Judge Jacqueline P. Cox - Opinions / Outlines

Judge Jacqueline P. Cox

In re Richard Sharif
March 14, 2011

09 B 05868

Movant Ragda Sharifeh requested that the court vacate (1) the part of the July 6, 2010 judgment order which held that the Soad Wattar Revocable Trust of 1992 was the alter egoof the Debtor, Richard Sharif (“the Debtor”) and (2) the August 5, 2010 order directing Wells Fargo Financial Advisors to turn over assets held in the name of the Trust to Horace Fox, Jr. the Trustee of the Debtor’s bankruptcy estate, pursuant to Federal Rule of Civil Procedure 60. Alternatively, she requested that pursuant to Federal Rule of Bankruptcy Procedure 8005, enforcement of the August 5, 2010 order be stayed pending the final disposition of a related adversary proceeding. The court found that the Movant failed to establish the requirements for entry of a stay pursuant to Federal Rule of Bankruptcy Procedure 8005, that Rule 60 was not the proper vehicle for asserting her legal error argument, and that the court has no jurisdiction to act on the orders which are now on appeal to the district court. The court denied Ragda Sharifeh's motion to intervene herein on March 10, 2011.

In re Richard Sharif
March 10, 2011

09 B 05868

Movant Ragda Sharifeh asked leave to intervene as to two orders: a July 6, 2010 order which held, in part, that the Soad Wattar Revocable Living Trust was the alter ego of the Debtor, Richard Sharif (“the Debtor”) and an August 5, 2010 order directing Wells Fargo Financial Advisors to turn over assets held in the name of the Trust to Horace Fox, Jr. the Trustee of the Debtor’s bankruptcy estate. The court held that the Trust assets were property of the Debtor’s estate as of the commencement of the bankruptcy case, that Ragda Sharifeh could have sought leave to intervene before this matter was adjudicated, and that pursuant to Federal Rule of Civil Procedure 24(b)(3), intervention five months after the entry of the orders at issue would unduly delay and prejudice the adjudication of the original parties’ rights.

In re Nancy Hall-Walker
February 22, 2011

10 B 42783

Debtor filed a motion seeking sanctions pursuant to 11 U.S.C. § 362(k), after the Respondent attended and continued a civil contempt status hearing in the Domestic Relations Division of the Circuit Court of Cook County after she was given notice that the Debtor had filed for Chapter 13 relief under the Bankruptcy Code. The court found that the Respondent’s action in attending and continuing the status hearing to a later date was a willful violation of the automatic stay. The court also found that an oral settlement agreement that the Debtor would receive $5,000 for damages and attorneys' fees for the Respondent’s violation of the automatic stay was binding under Illinois law.

04 B 17796, 10 A 01455

In this adversary proceeding, the court found that the County violated the discharge injunction under 11 U.S.C. § 1328(a) by failing to release its lien on Debtors’ property by continuing to assess interest and penalties and selling the property taxes at a tax sale. The County argued that its lien against Debtors’ property was an in rem lien, and as such the discharge eliminated Debtors’ personal liability only, and that the in rem debt for real estate taxes remains after discharge. The court found in favor of the Debtors, and held that the County’s lien on Debtors’ property is a “claim” within the meaning of 11 U.S.C. § 101(5) and further held that the provisions of Debtors’ confirmed plan are binding pursuant to 11 U.S.C. § 1327(a). The court noted that the County failed to object to the proposed treatment of its tax claim prior to plan confirmation, and that the County acted improperly when it assessed additional interest on the tax debt and sold the taxes at a tax sale after the Debtors completed the payments required by the plan and the entry of the chapter 13 discharge that covered the tax debts.

08 B 32684, 09 A 00718

In this adversary proceeding involving the dischargeability of a debt, the court found in favor of the debtor on a count under 11 U.S.C. section 523(a(2)(A) as the plaintiff did not prove that the debt was incurred by a false pretense, a false representation or actual fraud. The court found in favor of the plaintiff under a count seeking an exception to discharge under 11 U.S.C. section 523(a)(6) finding that the debtor acted willfully and maliciously in causing injury to the plaintiff when in violation of a franchise agreement he operated a competing business using the franchisor's software, trademarks, forms, distinctive signs and procedures.

09 B 13534, 09 A 00667

The court stuck most of the plaintiff's responses to the defendant's Local Rule 7056-1 statement of facts in support of her motion for summary judgment. The plaintiff admitted many of the facts asserted by the defendant. The court deemed as admitted many of the defendant's statements of fact that the plaintiff attempted to dispute because the plaintiff failed to assert them in a separate statement and because the facts the plaintiff asserted did not reference affidavits, parts of the record or other supporting material as required by Local Rule 7056-2.

09 B 13534, 09 A 00667

The court ruled in favor of the defendant on a count under 11 U.S.C. section 523(a)(4) charging defalcation or fraud while acting in a fiduciary capacity, finding as a matter of law that the defendant did not owe her brother or mother a fiduciary duty regarding their mother's financial transactions. The defendant held the mother's power of attorney when she helped the mother make banking transactions, some of which resulted in the brother being replaced as a surviving co-owner of the mother's accounts. Illinois law provides that the execution of a power of attorney creates a fiduciary relationship. However, federal law requires that in addition to the execution of a power of attorney that the principal entrust the agent with money or property to be used for the principal's benefit. The defendant was not entrusted with money or property to be administered for the benefit of the principal. The defendant merely helped their mother fill out bank forms to achieve transactions that the mother desired. The court found in favor of the defendant on a count under 11 U.S.C. section 523(a)(6) charging willful and malicious injury to the plaintiff's property. The plaintiff could not show that the defendant exercised the power of attorney or that she executed any of the transactions in issue. The court found in favor of the defendant on a count under 11 U.S.C. section 523(a)(2)(A) charging that the debt was incurred by way of false representations, false pretenses or actual fraud. The Plaintiff did not allege in his complaint or in a Local Rule 7056-2 Statement a false promise, a false representation or actual fraud leading to the formation of the debt in issue.

10 B 08877, 10 B 08882, 10 B 08879, 10 A 00981

The court granted Debtors' motion for a preliminary injunction staying various lawsuits pending against Debtors' guarantors. Harris Bank, N.A. objected to the entry of a preliminary injunction and argued, among other things, that the court lacked "related to" jurisdiction based upon the Seventh Circuit's ruling in In re Teknek LLC, 563 F.3d 639 (7th Cir. 2009). The court overruled Harris' objection and determined that the Teknek ruling did not address the propriety of a bankruptcy court temporarily enjoining lawsuits against a debtor's guarantors. In the instant case each of the Debtors' guarantors, principals of the Debtors, testified at the hearing that they contribute significant amounts of time and money to the Debtors' reorganization effort, and that if the pending lawsuits were to continue their time, money and energy would no longer be available for the Debtors' reorganization efforts. Based upon this and rulings in Walsh v. Abrams, 45 B.R. 668 (Bankr. E.D.N.Y. 1985), Baptist Medical Center v. Singh, 80 B.R. 637 (Bankr. E.D.N.Y. 1987) and In re Philadelphia Newspapers, LLC, 407 B.R. 606 (E.D. Pa. 2009), the court found that the lawsuits pending against the Debtors' guarantors were sufficiently "related to" the bankruptcy cases because their resolution could hinder this court's ability to help the reorganization process by diverting funds necessary for a successful reorganization. The court enjoined Harris Bank from commencing or continuing any legal actions against the guarantors, including the pending lawsuits, for a period of 120 days through November 12, 2010.

09 B 27094, 09 A 01230

The court granted Robert D. Leavitt and Lowis & Gellen LLP's Motion to Dismiss the Third Party Complaint of First Chicago Bank and Trust (FCBT), which alleged that as a result of the professional malpractice of Mr. Leavitt and the Lowis & Gellen law firm: (1) IFC Credit Corporation double pledged approximately $4.5 million of collateral, (2) FCBT's secured claim has been challenged by the Trustee, (3) the Trustee is seeking to avoid and recover payments made by the Debtor to FCBT and (4) that the Trustee is seeking to avoid FCBT's interest in the collateral. This court determined that there is no "related to" jurisdiction between FCBT's claims against Lowis & Gellen and the bankruptcy case because FCBT's potential recovery against Lowis & Gellen and Mr. Leavitt does not affect the amount of property for distribution in the bankruptcy case because any recovery by FCBT does not come into the bankruptcy estate. This court also determined that the FCBT's professional malpractice claim against Lowis & Gellen and Mr. Leavitt is not ripe for resolution because the Trustee's adversary proceeding against FCBT has not been resolved; until its resolution FCBT can not prove that it has suffered damages as a result of the alleged professional negligence of the defendants.

09 B 49343

On May 17, 2010 the court denied confirmation of the Debtors' proposed Chapter 13 Plan because it did not provide for retention of the totally unsecured junior mortgage creditor's lien until discharge under 11 U.S.C. Section 1328 or payment under nonbankruptcy law as required by 11 U.S.C. Section 1325(a)(5)(B). The Debtors then asked that the creditor's junior mortgage claim be disallowed because it was unsupported by collateral value, i.e., unsecured due to the operation of 11 U.S.C. Section 506(a). Because the Debtors have not asserted any legal authority in support of their position, the court has overruled the effort to disallow the junior mortgage claim because it is totally unsecured.

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