Chapter 13 trustee removed for cause.
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Opinions
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Judge Richard D. Taylor
The court sustained the trustee's objection to the debtor's claim that inherited annuities were exempt under s. 522(d)(10)(E). The annuities did not replace an income stream upon which the debtor relied prior to his grandmother's death; therefore, the payments were not "on account of" the death of the grandmother
A mortgage follows the originally collateralized debt until that debt is satisfied. In the absence of an express understanding of the parties through a future advance, all indebtedness, or cross collateralization clause, the original mortgage does not extend to other or additional indebtedness.
Chapter 13 debtors may not discharge post-petition debts by amending their schedules to include a post-petition creditor who has not filed and will not file a proof of claim under s. 1305.
Court sustained the trustee's objection to the debtors' amended exemptions and granted the trustee's motion for turnover of exempted property where debtors omitted assets from their schedules, violated their oath at the first meeting, and testified to owning unscheduled property.
Audrey R. Evans
Court held that a debt owed by Debtors is nondischargeable as a debt for a willful and malicious injury under 11 U.S.C. § 523(a)(6) where Debtors were found liable to Plaintiff in a Federal District Court jury trial for sexual harassment and retaliation. Court applied collateral estoppel to the jury’s verdict and awarded summary judgment in favor of Plaintiff; in doing so, the Court determined that the District Court jury necessarily and implicitly found that Debtors acted with the intent to injure Plaintiff, and with the knowledge that their actions were substantially certain to harm Plaintiff. Sells v.Porter (In re Porter), 363 B.R. 78 (Bankr. E.D. Ark. 2007). Affirmed on appeal to the 8th Circuit BAP. See Sells v. Porter (In re Porter), 375 B.R. 822 (8th Cir. B.A.P. 2007). Affirmed on appeal to 8th Circuit. See Sells v. Porter (In re Porter), 539 F.3d. 889 (8th Cir. 2008).
Memorandum opinion entered January 26, 2007; oral ruling issued January 24, 2005. Bank sought to have its debt excepted from Debtors' discharge under sec. 523(a)(2)(B). Court granted Debtors' discharge despite a finding that Mr. Harris presented materially false written statements to the bank because the bank failed to prove that it reasonably relied on such statements. Twin City Bank v. Michael and Lucinda Harris (In re Harris) ,360 B.R. 267(Bankr. E.D. Ark. 2007).
Court found that Debtor-contractor committed defalcation while acting in a fiduciary capacity by spending bonded job receipts on job costs for which the surety was not liable. Court held that any use of the trust res (i.e., bonded job receipts) to cover the contractor’s own expenses, whether that be the cost of using his own equipment, the cost of maintaining full-time employees, or the contractor’s general overhead expenses was a breach of fiduciary duty. International Fidelity Insurance Co. v. Emery Joseph Fox (In re Fox),357 B.R. 770 (Bankr. E.D. Ark. 2006).
The Court found that St. Francis County met its burden of proof under 11 U.S.C. § 727(a)(3), and the Debtors were, therefore, not entitled to a discharge. The Court also found that St. Francis County, as an unsecured creditor, lacked standing to bring the Complaint to set aside fraudulent transfers under the Bankruptcy Code, and that because the remaining state law fraudulent transfer claims did not have any effect on the administration of the bankruptcy estate, the Court did not have "related to" jurisdiction over the remaining state law fraudulent transfer claims. St. Francis County Farmers Assoc. v. Jerry Wright and Audrey Wright, Wright Land Co. (2:05-ap-1087) and St. Francis County Farmers Assoc. v. Jay Gardner Wright and Mary Rush Wright (2:04-ap-1289) (In re Wright), 353 B.R. 627 (Bankr. E.D. Ark. 2006). (The two adversary proceedings were consolidated for trial). Affirmed on appeal to the Eastern District of Arkansas.
Court found that IRS was equitably estopped from assessing a tax based on a disallowed loss in the 1982 tax year after it assessed and collected a tax for the 1995 tax year based on the validity of the same loss. Court held 1982 assessment invalid, and directed the IRS to refund Plaintiff’s bankruptcy estate $6,928 in previously withheld tax refunds with interest. Seay v. Internal Revenue Service (In re Seay), 353 B.R.614 (Bankr. E.D. Ark. 2007).