Building Trades United Pension Trust Fund v. Mueller, 2011 Bankr. LEXIS 2290(June 2011) -- Judge Kelley
Creditor's Motion for Summary Judgment denied where factual issues remained on whether Debtor's violation of theft by contractor statute was more than merely negligent.
Debtor filed a chapter 13 case in which she was ineligible to receive a discharge pursuant to § 1328(f), because the case was filed less than four years after she filed a chapter 7 case in which she received a discharge. Debtor commenced an adversary proceeding seeking to “strip off” her second mortgage because there was no equity for the lien to attach to. The creditor filed a motion to dismiss the adversary proceeding arguing that a discharge is a requirement for lien avoidance under § 506(d). An objection to confirmation of plan was filed on the same grounds. The court held that to allow a debtor in a no-discharge chapter 13 to avoid a junior lien would run afoul of § 1325(a)(5)(B)(i)(I)(aa) which provides that the holder of a secured claim shall retain such lien until the earlier of the payment of the underlying debt or discharge. The court further stated that permitting such action would be contrary to both the Congressional intent in enacting BAPCPA and the ruling of the U.S. Supreme Court in Dewsnup v. Timm. The court granted the motion to dismiss adversary proceeding and sustained the objection to confirmation of plan without prejudice to the right of the debtor to file an amended plan. **Affirmed on appeal**
Patterson v. Homecomings Financial, LLC, 444 B.R. 564(February 2011) -- Judge Kelley
Chapter 13 Debtors' complaint alleging that mortgage servicer violated stay by charging and collecting post-petition, pre-confirmation attorneys' fees without disclosing those fees to the Court, survived motion to dismiss.
Debtor's counsel was sanctioned $500 for filing chapter 7 petition for debtor who was ineligible for discharge, for sole purpose of delaying garnishment creditor until such time as debtor was eligible for discharge.