Defendant moved to set aside Default Judgment awarding $25,000 to Plaintiffs based on violations of the discharge injunction. Defendant argued that the service of process in the case was invalid because the person served was not the “officer” of the depository institution, as is required by Fed. R. Bankr. 7004(h). Following a hearing, the Court found that Plaintiffs met the requirement for service on an officer by specifically addressing the mailing to the position of the CEO, even though the specific CEO named in the mailing no longer held that position. With regard to the Defendant’s other arguments, the Court found the evidence insufficient to warrant setting aside the Default Judgment. In re Gambill, 477 B.R. 753 (Bankr. E.D. Ark. 2012).
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Opinions
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Audrey R. Evans
The Court held that the Defendant was not personally liable to the Plaintiffs for fraud, and that any debt the Defendant owed the Plaintiffs was not excepted from discharge by 11 U.S.C. § 523(a)(2)(A). The Plaintiffs asserted that the Defendant was liable to them for fraud because of an alleged breach of a contract between the Plaintiffs and the Defendant’s limited liability company. The Court determined that the Defendant lacked an intent to deceive the Plaintiffs, which was a necessary requirement for a finding of fraud, and for any resulting debt to be excepted from discharge under 11 U.S.C. § 523(a)(2)(A). Myers v. Dewese (In re Dewese), 469 B.R. 314 (Bankr. E.D. Ark. 2012).
Judge Richard D. Taylor
Court awards prevailing party attorney's fees and costs pursuant to Federal Rule of Bankruptcy Procedure 9011(c)(1)(A).
Judge Ben T. Barry
The debtors argued that the reaffirmation agreement between themselves and the creditor was legally deficient because it failed to reflect disclosures the debtors believed to be required under § 524(c) and (k). They also argued the reaffirmation agreement was deceptive because it did not disclose that one of the debtors was allegedly reaffirming an unsecured loan. The court found that the reaffirmation agreement between the creditor and the debtors met the requirements of § 524(c) and (k) and was a valid reaffirmation agreement.
The creditor objected to the debtor's discharge under 727(a)(3), (a)(4), and (a)(5) based on multiple property transfers made by the debtor prior to filing bankruptcy. The Court found that the creditor failed to prove by a preponderance of evidence the necessary elements of 727(a)(3), (a)(4), and (a)(5), and, accordingly, denied the creditor's objections to discharge. The Court also found that the creditor had abandoned an additional claim under section 727(a)(2).
The court denied the debtor's discharge under section 727(a)(4)(A) for knowingly and fraudulently failing to disclose a malpractice claim and other material omissions in the debtor's petition and schedules.
The Court denied the debtors' Motion for Summary Judgment in both cases, ruling that the creditors were not barred by res judicata from bringing dischargeability actions in bankruptcy court when fraud was not alleged in prior breach of contract actions in state court.
The court overruled the chapter 7 trustee's objection to the debtor's third amendment to exemptions. Although the debtor was confused, the court did not believe the debtor acted in bad faith.
The Court granted the creditors' motion to dismiss an adversary proceeding because the debtors did not have a private right of action under § 524 for an alleged violation of the discharge injunction.
James G. Mixon
The Court ruled that 7 U.S.C. 499(e)(c)(4) of the Perishable Agricultural Commodities Act must be strictly complied with and the creditor failed to do so. Therefore, the creditor did not qualify for PACA trust protection and the motion to abandon and for turnover was denied.