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Opinions

The Middle District of Louisiana offers a database of opinions for the years 2002 to the present, listed by year. For a more detailed search, enter the keyword or case number in the search box above.

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

Forrest Lewis, Jr. v. ANCO 06/10/2019
  • Case No.   01-52173 (MSSD)
  • Adv. No.     19-1003

Defendant Trinity Industries removed plaintiff’s state law mesothelioma action to bankruptcy court arguing protection under a 2003 confirmation order in a Southern District of Mississippi bankruptcy case. Plaintiff moved for mandatory abstention and remand.

Issue: Did the plaintiff carry his burden to require the bankruptcy court’s abstention under 28 U.S.C. 1334(c)(2)?

Ruling: Plaintiff failed to establish the requirements for mandatory abstention; however, the court found grounds to permissively abstain under 28 U.S.C. 1334(c)(1) and remanded the case to state court.

Tower Credit v. Hickerson 05/30/2019
  • Case No.   18-10469
  • Adv. No.     18-1035

ISSUE: Did lender reasonably rely on loan applications that contained material misstatements?

RULING: Because minimal investigation would have revealed the inaccuracy of the loan applications, the lender failed to carry its burden to prove that the debt should be nondischargeable under 11 U.S.C. 523(a)(2)(B).

Tower Credit v. Davis 05/16/2019
  • Case No.   18-10559
  • Adv. No.     18-1039

ISSUES: (A) Was the information the debtor supplied to lender about having a roommate materially false?  If so, (2) did the debtor intend to deceive lender and (3) did lender reasonably rely on the false statements?

RULING: (A) The debtor’s withholding from the lender that she did not have a roommate and paid more than half of her net monthly income in rent was a materially false statement because of the impact it had on assets available to pay the loan she sought. (B) The debtor had motive to misrepresent her financial condition and this, coupled with her implausible trial testimony, supports a finding that the debtor recklessly disregarded the truth and intended to deceive the lender.  (C)  Because minimal investigation by the lender would have revealed the falsity of the debtor’s representations, lender failed to carry its burden to show it reasonably relied on the debtor’s misrepresentation.
 

In re: Allen Wilson 03/04/2019
  • Case No.   13-10302

Issue: By submitting Affidavits of Small Succession with their application for unclaimed funds, did heirs prove their right to claim funds held by the court for a deceased debtor?

Ruling: The affidavits did not comply with the requirements of La. Code of Civ. Proc. Art. 3432 and therefore the applicants failed to establish their entitlement to the funds.

In re Kermas Patterson 02/12/2019
  • Case No.   18-10443

Issue: (A) Does the Rooker-Feldman Doctrine bar the debtor from challenging a proof of claim based on a state court judgment the debtor maintains was taken in violation of his discharge injunction? (B) If the debtor unsuccessfully raised the discharge injunction violation in the state court action, does issue preclusion bar him from raising it in his claim objection?

Ruling: (A) The Rooker-Feldman Doctrine does not apply when the discharge injunction has been violated.  (B)  Because the state court did not have jurisdiction to determine whether the discharge injunction was violated, issue preclusion does not bar the debtor from raising the violation in his claim objection.

In re Deloris and Nateshus Jackson 01/16/2019
  • Case No.   18-10647

Issue:  Are proceeds from collision insurance that are insufficient to satisfy secured creditor's claim property of the estate?
Ruling: Secured lender was entitled to payment of the proceeds under the policy and the proceeds were insufficient to satisfy the debt owed the lender, so there was no pecuniary benefit that could inure to the estate.  The proceeds were not property of the estate.

Schott v. Louis Anthony Sirico and Lisa Grace Loud 09/12/2018
  • Case No.   16-11028
  • Adv. No.     17-1042

Issue: Whether the debtors made a false oath or account within the meaning of 11 U.S.C. 727(a)(4)(A) when they omitted the sale of a house that netted them over one million dollars from their original and amended Statement of Financial Affairs (SOFAs), in addition to other omissions.

 

Ruling: The debtors displayed a reckless disregard for the truth in failing to disclose the sale of the house, receipt of child support, and eighty-four stock transactions on their original and amended SOFAs. The trustee carried his burden of proof to deny the debtors' discharge for making a false oath or account.

SE Property Holdings, LLC v. Jeffery Stephen Lawrence Green 07/06/2018
  • Case No.   17-1017
Issue: Whether a debtor committed willful and malicious injury within the meaning of 11 U.S.C. 523(a)(6) by circumventing a charging order and transferring funds from a family LLC to his tax preparer for the preparation of state and federal returns for himself and his juridical entities.

RULING: The debtor injured plaintiff by transferring funds to his accountant for the preparation of his personal tax returns and the injury was "willful and malicious" within the Fifth Circuit's definition of the term.  The debtor knew of plaintiff's charging order and injury to the plaintiff was substantially certain to result from the debtor's action.

 

In re Susan Maria Raborn 06/25/2018
  • Case No.   15-10938
  • RULING: The debtor’s motion for reconsideration was treated as a motion for new trial or relief from judgment and denied for failing to state a basis for relief from the court’s prior order.
SE Property Holdings, LLC. v. Green 05/21/2018
  • Case No. 17-1017

Issue: Whether plaintiff carried its burden of proof to show entitlement under Fed. R. Bankr. P. 9023 to reconsideration of Summary Judgment denial.
 
Ruling:  Plaintiff failed to show that there was new, previously unavailable evidence to support its motion or that the court had made a manifest error of law in granting defendant's motion for summary judgment.

In re Patricia A. Young 09/19/2017
  • Case No.   12-11509

Issue: Whether a debtor who missed multiple post-petition mortgage payments should have her case dismissed under the Fifth Circuit's ruling in Matter of Kessler (655 Fed. Appx. 242, 2016) if the debtor has obtained a mortgage modification that would eliminate the post-petition arrearages.
 
RULING: Though the debtor is in breach of her confirmed plan by failing to pay direct post-petition sums to her mortgage company, dismissal is inappropriate where the debtor may seek to modify her confirmed plan to incorporate the terms of a mortgage modification.

In re Susan Maria Raborn 05/09/2017
  • Case No.   15-10938

Issue: Whether a debtor is eligible for relief for a stay pending appeal of an adverse order.
 
RULING: Debtor failed to carry her burden of proof for entitlement to a stay pending appeal.
 

In re Susan Maria Raborn 04/20/2017
  • Case No. 15-10938

Issue: Whether the trustee's proposed compromise of multiple claims between the estate and several parties should be approved over the debtor's objections
 
RULING: (1) The debtor lacked standing to oppose the settlement.  The debtor failed to carry her burden of establishing a pecuniary interest in the proposed settlement. (2) The settlement is in the best interest of the estate and its creditors.  The trustee negotiated a settlement that realizes most of the value the debtor reasonably could have hoped to achieve had she prevailed in state court litigation, while eliminating the risk of loss to the estate and creditors.

Adams v. Janney 09/29/2016
  • Case No. 14-11278
  • Adv. No. 15-1026

Issues: (1) Whether debtor committed a false representation or actual fraud within the meaning of 11 U.S.C. §523(a)(2)(A) when he allegedly misrepresented his personal and company finances to his accountant. (2) Whether the debtor's discharge should be denied for failure to maintain adequate books and records and because of his inability to explain the loss of assets that could have been used to pay his creditors.

RULING: Plaintiff failed to carry its burden of proving that Janney's obligation should be excepted from discharge on the basis of false representations or actual fraud within the meaning of 11 U.S.C. §523(a)(2)(A).  Plaintiff's reliance on debtor was not justifiable given the "red flags" the plaintiff knew through its business relationship with debtor.  Additionally, plaintiff to prove that any assets the debtor transferred prepetition and cannot account for actually belonged to the debtor.  The evidence established that the assets belonged to debtor's businesses and were not available to satisfy his personal liabilities.

BBI v. Janney 09/13/2016
  • Case No. 14-11278
  • Adv. No. 15-1027

Issues: (1) Whether debtor committed a false representation or actual fraud within the meaning of 11 U.S.C. §523(a)(2)(A) when he induced litigant to settle a lawsuit with two of his closely held corporations that he knew were no longer in business. (2) Whether debtor's execution of an agreement settling the creditor's state court lawsuit was a false statement concerning the debtor's financial condition within the meaning of §523(a)(2)(B)?

RULING: Debtor was sole shareholder of two closely held corporations creditor had sued on a contract for architectural services. Debtor and his corporations settled the claim for $22,500, to be paid over time. Debtor knew when he signed the agreement that the corporations had not been doing business for over a year. The settling parties also agreed to entry of a consent judgment against the corporate entities and debtor. One of the defunct corporations made the only two payments on the settlement. Meanwhile at debtor's request, creditor agreed to amend the consent judgment to remove debtor, who claimed that the judgment was impairing his ability to obtain credit to pay the settlement. After the judgment was amended to remove the debtor in his individual capacity, neither he nor his corporate entities made any further payments. The bankruptcy court held that the debtor made false representations and committed actual fraud pursuant to 11 U.S.C. §523(a)(2)(A) when he induced the creditor to settle with corporations the debtor knew had not been conducting business for some time and later inducing the creditor to release him. The court also held that the settlement agreement was not a statement in writing concerning the debtor's financial condition within the meaning of §523(a)(2)(B).

In re Susan Maria Raborn 09/02/2016
  • Case No. 15-10938

Issue: Whether a party may file an amended motion seeking the same relief once a court has ruled on the party's request.

RULING: A party may not file an amended motion seeking the same relief once a cour has ruled on its request.  Further, matters not presented to the trial court cannot be added to the record after the court has ruled.

GulfSouth Credit, Inc. v. Perry 03/30/2016
  • Case No.   15-10064
  • Adv. No.     15-1021
In re Carroll 3/16/2016 03/16/2016
  • 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.

In re O'Hara 01/21/2016
  • 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.

Tower v. Lathers 10/28/2015
  • Case No.   14-11505
  • Adv. No.     15-1023
ISSUES:  Whether debtors' misrepresentations to Tower concerning their incomes, business losses and tax debts were materially false statements concerning their financial condition excepting the Tower debt from discharge under 11 U.S.C. §523(a)(2)(B)? Whether 11 U.S.C. §523(a)(2)(A) was applicable to the facts of the case?
 
RULING:  The debtors applied for loans from Tower on February 11, 2013 and on March 3, 2014 and misrepresented their income, failed to disclose the operation of a business or its losses and failed to disclose tax debts.  Tower made the loan based on these representations.  The debtors filed a chapter 7 case on November 22, 2014 and at their meeting of creditors admitted that Mrs. Lathers's income was less than represented on the loan applications and that Mr. Lathers operated a carpentry business that lost money which was not listed on the applications.  Also, the debtors' bankruptcy schedules listed tax debts not disclosed to Tower in the applications.  The debtors argued that they had been solicited by Tower to make the loans, but had no proof of this.  Mrs. Lathers stated that she and her husband did not understand the loan applications questions regarding their tax debts and also that no Tower employee asked them about the taxes.  Further, Amy Lathers stated she had not actually read the loan papers she had signed.  All of the debtors' false statements about their finances were made on their written loan applications, and thus the court held that the provisions of 11 U.S.C. §523(a)(2)(A), one of the grounds for Tower's objection to dischargeability, were not applicable.  However, the court  did conclude that the debtors' loan applications contained materially false statements concerning their financial condition made with intent to deceive Tower and on which Tower reasonably relied.  Therefore, the court held the debt owed to Tower by the debtors was nondischargeable under 11 U.S.C. §§523(a)(2)(B).
Tower v. Carter 09/24/2015
  • Case No.   14-11368, 15-10687 (original case severed)
  • Adv. No.     15-1014
ISSUE:  Whether debtors' misrepresentation concerning the purpose of their loan from Tower was a false representation excepting their debt to Tower from discharge under 11 U.S.C. §523(a)(2)(A) and was a materially false statement concerning their financial condition excepting the Tower debt from discharge under 11 U.S.C. §523(a)(2)(B)?
 
RULING:  The debtors applied for a loan with Tower on September 13, 2010 and listed the purpose for the loan as home improvements.  Tower made the loan based on this representation.  The debtors filed a chapter 13 plan on June 12, 2015 and at their meeting of creditors Ora Carter stated that the Tower loan was made to open a restaurant.  In their answer to Tower's complaint to determine dischargeability of the debt, the debtors stated that Ora Carter's representation at the creditor meeting about opening the restaurant was a misstatement.  They alleged the loan for the restaurant was made from Pioneer Credit in 2011.  However, the records of the debtors' bankruptcy cases (the original joint case was severed) do not indicate any loan from Pioneer to the debtors in 2011.  Nor did the debtors offer any evidence of a Pioneer loan during the relevant time period. Additionally, the debtors failed to respond to requests for admission from Tower, essentially admitting that they  made a knowingly false representation to Tower with the intent to deceive it.  The court found that the debtors' explanation for the misrepresentation of the loan purpose on the Tower loan application was not credible and that the false representation was knowingly made to deceive Tower and that Tower justifiably relied on the representation.  The court also found that the debtors' loan application was a materially false statement concerning their financial condition the debtors made with intent to deceive Tower and which Tower reasonably relied on.  The court's conclusion was that the debt owed to Tower by the debtors was nondischargeable under 11 U.S.C. §§523(a)(2)(A) and (B).
In re Schexnayder 05/22/2015
  • 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.

In re Carroll 03/30/2015
  • Case No.   08-10756
ISSUE:  Whether the debtors had voluntarily transferred and then concealed certain movable property brought into the estate as a result of a ruling of the United States District Court for the Middle District of Louisiana finding the attempted transfers invalid, such that 11 U.S.C. §522(g)(1) prohibited the debtors from  exempting the property.
 
RULING:  The debtors conceded that transfers of voluminous household goods and furnshings, antiques and collectibles to their daughters were voluntary.  The court concluded that the debtors' actions pre and post-petition showed that they concealed their ownership of the movables.  Namely, the debtors not only attempted to transfers the movables to their daughters pre-petition in a scheme to divest themselves of all of their individual assets, post-petition they then  listed the assets on the schedules of an affliate company, not their schedules.  Amending their schedules almost three years post-petition to include some of these assets on their schedules and state that they held other certain movables for their daughters was unavailing to the debtors: their pattern of misrepresenting facts and hindering and delaying the trustee's administration of their case revealed their true aim which was to conceal the property from the trusteee as long as possible.  Therefore, the court found that the debtors had voluntarily transferred and then concealed the movable property and were barred from claiming any exemption on the property by operation of section 522(g)(1).
In re Robertson 12/04/2014
  • 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.

In re Carroll consolidated with In re RedPen Properties, LLC 10/31/2014
  • Case No.   08-10756 (Carroll)
  • Adv. No.     08-10933 (RedPen)
ISSUES:  Whether the assets, liabilities and financial affairs of debtors William and Carolyn Carroll and debtor RedPen Properties are so entangled that it is in the best interests of the creditors to substantively consolidate the two estates for further administration.
 
RULING:  After reviewing the relevant tests for substantive consolidation, as applied to the specific facts of the two bankruptcy cases, the court concluded that the evidence showed that the assets and liabilities of the Carrolls and RedPen are virtually the same and the affairs of the debtors so intermingled that substantive consolidation would benefit the creditors by allowing for a more orderly administration by the trustee.
 

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