The Court overruled the mortgage creditor’s objection to confirmation of the debtor’s Chapter 13 plan, which proposed to “cram down” the home mortgage, finding that because the final payment due on the mortgage was due prior to the filing of the instant case, such payment became due prior to the final payment under the plan is due, and so the treatment in the plan of the mortgage satisfied the exception to the “anti-modification provision” of 11 U.S.C. §1322(b)(2) which is found in 11 U.S.C. §1322(c)(2). The Court determined the value of the residence for confirmation purposes based on the only evidence before it, the value ascribed to the property by the Crittenden County Assessor.
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Opinions
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Chief Judge Phyllis M. Jones
The estate of a deceased driver sought to have a state court judgment determined to be nondischargeable under Section 523(a)(6) where the debtor/defendant caused the driver’s death in a two-vehicle collision. The court granted summary judgment in favor of the debtor/defendant where the plaintiff did not present evidence to dispute that the debtor/defendant did not deliberately or intentionally cause the injury nor target the victim failing to meet the willful and malicious standards of Section 523(a)(6).
The bankruptcy court found that a $100,000 transfer made to the debtor from his aunt was a loan, not a gift, and that the debtor made false representations to his aunt to induced her to transfer the money to him making the debt nondischargeable as a debt obtained by false pretenses, false representations and actual fraud under to Section 523(a)(2)(A).
Judge Bianca M. Rucker
In this adversary proceeding, the Court denied the chapter 7 trustee’s request to set aside the debtor’s prepetition transfer of his interest in a home the debtor had purchased for a friend and her children, finding that the transfer was not testamentary in nature, there was no mutual mistake, undue influence, unjust enrichment, or confidential relationship between the parties, and the debtor did not lack mental capacity despite his history of anxiety and depression.
In this chapter 13 case, the debtors filed a motion under 11 U.S.C. § 522(f) to avoid a “clean-up lien” obtained by the City of Fort Smith pursuant to Arkansas Code Annotated section 14-54-903 for costs the City incurred in connection with removing a dead tree from the debtors’ property after the debtors failed to remove the tree within seven days of receiving notice from the City that the tree constituted an ordinance violation. Because the Court found that the City held a statutory lien that was not subject to avoidance under § 522(f), the Court denied the debtors’ motion to avoid lien.
The Court found that the creditors willfully violated the automatic stay when they sought and obtained a body attachment order in state court. The Court awarded actual damages for emotional distress and, because the creditors’ actions were intentional and egregious, the Court also awarded punitive damages.
The Court granted in part and denied in part the creditor’s motion for summary judgment, finding that the doctrine of collateral estoppel precluded further litigation of the debtor’s liability under § 523(a)(2)(A) based on a default judgment for fraud in the inducement entered against the debtor in Florida. The Court also found that the doctrine of collateral estoppel precluded further litigation of the debtor’s liability under § 523(a)(6) for certain attorney fees and costs awarded by the Florida court to the creditor’s predecessor in interest as a result of the debtor’s fraudulent conduct during discovery. The Court found both debts nondischargeable and reserved the determination of the amount of the debts for trial.
Judge Richard D. Taylor
Although attorneys are responsible for flawed research generated by artificial intelligence, sanctions may be mitigated under the circumstances.
A chapter 13 debtor’s liability as a guarantor on an unmatured, not defaulted debt does not count against them as a noncontingent debt for purposes of eligibility.