Opinions

The District of Northern Illinois offers a database of opinions for the years 1999 to 2013, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.

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Chief Judge A. Benjamin Goldgar

In re Joseph Van
January 13, 2020

16 B 19075

Judge Donald R. Cassling

In Re Sabrina Fay Lofton
December 23, 2019

19 B 23136

Judge Jacqueline P. Cox

18 B 21202, 19 A 00107
The Debtor Karen S. Rose was found liable to Plaintiff Steven Pavletich in state court for $250,000 on a defamation claim.  She published statements on social media that the Plaintiff cheated on his wife.  This adversary trial covered only her defense that the statements in issue were true.  The Debtor’s witnesses did not testify that the Plaintiff cheated on his wife.  They unconvincingly testified that the Plaintiff told them that while drinking in a bar.

Because the state court entered a default judgment against the Debtor for her refusal to cooperate with discovery, the issues were not actually litigated, preventing the application of collateral estoppel – issue preclusion.

Generally, default judgments cannot supply the basis for dischargeability claims.

In re John W. Fliss
December 3, 2019

15 B 29567
A bank obtained a judgment in state court on a loan to two businesses that the Debtor had guaranteed.  One of the Debtor’s co-obligors arranged to have an entity he controlled buy the judgment rather than pay to have the judgment released, thereby allowing the entity to seek full payment from the Debtor.  Had the judgment been released, the Debtor would have also been released; the individual would have a right to seek contribution.

The underlying judgment was entered by confession, without litigation.  This court found that for that reason collateral estoppel, issue preclusion, did not apply and found that the individual who controlled the purchaser was its alter ego, allowing application of the merger doctrine which extinguishes a debt when the person or entity which holds a debt as owner is also an obligor on it.

The entity controlled by the individual filed a proof of claim which has been disallowed on several grounds: alter ego- merger and as a remedy for a continuing discovery violation.

Judge LaShonda A. Hunt

In re: Charles V. Cook, Sr.
December 17, 2019

14bk36424
Following a trial on motions for sanctions and examination of fees filed by the United States Trustee against a debt relief agency, its principals, and counsel, pursuant to 11 U.S.C. § 526, 11 U.S.C. § 329, and 11 U.S.C. § 105, the court imposes a civil penalty for engaging in a pattern and practice of inaccurate bankruptcy disclosures, orders disgorgement of attorney fees, and awards reasonable attorney fees and costs to the UST.  No sanctions are warranted against individual counsel.

Judge Timothy A. Barnes

18bk04521, 18ap00185
On a plaintiff-debtor’s adversary complaint, seeking a discharge of presumptively nondischargeable student loan debt pursuant to 11 U.S.C. § 523(a)(8)(A), held: the plaintiff-debtor has failed to show by a preponderance of the evidence that he would suffer an undue hardship if forced to repay his student loans.  As a result, the plaintiff-debtor’s request to include such debt in his discharge fails.  Judgment will be entered in favor of the answering defendants.

Judge Carol A. Doyle

Judge Janet S. Baer

In re Gerald O. McInerney
November 15, 2019

16 B 40442
Gina B. Krol (the "Trustee"), chapter 7 trustee for the bankruptcy estate of Gerald O. McInerney (the "Debtor"), filed a motion for turnover of the estate’s interest in the Debtor’s federal and state income tax refunds for 2016 pursuant to 11 U.S.C. §§ 541 and 542. At issue was the proper allocation of those refunds which were filed jointly by the Debtor and his non-debtor spouse. The Trustee argued that the refunds should be divided equally between the Debtor and his spouse under the "50/50 Rule." The Debtor contended that, based on an agreement executed with his spouse after the filing of the bankruptcy petition, the refunds should be allocated using a "Hybrid Approach" of the "Separate Filings Rule" and the 50/50 Rule, whereby any tax benefit derived from the spouses’ decision to file jointly is equally divided between them, and the rest of the refund is then apportioned based on the balance owed or the refund due as calculated on hypothetical married-filing-separately tax returns. The Court found that, without a pre-petition agreement between the parties, the determination as to the division of the refunds must be made by the Court. Examining the various methods that other courts have used, as well as the Hybrid Approach advanced by the Debtor, the Court held that the appropriate method of allocating the refunds between the Debtor and his non-debtor spouse was the "Withholding Rule," under which the refund is divided between spouses in proportion to their respective tax withholdings during the relevant tax year. Applying that Rule, the Court found that, absent adjustments consensually made by the parties, the estate’s interest in the refunds totaled $6,254.91, and the Debtor was ordered to turn over to the Trustee, in addition to the amount he had already tendered, the sum of $5,035.42.

Judge Jack B. Schmetterer

19 B 10717, 19 A 00887

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