Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Bankruptcy
by
Debtors' claims relate to matters stemming from the 2018 foreclosure sale of their home. Mila Homes, represented by its counsel, purchased the property at the foreclosure sale.The Bankruptcy Appellate Panel affirmed the bankruptcy court's orders denying debtors' motions for sanctions against Mila's counsel; to alter or amend the order denying the request for sanctions and for additional findings of fact and conclusions of law; and seeking to disqualify the bankruptcy judge. The panel concluded that the bankruptcy court did not err by denying debtors' sanctions request based on counsel's statements on behalf of Mila Homes in the Mila Stay Motion. In this case, the bankruptcy court provided debtors with a hearing, listened patiently to their arguments, read methodically through the Bankruptcy Sanctions Motion, and addressed in detail why nothing in the Mila Stay Motion violated Rule 9011. Finally, the panel denied debtors' requests for judicial notice and awarded Mila's counsel $3,000 in sanctions from debtors. The panel concluded that the bankruptcy court did not err in denying debtors' fifth motion for disqualification of recusal and that debtors' appeal is frivolous. View "Scott v. Anderson" on Justia Law

Posted in: Bankruptcy
by
This appeal arose from a final order entered by the bankruptcy court denying debtor's motion for "Revised and Corrected Motion for Relief From Judgment or Order and/or Reopen the Case, Motion for Evidentiary Hearing/Appointment of Counsel." The Bankruptcy Appellate Panel dismissed the appeal as untimely and concluded that debtor's notice of appeal was not timely filed pursuant to Federal Rule of Bankruptcy Procedure 8002(a)(a). In this case, debtor recognized that his appeal was beyond the 14-day limit and debtor did not seek an extension of time to file his appeal from the bankruptcy court pursuant to Rule 8002(d). The panel noted that, to the extent debtor is raising an issue involving service of the order, and any related time period for appeal, it is properly addressed in the first instance by the bankruptcy court not in the Notice of Appeal. View "Reichel v. Snyder" on Justia Law

Posted in: Bankruptcy
by
The Eighth Circuit affirmed the bankruptcy court's grant of summary judgment in favor of debtors in an action brought by Lund-Ross, seeking to determine the dischargeability of a debt it alleges debtors owe. The court concluded that Lund-Ross's legal theory for the recovery of a debt from debtors personally and the probative evidence Lund-Ross would offer in support of that theory were absent from the summary judgment record before the bankruptcy court. In this case, there is no dispute Lund-Ross did not plead that the corporate veil should be pierced, and it did not argue the corporate veil should be pierced when contesting debtors' motion for summary judgment; Lund-Ross did not allege specific facts that demonstrate debtors used Signature Electric or D & J Electric to commit fraud, violate a legal duty, or perpetrate a dishonest or unjust act in contravention of the rights of another; and Lund-Ross did not identify any state statute or other nonbankruptcy law that would govern debtors' actions as principals of Signature Electric and create a personal debt to Lund-Ross.Because Lund-Ross did not first demonstrate for the bankruptcy court how it could establish a personal debt owed by debtors under nonbankruptcy law, the court, like the bankruptcy court, did not reach the issue of whether such a debt would be nondischargeable under 11 U.S.C. 523(a)(2)(A). View "Lund-Ross Constructors, Inc. v. Buchanan" on Justia Law

Posted in: Bankruptcy
by
The Eighth Circuit took this opportunity to clarify its jurisprudence about exceptions to discharge under 11 U.S.C. 523(a)(6) and concluded that a judgment for an intentional tort is not necessary to find judgment debt for a breach of contract nondischargeable. The willfulness requirement is met when the bankruptcy court finds facts showing that the debtor's conduct accompanying the breach of contract amounted to an intentional tort against the creditor. The court perceived that this aligns with the core of the analyses performed by the Ninth and Fifth Circuits.In this case, debtor sought to discharge hundreds of thousands of dollars in judgment debt in bankruptcy after a breach of contract lawsuit indebted him to his former employer. The court affirmed the bankruptcy court's determination that the debt resulted from his infliction of a willful and malicious injury on his former employer and so was non-dischargeable under 11 U.S.C. 523(a)(6). In this case, debtor's conduct amounted to an intentional tort under Missouri law. View "Luebbert v. Global Control Systems, Inc." on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's entry of summary judgment in favor of Flesner Wentzel, debtor's ex-wife's attorney, and confirmation of debtor's Sixth Amendment Chapter 13 plan.On de novo review, the panel identified no error in the bankruptcy court's conclusion that the attorney fees imposed on debtor by the state court are domestic support obligations under the bankruptcy code and are therefore not dischargeable pursuant to 11 U.S.C. 523(a)(5). In this case, the bankruptcy court engaged in a specific and detailed analysis of the undisputed facts and legal authority. Therefore, confirmation of debtor's Sixth Amended Plan that provided for priority treatment of Flesner's attorney fee claims as domestic support obligations was appropriate. View "Carpenter v. Amos" on Justia Law

Posted in: Bankruptcy
by
The Eighth Circuit affirmed the bankruptcy court's order denying relief requested by debtor for wrongful foreclosure in equity, holding that the record supports the bankruptcy court's conclusion that debtor could not have been lulled by the Bank into a false sense of security regarding the foreclosure sale. In this case, debtor stipulated that "KeyBank advised Plaintiff that she had to contact KeyBank's foreclosure counsel to obtain a written payoff statement that included legal costs and fees;" the notes from the Bank's telephone records, a stipulated exhibit, indicate that debtor was so advised and nowhere in debtor's briefing does she dispute that; the call notes also establish that debtor called the Bank's foreclosure department as instructed; and while there is no evidence proving debtor's receipt of the Reinstatement Notice, there is evidence that the Bank advised her that the correct amount would be forthcoming in a letter. Therefore, the court found that the bankruptcy court's conclusion that debtor was advised by the Bank about the inaccuracy of the notification statement was not clearly erroneous. View "Courtney v. KeyBank N.A." on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's order granting the Bank relief from the automatic stay. The panel held that the default provisions in debtor's Chapter 12 plan were dispositive of the Bank's motion for relief from the automatic stay. In this case, debtor admits he agreed to make certain payments on January 15, 2020; he made only a portion of those payments; and thus debtor was in default under his plan and the Bank was entitled to relief from the automatic stay. View "Brooks v. First Central Bank McCook" on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Appellate Panel reversed the bankruptcy court's order confirming the Chapter 12 plan of debtors. The panel held that the plain language of Bankruptcy Code 1232 does not allow a Chapter 12 plan to compel a taxing authority to disgorge pre-petition withholdings. In this case, contrary to debtors' position, section 1232 provides no basis to magically reverse the application of the pre-petition withheld funds when calculating the IDR's claim. View "Iowa Department of Revenue v. DeVries" on Justia Law

Posted in: Bankruptcy
by
Years of litigation resulted from Debtor's spouse's personal guarantee of a lease of real property from Lariat. One suit resulted in a state court judgment holding Debtor and Debtor's spouse jointly and severally liable for fraudulent transfers from Debtor's spouse to Debtor. In Debtor's subsequent chapter 11 bankruptcy, Lariat asserted a claim for $1,030,916.74 based on that judgment. The bankruptcy court overruled Debtor's objection but found Lariat's claim was for damages resulting from the termination of a lease of real property (the lease Debtor's spouse had personally guaranteed) and was subject to 11 U.S.C. 502(b)(6)'s cap on such claims. The Eighth Circuit held that Lariat held a claim for $308,805.00 (plus interest). Lariat filed a complaint under 11 U.S.C. 523(a)(2)(A); the bankruptcy court excepted the Lariat claim from discharge, finding seven badges of fraudThe Eighth Circuit Bankruptcy Appellate Panel affirmed. The evidence supported findings that the transfer was to an insider; the debtor retained possession or control of the property after the transfer; before the transfer was made, the debtor had been sued or threatened with suit; the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; the debtor was insolvent or became insolvent shortly after the transfer; the transfer occurred shortly before or shortly after a substantial debt was incurred. View "Lariat Companies, Inc. v. Wigley" on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Court denied the State's claim filed on behalf of unnamed charities for lack of standing, and denied the State's claim on behalf of Team Makers on the equitable doctrine of laches.The Bankruptcy Appellate Panel (BAP) held that the State failed to show the requisite injury to a substantial segment of North Dakota's population, and affirmed its ruling that the State did not have parens patriae standing to file a claim on behalf of Team Makers and other charities. While the panel agreed with the Bankruptcy Court that finality is a very important interest, particularly in a case of this duration, the panel held that laches does not apply to tardily-filed claims that are filed in time to permit distribution under Section 726(a) of the Bankruptcy Code. Accordingly, the panel affirmed in part, reversed in part, and remanded for reconsideration. View "North Dakota v. Bala" on Justia Law

Posted in: Bankruptcy