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

The Eighth Circuit affirmed the bankruptcy appellate panel's decision affirming the district court's dismissal of plaintiffs' action based on issue preclusion grounds. Looking to North Dakota preclusion law for the federal common law principles of issue preclusion applicable in this case, the court concluded that its decision in Finstad II that plaintiffs do not have any interest in the property was an issue actually litigated in a prior suit between the parties that is binding on plaintiffs in this lawsuit. View "Finstad v. Gord" on Justia Law

The Bankruptcy Appellate Panel vacated the bankruptcy court's order confirming debtor's chapter 12 plan, concluding that the bankruptcy court erred by failing to hold an evidentiary hearing to determine the value of the Bank's collateral where the collateral was disputed. The panel also concluded that the Bank needed to file a proof of claim. The panel explained that, until the bankruptcy court holds the requisite evidentiary hearing and determines the value of the Bank's collateral, it is impossible to say whether under the debtor's plan the Bank will be paid not less than the allowed amount of its secured claim. Accordingly, the panel remanded for further proceedings. Finally, the panel concluded that the record amply supports the bankruptcy court's finding of disposable income under 11 U.S.C. 1225(b)(1)(B). View "Citizens State Bank v. Schiller" on Justia Law

The Eighth Circuit affirmed the bankruptcy appellate panel's decision upholding the bankruptcy court's order that fully voided Waltrip's judicial lien on debtor's homestead. In this case, after Waltrip filed suit against debtor in October 2016 for breach of contract in Missouri state court, a fire damaged debtor's home. The homeowner's insurance policy paid debtor for damages and Waltrip obtained a consent judgment that gave Waltrip a judicial lien against the homestead property. The parties do not dispute that Waltrip had a valid, avoidable lien that was affixed to debtor's property before she filed her bankruptcy petition. At issue is the extent to which Waltrip's lien impairs debtor's claimed homestead exemption.The court concluded, under Missouri law, that when property is properly exempted under 11 U.S.C. 522, a debtor is the sole owner of the insurance proceeds covering the property. Without any precedent to support Waltrip's position, the court declined to include the amount of the insurance payout when calculating the fair market value of debtor's home on the petition date, and thus the court affirmed the bankruptcy court's ruling using the $3,000 to $6,000 valuation of the unrepaired, fire-damaged property as determined on the petition date. The court also concluded that, because Waltrip's lien is smaller than the extent of the impairment, the entirety of Waltrip's lien can be avoided. Finally, the court concluded that the bankruptcy court did not abuse its discretion in reopening the case to avoid the lien or in denying Waltrip's requests for attorneys' fees and costs related to the reopening. View "David G. Waltrip, LLC v. Sawyers" on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's grant of the trustee's motion to determine the reasonableness of respondent's attorney's fees. At issue in this case is the reasonableness of fees charged by a consumer bankruptcy attorney, respondent, for all work associated with filing a chapter 7 case using a bifurcated arrangement. The panel found no clear error in any of the findings of fact made by the bankruptcy court, concluding that it was well within its authority to reduce respondent's fees by $500 and did not abuse its discretion in doing so. In this case, respondent failed to present evidence that would enable the court to conduct a lodestar analysis. View "Ridings v. Casamatta" on Justia Law

Excellent Home filed a claim against appellee in bankruptcy, arguing that its claim is excepted from discharge, as well as alleging three state law theories: fraudulent misrepresentation, negligent misrepresentation, and civil conspiracy.The Eighth Circuit affirmed the district court's decision upholding the bankruptcy court's finding in favor of appellee, and concluded that Excellent Home, in submitting the full-credit bid, did not justifiably rely on appellee's misrepresentations, so its claim is not excepted from discharge. The court explained that Missouri fraudulent misrepresentation, negligent misrepresentation, and derivative civil conspiracy each require a plaintiff justifiably rely on defendant's actions. In this case, based on the findings of fact, Excellent Home's reliance was unjustifiable and its state law claims were thus properly dismissed. View "Excellent Home Properties, Inc. v. Kinard" on Justia Law

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

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

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

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

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