Judge Jacqueline P. Cox - Opinions / Outlines

Judge Jacqueline P. Cox

In re Meridee Hodges
February 28, 2007

05 B 46676

The debtor objected to the claim of the Social Security Administration (SSA) that she owed it $38,878.40 for overpayment of disability benefits. The SSA's motion to dismiss the claim objection was granted because debtor did not exhaust her administrative remedies by first securing SSA's review of her position that she had not received more than she was entitled to. The Social Security Act allows review of SSA's final decisions via a civil action and deprives the courts of original jurisdiction of such matters. The court also found that even though the government violated the automatic stay by sending the debtor a demand letter after the bankruptcy petition was filed, it was questionable whether stay violation damages could be proven because the debtor pursued the government by filing its claim, objecting to it and seeking court review of the SSA's position.

05 B 27545, 06 A 00412

In re Teknek, LLC; Phillip Levey, Trustee v. Sheila Hamilton et al. Defendants, who are citizens of the United Kingdom, moved to dismiss Trustee’s adversary complaint for lack of personal jurisdiction or, in the alternative, on grounds of forum non conveniens. The court found under Bankruptcy Rule 7004, 28 U.S.C. § 1334(b) and the Fifth Amendment of the United States Constitution that it could exercise personal jurisdiction over the defendants. The court additionally held that even though insolvency proceedings were pending in the United Kingdom for a foreign company with essentially the same ownership structure as the chapter 7 debtor and that the United Kingdom would provide an adequate alternative forum, the balancing of private and public factors was such that dismissal based on forum non conveniens would not be appropriate.

In re Laura Flores
July 20, 2006

06 B 02169

Prior to the petition date, the debtor’s non-filing spouse obtained title to property for which he executed a note secured by a mortgage which included an anti-modification provision. He later transferred title to his wife who did not assume the payment obligations of the note or the mortgage. A default on the mortgage note ensued and the wife filed this chapter 13 case seeking to pay the arrears in her reorganization plan. Mortgagee filed a motion to lift the automatic stay citing the debtor’s lack of privity of contract. The court held that because of United States Supreme Court precedent which defines "claim" to include obligations for which a debtor has no personal liability, only in rem liability, the debtor’s interest in the property could be included in a chapter 13 plan. The court also held that inclusion of the debt in the debtor’s plan did not impermissibly modify the lender’s rights under § 1322(b)(2) but instead provided extra protection as it gives the lender an additional person from whom to seek satisfaction of the underlying obligation. The court noted that Illinois law may dictate that a creditor-debtor relationship exists between the debtor and Mortgagee based upon the Illinois Family Expense Act and under an Illinois Supreme Court case that held that a lender's acceptance of an interim grantee's payments makes the grantee the primary obligor on a debt.

05 B 27545, 06 A 00412

Defendant corporation and its four shareholders moved to vacate a temporary restraining order and the appointment of a receiver. Movants argued that the court committed legal error in justifying the receivership by applying facts pertaining to the alleged misdeeds of the other three defendants and that the court lacked subject matter jurisdiction to appoint a receiver because an appointment is a “noncore proceeding” that is merely “related to” the bankruptcy case in chief because all aspects of such appointment are governed by Illinois law. The court held that the appointment of an Illinois equity receiver was a core matter and the appointment of a limited receivership with oversight, auditing, and clearance authority was warranted to preserve value for whomever is ultimately entitled to it. The court additionally dissolved the TRO and concluded that grounds did not exist for preliminary injunctive relief.

02 B 08699, 04 A 01322

Creditor’s Trust created under a confirmed chapter 11 plan moved for partial summary judgment on its adversary proceeding seeking avoidance under 11 U.S.C. § 547(b) of three pre-petition transfers the debtor made to the defendant. The defendant argued that the transfers fell within the “ordinary course of business” and “new value” exceptions of 11 U.S.C. § 547(c) and were not subject to avoidance. Finding that the “ordinary course of business” exception applied even though the payments were technically late according to a new contract negotiated during the preference period, the court denied the motion for summary judgment and entered judgment for the defendant on its motion for summary judgment.

04 B 45177

Creditor requested an award of costs and attorneys’ fees it incurred when the debtor-in -possession filed a notice of appeal without first seeking a modification of the automatic stay imposed by 11 U.S.C. § 362(a). The court held that a trustee, or a debtor-in-possession, has the authority to unilaterally waive the protections of the automatic stay to proceed with acts of estate administration that would otherwise violate 11 U.S.C. § 362(a) if performed by anyone else. Creditor’s request was denied.

05 B 13874

In re Otha Isaac Special Note: two related, successive opinions regarding Chapter 13 plan confirmation The holder of mortgages on three separate parcels of property owned by the debtor objected to confirmation of her chapter 13 plan because it incorrectly listed the amount of the arrears, failed to provide for the payment of property taxes and insurance premiums, failed to correctly list the monthly mortgage payments coming due during the term of the plan, and failed to make provisions for a balloon payment. Aside from the debtor’s willingness to correct discrepancies in the plan, the debtor argued that her plan was feasible because the balloon payment would be satisfied when due by either refinancing the mortgage or selling the property. The plan would also provide that the automatic stay would automatically be modified if the balloon payment was not made according to these terms. The court found the debtor’s plan to be unfeasible under 11 U.S.C. § 1325(a)(6) because its success hinged upon the occurrence of a speculative and contingent event in the distant future.

03 B 13825, 04 A 01861

In re Dianne Logan Creditor brought an adversary proceeding against this chapter 7 debtor requesting that the debt the debtor incurred borrowing money from it to purchase a car be excepted from her discharge under 11 U.S.C. §§ 523(a)(2), (a)(4) & (a)(6). The seller of the car never registered the car’s title showing that it was transferred from the prior owner to himself and then to the debtor. Neither was the seller able to produce the title during the trial. Debtor testified that an unidentified person or company towed the car to an unidentified location after she abandoned it on the side of a road near her home because of mechanical problems. The court’s ruling in favor of the Creditor was based, in part, on the gaping holes, inconsistencies, and implausible nature of the debtor’s evidence and theory of what happened to the car.

04 B 06663, 04 A 02415

Chapter 13 debtor sought to invalidate a mortgage on her residential real estate because she did not know or understand that she was entering into a mortgage transaction due to a medical condition. Court found against the debtor due to a lack of medical evidence relating to the debtor’s medical condition at the time the mortgage was created.

04 B 02682, 04 A 02054

The debtor’s former spouse initiated an adversary proceeding against the debtor to determine whether the debtor’s obligation under a marital settlement agreement to hold him harmless on certain joint liabilities was excepted from discharge under 11 U.S.C. §§ 523(a)(5) and (a)(15). On a motion for summary judgment, the court found that the debt owed by the debtor to her former spouse was nondischargeable under § 523(a)(5).

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