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

The Eighth Circuit affirmed the district court's decision affirming the bankruptcy court's sustaining of debtors' objection to the proof of claim. The court held that 8 U.S.C. 502 does not preempt Arizona Revised Statute section 33-814, which sets a 90-day limit for commencing or continuing a civil action in Arizona state court. In this case, the 90-day limit had not expired before debtors filed their Chapter 11 petition. The court also held that, because creditor's state court action was dismissed shortly after the trustee's sale for failure to perfect service on defendants, it was not "maintained" within the meaning of Valley Nat'l Bank of Ariz. v. Kohlhase, 897 P.2d 738, 741 (Ariz. Ct. App. 1995). In Kohlhase, the court adopted an Arizona district court's holding that an action on the debt qualified as a deficiency action under A.R.S. section 33-814 even though the creditor filed the action before the trustee's sale and did not amend the complaint to allege a deficiency after the trustee's sale. View "Melikian Enterprises, LLLP v. McCormick" on Justia Law

Mello appealed the bankruptcy court's order confirming debtors' second amended plan without a hearing. The Bankruptcy Appellate Panel held that the bankruptcy court was in the best position to determine when an evidentiary hearing on the issue of good faith was necessary. The panel also held that the bankruptcy court did not err in overruling Mello's objections and confirming debtors' second amended plan. View "Mello v. Wojciechowski" on Justia Law

Agriprocessors wired funds covering overdrafts at Luana Savings Bank in the 90 days before the company filed for bankruptcy. After the bankruptcy court found that the bankruptcy trustee could recover some deposits, the trustee and the bank cross-appealed. The Eighth Circuit held that the true overdrafts were debt because the bank made an unsecured loan and/or extension of credit to Agriprocessors and thus Agriprocessors was legally obligated to the bank for the amount of the overdrafts. Therefore, the district court correctly found that the trustee could recover Agriprocessors' true-overdraft-covering deposits from the bank. Furthermore, the payments did not qualify as contemporaneous exchanges for new value, debts and transfers in the ordinary course of business, nor transfers creating security interests. The court affirmed the bankruptcy court's decision to base the bank's liability on the uncorrected balances; the bankruptcy court did not err in finding a netting agreement; and the transfer was not for or on account of an antecedent debt owed by the debtor before such transfer was made, and thus not voidable; View "Sarachek v. Luana Savings Bank" on Justia Law

General Mills filed an adversary proceeding to determine the dischargeability of a debt in debtor's Chapter 7 bankruptcy. Applying Minnesota law to its preclusion analysis, the Eighth Circuit affirmed the bankruptcy court's rejection of debtor's claim preclusion defense. In this case, because all claims between codefendants were dismissed without prejudice by stipulation, there was no final adjudication on the merits. Furthermore, because General Mills' adversary claim arose from its rights and remedies with respect to debtor's execution of a promissory note secured by the property at issue, there was no final adjudication of that issue. The court affirmed the bankruptcy court as to issue preclusion as well. The court rejected debtor's claim of judicial estoppel where General Mills did not take inconsistent positions. The court also held that General Mills' fraud claims were not barred by the statute of limitations; rejected debtor's challenges to the bankruptcy court's evidentiary rulings; and affirmed the bankruptcy court's finding that debtor's debt was not dischargeable. Accordingly, the court affirmed the judgment. View "Hernandez v. General Mills Federal Credit Union" on Justia Law

The bankruptcy trustee filed suit against Pennie Glasser, seeking to recover from her, as a preference, a payment made by debtor to her. Glass is the former wife of an insider of debtor, as well as a minor investor and employee of debtor at the time of payment. The Bankruptcy Appellate Panel held that Glasser was not an insider of debtor and the payment was not an avoidable preference under 11 U.S.C. 547(b) and Minnesota Statute 513.45(b). In this case, Glasser did not have sufficient closeness to be treated as an insider. View "Seaver v. Glasser" on Justia Law

On remand to the Bankruptcy Appellate Panel, debtors challenged the bankruptcy court's order granting in part and denying in part Starion's motion to compel payment of fees under the confirmed plan of reorganizations, and granting in part and denying in part debtors' motion to disallow attorneys' fees and costs claimed by Starion. The panel affirmed the bankruptcy court's judgment and held that its prior opinion was not clearly erroneous nor did it work a manifest injustice in this case. Therefore, it is law of the case and will not be reopened. The panel also held that the relatively short delay in submitting the requests for attorneys' fees did not prejudice debtors and was not a material breach of the plan that should prohibit Starion's right to collect its fees and costs under the plan. Finally, the bankruptcy court did not abuse its discretion by reducing the fees instead of denying all fees. View "McCormick v. Starion Financial" on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's opinion and order abstaining from hearing Roberts Broadcasting's malpractice claim against Danna McKitrick pursuant to 28 U.S.C. 1331(c)(1). McKitrick represented Roberts Broadcasting in its chapter 11 case. The Panel explained that the bankruptcy court considered and addressed each of the listed criteria, and it considered and addressed only the listed criteria. Therefore, the bankruptcy court did not abuse its discretion either by failing to consider a relevant factor that should have been given significant weight or by considering and giving significant weight to an irrelevant or improper factor. View "Roberts Broadcasting Company v. DeWoskin" on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's grant of summary judgment to the Iowa Department of Revenue and dismissal of the adversary proceeding. The Panel held that the bankruptcy court did not abuse its discretion in denying debtor's motion to file newly discovered evidence where the motion did not deal with newly discovered evidence at all, but was just an attempt to make more arguments for why the Iowa income statute was void for vagueness; the bankruptcy court did not err when it gave res judicata effect to debtor's claim that the Iowa income tax statute is unconstitutional; the bankruptcy court did not err when it applied collateral estoppel to debtor's claim regarding the constitutionality of Iowa's income statute; debtor's void for vagueness argument lacked merit and the Rooker-Feldman doctrine prevented the bankruptcy court and the Panel from reviewing the state supreme court's decision; and Iowa is a state. Debtor's remaining arguments were frivolous and rejected by the Panel. View "Yuska v. Iowa Department of Revenue" on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's order sustaining the objection of the Trustee and holding that monthly payments due to debtor under a single premium annuity were not exempt under Mo. Rev. Stat. 513.430.1(10)(e). In this case, it was clear that the Annuity payments were not on account of illness, disability or length of service. The Panel explained that the payments to debtor under the Annuity were not triggered by her husband's death, but by her choice to begin receiving payments within 30 days of payment of the premium. The right to receive payments was two steps removed from her husband's death, namely sale of the house and her choice of when to begin receiving payments. View "Helming v. Reed" on Justia Law

Creditor challenged the bankruptcy court's order confirming debtor's Chapter 13 plan. In this case, Creditor did not provide the panel with a transcript of the relevant bankruptcy proceedings, specifically the confirmation hearing. The panel concluded that, because the bankruptcy court stated her findings of fact and conclusions of law on the record and the panel has no transcript of the bankruptcy court's statements made during the portion of the hearing during which she did so, there was no basis upon which the panel could say that the bankruptcy court erred. Accordingly, the panel affirmed the bankruptcy court's decision. View "Situm v. Coppess" on Justia Law