- Case No. 15-10064
- Adv. No. 15-1021
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The following synopses are provided for the benefit and assistance of parties and attorneys who appear and practice in this Court. The synopses are brief and general in nature and may not be cited as authority in and of themselves. They are not intended to be a substitute for a review of the opinions in their entirety.
Judge Douglas D. Dodd
- Case No. 08-10756
ISSUE: Whether the debtors and their daughters, Pamela Alonso and Cynthia O'Neal, are vexatious litigants under 28 U,S,C, §1651 and 11 U.S.C. §105 and therefore should be enjoined from future filings and monetarily sanctioned?
RULING: Since the debtors filed this case in May 2008, the record of the case, as well as an adversary proceeding withdrawn to the USDC, are replete with examples of the debtors, and their daughters', relentless efforts to thwart the trustee's administration of their estate and that of the consolidated debtor, RedPen Properties, LLC. This effort consisted of voluminous unnecessary and duplicative pleadings, dishonest filings, misleading motions containing unsubstantiated allegations and contrived arguments, including personal attacks on the trustee. The evidence in the record of this case and the USDC case supports a conclusion that the factors for enjoining vexatious filers from future filings set out in Baum v. Blue Moon Ventures, LLC, 513 F.3d 181 (5th Cir. 2008) have been met. The court held that the debtors, Alonso and O'Neal were vexatious litigants and bad faith filers and that a pre-filing injunction against them, and anyone acting on their behalf, with regard to filings in this case or filing future cases in this court without prior court permission, was warranted. The court also concluded that the abusive and harassing actions of the debtors alone in connection with certain motions were so egregious that $49,432 in monetary sanctions under 11 U.S.C. §105 was appropriate.
- Case No. 14-11086
ISSUES: Whether the debtor is liable to claimant Residential Credit Solutions, Inc. ("RCS") for the sheriff's commission, fees and costs related to foreclosure despite (1) the debtor's 2010 chapter 7 discharge and (2) the 2011 loan modification entered into between the debtor and RCS and the fact that the foreclosure sale triggering the commission, fees and costs did not take place.
RULING: In 2007, Edward O'Hara mortgaged the home he still resides in to secure a loan from Assurance Financial Group, serviced by claimant RCS. He defaulted on that debt and foreclosure was initiated in June 2008. The debtor filed a chapter 13 case on October 21, 2008 which was converted to chapter 7 and from which he debtor received a discharge on March 12, 2010. O'Hara and RCS entered into a loan modification on March 30, 2011 and the foreclosure was put on hold. However, the debtor defaulted on the loan modification and the foreclosure suit was refiled as amended by the creditor. The state court issued writ of seizure and sale on July 10, 2013 and the sheriff's commission, fees and costs of the sale were paid by RCS in August 2013. No sale occurred as a result of the suit because the creditor dismissed the action. A new foreclosure suit was filed in February 2014, but O'Hara's filing of the instant case has stayed it. O'Hara objected to RCS's claim for $8342.58 in commission, fees and costs asserting that the loan modification superceded the original note and mortgage and rolled the sheriff's fees and costs into the new loan amount so that he is not liable for them. Issue #1 - the debtor's 2010 discharge has no effect upon the claim of RCS since, as noted in Johnson v. Home State Bank, 501 U.S. 78, 78-9, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991), the discharge relieved O'Hara of only his personal liability for the debt to RCS, but not the in rem liability and a "mortgage lien securing an obligation for which a debtor's personal liability has been discharged in a Chapter 7 liquidation is a 'claim' within the meaning of §101(5) and is subject to inclusion in an approved Chapter 13 reorganization plan." Issue #2 - the language of the original note and mortgage, when read together with the terms of the loan modification, indicate that the loan modification did not modify the debtor's obligation to pay any fees and costs associated with mortgage default. Under La. R.S. 13:5530(A)(13)(a), the sheriff was entitled to collect a commission, fees and costs as of the date he possessed the issued writ of seizure and sale on July 10, 2013, even though the sale scheduled for that time period did not occur. It was also as of July 10, 2013, not earlier when the loan modification was entered into, that the sheriff's entitlement to the commission, fees and costs was triggered. Thus, debtor is liable for the $8342.58 in commission, fees and costs paid by RCS, the objection is overruled and the claim of RCS allowed in full.
- Case No. 14-11505
- Adv. No. 15-1023
- Case No. 14-11368, 15-10687 (original case severed)
- Adv. No. 15-1014
- Case No. 12-10407
ISSUE: Whether a debtor is entitled to a Louisiana state homestead exemption on the whole marital residence - or only on her one-half interest - when her non-filing spouse, who received a credit of the full exemption toward the purchase price, buys the entire piece of community property from the bankruptcy estate?
RULING: The court concluded that the Louisiana homestead exemption provided for in La. R.S. 20:1 entitled the debtor to one exemption of $35,000 on the entire piece of property that was the marital residence, and became wholly property of the estate upon the debtor's filing, not just on the debtor's undivided one-half interest in the property. Moreover, the debtor received that whole $35,000 exemption as an appropriate credit towards her non-filing spouse's purchase price for the property. Any other approach would multiply the debtor's homestead exemption beyond the sum that Louisiana law allows for a single tract of community-owned property. Thus, the debtor was not entitled to any further amounts from the estate to satisfy her state homestead exemption.
- Case No. 08-10756
- Case No. 11-10354
ISSUE: Whether the debtors' payment on a prescribed claim through their chapter 13 plan renounced prescription.
RULING: The parties agreed that the claim of GC III, LLC and its agent Quantum3 Group, LLC ("GC") was prescribed under Louisiana's liberative prescriptive period of three years for an action on an open account. La. C.C. art. 3494. GC argued that the debtors' payments to it as an unsecured creditor under the chapter 13 plan either expressly or tacitly renounced prescription. The court noted that relevant case law required GC to prove that the renunciation was "clear, direct and absolute." Huckabee v. Sunshine Homes, Inc., 647 So.2d 409, 413 (La. App. 2d Cir. 1994). Finding that GC had not met this burden, the court held that prescription was not renounced and disallowed GC's claim as prescribed.
- Case No. 08-10756 (Carroll)
- Adv. No. 08-10933 (RedPen)
- Case No. 12-11241
- Adv. No. 13-1040
ISSUES: Whether the actions of the debtor Melvin Hampton in connection with an accident in which his car collided with plaintiff John Johnson's car willfully and maliciously caused the injuries Johnson sustained in the accident; whether Johnson's theory of recovery in his state court suit against Hampton judicially estopped him from pursuing a judgment of non-dischargeability under 11 U.S.C. §523(a)(6).
RULING: The court concluded that Johnson did not prove that Hampton was drag racing before the accident that injured Johnson, nor that Hampton's actions in causing the accident otherwise willfully and maliciously resulted in Johnson's injuries under the provisions of section 523(a)(6); the court also concluded that Johnson's state court judgment arose from a claim of negligence on Hampton's part which claim was inconsistent with Johnson's position in bankruptcy court that Hampton willfully and maliciously injured him and thus judicially estopped Johnson from asserting his claim under section 523(a)(6).
- Case No. 11-11933
- Adv. No. 13-1001
ISSUE: Whether debtors Peter and Alfreda Williams's pre and post-petition acts and omissions were sufficient to bar their discharge under 11 U.S.C. §727(a)(4)
- Case No. 12-11811
- Adv. No. 13-1022
Soundra Temple Johnson, et al. v. Woodlands Development, LLC, et al., Adv. No. 13-1022. ISSUES: Whether the court should dismiss or abstain from considering the plaintiffs/debtors' amended complaint for declaratory judgement regarding ownership insurance proceeds, objecting to claims and seeking to avoid preferential transfers; whether the court should dismiss or abstain from considering the cross-claim filed by Regions Bank seeking a ranking of claims to the insurance proceeds.
RULING: The court concluded that: (1) using the standard for ruling on motions for failure to state a claim under Fed. R. Bankr. Proc. 7012(b) enunciated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and In re Katrina Canal Breaches Litigation, 495 F.3d 191 (5th Cir. 2007), the claims of the plaintiffs' amended complaint were sufficient to "state a claim that is plausible on its face;" (2) that there were no grounds for mandatory abstention under 28 U.S.C. §1334(c)(2) or for permissive abstention under 28 U.S.C. §1334(c)(1); but (3) that the pronouncements of Stern v. Marshall, ___ U.S. ___, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), as explained by the Fifth Circuit in In re BP RE, L.P., 735 F.3d 303 (5th Cir. 2013), regarding the bankruptcy court's authority to issue a final ruling on the claims of the plaintiffs' amended complaint raised sufficient concerns that the court required the parties to consent to bankruptcy court jurisdiction or move to withdraw the reference of the case to the United States District Court.
- Case No. 12-11811
- Adv. No. 13-1049
Woodlands Development, LLC et al. v. Regions Bank, et al., Adv. No. 13-1049 ISSUE: Whether the bankruptcy court should abstain under 28 U.S.C. §1334(c)(1) or (2) from hearing a state court action removed to bankruptcy court by the debtor following several judgments entered by the state court.
RULING: After examining the statutory requirements as applied to the facts of the removed proceeding, the court concluded that mandatory abstention under 28 U.S.C. §1334(c)(2) was proper. The court also applied the factors for discretionary abstention under 28 U.S.C. §1334(c)(1) as set out in Browning v. Navarro, 743 F.2d 1069 (5th Cir. 1984) to the case facts and decided that it should permissively abstain from hearing the removed proceeding. Based upon these conclusions, the court remanded the proceeding to the state court under 28 U.S.C. §1452(b).
- Case No. 02-10076
In re J. Co. Medical Management, Inc., Case No. 02-10076 ISSUES: Whether the court can appoint a tax preparer/accountant nunc pro tunc more than eleven years post-petition under 11 U.S.C. §327 so that post-petition services would be an allowable administrative expense; whether attorney performing pre-petition legal services for the debtor is entitled to a wage claim under 11 U.S.C. §507; whether the same attorney is entitled to an administrative expense under 11 U.S.C. §503(b)(3)(C) and (b)(4) for criminal defense of debtor's principal; and whether tax preparer or attorney were entitled to any claims against the estate due to untimeliness of the filing of their claims, their lack of disinterestedness and failure to prove that their services were necessary to and benefitted the estate.
RULING: The court concluded that: (a) there were no exceptional circumstances existing that would allow nunc pro tunc appointment of tax preparer/accountant after extraordinary delay in seeking appointment; (b) the attorney for the debtor was not entitled to a wage claim under 11 U.S.C. §507 due to lack of supporting documentation and untimely filing of claim under 11 U.S.C. §726(a); (c) that attorney was not entitled to an administrative expense under 11 U.S.C. §503(b)(3)(C) and (b)(4) because his services related to the criminal defense of the debtor's principal and were not related to the criminal prosecution of the debtor; and (d) the claims of both the tax preparer and the attorney were inexcusably untimely, the claimants were not disinterested but were instead closely connected to the debtor. the debtor's principal and affiliates of the debtor and there was insufficient evidence that the services of the tax preparer and the attorney were necessary to and for the benefit of the debtor and not merely or also for the benefit of other related parties.
- Case No. 13-10157
In re Price, 2013 WL 1655678, Case No. 13-10157 ISSUE: Whether there was a basis for amending the ruling denying the incarcerated debtor's request for temporary waiver of credit counseling and the dismissal of the debtor's chapter 7 case for failure to obtain prepetition credit counseling as required by 11 U.S.C. §109(h)(1). RULING: The court concluded that the debtor had not shown at the original hearing on his request for waiver of credit counseling that he was entitled to that relief because (1) incarceration alone is not an exigent circumstance justifying the waiver and (2) there was no evidence that the debtor had tried but failed to obtain counseling under the provisions of 11 U.S.C. §109(h)(3)(A)(ii). At the hearing on the motion to alter or amend, the debtor offered more evidence of his attempts to obtain credit counseling. However, the court found that the debtor possessed this evidence at the time of the original hearing and so it did not qualify as "newly discovered" and did not support relief under Federal R. Civ.. Proc. 59(e) (adopted by Fed. R. Bank. Proc. 9023). The court also held that the "new" evidence offered by the debtor still did not constitute the certification of his attempt to obtain counseling as required by 11 U.S.C. §109(h)(3)(A)(ii). Finally, the court noted that the 11 U.S.C. §109(h)(3)(B) allows an extension of only 30 days to obtain credit counseling with the possibility of a further 15 day extension, but that the debtor's motion to alter or amend was filed more than 45 days post-petition removing the court's authority to extend the time period. Ultimately, the court found no basis for altering the judgment denying the waiver of credit counseling or for amending the judgment dismissing the debtor's chapter 7 case.
- Case No. 11-11548
- Adv. No. 12-1026
Khosravinapour v. Pasman, 2013 WL 594476 , Adv. No. 12-1026
ISSUE: Whether the defendant/debtor's improper dissolution, under state law, of a limited liability company in which he was the only member created a new post-petition debt that was not discharged in his chapter 7 case or whether the dissolved company's debt to the plaintiff was a pre-petition contingent debt covered by the debtor's chapter 7 discharge.
RULING: The court concluded that the relevant state statute, La. R.S. 12:1335.1(A), did not create a new liability of the debtor to the plaintiff as a result of the debtor's improper dissolution of the limited liability company. Rather, the failure to comply with the statute's provisions shifted responsibility for the debt to plaintiff from the company to its members, here, the debtor. Thus, using the approach endorsed by the Fifth Circuit in In re Lemelle, 18 F.3d 1268 (5th Cir. 1994), the court found that (1) the plaintiff and debtor had a prepetition relationship; (2) that the debtor's potential liability for the company's debts arose prepetition when the company was formed; and (3) that the plaintiff could have contemplated the debtor might become liable for the company's debts. Therefore, the court held that the plaintiff's claim against the debtor was a prepetition contingent claim that was subject to the chapter 7 discharge.
- Case No. 11-11694
- Adv. No. 11-1109
- Case No. 09-10888
- Adv. No. 09-1106
- Case No. 10-10454
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- Case No. 08-10603
- Adv. No. 09-1017
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