Opinions

 

The NCMB offers a database of opinions for the years 2000 onward, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.

In re Lundy (Case No. 14-10421) 08/25/2016
(Judge Catharine R. Aron)

Attorney for Debtor filed application for compensation with respect to efforts to determine that debtor had paid mortgage account in full, relying on the American Rule and its judicially fashioned exceptions.  Court found that fees could be awarded for willful violation of the automatic stay, in light of unauthorized notices sent to debtor with respect to mortgage account.

Automatic Stay, Published No

The Court granted summary judgment in favor of Plaintiff, Trustee, bringing a 547(b) action against the Defendant, on cross motions for summary judgment.  The Court found that two payments made from the Debtor to the Defendant five days before the petition date were preferential.  The Debtor made two payments from an account created as the result of a contract between Debtor and Defendant, which set up a relationship whereby the Defendant sold warranties and the Debtor administered the warranties, paying claims and insuring the warranties through its relationship with a third party.  In dispute was the interest of the Debtor in the account, whether the Defendant was a creator, and whether the court should impose a constructive trust over the funds in the account to the benefit of the Defendant.

Preferences, Published No

Defendants filed a motion to dismiss adversary proceeding under Rule 12(b)(6).  The Court held that the complaint sufficiently stated a claim for breach of contract; that the plaintiff had successfully pled facts to support the claim that the Debtor was an intended third-party benficiary of a confidentiality agreement; that the plaintiff had plausibly alleged that the corporate defendants acted as the alter ego of an individual defendant; that the complaint properly pled a cause of action for breach of the implied duty to negotiate in good faith; and that the complaint sufficiently stated a claim for fraud in the inducement.  Court dismissed final request for relief, an objection to claim on the sole basis that the debt was procured by misrepresentation, concealment of material facts, unfair and deceptive actions, and failures to act in good faith.

Dismissal, Published No

Trustee moved for summary judgment on a preference action.  Defendant argued against summary judgment for three main reasons: (1) the Trustee had failed to prove that the Debtor was insolvent at the time of the alleged payments as required by 11 U.S.C. §547(b)(3); (2) the payments were made in the ordinary course of business and could not be avoided pursuant to 11 U.S.C. §547(c)(2); and (3) the loans made by the Defendant during the preference period constituted "new value" which barred any preference recovery pursuant to 11 U.S.C. §547(c)(4).  The Court entered partial summary judgment for the Plaintiff ruling that: (1) the Trustee had failed to provide evidence proving that the Debtor was insolvent at the time of the transfers; (2) the payments were not in the ordinary course of business and the ordinary course of business defense could not be met; and (3) the loans made by the Defendant during the preference period to the Debtor constituted new value which would be a partial defense, reducing any preference amounts by the amounts loaned.  

Preferences, Published Yes
In re Reed (Case No. 11-50343) 08/05/2016
(Judge Catharine R. Aron)

Court denied motion to reconsider order granting relief from automatic stay with respect to a manufactured home, finding that the creditor had not accepted a reaffirmation agreement, and the debtor had failed to redeem the property. 

Reconsider/Amend, Published No
In re Hamlet (14-50836) 08/05/2016
(Judge Lena M. James)

Chapter 13 Trustee and creditor who failed to properly perfect a vehicle covered under the hanging paragraph of 1325(a) reached a settlement with the Debtor on the Trustee's 549 avoidance action. The Consent Order found the value of the avoidance was equal to the creditor's fully secured claim, and the order further directed that the equity be preserved for unsecured general claims. The Trustee brought a Motion to Modify Plan to incorporate that requirement into the Plan, and the Debtor objected, arguing that only the collateral's value need be paid into the Plan, as in addition to the claim being voidable under 549, it was also void ab initio.  In ruling for the Trustee, the Court declined to answer whether the claim was void, as the Consent Order already established the lien's status as avoidable.

 

Property of the Estate, Published No
In re Daniel (16-80216) 07/11/2016
(Judge Lena M. James)

Prior to filing, a Debtor's residence was foreclosed upon by his homeowners association and sold via a non-judicial sale.  The real property was purchased, a foreclosure deed was delivered, an order for eviction was obtained, and a Sheriff's eviction was scheduled.  Prior to eviction, the Debtor filed for bankruptcy.  The purchaser moved to lift the automatic stay pursuant to § 362(d)(1)-(2) to continue with eviction under state law, and the Debtor opposed the motion, arguing that as he had filed an adversary proceeding under § 548 that went to the heart of the purchaser's claimed ownership, that relief from stay should be denied.  The Court found that legal title to the property had passed to the purchaser under North Carolina law, and that cause existed to modify the stay under subsection (d)(1). Further, the Court found that, as legal title had passed, the Debtor had no equity in the property, and that the Debtor made no argument as to the property's necessity for an effective reorganization such that the stay could be modified under subsection (d)(2).  The Court also found that the pendency of the Debtor's adversary proceeding was no impediment to granting the purchaser's requested relief.

Automatic Stay, Published No

Court granted motion for waiver of financial management course requirement under section 727(a)(11) for a Chapter 7 who died prior to taking the course.

Discharge Requirements, Published No
In re Dean (Case No. 10-5773) 07/07/2016
(Judge Catharine R. Aron)

Court allowed judicial lien avoidance in case that was reopened without objection, finding that the creditor had not carried its burden of proving that any alleged prejudice it may have suffered outweighed harm to the debtors in not allowing avoidance.

Lien Avoidance, Published No

Court first determined the ownership interests of the parties in certain companies, after an analysis of several agreements between the parties and the Trustee's request to avoid and recover certain transfers under sections 548, 549, and 550.  Court then determined that certain intellectual property constituted an asset of the companies, in light of precendent distinguishing a patent assignment from an agreement to assign a patent.  While the former must be in writing, the later may be oral.  Ultimately, Court ordered assignment of the patents to the companies, as an agreement to assign a patent constitutes the proper subject of an action for specific performance.

Property of the Estate, Published No

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