Here, the court found that a state court jury had awarded the plaintiff punitive damages based upon fraud, making a determination of fraud essential to the state court judgment and satisfying the final element necessary for the court to apply collateral estoppel to the plaintiff’s cause of action under § 523(a)(2)(A). As a result, the court found that the punitive damage award was nondischargeable under § 523(a)(2)(A). The court also found that a debt arising from the debtor’s embezzlement of the plaintiff’s vehicle was nondischargeable under § 523(a)(4).
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Judge Ben T. Barry
In this case, the United States Trustee moved to dismiss the debtor’s chapter 7 case under § 707(b)(2) and § 707(b)(3). Because the court found that the trustee had not calculated the debtor’s current monthly income in accordance with § 101(10A), the court denied the relief sought under § 707(b)(2). After considering the totality of the circumstances of the debtor’s financial condition, including the debtor’s ability to pay her creditors, the court found that the granting of relief under chapter 7 would be an abuse of the provisions of the chapter and granted the trustee’s motion to dismiss under § 707(b)(3), subject to the debtor converting her case to a case under chapter 13 within 14 days.
In this case, a creditor moved to convert a high-income debtor's case from chapter 7 to chapter 11 under § 706(b) and, in the alternative, moved to dismiss the case under § 707(a) and (b). The court denied the creditor's motion to convert under § 706(b) because it found that conversion would not benefit all parties in interest. The court also denied the creditor's motion to dismiss under § 707(a) because it found no evidence that the debtor had engaged in the type of extreme misconduct that would qualify under Eighth Circuit precedent as bad faith sufficient to dismiss the case "for cause" under § 707(a). Finally, the court denied the creditor's motion to dismiss under § 707(b) because it found that the debtor did not have primarily consumer debts, making § 707(b) inapplicable in this case.
The court found that A.C.A. § 18-60-308 did not bar the debtor from pleading as a compulsory counterclaim an allegation of non-compliance with the AR statutory foreclosure act in a previous state court unlawful detainer action. Because she waived her compulsory counterclaim, she was now precluded from attempting to set aside the foreclosure sale by raising the issue in her bankruptcy case.
Chief Judge Phyllis M. Jones
Court adopted the “causal connection approach” and found that the 180-day bar of Section 109(g)(2) applies when the creditor’s request for relief from stay resulted in the debtor seeking and obtaining a voluntary dismissal of his prior case. In so ruling, the Court rejected the Debtor’s argument that the motion for relief from stay had to be pending at the time of dismissal of the prior case.
Denying motion for relief from stay under Section 362(d)(2) of the Bankruptcy Code. Creditor met its burden of proving lack of equity in the Debtor’s residence, but Debtor met his burden of proving the residence was necessary for an effective reorganization.
Finding contract was a contract for deed that should be treated as a security device. Accordingly, Debtor had an interest in the subject property, and the claim secured by the property could be classified and treated in the chapter 13 plan. Objection to confirmation of plan overruled.
Denying motion to reopen case where relief was available in another forum. Litigation was already pending in state court against the Debtor’s non-filing spouse and state court could determine what effect, if any, the Debtor’s discharge had on her non-debtor husband’s liability on the debt in question.
Debt was nondischargeable pursuant to Section 523(a)(2)(B) where the loan was obtained through a false financial statement intended to deceive the Bank, through the Debtor's reckless disregard for the truth, on which the Bank reasonably relied. Debtor's discharge was also denied pursuant to Section 727(a)(4)(A) for his failure to list accurate income and failure to disclose his interest in a limited liability company of which he was the sole member.
Judge Richard D. Taylor
Debtor's discharge granted over Chapter 7 trustee's objection based on alleged false oaths at her first meeting or statements on her schedules.