Judge David D. Cleary - Opinions

Judge David D. Cleary

18 B 35437, 19 A 1009
Creditor sought denial of Debtor/Defendant’s discharge under 11 U.S.C. §§ 727(a)(2), (a)(3) and (a)(4).  Following trial, court found Debtor intended to defraud his creditors when he gave proceeds from a workers’ compensation claim to his brother, who then returned the money in cash payments.  Judgment entered for the creditor under § 727(a)(2).  However, Debtor’s lack of extensive financial records was justified under all the circumstances of the case, and he did not make false oaths with intent to defraud.  Judgment entered for the Debtor under §§ 727(a)(3) and (a)(4).

14 B 34232, 16 A 691
Defendants asked the court to compel Plaintiff to produce documents identified as privileged, asserting that Plaintiff placed the documents “at issue” and waived privilege.  Held: under federal law, at-issue waiver occurs when a party affirmatively puts at issue the specific communication to which the privilege attaches.  Since Plaintiff did not assert a claim or defense that put any specific communications at issue, he did not waive the privilege.

14 B 34232
Applicant requested allowance and payment of administrative expense claim as a “substantial contribution” to the case pursuant to 11 U.S.C. § 503(b)(3)(D).  Held: Section 503(b)(3)(D) does not support the allowance of an administrative expense claim in a case under chapter 7.

19 B 4105, 19 A 918
Plaintiffs sought a determination that their claim was nondischargeable and that the Debtor/Defendant’s discharge should be denied.  Held: Plaintiffs’ contract was with an LLC of which Defendant was the sole member.  The corporate veil would not be pierced.  Even if the veil could be pierced, the debt was not nondischargeable under §§ 523(a)(2)(A), (a)(4) or (a)(6).  Defendant’s discharge would not be denied under §§ 727(a)(3), (a)(4)(A) or (a)(4)(C).

14 B 34232
Chapter 7 trustee objected to creditor’s proof of claim, asking the court to reclassify it from secured to unsecured and to reduce the amount.  Held: (1) an objection to claim was the proper procedural posture to resolve the matter; (2) due to the debtor’s delays, a state court citation proceeding did not expire prepetition, thus the creditor had a citation lien on the petition date; (3) nevertheless, the creditor waived its secured claim by its actions in the bankruptcy case; and (4) since the creditor was a landlord whose claim resulted from lease termination, 11 U.S.C. § 502(b)(6) capped its claim.

16 B 25958
Chapter 13 debtor requested a hardship discharge.  The parties agreed that her failure to complete plan payments was due to circumstances for which she should not justly be held accountable.  Held: her case would have been a no-asset under chapter 7, the debtor sought relief quickly after falling drastically ill, and modification was not practicable even if she became eligible for Social Security benefits.  Therefore, the debtor was eligible for a hardship discharge.

19 B 7328
Adversary plaintiff filed his complaint objecting to discharge and dischargeability 19 minutes after the deadline expired.  He asked the court to excuse the late filing.  Held: the excusable neglect standard of Fed. R. Bankr. P. 9006(b)(1) does not apply to complaints brought under §§ 523 and 727.  Defendant did not satisfy the requirements for the defense of equitable tolling, so the court could not excuse the late filing.