The following are summaries of the September opinions posted on the Massachusetts Bankruptcy Court’s website.
DeGiacomo v. Tashmoo Cove Realty, Inc. (In re Northwood Properties, LLC), Adv. P. No. 10-1314, Bankr. No. 05-18880-FJB (September 3, 2014).
The Chapter 7 Trustee sought damages against Tashmoo Cove Realty, Inc. (“Tashmoo”), an owner of the Debtor and a proponent of the Debtor’s confirmed, but subsequently failed, Chapter 11 plan, for breach of plan funding obligations. All of the counts in the Trustee’s complaint were predicated on Tashmoo having made some sort of promise to pay administrative claims, including professional fee claims. After a trial, however, the bankruptcy court found that no factual support existed for the Trustee’s contention that there existed on the date of the confirmation hearing or otherwise any agreement that Tashmoo would fund administrative claims. Instead, the court found that “every reference to professional fee claims, no matter by whom made, carried with it an indication that there was no expectation of effective date payment and no then-existing agreement that Tashmoo would fund those claims.” Accordingly, the bankruptcy court entered judgment for Tashmoo.
Agin v. PNC Mortgage (In re Spodris), Adv. P. No. 11-305, Bankr. No. 11-15925-WCH (September 4, 2014).
Prepetition, the Debtor and a non-debtor third party granted a mortgage on property they owned as joint tenants to the defendant. The Chapter 7 Trustee avoided the Debtor’s transfer of the mortgage as preferential and then sought a monetary judgment for the value of the mortgage the Debtor transferred. The issue was whether avoidance of the mortgage and its preservation for the estate pursuant to § 551 was sufficient to place the estate in a position it would have been prior to the transfer, or if a monetary judgment under § 550 was necessary to do so. The Court denied the Trustee’s request for a monetary judgment, holding that preservation of the lien for the estate was sufficient, and the difficulty in administering the interest was not a special circumstance warranting a monetary judgment in this case.
In re Kevin Spring, Bankr. No. 14-12205-JNF (September 4, 2014).
A pro se Debtor filed a chapter 7 bankruptcy case on the eve of a civil trial where his sister asserted twenty-two counts against him for myriad misdeeds. Debtor failed to file any statements or schedules pursuant to 11 U.S.C § 521, and he failed to comply with credit counseling requirements pursuant to 11 U.S.C. § 109. Further, amongst other things, he missed hearings, other Court imposed deadlines, and the 341 meeting. The court provided an analysis on the minimum requirements needed for a Debtor to show cause to dismiss his own case. In light of the lack of creditors filing notices of appearance, the lack of oppositions to his motion to dismiss, and despite Debtor’s failure to timely file statutorily required documents and attend Court established hearings, the case was dismissed.
Mbazira v. OCWEN Loan Serv., LLC (In re Mbazira), Adv. P. No. 14-1055, Bankr. No. 13-16586-WCH (September 11, 2014).
In this adversary proceeding, the Debtor sought to avoid a first mortgage arguing that the acknowledgment was materially defective. The issue of first impression tackled by Judge Hillman was “[w]hether a mortgage encumbering registered land, whose certificate of acknowledgment mistakenly omits the mortgagor’s name, but which mortgage was accepted by the Land Court for registration and is noted on the certificate of title of such registered land, provides constructive notice.” The Court analyzed the statutory text governing registered land and concluded, just like two decisions concerning unregistered land, that a mortgage with a materially defective acknowledgment does not provide constructive notice and therefore can be avoided in the context of 11 U.S.C. § 544(a)(3). Because the Court resolved the motion to dismiss issue based on statutory text, there was no need to certify the question to the Massachusetts Supreme Judicial Court.
In re C.R. Stone Concrete Contractors, Inc., Bankr. No. 05-11119-WCH (September 15, 2014).
The Bankruptcy Court approved the Chapter 7 Trustee’s unopposed 9019 settlement motion and recommended that the District Court approve any stipulations of dismissal filed in connection with the underlying consolidated civil action (which had been previously transferred to the District Court after a withdrawal of the reference). Because the reference for the main case had never been withdrawn, the District Court had directed the Trustee to file the settlement motion with the Bankruptcy Court. The Bankruptcy Court reviewed the settlement and concluded that the Trustee had properly exercised his business judgment in reaching a fair and reasonable result.
Taatjes v. Maggio (In re Maggio), Adv. P. No. 14-1025, Bankr. No. 13-16257-JNF (September 22, 2014).
The matters before the court were cross-motions for summary judgment filed by the Plaintiffs and the Defendant, Debtor, in connection with alleged fraud committed by the Debtor that resulted in losses sustained by the Plaintiffs. In denying Plaintiffs’ motion, the court held that in the absence of a fiduciary relationship between the Plaintiffs and the Debtor, Plaintiffs could not use collateral estoppel to establish that debts owed to them by the Debtor as a result of a state court judgment were nondischargeable under Section 523(a)(4) of the bankruptcy code. As for the Debtor, the court held that the evidence in support of her motion contradicted factual findings of the state court, as well as medical records submitted by the Plaintiffs, and therefore Debtor was not entitled to summary judgment.
Orumwense-Lawrence v. Osula (In re Osula), Adv. P. No. 10-1174, Bankr. No. 09-19922-JNF (September 30, 2014).
In this adversary proceeding, the Plaintiff sought a determination that the debt owed to him for the Debtor’s alleged misrepresentations, fraud, or defalcation while acting in a fiduciary capacity and embezzlement in connection with his use of Plaintiff’s property while the Plaintiff was detained by the United States Immigration and Naturalization Service is excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(A) and (4). After a trial, the Bankruptcy Court ruled that, with the exception of a $62,200 embezzlement claim, the Plaintiff failed to establish that the Debtor owed any part of the $600,000 debt asserted to exist, let alone a nondischargeable debt under 11 U.S.C. § 523(a)(2)(A) or (4). The embezzlement claim was found to be nondischargeable pursuant to 11 U.S.C. § 523(a)(4).
John Joy, Boston College Law School
Devon MacWilliam, Partridge Snow & Hahn
Michael K. O’Neil, Murphy & King
Nathan Soucy, Soucy Law Office
Aaron S. Todrin, Sassoon & Cymrot
Gina Barbieri O’Neil, Mirick, O’Connell, DeMallie & Lougee
Christopher M. Candon, Sheehan Phinney Bass + Green