All posts in Appeals

4/29/2014 – San Fernando Valley Bar Association – Section 523(a)(4) Bullock Update Program

By | April 21, 2014 | Appeals, Bankruptcy Data, Case Briefs, Cases, Community, Current Events, Programs, Specialist Information, Supreme Court | No comments

In Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013), the Supreme Court resolved a split among the circuits concerning whether a “culpable state of mind” was required in order to come within the “defalcation” exception of § 523(a)(4) and whether such a state of mind was required in order to fall within the exception.

The San Fernando Valley Bar Association is presenting a panel discussion on §523(a)(4) and an update on the Supreme Court’s opinion in Bullock. You are invited to sign up and to attend the panel discussion.

As always, the discussion will be enlightening and informative.  One judge sitting at the Woodland Hills Bankruptcy Court has committed to attending the program, subject to unexpected calendar issues.

Here are the particulars for the program:

San Fernando Valley Bar Association
Attention: Linda Temkin
5567 Reseda Blvd., Ste 200
Tarzana, CA 91356
(101 Freeway at Reseda Blvd.)
Telephone (818) 227-0490 ext.105
Facsimile (818) 227-0499
E-mail: events@sfvba.org

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Ninth Circuit joins majority, holds unstayed judgments not ‘bona fide dispute’ — In re Georges Marciano, No. 11-60070 (9th Cir., Feb. 27, 2013)

By | June 19, 2013 | Appeals | No comments

Reed Smith LLP — Marsha A. Houston and Christopher O. Rivas

From: http://www.lexology.com/library/detail.aspx?g=af6d1cf5-d067-4e43-8e6a-3029be339228

In re Georges Marciano, No. 11-60070 (9th Cir., Feb. 27, 2013)

CASE SNAPSHOT

Judgment creditors of Georges Marciano filed an involuntary chapter 11 petition against Marciano, who appealed the state judgments before the petition was filed. The Ninth Circuit ruled, in a case of first impression, that unstayed state court judgments on appeal were not “the subject of a bona fide dispute,” and thus the Bankruptcy Court did not err when it entered an order for relief under chapter 11 against Marciano, notwithstanding the pending appeals.

FACTUAL BACKGROUND

Guess Jeans founder, Georges Marciano, sued multiple former employees in California Superior Court, alleging theft, and some of these employees cross-complained against Marciano for defamation and intentional infliction of emotional distress. The California court entered separate judgments against Marciano in favor of the employees in amounts as high as $55 million. Three of the former employees and judgment holders filed an involuntary chapter 11 petition against Marciano, while the judgments were being appealed by Marciano to the California Court of Appeal. Marciano did not post a bond to stay the judgments.

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Borsos v. United Healthcare Workers-West (In re Borsos)

By | June 19, 2013 | Appeals | No comments

From: http://volo.abi.org/borsos-v-united-healthcare-workers-west-in-re-borsos

Citation: BAP No. EC-12-1163-MkDJu (B.A.P. 9th Cir. June 10, 2013) (NOT FOR PUBLICATION)

Ruling:
The Bankruptcy Appellate Panel of the Ninth Circuit VACATED the bankruptcy court’s nondischargeability judgment and REMANDED the matter for further findings regarding whether the debtor committed defalcation within the meaning of 11 U.S.C. § 523(a)(4). During the pendency of the appeal, the Supreme Court decided Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013). Interpreting the meaning of “defalcation,” as used in § 523(a)(4), the Supreme Court held that defalcation requires a culpable state of mind, effectively abrogating Ninth Circuit law that formerly did not require a particular state of mind to except a debt from discharge. Applying Ninth Circuit law as it stood at the time, the bankruptcy court did not make any findings regarding the debtor’s state of mind. In light of the Supreme Court’s holding in Bullock, the panel held that it was necessary for the bankruptcy court to revisit the matter and determine whether the debtor acted either with knowledge that his conduct would constitute a breach of his fiduciary duty, or with conscious disregard or willful blindness to a “substantial and unjustifiable risk” that his conduct would constitute a breach of his fiduciary duty. The record before the panel did not allow it to ascertain with any certainty the debtor’s mental state. Because of its holding on the defalcation issue, the panel chose not to address the debtor’s argument that 29 U.S.C. § 501 did not impose upon him the type of fiduciary capacity envisioned by 11 U.S.C. § 523(a)(4).

Procedural context:
The debtor appealed from the bankruptcy court’s nondischargeability judgment under 11 U.S.C. § 523(a)(4).

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Ninth Circuit (“BAP”) has affirmed a judgment excepting debts from discharge under 11 U.S.C. § 523(a)(6) based upon the preclusive effect of a Nevada state court judgment for abuse of process, nuisance, and oppression

By | June 14, 2013 | Appeals | No comments

June 13, 2013

Dear constituency list members of the Insolvency Law Committee, the following is a recent case update:

Summary

The U.S. Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”) has affirmed a judgment excepting debts from discharge under 11 U.S.C. § 523(a)(6) based upon the preclusive effect of a Nevada state court judgment for abuse of process, nuisance, and oppression. Black v. Bonnie Springs Family Ltd. P’ship (In re Black), Case Nos. 12-1122-DJuKi and 12-1124-DJuKi (related appeals)(9th Cir. BAP Feb. 11, 2013). To read the full decision, click (Black) http://cdn.ca9.uscourts.gov/datastore/bap/2013/02/12/Black12-1122.pdf

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Some New 9th Circuit Court of Appeals Rules

By | January 25, 2013 | Appeals | 4 Comments

January 25, 2013

Dear constituency list members of the Insolvency Law Committee, the following is a summary of new procedures recently adopted by the U.S. Court of Appeals for the Ninth Circuit:

Electronic Submission of Excerpts: Encouraged as of January 1, 2013 and required as of March 1, 2013. 

While paper copies are still required, parties are now strongly encouraged to submit electronically via Appellate ECF their (i) Excerpts of Record, (ii) Supplemental Excerpts, and/or (iii) Further Excerpts on the same day they electronically submit their brief, unless the Excerpts contain sealed materials. The electronic submission of all non-sealed Excerpts will become mandatory on March 1, 2013 for all parties registered for Appellate ECF.

After electronic submission, the procedure will mirror the current procedure for briefs. After the Court reviews the electronically-submitted Excerpts, the Court will direct parties to file 4 paper copies of the Excerpts with the Court. Parties shall serve a paper copy on any party not registered for Appellate ECF on the same day that the Excerpts are submitted electronically.

If the Excerpts contain sealed materials, parties are instructed NOT to electronically submit the Excerpts.

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Sham Affidavit Rule

By | September 11, 2012 | Appeals, Judges Corner | No comments

The Sham Affidavit – Lessons in Patience

For years while in private practice I was fascinated with witnesses at depositions who claimed, question after question, that they just “couldn’t recall.”  Lawyers present at those deposition grew frustrated at either the witness for such recalcitrance, or else at me for continuing to ask dozens of straight-forward questions while never seeming to obtain “results.”  But, au contraire, Pierre.  I learned about the Sham Affidavit Doctrine early in my career.  That’s when a defensive affidavit (or declaration) is presented in opposition to a Motion for Summary Judgment that suddenly has all of the “disputed facts” miraculously appear by the earlier forgetful deponent.   That declaration is destined to be struck by the Court.

Yesterday, we were reminded of this Rule.  In the Ninth Circuit’s Yeager v. Bowlin (yes, the Speed of Sound General Chuck Yeager) (9th Cir. Sept. 10, 2012), a three-judge panel on Monday ruled an affidavit General Yeager filed with the district court was a ‘sham’ because it included extensive details he claimed not to recall during a deposition three months earlier….”  Sham Affidavit Rule.   Just like taking the 5th in civil matters, “I don’t recall” has significant consequences as well.  This is a case that should be reviewed by all litigators, and passed along to their clients.

Hon. Scott C. Clarkson
United States Bankruptcy Judge

Nice – WFB hit with $3.2 million in Punitive Damages in Favor of little ol’ Homeowner

By | August 18, 2012 | Appeals, Chapter 13 | 1 Comment

Nice opinion from Louisiana:

“On April 13, 2007, the Court entered an Opinion and Partial Judgment awarding [the debtor] $24,441.65, plus legal interest for amounts overcharged by Wells Fargo.  In addition, [the bankruptcy court] found Wells Fargo to be in violation of the automatic stay because it applied postpetition payments made by [the debtor] and his trustee to undisclosed postpetition fees and costs not authorized by the Court, noticed to Debtor or his trustee, and in contravention of Debtor’s confirmed plan of reorganization and the Confirmation Order.  Wells Fargo’s conduct was found to be willful and egregious.”

Later the court awarded $67,000 in attorney’s fees as “compensatory sanctions.”  The court did not award punitive damages.    On appeal, the district court increased the judgment to $170,000.  The Fifth Circuit remanded (ultimately) with an order to reconsider the punitive damages.  On remand, the bankruptcy court increased the compensatory award to $292,000 for the additional fees involved in the appeal and said,

“After considering the compensatory damages of $24,441.65 awarded in this case, along with the litigation costs of $292,673.84; awards against Wells Fargo in other cases for the same behavior which did not deter its conduct; and the previous judgments in this case none of which deterred its actions; the Court finds that a punitive damage award of $3,171,154.00 is warranted to deter Wells Fargo from similar conduct in the future.”

The opinion is here.  WFB Hammered  Thanks to Marc Stern in Seattle for the FYI on this.

How to Serve Wells Fargo Bank

By | August 17, 2012 | Appeals | 1 Comment

Here is a nice brief from attorney Marc Stern in Seattle.  It seems he served Wells Fargo Bank by handing a copy of the complaint to the manager of some particular branch in Seattle.  I am guessing that the bankruptcy judge did not believe that was sufficient since Marc is now appealing.  The brief lays out very nicely the federal rules on service of process.  Brief re Service on WFB

Note:  I asked Marc how goes the appeal?  He said,

Wells Fargo hired counsel and stipulated to the relief that I wanted in the first place.  Also, we dismissed the appeal.

MSS

 

Applicable Commitment Period Appeal

By | May 18, 2012 | Appeals, Chapter 13 | No comments

Last Friday, May 11th, 2012, Nancy Clark of Borowitz & Clark and Beth Schneider of Rod Danielson’s Office argued the applicable commitment issue before the 9th circuit.  I’ve been told that the three panel judge stated on the record that they did not have much knowledge of bankruptcy law and both attorneys had to spend some time explaining how things work in chapter 13 bankruptcy.  Hopefully, we will have some clarity on this last major issue in the near future.  We have been waiting for about seven years since BAPCPA was enacted for the courts to tell us what the “applicable commitment period” actually means.  Keep your fingers crossed.

Aki Koyama

In re Taylor — District Court Reverses Judge Wayne Johnson and Rules “Chapter 13 debtor’s right to convert to Chapter 7 is absolute.”

By | April 18, 2012 | Appeals, Chapter 13 | 2 Comments

In re Taylor — Case No. EDCV 11-1879-GHK

Appeal from Bankruptcy Court’s (Judge Johnson, Riverside) dismissal of Chapter 13 case at the confirmation hearing “for failure to make payments and….timely file a secured debt payment history declaration” even though Debtors had filed their Notice of Conversion from Chapter 13 to Chapter 7 the day before the confirmation hearing.

The District Court reversed holding that “a Chapter 13 debtor’s right to convert to Chapter 7 is absolute…the Bankruptcy Court erred in failing to give effect to Appellants’ Notice of Conversion and subsequently dismissing Appellants’ Chapter 13 case.” Case was remanded to the Bankruptcy Court.

Read the decision, written by Hon. George H. King, here.  I sat next to Judge King at Federal Bar Association program a couple of months ago (Dean Chemerinsky’s annual Supreme Court Review)!

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