The debtors filed an adversary proceeding alleging a violation of the Fair Debt Collection Practices Act [FDCPA] against a creditor that had filed a proof of claim for a stale debt. The debtors argued that because the statute of limitations had run on the underlying debt, when the creditor filed its proof of claim in the debtors’ bankruptcy case, it violated the FDCPA. The court held that filing a proof of claim in the debtors’ bankruptcy case was not a violation of the FDCPA and that the debtors’ remedy was to object to the claim under § 502 or proceed under Rule 9011 for filing the proof of claim in the first place.
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Opinions
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Judge Ben T. Barry
The Court sustained the debtor's objection to Great American Appetizer's PACA proof of claim on the grounds that the food items sold to the debtor did not qualify as perishable agricultural commodities under 7 U.S.C. 499a(b)(4). The Court found that those food products--breaded jalapenos with cheddar cheese, spicy breaded pickle slices, fried green tomatoes, and battered corn nuggets--had been manufactured into articles of food of a different kind or character from the native vegetable ingredients.
After granting in part and denying in part the debtor's oral Rule 15(b) motion made at the trial, the Court overruled the debtor's objections to Hartung's PACA proof of claim on all grounds.
The court denied the trustee’s motion to extend time on behalf of herself and all creditors to file a complaint to determine the dischargeability of a debt. The court found that the chapter 7 trustee was not a party in interest within the context of a nondischargeability action under § 523 or Rule 4007(c). The court granted the trustee’s motion to extend time on behalf of herself and all creditors to file a complaint objecting to the debtor’s discharge. Although ordinarily a motion to extend time to object to discharge only applies to the moving party, in this instance the trustee specifically included all creditors in her motion and established cause.
The court granted the United States’s motion for summary judgment after finding that reconsideration of the US Navy’s decision to separate the debtor from service was not a justiciable issue for the court. The debtor’s obligation to repay an enlistment bonus was non-dischargeable because the debtor received his bankruptcy discharge within 5 years of his separation from the Navy.
The Court granted in part and denied in part the debtors' motion to dismiss a creditor's adversary complaint. The Court found that the creditor failed to state a plausible claim under Fed. R. of Civ. Pro. 12(b)(6) or plead fraud with particularity pursuant to Fed. R. of Civ. Pro. 9(b) as to some of the allegations and, accordingly, dismissed those counts.
The debtor filed a motion for contempt against a creditor that would not turnover funds withheld from the debtor’s tax refund after the debtor received his discharge. Although the debtor scheduled the creditor on his petition, the debtor used an incorrect address. The debtor argued that the “no-asset rule” makes the errant listing irrelevant because the debt would have been discharged regardless in this no-asset case. The creditor argued that it deserved the opportunity to assert the non-dischargeability of its debt under § 523(a)(2) for fraud. The court found that § 523(a)(3)(B) was applicable in this instance and denied the debtor’s motion for contempt.
The Court granted the debtor's oral Rule 15(b) motion made at trial and, upon consideration of the debtor's additional ground for objection to the creditor's PACA claim, sustained that objection by finding that the creditor had failed to preserve its PACA trust rights under 7 U.S.C. 499e(c)(3) when it did not include the payment terms in its invoices.
The court found that property a chapter 13 debtor received as a result of a Missouri beneficiary deed when her mother died was not property of the estate in the debtor's converted chapter 7 case pursuant to § 348(f).
The Court sustained the debtor's objection to a creditor's 503(b)(9) claim for administrative expenses on the basis that the creditor did not file a claim by the Court-ordered deadline. The Court found that the creditor did not prove excusable neglect under Rule 9006, was not entitled to amendment of its PACA claim to reflect the administrative expense, and had not established an informal proof of claim through its PACA claim and correspondence with the debtor.