dischargeable amount includes the attorney’s fees awarded by the state court in connection with a contempt order entered in the plaintiff’s favor when the debtor failed to make an installment payment on the property judgment when due.
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After a trial seeking denial of discharge under 11 U.S.C. § 727, the court ruled in favor of the debtor. The plaintiff had filed the complaint seeking a declaration that the debtor is a business partner to his non-debtor spouse, who owns a business that buys, breeds, and sells cattle. Because the debtor did not list this alleged partnership interest in his bankruptcy schedules or Statement of Financial Affairs, and declared under oath the schedules as filed were correct, the plaintiff sought to deny him a discharge from his debts under §§ 727(a)(2) and (4).
After hearing the evidence, the court found that the business belongs to the debtor’s wife and is operated by her and her children without input or assistance from the debtor. The court ruled:
The plaintiff’s argument is based primarily on assumptions and inferences rather than facts. Plaintiff is essentially asking the court to assume that [Debtor’s wife] could not conduct the business of buying, breeding, and re-selling cattle without substantial involvement by [the debtor], who had a longer history of such activities. The court, however, cannot rely on assumptions and inferences. Instead, facts must be presented. As discussed above, the facts are lacking.
Plaintiff has failed to prove the existence of a partnership by a preponderance of the evidence. Therefore, Count I of plaintiff’s complaint seeking a declaratory judgment as to the existence of a partnership is denied. Further, Counts II and III seeking denial of discharge are also denied as they are premised on the existence of a partnership under Count I.
After a trial on a creditor’s motion for relief from the automatic stay and the debtor’s objection to that creditor’s proofs of claim, along with a request for valuation and cramdown, the court granted the motion for stay relief because the debtor did not own nor did he have a leasehold or possessory interest in the secured real estate, and no justification was shown for extending the automatic stay to third parties.
While the debtor does not own the real estate and his discharge would not affect the creditor’s lien against the property pursuant to § 524(e), the court ruled on the valuation issues concerning the land in order to ascertain whether the debtor could develop a confirmable plan. After evaluating the testimony of each party’s expert witness, the court found the creditor’s valuation to be more reliable, resulting in the creditor being over-secured. The court therefore overruled the debtor’s objection to the creditor’s claims.
Because the debtor’s pending Chapter 12 plan was predicated upon the creditor’s claims being crammed down as under-secured, the court gave the debtor an opportunity to show cause why the case should not be dismissed for failure to propose a confirmable plan.
This adversary proceeding was filed by a creditor holding a judgment in a state-court lawsuit finding that the debtor had committed tortious conversion. The complaint seeks a denial of discharge under § 727(a)(4)(A) because the debtor failed to disclose certain assets in his bankruptcy schedules and at his § 341 meeting, or, alternatively, an exception from discharge based on § 523(a)(4).
The debtor filed a motion for partial judgment on the pleadings as to the denial of discharge. The court denied the motion, stating that while “there is no dispute that certain information was omitted from Navarro’s initial set of bankruptcy schedules, although they were later amended, and that testimony he gave at his § 341 meeting was not factually accurate[, t]he key issue is whether those statements were knowingly and fraudulently made. It is difficult for the court to determine whether a debtor’s actions were intentional without the opportunity to hear from the debtor and gauge his credibility.”
The creditor filed a motion for summary judgment regarding the exception from discharge under § 523(a)(4) for larceny, on the basis that the state court judgment is res judicata. Had that judgment been made part of the record in the bankruptcy court, the summary judgment motion likely would have been granted. However, the court denied it on the grounds that the lack of evidence rendered it impossible to determine what facts, if any, concerning dischargeability under § 523(a)(4) were in dispute.
The court denied the plaintiff’s motion for summary judgment on its § 523(a)(2) claims to except a debt from discharge because factual issues exist as to the debtor’s intent in his statements to the bank and whether the bank justifiably relied on that information.
The bankruptcy court granted the debtors’ motion to dismiss an adversary proceeding against them, on collateral estoppel and Rooker-Feldman grounds. The adversary complaint sought a determination that debts owed to the plaintiffs, based on a state court judgment, were excepted from discharge under § 523(a)(2). The plaintiffs had filed a lawsuit in state court alleging fraudulent misrepresentation and breach of contract in connection with a lease of real property. The state court ruled against the plaintiffs on the fraudulent misrepresentation claim, specifically finding they did not prove fraudulent intent. Collateral estoppel prevents an issue that was fully and fairly litigated by the parties in state court with a final judgment on the merits from being relitigated in bankruptcy court. Therefore, the § 523(a)(2) claim premised on false representations was barred. In addition, the Rooker-Feldman doctrine bars the bankruptcy court from exercising subject-matter jurisdiction over the fraudulent misrepresentation claims because of the possibility of undermining the state court decision.
The court denied the parties’ cross-motions for summary judgment on the judgment creditor’s complaint that the debt is non-dischargeable under § 523(a)(2)(A) and on the debtor’s counterclaim for breach of the automatic stay based on the creditor’s correspondence with the state court. The state-court default judgment did not establish the necessary elements – in particular, false representation and intent – of § 523(a)(2)(A), so it could not on its own support an exception from discharge for this debt and further fact-finding was necessary. Likewise, while the creditor’s violation of the automatic stay did appear to be willful, the record did not support a summary award of damages.
The debtor filed this adversary proceeding alleging breach of contract and fraud against the seller from whom the debtor bought an affordable housing complex. The court denied the defendant’s motion to dismiss the adversary complaint for failure to state a claim, finding that if the allegations in the complaint are construed in favor of the plaintiff, they are legally sufficient to survive dismissal.
On the debtors' challenge to the claim filed by their mortgage holder and servicer, the court granted summary judgment in favor of the creditor. First, the court determined the debtors had no standing to challenge the assignment of the promissory note to its current holder because they hadn't shown any harm to themselves as a result of the assignment, and because they earlier in the bankruptcy case had conceded that the note holder holds a valid perfected security interest in their residence. Second, the court determined the debtors had not produced sufficient evidence under Rule 3001(f) to rebut the prima facie validity of the claim.
The bankruptcy court granted summary judgment to a creditor in this Chapter 13 case, finding the debt non-dischargeable under 11 U.S.C. § 1328(a)(4). The creditor holds a judgment for actual and punitive damages and attorneys' fees for the debtor's willful, malicious, and reckless violation of the Iowa law against unauthorized interception and disclosure of oral communications. The court determined that the debt constitutes a debt "for . . . damages awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual" and is not dischargeable pursuant to § 1328(a)(4).