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

Articles Posted in Bankruptcy
by
The Bankruptcy Appellate Panel dismissed debtor's Chapter 13 bankruptcy appeal, holding that it lacked jurisdiction. The panel held that debtor has not shown she is a person aggrieved by the bankruptcy court's order overruling her objection to the trustee's final report and thus does not have standing to appeal the bankruptcy court's order. In this case, although debtor questioned the accuracy of some of the information in the final report, she did not challenge in her objection, nor on appeal, the amount the trustee reported had been returned to her following dismissal of her case. View "Marshall v. McCarty" on Justia Law

Posted in: Bankruptcy
by
After debtors filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, the United States Trustee objected to the discharge in bankruptcy. The Bankruptcy Appellate Panel (BAP) affirmed the bankruptcy court's denial of discharge. The Eighth Circuit affirmed and agreed with the BAP that the bankruptcy court did not err in denying debtors a discharge in bankruptcy under 11 U.S.C. 727(a)(3) based on its findings that debtors unjustifiably failed to keep adequate records of financially significant watch and jewelry transactions. In a consumer bankruptcy, the debtor has a greater duty to keep records of a sudden and large dissipation of assets. In this case, debtors' return of twenty-seven valuable watches and the Kwait bridal collection ring to a judgment creditor was such a sudden and large dissipation of assets. View "Snyder v. Dykes" on Justia Law

Posted in: Bankruptcy
by
The bankruptcy appellate panel affirmed the bankruptcy court's dismissal of appellants' adversary proceeding against appellees, individually and in their capacity as assignees of Beresford. The panel held that the bankruptcy court correctly determined that the North Dakota state courts possessed concurrent jurisdiction to decide appellants' quiet title action and interpret the Chapter 12 Plan, as well as the incorporated settlement agreement and Beresford Deed. The panel also held that the bankruptcy court properly determined that it must apply North Dakota law (including the parol evidence statute) to determine ownership of the farm, because property interests are created and defined by state law. Furthermore, because the state courts had jurisdiction and determined property interests in accordance with North Dakota law, and because the bankruptcy court properly decided that it would be constrained to follow that law, preemption under the United States Constitution or federal bankruptcy laws does not apply. Finally, the panel held that the Rooker-Feldman doctrine applies and the bankruptcy court correctly concluded that it lacked subject matter jurisdiction to review appellants' claim of ownership, and appellants' claims and causes of action were barred by the doctrine of res judicata. The panel rejected appellants' remaining claims as without merit. View "Finstad v. Gord" on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's orders dismissing debtors' individual chapter 13 cases with a bar to re-filing for 180 days. The panel held that the bankruptcy court did not abuse its discretion where debtors acted in bad faith. In this case, debtors have filed eight chapter 13 bankruptcy petitions between 2010 and 2018, and the bankruptcy court found that debtors' filings were part of a long-running scheme to manipulate and abuse the Bankruptcy Code and the bankruptcy system to the extreme detriment of their creditors, particularly Wilmington Savings. View "Steiner v. Wilmington Savings Fund Society" on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Appellate Panel reversed the bankruptcy court's order denying BOM's motion under 11 U.S.C. 506(b) for allowance of postpetition default interest. The panel held that the bankruptcy court erred in applying a liquidated damages analysis and ruling the default interest rate was an unenforceable penalty under Missouri law; the panel made no decision as to whether and when the default interest rates under the notes at issue were triggered under the facts of this case, because such decisions are mixed questions of law and fact that are best left for the bankruptcy court to decide in the first instance; the panel endorsed the view that post-Ron Pair, the pre-confirmation interest rate to be applied under section 506(b) to an oversecured creditor whose claim is evidenced by a promissory note or similar loan agreement is the contract (both non-default and default) rate set forth in the note or loan agreement, to the extent enforceable under applicable law; the panel held that, absent state law to the contrary, a liquidated damages vs. penalty analysis is not applicable and should not be applied to a default interest rate set forth in a promissory note or similar loan agreement; and the panel followed the rule that equitable considerations should be used sparingly and only in exceptional circumstances. Accordingly, the panel remanded for further proceedings. View "The Bank of Missouri v. Family Pharmacy, Inc." on Justia Law

Posted in: Bankruptcy
by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's decision applying the contemporaneous exchange for new value preference defense under Bankruptcy Code 547(c)(1) to except payments by debtor to Wells Fargo from avoidance as preferences. The panel held that new value was provided by the release of Wells Fargo's junior liens where a senior lienholder voluntarily released its liens for less than full payment of its debt; Wells Fargo provided new value to debtor when the IRS, a secured creditor senior to Wells Fargo, was paid from the proceeds of a sale of debtor's assets and voluntarily released its liens; a $100,000 payment made by debtor to Wells Fargo one day before a sale closing was intended to be a contemporaneous exchange; and Wells Fargo's release of claims against Phillips 66 and KCRC resulted in new value to debtor intended by the parties to be a contemporaneous exchange. View "Lauter v. Wells Fargo Bank" on Justia Law

Posted in: Bankruptcy
by
The Eighth Circuit reversed the Bankruptcy Appellate Panel's (BAP) conclusion that Lariat's claim against debtor no longer exists because her husband discharged his liabilities in an earlier bankruptcy. Rather, the court affirmed the bankruptcy court's allowance of Lariat's claim based on the fraudulent-transfer judgment. The court held that the husband's discharge did not extinguish debtor's liability because it did not cover all the money owed, and that Lariat's claim against debtor is capped under 11 U.S.C. 502(b)(6). View "Lariat Companies, Inc. v. Wigley" on Justia Law

Posted in: Bankruptcy
by
The bankruptcy appellate panel dismissed debtor's appeal based on lack of jurisdiction, because debtor failed to show that she was a person aggrieved by the bankruptcy court's order overruling her objection to the trustee's final report. Therefore, debtor did not have standing to appeal the bankruptcy court's order. In this case, debtor did not challenge in her objection, nor on appeal, the amount the trustee reported had been returned to her following dismissal of her case. Furthermore, debtor has not demonstrated that the bankruptcy court's order directly and adversely affected her pecuniarily. View "Marshall v. McCarty" on Justia Law

Posted in: Bankruptcy
by
The Garvens contracted with Debtor and DRMP for home repairs and improvements. Unhappy with the results, the Garvens sued Debtor and DRMP in state court and obtained a default judgment against them. At the Garvens' request, the sheriff levied a writ of execution on Debtor's ownership interest in DRMP and scheduled an execution sale. At the execution sale, the Garvens purchased Debtor's ownership interest and became the sole owners of DRMP. Upon learning of the execution sale, Debtor allegedly began withdrawing assets from DRMP and transferring them to a different entity. Debtor then filed a chapter 7 bankruptcy petition. The bankruptcy court lifted the automatic stay to allow the Garvens and DRMP to commence a state court action against Debtor and related third parties to avoid the allegedly fraudulent transfers. The Eighth Circuit Bankruptcy Appellate Panel dismissed an appeal. The Garvens and DRMP filed their motion for relief from the automatic stay on June 5, 2019. The bankruptcy court rendered its final decision on September 19, 2019, more than 60 days after the motion was filed. The 60-day period was not extended, so the automatic stay was terminated by operation of law on August 5, 2019, rendering the order lifting the stay superfluous. View "Paczkowski v. Garven" on Justia Law

Posted in: Bankruptcy
by
The Eighth Circuit affirmed the bankruptcy appellate panel's judgment upholding the bankruptcy court's determination that debtor's interest in his ex-wife's IRA and 401(k) retirement accounts that were awarded to him after the dissolution of marriage were not exempt as retirement funds. The court explained that debtor's interest in his ex-wife's IRA and 401(k) accounts lacked most of the legal characteristics of ordinary "retirement funds." View "Lerbakken v. Sieloff and Associates, P.A." on Justia Law

Posted in: Bankruptcy