Bankruptcy Year In Review 2014
San Diego County Bar Association
February 17, 2015
UNITED STATES SUPREME COURT
Clark v Rameker,
573 U.S. ___, ___ S.Ct., L.Ed.2d ___ (2014)
Funds in an inherited IRA are not “retirement funds” exempt under 11 U.S.C. section 522(b)(3)(C).
Executive Benefits Ins. Agency v. Arkinson
573 U.S. ___, ___ S.Ct., L.Ed.2d ___ (2014)
Bankruptcy court’s judgment in core “Stern” claim may follow the statutory provision for review of non-core claims (proposed findings/conclusions subject to de novo review by the district court.
Law v. Siegel
573 U.S. ___, ___ S.Ct., L.Ed.2d ___ (2014)
Exempt property is really exempt under 11 U.S.C. section 522(k). A bankruptcy court may not surcharge or deny an exemption based on the debtor’s inequitable conduct.
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Deitz v Ford
760 F.3d 1038 (9th Cir 2014)
Bankruptcy court may enter final monetary judgment in complaint alleging debt is excepted from discharge.
Haag v. Northwestern Bank
584 Fed. Appx. 620 (9th Cir. 2014)
Debtor denied discharge for placing cash in safe deposit box and transferring funds to spouse pre-petition.
Hawkins v. Franchise Tax Board
769 F.3d 662 (9th Cir. 2014)
Specific intent is required to find a debtor’s tax liabilities are excepted from discharge for a willful attempt to evade or defeat taxes. (Extravagant lifestyle is not enough.)
In re Icenhower
757 F.3d 1044 (9th Cir. 2014)
Bankruptcy court had jurisdiction to adjudicate unauthorized postpetition transfer affecting real property in Mexico.
Mastro v. Rigby
764 F.3d 1090 (9th Cir. 2014)
Bellingham (consent allows entry of final judgment by bankruptcy court over stern claims) is binding in Ninth Circuit. Appeal of fraudulent conveyance judgment cannot be dismissed based on defendant’s flight from jurisdiction.
In re MERS
754 F.3d 772 (9th Cir. 2014)
Upholds dismissal of multi-district challenge to foreclosures of trust deeds within MERS system because none of the plaintiffs alleged lack of default, tender, or excuse from tender.
In re The Mortgage Store, Inc.
773 F.3d 990 (9th Cir. 2014)
Liability as an initial transferee is based on the dominion test rather than control.
In re Mwangi
764 F.3d 1168 (9th Cir. 2014)
Bank’s administrative freeze on debtor’s account (pending guidance from Trustee, abandonment, or running of time to object to exemption) is not a violation of the automatic stay.
Schultze v. Chandler
765 F.3d 945 (9th Cir. 2014)
Malpractice action against counsel for Official Creditors Committee is a core proceeding.
In re Schwartz-Tallard
765 F.3d 1096 (9th Cir. 2014)
Debtor may recover as damages the attorney’s fees incurred on creditor’s appeal of the order finding a violation of the automatic stay.
Shapiro v Henson
739 F.3d 1198 (9th Cir. 2014)
Trustee can seek “turnover” of funds no longer in debtor’s possession or control.
Snowden v Check Into Cash of Washington
769 F.3d 651 (9th Cir. 2014)
Pay day lender’s conditional settlement offer did not work to avoid punitive damages for violation of automatic stay.
BANKRUPTCY APPELLATE PANEL FOR THE NINTH CIRCUIT COURT OF APPEALS
In re Dale
505 B.R. 8 (9th Cir. BAP 2014)
Inheritance received more than 180 days after filing petition but prior to confirmation of Chapter 13 plan is property of the Chapter 13 estate.
In re Dingley
514 B.R. 591 (BAP 9th Cir. 2014)
Civil contempt against debtor for failure to pay discovery sanctions is not a violation of the automatic stay.
In re Elliott
523 B.R. 188 (BAP 9th Cir. 2014)
Exemption cannot be denied on grounds that the debtor acted in bad faith.
In re Huh
506 B.R. 257 (BAP 9th Cir. 2014)
Agent’s fraud may be imputed to the debtor-principal if the debtor knew or should have known of the fraud even without active participation.
In re Makosian
506 B.R. 273 (BAP 9th Cir. 2014)
Bonus received by employee debtor during Chapter 11 case reverted to debtor on conversion to case under Chapter 7.
In re Neff
505 B.R. 255 (BAP 9th Cir. 2014)
One year period for transfer under section 727(a)(2)(A) is not subject to equitable tolling.
In re Rivera
511 B.R. 643 (BAP 9th Cir. 2014)
Debt owed to county for some costs of incarceration of minor son is a nondischargeable domestic support obligation, and collection does not violate automatic stay.
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
Heller Ehrman LLP v Davis Wright Tremaine (In re Heller Ehrman)
___ B.R. ___ (N.D.Cal. 2014)
Trustee for dissolved law firm had no property interest in hourly fee matters pending at time of its dissolution, for which law firm's former partners had any duty to account.
UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
In re Scoggins
517 B.R. 206 (Bankr. E.D.Cal. 2014)
Guidelines for when Chapter 7 Trustee’s fees will be reduced for “extraordinary circumstances” requiring detailed fee applications when the fees exceed $10,000; in which the fees exceed the amount available to pay creditors; and in cases involving short sales and carve outs.
UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA
In re Arellano
517 B.R. 228 (Bankr. S.D.Cal. 2014 Taylor)
Bankruptcy court cannot deny debtor’s request to amend his exemption schedule to exempt previously undisclosed assets under Law v Siegel.
In re Pugh
522 B.R. 277 (Bankr. S.D.Cal. 2014 Mann)
California exemption for “Head of Household” satisfied where custody of minor child is shared with ex-spouse.
CALIFORNIA
CCP Section 701.680(e)
Preserves equitable right of redemption following judicial sale/foreclosure for creditor/purchaser misconduct.
California Bank & Trust v DelPonti
232 Cal.App.4th 162 (2014)
Guarantor’s waiver of statutory defenses does not waive equitable defenses such as unclean hands.
Feresi v The Livery LLC
182 Cal.App.4th 169 (2014)
If a security interest is perfected in breach of a fiduciary duty, equitable principles may give priority to an earlier unperfected interest.
First California Bank v. McDonald
231 Cal.App.4th 550 (2014)
Agreement by secured lender and one co-borrower to a short sale barred deficiency judgment against co-borrower (who did not consent to sale) under one form of action rule.
Stine v. Dell’Osso
230 Cal.App.4th 834 (2014)
Wrongdoer’s unclear hands are not imputed to successor fiduciary.
US Bank N.A. v. Yashouafar
232 Cal.App.4th 639 (2014)
Prepayment fee construed to require payment and not mere acceleration upon a default.
CAL State Bar Ethics Opinion 2014-191
Attorney may represent debtor in simple, no asset Chapter 7 and simultaneously represent a creditor of the debtor