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Opinions

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Judge Ben T. Barry

The Court sustained the debtor's objection to Great American Appetizer's PACA proof of claim on the grounds that the food items sold to the debtor did not qualify as perishable agricultural commodities under 7 U.S.C. 499a(b)(4). The Court found that those food products--breaded jalapenos with cheddar cheese, spicy breaded pickle slices, fried green tomatoes, and battered corn nuggets--had been manufactured into articles of food of a different kind or character from the native vegetable ingredients.

The court denied the trustee’s motion to extend time on behalf of herself and all creditors to file a complaint to determine the dischargeability of a debt. The court found that the chapter 7 trustee was not a party in interest within the context of a nondischargeability action under § 523 or Rule 4007(c). The court granted the trustee’s motion to extend time on behalf of herself and all creditors to file a complaint objecting to the debtor’s discharge. Although ordinarily a motion to extend time to object to discharge only applies to the moving party, in this instance the trustee specifically included all creditors in her motion and established cause.

The court granted the United States’s motion for summary judgment after finding that reconsideration of the US Navy’s decision to separate the debtor from service was not a justiciable issue for the court. The debtor’s obligation to repay an enlistment bonus was non-dischargeable because the debtor received his bankruptcy discharge within 5 years of his separation from the Navy.

The Court granted in part and denied in part the debtors' motion to dismiss a creditor's adversary complaint. The Court found that the creditor failed to state a plausible claim under Fed. R. of Civ. Pro. 12(b)(6) or plead fraud with particularity pursuant to Fed. R. of Civ. Pro. 9(b) as to some of the allegations and, accordingly, dismissed those counts.

The debtor filed a motion for contempt against a creditor that would not turnover funds withheld from the debtor’s tax refund after the debtor received his discharge. Although the debtor scheduled the creditor on his petition, the debtor used an incorrect address. The debtor argued that the “no-asset rule” makes the errant listing irrelevant because the debt would have been discharged regardless in this no-asset case. The creditor argued that it deserved the opportunity to assert the non-dischargeability of its debt under § 523(a)(2) for fraud. The court found that § 523(a)(3)(B) was applicable in this instance and denied the debtor’s motion for contempt.

The Court granted the debtor's oral Rule 15(b) motion made at trial and, upon consideration of the debtor's additional ground for objection to the creditor's PACA claim, sustained that objection by finding that the creditor had failed to preserve its PACA trust rights under 7 U.S.C. 499e(c)(3) when it did not include the payment terms in its invoices.

The court found that property a chapter 13 debtor received as a result of a Missouri beneficiary deed when her mother died was not property of the estate in the debtor's converted chapter 7 case pursuant to § 348(f).

Audrey R. Evans

Court found that mortgage servicer's attachment of note indorsed in blank to its proof of claim was not fraudulent based on its prior presentation of an unindorsed note in state court foreclosure action. Court also found that Debtors lacked standing to raise speculation about the proper assignment of the note, particularly where they allege no injury resulting from the note's assignment. Finally, the Court found that the fees listed on servicer's proof of claim were not fraudulently incurred, that Debtors did not show any fees were unreasonable, and that the fees were provided for in the note and mortgage.

In this Chapter 7 case, the Debtors formed a joint venture to conduct their farming operations; the Court previously held that the joint venture was not a separate legal entity. On competing motions for summary judgment, the Court held that the joint venture could grant legally enforceable security interests in property owned by the Debtors individually and that the creditors had perfected security interests in the Debtors' rice and farming equipment with the exception of certain vehicles for which the creditors' names were not listed on the certificates of title. Specifically, the Court found that financing statements filed in the name of the joint venture were not seriously misleading and the creditors filed financing statements in the appropriate location. The Court also determined that a portion of the Debtors' rice crop designated as the "landlord's share" under a lease agreement was subject to a landlord's lien and therefore belonged to the Trustee, as the successor-in-interest to the landlord. The Court further found a post-petition transfer of funds to a creditor was avoidable under 11 U.S.C. § 549, but that the Court must decide a factual issue to determine whether the creditor had a security interest in those funds and to calculate the amount of the Bank's secured claim under 11 U.S.C. §§ 502(h) and 506(a). The Court also denied summary judgment on other issues which required additional findings of fact, including: surcharge, preferential transfers, disallowance of claims, equitable subordination, and violation of the automatic stay. Bank of England v. Rice et al. (In re Webb), 2014 WL 5472568 (Bankr. E.D. Ark. Oct. 23, 2014).

Judge Richard D. Taylor

When a case is dismissed without a confirmed plan, the standing chapter 13 trustee may remit funds on hand to the debtor and insist that attorneys comply with section 503(b) before deducting any outstanding fees

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