The court denied the pro se debtors’ motion for leave to amend their adversary complaint to add the U.S. Trustee as a defendant and seek an injunction barring the U.S. Trustee from investigating the debtors’ interest in property listed on their current bankruptcy schedules via a previously approved Rule 2004 examination or subsequent investigation of the debtors’ property interests. The debtors claimed that res judicata and collateral estoppel applied because they had listed the property in their prior bankruptcy cases such that receiving discharges in one or more of those cases resulted in a final determination that they had no ownership interest in the property. The court denied leave because the amendment would be futile, res judicata and collateral estoppel did not apply, and the debtors could not use a complaint for injunctive relief against the U.S. Trustee to circumvent their obligation to provide full and accurate disclosures in the present bankruptcy case.
In re Salinas, Case No. 18-25509 (August 2018) -- Chief Judge G.M. Halfenger
The debtor failed to file payment advices before the expiration of the 45-day deadline set by 11 U.S.C. §521(i). The court issued an order to show cause why the debtor's case was not automatically dismissed on the 46th day for failing to file payment advices. The debtor thereafter filed payment advices. The court entered an order stating that the case was automatically dismissed on the 46th day. The debtor filed a motion to reconsider the dismissal order and provided a detailed explanation of the reasons for the failure to timely file her payment advices. The court denied the debtor's motion to reconsider because the case terminated by operation of law on the 46th day once the payment advices were not timely filed. The court reasoned that §521(i) does not afford any discretion to reinstate the case after it was automatically dismissed by statute.
Wisconsin Mutual Insurance Company v. Cross (In re Cross), Adv. No. 17-02153, Case No. 17-20977-beh, 2018 WL 3965191 (August 2018) -- Judge B.E. Hanan
The court granted the creditor’s motion for default judgment against the debtor, concluding that the creditor made a prima facie showing of a nondischargable debt under 11 U.S.C. section 523(a)(9), based on a police report (portions of which were considered under Federal Rule of Evidence 803(8)(c)) and a court record evidencing debtor’s guilty plea to the charge of operating while intoxicated (of which the court took judicial notice).
Heinrich v. Bagg, Adv. No. 17-2247 (August 2018) -- Judge B.H. Ludwig
Court found debts based on state court civil judgment for tortious interference with contract and unlawful harvesting of timber dischargeable. Creditor failed to establish at trial that debts were for willful and malicious injury under section 523(a)(6).
In re Bernhard, Case No. 17-27843 (August 2018) -- Judge B.H. Ludwig
Court granted creditor and chapter 13 trustee's motions to dismiss because the debtor's total noncontingent, liquidated unsecured debts exceeded the chapter 13 debt limits. The debtor had scheduled a substantial debt as "unliquidated" because she had several affirmative defenses to it. Nevertheless, since it was readily ascertained by reference to an agreement and through simple mathematics, it was a liquidated debt and counted toward the §109(e) debt limits.
In re Stanley Immel, Case No. 17-22036 (August 2018) -- Chief Judge G.M. Halfenger
Section 522(f)(3)(B) of title 11 provides that if a debtor elects state-law exemptions for implements and tools of the trade under a law of a state that "prohibits avoidance of a consensual lien on property otherwise eligible to be claimed as exempt", then the debtor may not avoid the lien "to the extent the value of such implements . . . [and] tools of the trade . . . exceeds $6,425." Wisconsin law "prohibits avoidance of a consensual lien on property". A debtor electing Wisconsin exemptions can only avoid a lien on implements and tools of the trade up to $6,425.
In re Groth, Case No. 17-30264 (July 2018) -- Chief Judge G.M. Halfenger
The trustee objected to confirmation because the debtor was not providing all of her projected disposable monthly income to unsecured creditors. The trustee argued that the debtor should not be allowed to deduct her homeowner association dues as a special circumstance on her means test. The court agreed and concluded that, under the facts of this case, the debtor's obligation to pay her homeowner association dues was not a special circumstance for purposes of 11 U.S.C. section 707(b)(2)(B)(i).
In re Ryan, Case No. 18-20366 (July 2018) -- Chief Judge G.M. Halfenger
The court overruled the debtors' claim objections because (1) the debtors did not serve the claimant, Waterstone Bank, by certified mail as required by Fed. R. Bankr. P. 3007(a)(2)(A)(ii) and 7004(h); and (2) the claim objections did not comply with Local Rule 3007(b) because they were not supported by an affidavit or declaration stating facts in support of the objection made by individuals with personal knowledge. The debtors attempted to support their claim objections with an affidavit from their bankruptcy attorney. The debtors' bankruptcy attorney's affidavit did not establish that the bankruptcy attorney had personal knowledge of the relevant facts and accordingly the affidavit was not sufficient to support the claim objections.
Gorokhovsky v. Ocheretner (In re Gorokhovsky), Adv. No. 17-2360 (July 2018) -- Judge B.E. Hanan
The debtor moved for sanctions against his ex-wife and her family law attorney for allegedly violating the automatic stay by filing a state court motion for contempt based on the debtor’s failure to pay “section 71” payments incurred in the parties’ prepetition divorce. The court denied the motion, first noting—without deciding—that the action may have been excepted from the automatic stay under § 362(b)(2)(B) as an attempt to collect a domestic support obligation from non-estate property, and that the debtor had failed to demonstrate any compensable injury from the action, precluding an award of damages.
In re Ali, Case No. 18-25548 (July 2018) -- Chief Judge G.M. Halfenger
The debtor filed an application to waive the filing fee. The debtor filed a detailed affidavit showing he met 28 U.S.C. §1930(f)(1)'s waiver requirements, including stating facts showing that he faced special circumstances that make a discharge extraordinarily beneficial. The court waived the debtor's filing fee and commended debtor's pro bono counsel.