After a trial, the court ruled for the plaintiff on the non-dischargeability of a debt under §§ 523(a)(2)(A), (a)(4), and (a)(6). The debt was owed by the debtor and the car dealership he owned and operated, and resulted in part from selling vehicles out of trust and pledging the same collateral to more than one lender. The debt owed by the non-debtor dealership was the full amount of the contract claim arising from the breach of the financing and security agreement and judgment was entered accordingly. Judgment was entered against the debtor only for the portion of the debt attributable to his embezzlement and his fraudulent and willful and malicious conduct, and that amount was excepted from discharge.
You are here
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.
The court denied without prejudice a motion to compel production of documents, finding that the documents requested were covered by the attorney-client and work product privileges. This lawsuit is a contract dispute about insurance coverage. The defendant wants to see emails sent between non-attorney employees of the plaintiff concerning coverage for the loss at issue, but those emails are privileged because they discuss the advice and opinions of legal counsel. Work product privilege also applies because the plaintiff retained outside counsel for the dispute, indicating that an adversarial relationship existed.
After a trial on the debtor’s objection to the claim filed by her ex-husband, the court ruled the debtor should receive credit for alimony and property settlement payments made directly to the creditor.
The parties’ divorce decree provided for the debtor to pay her former husband monthly “alimony” payments and property settlement payments that by the terms of the decree were to be used to pay down joint debt. The debtor was not responsible for paying monthly child support to her former husband as the custodial parent, but both parties were to equally share the children’s medical and day care expenses.
The debtor paid more than $34,000 in alimony and property settlement payments directly to her former husband for four years. He considered the payments to be applicable to the children’s expenses. After her former husband made legal demands and garnished her wages for past-due alimony and property settlement payments, the debtor filed this Chapter 13 case. The former husband filed a bankruptcy claim for priority domestic support, and the debtor objected.
The bankruptcy court ruled that the debtor proved the payments were for alimony under the terms of the divorce decree, and that her payments directly to the creditor rather than through the state court does not disqualify their applicability to the alimony judgment and property settlement. As a result, the creditor has an unsecured priority claim under § 507(a)(1)(A) for unpaid alimony in the principal amount of $4,443.43, plus interest of $24.15, for a total of $4,467.58. The creditor also holds a general unsecured claim for the unpaid property settlement judgment in the principal amount of $57,600, plus interest of $1,442.60, for a total of $59,042.60.
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.
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 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 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.”
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 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.