Posts Categorized: BAP

Case Summaries — Recent Appellate Decisions

Below are summaries of two recent appellate decisions.  In both cases, and with differing outcomes, the courts considered the scope of a notice of appeal and the requirements of Fed. R. App. P. 3.

Biltcliffe v. CitiMortgage, Inc., C.A. No. 14-1043 (1st Cir. November 25, 2014) (Stahl, J.).

After Defendant-Appellee initiated foreclosure proceedings on Plaintiff-Appellant’s house, Plaintiff filed suit, alleging breach of contract, unjust enrichment, and breach of the covenant of good faith and fair dealing. The district court granted summary judgment to Defendant on all counts, and denied Plaintiff’s motion for reconsideration. The threshold jurisdiction question for the First Circuit Court of Appeals was whether Plaintiff appealed the District Court’s order entering summary judgment for Defendant or its order denying the Plaintiff’s motion for reconsideration. Fed. R. App. P. 3(c)(1)(B) requires a party to “designate the judgment, order, or party thereof being appealed” in the notice of appeal, and appellate jurisdiction is limited to the events designated in the notice of appeal. Here, Plaintiff’s notice of appeal stated he appealed from “Final Order Denying Reconsideration of Entry of Judgment.” The Court held that Plaintiff’s notice of appeal was not sufficient to fairly put Defendant on notice of an appeal of the underlying judgment. The consequence of Plaintiff’s notice of appeal was that the First Circuit reviewed the District Court’s reconsideration decision only and under the deferential abuse of discretion standard. The Court found the District Court did not abuse its discretion in denying reconsideration, adding in a footnote that it also would have affirmed the District Court’s underlying summary judgment decision using the de novo standard of review.

 

Witkowski v. Boyajian et al. (In re Witkowski), B.A.P. No. 14-040 (November 13, 2014).

The Debtor appealed the Bankruptcy Court’s orders dismissing her chapter 13 case and denying her motion for reconsideration. Citing First Circuit precedent for liberally construing Fed. R. App. P. 3 (c)(1)(B), the BAP ruled that both the dismissal order and the reconsideration order were properly before the panel even though the Debtor only identified the reconsideration order in her notice of appeal. This part of the decision may have turned out differently had the matter been decided two weeks later (see Biltcliffe case summary above). The BAP affirmed the dismissal order, ruling that the Debtor’s “failure to make plan payments – viewed independently or in combination with her failure to attend the Section 341 meeting of creditors – easily justifies the dismissal of her chapter 13 case.” The reconsideration order was also affirmed as the Debtor failed to identify any new evidence or establish any manifest error of law or fact.

Contributed by:

Devon MacWilliam, Partridge Snow & Hahn

Christopher M. Candon, Sheehan Phinney Bass + Green

Request for Public Comment on Proposed Amendments to BAP Rules

The U.S. Bankruptcy Appellate Panel for the First Circuit (“BAP”) has provided notice that it is seeking public comment on its amendments to the First Circuit BAP Local Rules. The proposed amendments were drafted in response to the amended Part VIII rules of the Federal Rules of Bankruptcy Procedure which will take effect on December 1, 2014. 

Please click on the link below for the official notice from the BAP:

Notice of Request for Comment on Proposed Amendments to the First Circuit BAP Local Rules

 

B.A.P. to Hold Oral Argument on July 21, 2014

On Monday, July 21, 2014, the U.S. Bankruptcy Appellate Panel for the First Circuit (Judges Lamoutte, Deasy, and Kornreich) will hear oral arguments in several cases. The hearings will be conducted in Courtroom 5 (U.S. Tax Court), 12th floor at the McCormack Post Office and Court House, 5 Post Office Square, Boston, MA. The hearings commence at 9:30 a.m. and are open to the public. Please be courteous to the Panel and those appearing before the Panel and arrive early. To see the Scheduling Order, please go to the BAP’s website at www.bap1.uscourts.gov.

The cases and issues on appeal are as follows:

MB 13-059 IN RE: Robert N. Lupo, Debtor

Jacobs v. Collins, Chapter 7 Trustee

Issue: Whether the bankruptcy court erred in denying creditor’s motion to sue chapter 7 trustee.

MB 13-061 IN RE: Jonathan W. Green, Debtor

Hunnicutt v. Green

Issue: Whether the bankruptcy court erred in dismissing creditor’s complaint seeking revocation of discharge.

MB 14-013, IN RE: Harborhouse of Gloucester, LLC, Debtor

MB 14-014 Desmond, Chapter 7 Trustee v. Raymond Green, Inc. as Trustee of Raymond C. Green Trust

Issue: Whether bankruptcy court erred in granting in part and denying in part motions for summary judgment in the chapter 7 trustee’s adversary proceeding objecting to the validity, extent, and priority of claimholder.

 

B.A.P. to Hold Oral Argument on January 27, 2014

On Monday, January 27, 2014, the U.S. Bankruptcy Appellate Panel for the First Circuit (Judges Kornreich, Tester, Finkle, and Feeney) will hear oral arguments in several cases.  The hearings will be conducted in Courtroom 5 (U.S. Tax Court), 12th floor at the McCormack Post Office and Court House, 5 Post Office Square, Boston, MA.  The hearings commence at 9:30 a.m. and are open to the public.  Please be courteous to the Panel and those appearing before the Panel and arrive early.  To see the Scheduling Order, please go to the BAP’s website at www.bap1.uscourts.gov.

The cases and issues on appeal are as follows:

MW 13-036 IN RE: Alfio J. Ragonese, Debtor

Richard Falcone and Mary Falcone v. Alfio J. Ragonese

Issue: Whether the bankruptcy court erred in excepting a portion of the homeowners’ claim from contractor’s discharge pursuant to 11 U.S.C. § 523(a)(2)(A).

MB 13-037 IN RE: Ross Kramer, Susan Kramer, Debtors

Ross Kramer, Susan Kramer v. Carolyn A. Bankowski

Issue: Whether the bankruptcy court erred in denying plan confirmation on grounds that debtors failed to dedicate all of their projected disposable income to plan.

MB 13-042 IN RE: Eldorado Canyon Properties, LLC, Debtor

Eldorado Canyon Properties v. JPMorgan Chase Bank

Issue: Whether the bankruptcy court erred in granting relief from stay.

MB 13-045 IN RE: Eldorado Canyon Properties, LLC, Debtor

Eldorado Canyon Properties, LLC, Appellant

Issue: Whether the bankruptcy court erred in dismissing the case.

NH 13-029 IN RE: Robert Lapointe, Debtor

T.D. Bank, N.A. v. Robert Lapointe

Issue: Whether the bankruptcy court erred in denying motion for relief from stay notwithstanding pre-petition foreclosure.

Case Summaries: Recent BAP Decisions on Conversion, Jurisdiction and Discharge

Zizza v. Pappalardo (In re Zizza), No. MW 13-008 (B.A.P. 1st Cir. October 18, 2013).

Appealed from Bankr. D. Mass. Case No. 11-40840-HJB

Lamoutte, Haines, Deasy, JJ.

Ruling:  Affirming conversion of Chapter 13 case for bad faith on trustee’s motion due to debtor’s failure to disclose two personal injury lawsuits and seek authorization to employ personal injury counsel.

The debtor (an attorney) suffered injuries in two separate auto accidents and filed suit shortly before her Chapter 13.  The debtor failed to disclose the suits in her schedules, SOFA or at the 341 meeting and did not seek court approval for personal injury counsel retained postpetition.  More than a year and a half after the petition date, and shortly after a motion to dismiss the case by the trustee for failing to make plan payments, the debtor finally disclosed the suits and claimed them as exempt.  The trustee moved to convert the case because the debtor was not proceeding in good faith, as required by § 1325(a)(3), and the bankruptcy court granted the motion after a non-evidentiary hearing.  Applying a clearly erroneous standard of review, the B.A.P. affirmed, holding that evidentiary hearings are not always required when a bankruptcy court dismisses or converts a case.  In affirming the conversion, the B.A.P. followed its prior holding that a lack of good faith is grounds for dismissal or conversion “for cause” under § 1307(c), and applied a “totality of the circumstances test” for determining bad faith.  Among those factors included in the totality test are the “debtor’s accuracy in stating her debts and expenses…” and “debtor’s honesty in the bankruptcy process, including whether she has attempted to mislead the court and whether she has made any misrepresentations…”

Click here for the full opinion.

 

Ramos v. Negron (In re Ramos), No. PR 13-005 (B.A.P. 1st Cir. October 22, 2013).

Appealed from Bankr. D. P.R. Case No. 12-00327-BKT

Deasy, Kornreich, Bailey, JJ.

Ruling:  Vacating and remanding bankruptcy court order holding that Chapter 7 trustee’s abandonment of debtor’s residence deprived it of jurisdiction to rule on the debtor’s motion to avoid a judgment lien under § 522(f).

After the Chapter 7 trustee had abandoned the debtor’s residence, a judgment creditor sought relief from the automatic stay to record with the land registry a lien he had obtained shortly prior to the petition.  The debtor objected to the stay relief motion and sought to avoid the lien under § 522(f).  The bankruptcy court held that both the stay relief and 522(f) motions were moot because, as the residence was no longer property of the estate, the court lacked jurisdiction.  The bankruptcy court also denied the debtor’s second 522(f) motion and a subsequent motion for reconsideration on the same grounds.  The B.A.P. vacated the bankruptcy court’s order noting that lien avoidance under § 522(f) relates specifically to property of the debtor, and not property of the estate.  In addition, the B.A.P. also observed that the bankruptcy court’s jurisdiction, pursuant to 28 U.S.C. § 1334(e)(1), expressly includes property of the debtor as of the commencement of the case, not just property of the estate.

Click here for the full opinion.

 

deBenedictis v. Brady-Zell (In re Brady-Zell), No. MB 13-019 (B.A.P. 1st Cir. October 24, 2013).

Appealed from Bankr. D. Mass. Case No. 10-10922-FJB, Adversary Proc. No. 10-01119-FJB

Lamoutte, Haines, Deasy, JJ.

Ruling:  Affirming bankruptcy court order holding that debt for legal fees incurred during representation of debtor in prepetition divorce proceeding was not excepted from discharge under § 523(a)(2)(A).

Prior to the Chapter 7 filing, the debtor retained counsel (the Appellant) to represent her in a divorce proceeding.  Because of the nature and complexity of the allegations made by the debtor’s husband in the divorce action, the probate court ordered the debtor’s husband to pay $25,000 to the debtor’s attorney for legal representation.  Counsel accepted the $25,000 as a retainer, and informed the debtor that she would wait to be paid for the remainder of her services until the divorce was concluded.  Counsel testified in the bankruptcy court that the divorce case presented difficult issues of divorce, criminal and immigration law, and that the case became “paramount and all consuming” for two months.  Ultimately, the debtor and her husband reconciled and the divorce action was dismissed.  Around the time of the dismissal of the divorce case, counsel sent the debtor a bill for legal services for approximately $87,000, against which she credited the $25,000 retainer, leaving a balance of about $62,000.  Although the debtor initially indicated that she was trying to make arrangements to pay the balance owed, she never paid and subsequently argued that she understood the $25,000 to be a flat fee or cap.  After the Chapter 7 filing, counsel filed an adversary complaint asserting, among other things, that the outstanding debt for legal fees was nondischargeable under § 523(a)(2)(A) as a debt arising from a false representation and false pretenses.  Counsel argued that the debtor made a promise to pay and that she made this promise without intending to honor it.  The debtor argued that no such promise was made, contending that she had agreed with counsel on a flat fee of $25,000.

Although the bankruptcy court did not find the debtor to be credible, it noted that counsel had the burden to prove falsity – that at the time she was hired, debtor never intended to pay more than the $25,000 retainer – and that the burden had not been met.  Counsel appealed, arguing that the bankruptcy court should have inferred the debtor’s fraudulent intent from the totality of the circumstances.  The B.A.P. concluded that the bankruptcy court did not err by not inferring fraudulent intent from the totality of the circumstances

Click here for the full opinion.

 

Contributed by:

Nathan R. Soucy
Soucy Law Office
755 Dutton Street
Lowell, MA 01854
Tel.: (978) 905-8010
E-mail: [email protected]

and

Christopher M. Candon
Sheehan Phinney Bass + Green
1000 Elm Street, 17th Floor
Manchester, NH 03101
Tel.: (603) 627-8168   
E-mail: [email protected]
http://www.sheehan.com

B.A.P. to Hold Oral Argument on October 21, 2013 in Boston

On Monday, October 21, 2013, the U.S. Bankruptcy Appellate Panel for the First Circuit (Judge Deasy, Judge Caban, and Judge Finkle) will hear oral arguments in several cases.  The hearings will be conducted in Courtroom 1, 12th floor at the McCormack Post Office and Court House, 5 Post Office Square, Boston, MA.  The hearings commence at 9:30 a.m. and are open to the public.  Please be courteous to the Panel and those appearing before the Panel and arrive early.  To see the Scheduling Order, please go to the BAP’s website at www.bap1.uscourts.gov.  The cases and issues on appeal are as follows:

MB 13-021     IN RE: Adalgisa Mercado, Debtor

                           Adalgisa Mercado v. Combined Investments, LLC

Issue:  Whether the bankruptcy court erred in granting relief from stay in chapter 11 case.

 

MW 13-026     IN RE: Anthony M. Gonzalez, Debtor

                            Massachusetts Department of Revenue v. Anthony Gonzalez

and

MW 13-027     IN RE: John T. Brown, Debtor

                             Massachusetts Department of Revenue v. John Brown

Issue:  Whether MDOR’s claims for unpaid Massachusetts income taxes are excepted from discharge pursuant to 11 U.S.C. § 523(a)(1)(B) when the income tax return is not filed on or before the date established by state statute.