This case lays out the required two-step process for obtaining default judgment. The debtor properly served the creditor bank with summons and the complaint. When the bank failed to respond to the complaint, the debtor then properly served a motion for default judgment on the bank, to which the bank did respond. After recognizing the Eighth Circuit’s two-step process, the court treated the motion for default judgment as a motion for entry of default, which would have been entered on the court’s docket when the motion was filed. Based on the lesser standard of “good cause,” the court treated the bank’s response as a motion to set aside the entry of default, granting the motion setting aside the default and allowing the case to proceed.
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Judge Ben T. Barry
The debtor objected to the late filed claim of the IRS. The court sustained the objection, finding that although the IRS was not on the initial creditor matrix, it received actual notice with good service at least three times prior to the claims bar date, the last such notice being received at least two months prior to the bar date. The IRS did not file its proof of claim until three years after the bar date.
The court found that 11 USC 1322(c)(1) provides a federal right to cure a home mortgage default up until the purchase price is paid and a trustee's deed is delivered, even though the Arkansas Statutory Foreclosures Act follows the "gavel rule" in Arkansas, which states that a statutory foreclosure sale is concluded when the highest bid is accepted.
The debtor filed a small business chapter 11 plan on the 300th day after filing its petition. The court set the plan for confirmation hearing. At the hearing, the debtor did not have any of its impaired classes voting for the plan so the court denied confirmation. Because another plan could not be filed within the statutory 300 days, the court dismissed the case.
The court denied the debtor’s motion to reopen his case to add an omitted creditor. The creditor’s claim is a non-dischargeable obligation under § 523(a)(3) and reopening the case to schedule the creditor would not affect the dischargeability of this debt.
The court denied the debtor’s motion to reconsider. The debtor asked the court to “impose” a stay because she failed to file a timely motion to extend the stay under § 362(c)(3), even though she only had one case pending in the prior year. Neither the debtor nor her counsel appeared at the hearing on her motion.
The court granted the creditors’ motion to dismiss the trustee’s complaint on two of the fourteen counts: fraud on the court and violation of § 363(n). The trustee failed to plead facts sufficient to state a plausible claim for fraud on the court. Additionally, the court did not accept the trustee’s legal conclusion concerning the identity of “potential bidders” and found that the trustee did not plead sufficient facts to support a finding of collusion under § 363(n).
The court denied the creditor’s motion for relief from stay in this chapter 13 case. The debtor’s plan was confirmed prior to the hearing on the relief from stay rendering the creditor’s argument that the collateral was not necessary for reorganization under § 362(d)(2) not applicable.
The debtor challenged, and overcame, the court’s finding that the creditor had established the prima facie validity of its claim. However, after the creditor then met its burden of proving the validity of its claim, the court had to overrule the debtor’s objection to the mortgage holder’s claim for failure to state any of the exceptions listed in § 502(b) even though the court had asked counsel to advise the court in a post-trial brief specifically under what exception she was proceeding. The court also denied the debtor’s request for attorney fees, which was based on the “significant amount of legal work” involved in this case. Debtor’s counsel failed to respond to the court’s directive to give the court a path showing why the debtor may be entitled to attorney fees.
Judge Phyllis M. Jones
Student loan debt incurred by Debtor to obtain two associate degrees determined to be an undue hardship and therefore dischargeable under Section 523(a)(8) where debtor was sixty-three years old, had been unable to maintain steady employment in the past, had been unsuccessful in obtaining new employment despite her numerous attempts, and where her reasonably reliable future financial resources consisted of only her social security benefits, which were insufficient to meet her meager monthly expenses.