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Judge Jacqueline P. Cox

13 B 29753, 14 A 00674
In this Chapter 13 adversary proceeding, the Debtor-Plaintiff, Samuel Brimmage, alleges that the Defendants, Quatnum3 Group LLC and Elite Recovery Acquisition, LLC, violated the Fair Debt Collection Practices Act (FDCPA) by filing a proof of claim on a debt that is otherwise time-barred. Elite Recovery Acquisition is a national debt buyer and Quantum3 Group is its agent.
The Defendants moved to dismiss the adversary proceeding by arguing that 1) filing a proof of claim is not a debt collection action subject to FDCPA and 2) that if it was a debt collection action then it would be impossible to comply with both the Bankruptcy Code and the FDCPA, and that the Code should therefore control.
The Court denied the motion, concluding that filing a proof of claim is a form of debt collection. The Seventh Circuit has held that while the statutes do overlap, enforcement of both is possible where “any debt collector can comply with both simultaneously.” Randolph v. IMBS, Inc., 368 F.3d 726, 730 (7th Cir. 2004). Agreeing with a similar decision out of the Southern District of Indiana, the Court determined that the Defendants could easily comply with both the Code and the FDCPA by simply not filing a proof of claim on a time-barred debt. See also Patrick v. PYOD,LLC, 2014 WL 4100414 (S.D.Ind. 2014). As such, the Court will be able to enforce both the FDCPA and the Code in this situation.

13 B 38149, 14 A 00177
In this Chapter 7 adversary proceeding, Plaintiff Kenneth Wians, as Independent Administrator of the Estate of Clara Wians, filed a Motion for entry of Summary Judgment against Defendant Dennis Wians on a complaint seeking to except a debt from discharge under 11 U.S.C. § 523(a)(4).  The Plaintiff alleged that the Defendant converted assets belonging to his elderly and disabled mother, while he held powers of attorney for healthcare and property.

In support of his Motion, the Plaintiff asserted that the doctrine of collateral estoppel precluded the Defendant from relitigating the issues previously resolved in a prior state court matter, which proceeded to final judgment, creating the $196,000 debt at issue herein.

The Court granted the Motion, finding that the prior state court order contained specific findings establishing that a fiduciary relationship existed between the Defendant and his mother, within the meaning of § 523(a)(4) and that Defendant committed acts of defalcation with the requisite state of mind, as required by the Supreme Court in Bullock v. BankChampaign N.A.,133 S. Ct. 1754, 1759 (2013).

Judge Jack B. Schmetterer

Judge Timothy A. Barnes

11 B 41555, 13 A 01243
Upon certain defendants’ motions to dismiss the Trustee’s fraudulent conveyance adversary complaint on statute of limitations grounds, the Trustee argues that it may rely on such longer statute of limitations as may be applicable to the IRS as an actual prepetition creditor of the bankruptcy estate.
  In response, a limited number of the moving defendants jointly move for an order disallowing the IRS’s claim.
In considering the foregoing, held:  With respect to the motion to disallow the claim, adversary defendants qua adversary defendants lack standing to object to claims.  As such, the joint motion to disallow is DENIED.
With respect to the motions to dismiss, for the purposes of testing the sufficiency of the complaint under Federal Rule of Civil Procedure 12(b)(6), transfers occurring more than 2 years prior to the petition date are time-barred under section 548 of the Bankruptcy Code and the motions to dismiss will be GRANTED in this respect.  As to the remaining grounds, the court accepts the allegations in the complaint as true, wherein the Trustee has alleged that the IRS is a prepetition creditor of the bankruptcy estate.  That allegation is supported by the actual claim on file by the IRS at the commencement of the adversary.  As the trustee may act within the statute of limitations applicable to any creditor of the estate, including such longer statutes as apply to the IRS, and as the transfers sought to be avoided by the Trustee appear to fall within those longer periods, the court finds for these purposes that the Trustee’s actions are not conclusively time-barred.  The motions to dismiss are therefore DENIED in this respect.  The legal and factual predicates of the defendants’ statute of limitations affirmative defense, including, but not limited to, whether the IRS had an allowable claim against the estate on the petition date, remain issues to be determined on summary judgment or at trial, not in the limited scope of a motion to dismiss, and such arguments are preserved.

Judge A. Benjamin Goldgar

Judge Eugene R. Wedoff

Judge Carol A. Doyle

14 B 10740, 14 A 00461