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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.

On the Chapter 13 trustee’s objection to exemptions – particularly to the debtor’s use of the Schedule C check box for “100% of fair market value, up to any applicable statutory limit” – the court ruled:

A debtor is not prohibited from using the 100% FMV Box. But the box should be used sparingly. If a debtor selects the 100% FMV Box, the debtor must ensure the trustee can determine the amount of the exemption claimed from Schedule C and the applicable statute. If a debtor creates an ambiguity in claiming an aggregate exemption more than one time, an objection to exemptions will be sustained.

The 100% FMV Box may have little to no value to a debtor. If a debtor uses the 100% FMV Box and the trustee objects, Schwab makes value an issue [and an evidentiary hearing with live testimony will be required].

The court denied a creditor’s motion to extend the deadline to file a complaint objecting to the debtors’ discharge or to determine the dischargeability of debts. The court declined to equitably toll the deadline because the creditor’s counsel did not act diligently to preserve the creditor’s rights, instead waiting until the afternoon of the last day to contact debtors’ counsel about extending the deadline, then encountering technical difficulties in attempting to file the agreed-upon motion. The court noted that equitable relief is granted sparingly, and is unlikely to be used to rescue a claimant who has failed to exercise due diligence in protecting his rights. Here, the court said, too many questions remain as to why creditor’s counsel did not act more promptly or take additional steps to protect the client’s rights.

The debtor and his parents filed separate adversary complaints seeking to subordinate or disallow the claims of a creditor and to rescind or reform deeds of trust in which that creditor is beneficiary. After a trial on the complaints, the court ruled that because the deeds of trust from the debtor’s parents contain a cross-collateralization clause not within the intent of the parties, the plaintiffs’ claims for reformation are partially granted to remove the clause. All other requested relief is denied.

After a trial, the court denied the plaintiffs’ complaint to except a debt from discharge under § 523(a)(6). The alleged debt concerned a deficiency in the plaintiffs’ share of proceeds from a partition sale forced by the debtor, under facts that seemed more like a breach of contract shoe-horned into a § 523(a)(6) proceeding. The evidence did not support a finding of willfulness or malice on the part of the debtor.

After a trial, the court denied the plaintiffs’ complaint to except a debt from discharge under § 523(a)(6). The alleged debt concerned a deficiency in the plaintiffs’ share of proceeds from a partition sale forced by the debtor, under facts that seemed more like a breach of contract shoe-horned into a § 523(a)(6) proceeding. The evidence did not support a finding of willfulness or malice on the part of the debtor.

The bankruptcy court granted the debtor’s motion to avoid a lien that impaired his homestead exemption under § 522 “[b]ecause the debtor is allowed to claim a homestead in his one-half interest in property, and because there is no evidence or presumption his non-filing spouse consented to a homestead in her one-half interest.” After analyzing the 2011 Nebraska bankruptcy decision of In re Pedersen and the cases cited therein, the court distinguished it from the present case because Pedersen involved a married couple filing jointly while this case involves a debtor and his non-filing spouse. The court would not presume the non-filing spouse consented to the selection of the homestead from her separate property.

After extensively reviewing the history of Nebraska’s homestead law, the bankruptcy court held that a married couple may claim only a single homestead exemption in one parcel of property.

When the Nebraska legislature amended § 40-102 in 2014, it allowed either spouse to claim the homestead, but it “did not change the fact the claiming spouse makes the selection for the married couple.” The court gave several reasons for this:

Section 40-102 continues to differentiate between married couples and unmarried individuals. It retains the consent language. The balance of the act remains unchanged and continues to differentiate between a homestead and the value of the exemption. The homestead continues to be in property, not in an “interest” in property. Finally, and perhaps most importantly, the LB 964 did not change long-standing Nebraska law holding one parcel of property cannot sustain two homesteads.

In speaking to the dissonance between the long-standing proposition of law that two homesteads cannot be claimed in a single parcel of property and the bankruptcy court’s 1997 Roush decision, the court overruled Roush “[t]o the extent [it] could be read to allow a married couple two homesteads.”

After a trial, the court sustained the debtors’ objection to a claim because there was no underlying basis for the debt. The creditor argued it was on account of a breach of contract, but he had no separate judgment on that basis, nor did he plead it in the associated adversary complaint he filed.

The court also ruled in favor of the debtors in the adversary proceeding, which sought to except the debt from discharge under § 523(a)(2)(A). The issue of fraudulent intent came down to the credibility of the parties’ testimony, and the court found the debtor’s explanations to be more believable.

The court overruled an objection to a claim of exemptions under Neb. Rev. Stat. § 25-1552(1).

As to the assertion that the exempted property was potentially incorrectly valued, the court said if the property is worth less than claimed, the excess exemption claimed was not necessary. If any item of property is worth more than the debtors claimed, the excess value remains available for the bankruptcy estate. If the property is worth materially more than claimed or if the debtor did not schedule assets, the remedy is an objection to or revocation of discharge.

As to the assertion that the exemptions were somehow fraudulent, the court pointed out that a generic “scheme of fraud” allegation has not been found to be a valid objection to a wildcard exemption under either federal or state law. Moreover, the objection did not plead fraud with particularity as required by Fed. R. Civ. P. 9.

Finally, the evidence was sufficient to sustain the claimed exemptions.

The bankruptcy court denied a debtor’s objection to the claim of a creditor asserting an attorney’s lien in real estate awarded to her in divorce proceedings. The court ruled that, under Nebraska law, although an attorney does not have a general or possessory attorney’s lien against a client’s real estate, an attorney’s charging lien can attach to real estate that is the subject of and recovered in an action.

However, this order is not final, as issues remain to be decided. Those issues include whether a charging lien attaches to real estate recovered in a divorce action; how much of the lien is secured by the real estate; is an attorney’s charging lien against real estate avoidable in an adversary proceeding as a statutory lien under 11 U.S.C. §§ 544 and 545; and does the secured claim need to be estimated for purposes of a Chapter 13 plan?

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