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

Debtor filed for Chapter 7 bankruptcy and his former business associate, David Heide, challenged certain debts debtor owed to Heide as nondischargeable. The court reversed the BAP and reinstated the bankruptcy court's judgment that the debt was non dischargeable under 11 U.S.C. 523(a)(2)(A) because debtor obtained and lost more than $300,000 in loans by false representation. View "Heide v. Juve" on Justia Law

Debtor served as the trustee of a consolidated case (NWFX). As a result of debtor's fraud, the NWFX court entered judgment against debtor in favor of the bankruptcy estate for $199,979.26 plus interest. After debtor filed his own petition for Chapter 11 bankruptcy relief, plaintiff filed a complaint to determine the dischargeability of the debt underlying the judgment. On plaintiff's motion for summary judgment under 11 U.S.C. 523(a)(4), the bankruptcy court concluded that the debt was nondischargeable and entered a judgment to that effect. Reviewing the matter de novo, the panel determined that there was no genuine issue of material fact and that plaintiff was entitled to judgment as a matter of law. The panel rejected debtor's arguments that it was unclear whether plaintiff complied with Arkansas law for reviving the judgment. Accordingly, the panel affirmed the judgment of the bankruptcy court. View "Shaffer v. Bird, II" on Justia Law

Pettry Claimants appealed the bankruptcy court's order denying a motion for reconsideration of a November 8, 2013 order sustaining debtor's seventeenth omnibus objection to claims. The bankruptcy appellate panel affirmed because the bankruptcy court did not abuse its discretion in denying the motion to reconsider where the motion did not raise any new issues or any other grounds for reconsideration of the bankruptcy court's order. View "Pettry, et al. v. Patriot Coal Corp." on Justia Law

Debtor appealed the bankruptcy court's judgment excepting a debt owed to CFG from debtor's discharge under 11 U.S.C. 523(a)(2)(A). The court concluded that the bankruptcy court did not clearly err by finding that debtor made a misrepresentation to CFG regarding how the proceeds of the loan would be used and that CFG justifiably relied on the misrepresentation. The court concluded that the misrepresentation was made with the requisite knowledge and intent to deceive where the bankruptcy court found that the debtor knew the representation was false. Accordingly, the court affirmed the judgment of the bankruptcy court. View "Community Finance Group, Inc. v. Field" on Justia Law

After debtors filed for Chapter 7 bankruptcy protection, GMAC filed this adversary proceeding claiming that it was entitled to a first-priority lien on a home and surrounding twenty-two acres of land by operation of the Arkansas doctrine of equitable subrogation, or to reformation correcting the mutual mistake in its mortgage. The court concluded that, at the time Summit and Southern State made their new loans, knowledge that GMAC made a mistake by describing the wrong property on its earlier mortgage was not knowledge that GMAC had or even claimed to have a superior unrecorded interest, because GMAC had for many months made no attempt to correct the known error, or to reform its mortgage; the principle of Killam v. Tex. Oil & Gas Corp. did not apply to mortgage priority disputes; and the blame for the uncertainty regarding GMAC's lien position lies with GMAC. Had GMAC taken timely action, it would have held the senior recorded lien. Accordingly, the court affirmed the district court's denial of relief for GMAC. View "Owcen Loan Servicing, LLC v. Summit Bank, et al." on Justia Law

The Trustee appealed from the bankruptcy court's holding that a property tax refund was exempt under Minn. Stat. 550.37, subd. 14, as "government assistance based on need." The property tax refund at issue is authorized by the State of Minnesota Property Tax Refund Act, Minn. Stat. 290A.01-290A.27. The bankruptcy appellate panel concluded that the property tax refund at issue here was not government assistance based on need and was therefore not exempt under section 550.37, subd. 14. Accordingly, the panel reversed the bankruptcy court's order. View "Manty v. Johnson" on Justia Law

Creditor appealed from the bankruptcy court's order directing the clerk to reject the filing of his dischargeability complaint based on creditor's failure to make a motion to reopen the underlying bankruptcy case. The bankruptcy appellate panel reversed, holding that reopening a case is not a prerequisite to filing a dischargeability complaint. View "Goldstein v. Diamond" on Justia Law

The trustee filed an adversary proceeding to recover as voidable preferences two payments that Momar received from debtor during the 90 days prior to filing a bankruptcy petition. On appeal, the trustee challenged the district court's grant of summary judgment excepting the second transfer. The court cautioned district courts and parties in future preferential transfer cases that the Seventh Amendment right to jury trial must be respected and therefore, unless a proper demand for jury trial has been waived, the normal rules limiting the grant of summary judgment applied. On the merits, the district court did not clearly err in finding that the preferential transfer at issue, a payment made to a regular supplier 26 days after the supplier's invoice, was made in the ordinary course of business between debtor and Momar. Accordingly, the court affirmed the judgment of the district court. View "Cox v. Momar Inc." on Justia Law

The Creditor appealed from the bankruptcy court's denial of its motion for relief from the automatic stay in the Chapter 13 bankruptcy case of debtors. At issue was whether the bankruptcy court abused its discretion when it denied the Creditor's motion for relief from the stay. The court concluded that the bankruptcy court abused its discretion by denying the Creditor's request to stay relief in light of the debtors' failure to comply with their obligations under their plan (and therefore, the relevant loan documents), by being significantly behind in their payment to the Creditor. Accordingly, the court reversed and remanded. View "CitiMortgage, Inc. v. Borm, et al." on Justia Law

LGI's bankruptcy trustee filed suit to recover payments to SDGE and SCE that LGI made for its clients, Buffets and Wendy's restaurants, as avoidable preferences under section 547(b) of the Bankruptcy Code, 11 U.S.C. 547(b). SDGE and SCE asserted the subsequent new value exception to preference liability pursuant to section 547(c)(4). The court held that, in three-party relationships where the debtor's preferential transfer to a third party benefits the debtor's primary creditor, new value could come from the primary creditor, even if the third party was a creditor in its own right and was the only defendant against whom the debtor had asserted a claim of preference liability. As section 547(b) makes voidable a transfer "for the benefit of a creditor," it both served the purposes of section 547 and honored the statute's text to construe "such creditor" in the section 547(c)(4) exception as including a creditor who benefited from the preferential transfer and subsequently replenished the bankruptcy estate with new value. Therefore, the Bankruptcy Appellate Panel correctly concluded that SDGE and SCE could each offset subsequent new value that Buffets or Wendy's paid to LGI for that utility's services, regardless of when those services were provided. The court directed the BAP to enter a modified judgment reducing SCE's preference liability based on the double-counting of two payments. The court otherwise affirmed the judgment. View "Stoebner v. San Diego Gas & Electric Co., et al." on Justia Law