Eastern District

Izzo v. United States (In re Izzo)

Defendant United States sought review of an adversary proceeding summary judgment ruling by the bankruptcy court that the tax liabilities of plaintiff, a chapter 7 debtor, were not excepted from discharge under 11 U.S.C. § 523(a)(1)(B)(i).
Ruling: 
Court reversed and remanded case since debtors'tax liabilities were deemed nondischargeable due to debtors'untimely filing of seven annual tax returns.
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Shapiro v. First Franklin Fin. Corp. (In re Rechis)

Plaintiff chapter 7 trustee filed an adversary proceeding against defendants, creditors, seeking to avoid a mortgage as a preferential transfer. The trustee moved for summary judgment. The debtor amended her schedule to claim an exemption in the underlying real property as property held by the entireties. The trustee objected to the claimed exemption under the doctrine of laches.
Ruling: 
Mortgage was avoided as a preferential transfer since the debtor's effort to exempt the property as entireties property after an 18-month delay was not allowed.
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Andrus v. Ajemian (In re Andrus)

Plaintiff debtor sued defendant former spouse, seeking a determination that a debt of $146,184 he owed to her under a divorce judgment was a dischargeable debt and not within the exception to discharge of 11 U.S.C. § 523(a)(5). She filed a motion to dismiss or, alternatively, to abstain, a counter-complaint seeking a determination that the debt was non-dischargeable, and a summary judgment motion. Debtor filed his own summary judgment motion.
Ruling: 
Court deemed an amount owed by the debtor to the debtor's former spouse to be dischargeable and not within an exception since the obligation was a property settlement.
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Wells v. TCF Natl Bank (In re Hi Tech Fleet Serv.)

The matter came before the court on plaintiff chapter 7 trustee's motion for summary judgment. The trustee requested summary judgment on a two-count complaint seeking: (1) a determination of the amount, validity, and extent of defendant creditor's claim, and (2) avoidance of an allegedly unauthorized postpetition transfer of funds to the creditor.
Ruling: 
Court dismissed the trustee's complaint alleging avoidable transfers and demanding turnover since no provision in either the Code or case law allowed a chapter 7 trustee to bring an action challenging an asset sale consummated pursuant to court order in a chapter 11 proceeding.
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Chase Manhattan Mortg. Corp. v. Shapiro (In re Lee)

Appellant creditor challenged the decision entered by the bankruptcy court, which granted summary judgment in favor of appellee trustee, in an adversary proceeding. The trustee moved for judgment upon his claim to avoid the creditor's mortgage as a preferential transfer under 11 U.S.C. § 547.
Ruling: 
Creditor's refinance mortgage was deemed not preferential since under the earmarking doctrine the debtor's estate was valued the same before and after the refinance transaction.
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In re Vinson

Petitioner debtors each claimed a homestead exemption in the same real property. Respondent trustee objected.
Ruling: 
Debtors were not permitted to claim state homestead exemption because the state law authorizing the exemption violated the Code by exempting non-debtor property.
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Jin Lim v. Chase Home Fin. LLC (In re Comps)

Plaintiff chapter 7 trustee filed a complaint against defendant creditor, seeking to set aside a mortgage as a preferential transfer under 11 U.S.C. § 547(b), and seeking to disallow the creditor's claim under 11 U.S.C. § 502(d) unless it turned over the transferred property. Both sides sought summary judgment.
Ruling: 
Mortgage was not a preferential transfer since the mortgage was perfected within 10 days of the transfer and thus was not a transfer on account of an antecedent debt.
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In re Lott

The bankruptcy court granted the chapter 7 trustee's motion to reopen the debtors' case. The issue was whether the wife debtor's interest in the proceeds of an action for the wrongful death of her mother were property of the estate. The trustee claimed that the debtor's interest in the wrongful death action proceeds was property of the estate because that interest, and the cause of action, arose on the prepetition date of death.
Ruling: 
Debtor's interest in the proceeds of a wrongful death action of her mother's estate was property of the estate since it was at least a prepetition contingent right to the proceeds.
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Yun Zhong Qui v. Ci Qing Zhou (In re Ci Qing Zhou)

Plaintiff judgment creditor brought an adversary proceeding against defendant bankruptcy debtor, seeking a determination that the judgment debt against the debtor for defamation and infliction of emotional distress was not dischargeable under 11 U.S.C. § 523(a)(6) based on the debtor's false accusations that the creditor committed sexual assaults.
Ruling: 
Judgment debt against the debtor for defamation and infliction of emotional distress was dischargeable since the schizophrenic debtor had believed the creditor sexually assaulted her and thus did not act maliciously toward the creditor.
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