Court determined that summary judgment was not appropriate on collateral estoppel grounds where the State Court judgment was entered following the Debtor's failure to participate in the lawsuit. Under Missouri law, a default judgment is not considered a judgment on the merits for collateral estoppel purposes. Furthermore, the issues crucial to a § 523(a)(2) or § 523(a)(4) case were neither presented nor ruled upon by the Missouri State Court, and therefore, the State Court case and the creditor's adversary proceeding were not based on the same issue(s). Finally, the State Court case and the adversary proceeding in bankruptcy were predicated upon a contract alleged to be between the debtor and creditor, when it was in fact between the creditor and an unrelated third party. Accordingly, the creditor's attorney would be ordered to show cause why inaccurate evidence was presented to the court. Ebco Construction Group, LLC v. Garretson (In re Garretson), 377 B.R. 214 (Bankr. E.D. Ark. 2007).
You are here
Opinions
Notice: Not all of the Judges Opinions will be made available on this site. Individual Judges have the option of specifying that all, some or none of their opinions be posted.
Audrey R. Evans
Court entered default against Defendant who failed to answer complaint served on Defendant's attorney. Defendant's attorney had filed a Request for Service in the bankruptcy case-in-chief, which asked Debtors to serve a copy of each notice of any proceeding, hearing, and/or report in this matter on her. The signature block under her name also read Authorized Agent for America's Servicing Company. Because an adversary proceeding is a proceeding stemming from and related to the main bankruptcy case, the Court determined that the Request for Service expressly authorized Defendant's attorney as an agent to receive process for Defendant under both Bankruptcy Rules 7004(b)(3) and 7004(b)(8). The Court gave Defendant an additional time period in which to respond to the Debtors' request for a default judgment. The Court will then determine whether a hearing is necessary before entering default judgment, if appropriate. Price v. America's Servicing Company (In re Price), 377 B.R. 224 (Bankr. E.D. Ark. 2007)
The Court granted Debtor's motion for more time to pay the filing fee in installments. Specifically, the Court held that while Bankruptcy Rule 1006(b)(2) allows for more time to pay installments of the filing fee than General Order 26, II.I., General Order 26, II.I. is not invalid. It is permissible for a court to set deadlines that are more restrictive than those provided by the Code or Rules unless prohibited from doing so under Fed. Rule Bankr. Proc. 9006. However, after hearing arguments in opposition to General Order 26, II.1., the Court found that in Debtor's case, the requirement that the Debtor make the regular plan payment and also pay the $274 filing fee within thirty days of filing her petition created an undue hardship for this Debtor given her monthly income. Not selected for publication.
On creditor's motion for relief from the automatic stay, the Court makes two holdings regarding the extent of the automatic stay's termination under § 362(c)(3)(A) (added to the Code by BAPCPA). First, the Court finds that the phrase with respect to any action taken in § 362(c)(3)(A) requires a creditor to have taken a formal action, such as a judicial, administrative, governmental, quasi-judicial, or other essentially formal activity or proceeding prior to the filing of the debtor's bankruptcy petition in order for the automatic stay to terminate. Second, the Court finds that § 362(c)(3)(A) terminates the automatic stay only with regard to the debtor and property of the debtor, not property of the estate. In re Stanford, 373 B.R. 890 (Bankr. E.D. Ark. 2007).
Court found that the Debtors' right to a refund of prepaid private school tuition was property of the Debtors' estate at the time they filed bankruptcy, and that the Trustee's timing in seeking reimbursement for this asset was not unreasonable. The Court further found that the proper remedy is a judgment against the Debtors pursuant to 11 U.S.C. § 105 for the prepaid tuition which was an estate asset the Debtors dissipated by not timely seeking a refund. Specifically, the Court found that it would be an abuse of the bankruptcy process to allow the Debtors to prepay their children's tuition, fail to adequately disclose such prepayments on their schedules and statement of financial affairs, and then not reimburse the Trustee for those funds. Rice v. Johnson (In re Johnson),371 B.R. 380 (Bankr. E.D. Ark. 2007).
Judge Ben T. Barry
The Court denied creditor's motion for relief from stay to setoff funds deposited post-petition into a debtor's savings account against a negative balance incurred pre-petition in the debtors' joint checking account because the creditor failed to meet the requirements of 11 U.S.C. 553(a).
Even though the UST did not file a definitive statement indicating whether the debtor's case was a presumption of abuse, as required by § 704(b)(1), she was not precluded from filing motion to dismiss under § 707(b)(3) based on debtor's declaration on Form B22A (means test) that there was no presumption of abuse.
Using a totality of the circumstances standard, the Court found that this chapter 7 debtor, whose income was below 150% of the income official poverty line, was unable to pay the filing fee in installments and, therefore, eligible to have the filing fee waived, even though she had paid her attorney $300 prior to filing the petition.
Debtors who moved from Arizona to Arkansas within 730 days required to use Arizona exemption statute, if available, under 522(b)(2) and (3); however, even though Arizona is an “opt-out” state, non-residents are not precluded from using federal exemptions.
Judge Richard D. Taylor
The Court overruled trustee's objection to confirmation of chapter 13 plan, finding that, when calculating disposable income, the code does not provide for the proration of 401(k) loan repayments when such loans will be paid off prior to the completion of a debtor's plan.