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Judge Deborah L. Thorne


Judge Thomas M. Lynch

11-81785, 14-96129
The court relinquished jurisdiction and dismissed without prejudice the Debtor’s adversary complaint challenging the validity of CitiMortgage, Inc.’s asserted lien in the Debtor’s residence. Because the bankruptcy case had closed, the plan had completed, and the residence was not property of the estate, the court determined that all that remained was a two-party dispute under state law which did not implicate bankruptcy rights.

Judge Jack B. Schmetterer

Judge Timothy A. Barnes

On a chapter 13 debtor’s claim objection seeking a determination from the court of the nature, validity and amount of a tax purchaser’s claim in a chapter 13 case where the deadline to redeem the property taxes in question expired prepetition but no tax deed has been issued or recorded and also upon the tax purchaser’s objection to the confirmation of the debtor’s chapter 13 plan, held:
The tax purchaser has a perfected in rem claim for the statutory redemption amount that exists irrespective of whether the redemption period has passed.  That claim is allowed as a secured claim in the amount asserted by the tax purchaser.  The tax purchaser also has a contingent, unperfected in rem claim for the fair market value of the property in question that exists irrespective of whether the redemption period has passed.  The court estimates for the purpose of allowance that this unperfected in rem claim is in the amount asserted by the tax purchaser, the property’s full fair market value as of the petition date, less that amount of perfected in rem claim for the redemption amount.  Such unperfected in rem interest is, however, unsecured, by operation of 11 U.S.C. § 506(a) and because it is subject to the trustee’s avoidance power as a hypothetical lien creditor.  The resulting allowed unsecured claim must be treated in the debtor’s plan.  The debtor’s objection is, therefore, SUSTAINED IN PART AND OVERRULED IN PART.
The confirmation objection fails in its attempt to have this court change its prior published legal conclusions regarding the treatment of tax purchaser claims after the passing of the redemption period but before the issuance of a tax deed.  However, as the tax purchaser’s claim as determined and allowed by the court is not fully addressed in the debtor’s plan, the confirmation objection is SUSTAINED in that limited respect only.

Upon the motion to dismiss brought by a creditor, alleging that the debtor filed a second petition for bankruptcy in violation of a court order that dismissed the debtor’s first bankruptcy case with prejudice, held: The dismissal of the debtor’s first case under bad faith grounds precluded the debtor from filing for relief at the time it filed its second petition. The motion is, therefore, GRANTED.


Judge Janet S. Baer

16 A 00223, 15 B 04436
Plaintiff Christopher Salgado filed an adversary complaint against debtor-defendant David E. Lenoci, II, seeking a determination that a state court judgment debt for battery is not dischargeable under 11 U.S.C. § 523(a)(6).  Salgado alleged that Lenoci struck him in the face with a baseball bat during a fight, while Lenoci claimed that someone else struck Salgado with a bicycle kickstand.  At a bench trial, the Court admitted various documents into evidence and heard the testimony of Salgado, his brother, and Lenoci.  After considering the evidence and testimony, the Court determined that the doctrine of issue preclusion did not bar Lenoci from disputing that he struck Salgado because: (1)  Lenoci did not have a full and fair opportunity to be heard in the prior criminal and civil state court cases that arose from the same facts, and (2) the records from the prior suits lacked specific findings as to which issues had been actually litigated and determined.  Turning to the merits of Salgado’s § 523(a)(6) claim, the Court found that Salgado and his brother were more credible than Lenoci.  Thus, the Court accepted Salgado’s version of the story and found both that Lenoci injured Salgado and that Lenoci’s actions were willful and malicious.  Accordingly, the Court concluded that the state court judgment debt was not dischargeable under § 523(a)(6).

18 B 13481, 18 A 00212
Debtor George Burciaga filed an adversary complaint against chapter 7 trustee Alex D. Moglia, seeking a determination that certain severance pay is not property of the estate under 11 U.S.C. § 541(a)(1) but, rather, constitutes excluded post-petition earnings under 11 U.S.C. § 541(a)(6). The parties subsequently filed cross-motions for judgment on the pleadings. The Debtor argued that the severance pay is not property of the estate because his receipt of that pay was contingent on his execution of a separation agreement and his subsequent compliance with the post-petition conditions outlined therein. The Trustee argued that the severance pay is property of the estate because it is based on both the Debtor’s pre-petition employment and pre-petition termination from that employment. Applying the U.S. Supreme Court’s "sufficiently-rooted test" in Segal v. Rochelle, 382 U.S. 375 (1966), the Court found that the severance pay is both pre-petition property of the bankruptcy estate and post-petition earnings for services excluded therefrom and concluded that a fair allocation of the pay between the estate and the Debtor is 50/50. As such, the Court granted in part and denied in part both parties’ motions for judgment on the pleadings.

Judge Jacqueline P. Cox

In re James Thigpen
April 20, 2019

17 B 10161
The Debtor James Thigpen maintained two Social Security numbers and made false statements to obtain Supplemental Security Income ("SSI") benefits he was not entitled to.  He pleaded guilty and was convicted of embezzling money belonging to the United States.  The sentencing district judge required him to pay restitution to the government in the amount of $49,327.17 in increments of 10% of his net, monthly income.
Thigpen eventually qualified for and received Old-Age, Survivors and Disability Insurance ("OASDI") benefits which he received for a period of time. The Social Security Administration, which administers each program under separate statutes, sought to retain 100% of his monthly OASDI benefit to satisfy the SSI overpayment debt.
Thigpen got a chapter 13 plan confirmed that provided payment of $6000 toward the restitution obligation during the plan's term.
The Court ruled that because the debts arose from separate government programs the recoupment doctrine and its exception from the automatic stay did not apply.  The Court ruled that setoff applied.  However, Bankruptcy Code Section 362(a)(7) provides that the automatic stay applies where setoff is available.  Courts have discretion to not permit setoff where it is unfair to do so, which is what the Court ruled in denying the government's motion for relief from the automatic stay to withhold 100% of Thigpen's monthly OASDI benefit to satisfy the SSI overpayment debt.

Judge LaShonda A. Hunt

Secured creditor objected to confirmation of debtor’s Chapter 13 plan, requiring supplemental language be included in Section 8.1 to address claims treated in Section 3.1 of the plan. Although the debtor eventually amended the plan as requested, the court held that the creditor’s proposed language was inconsistent with the requirements of 11 U.S.C. 1325(a) and therefore the plan could not be confirmed.

Chief Judge A. Benjamin Goldgar

In re Bruno Ranieri
March 29, 2019

15 B 20765