Congress regularly makes judgment calls of constitutional dimension. One important example of the interaction between the constitutional analysis of the Court and that of Congress involves disputes over the broad grant of jurisdiction exercised by untenured bankruptcy judges. The legislative history preceding the Supreme Court’s decisions in Northern Pipeline Co. v. Marathon Pipe Line Co. and Stern v. Marshall suggest that Congress’s constitutional interpretation is different in kind from that of the Supreme Court. Because Congress is a political, not a deliberative, body, its constitutional analysis is infused with political judgments. The political compromises reached in enacting the bankruptcy court provisions in 1978 and 1984 may well have contributed to the Court’s constitutional rulings.… Read More
This paper discusses the possible meaning and effect of the Supreme Court’s recent decision in Stern v. Marshall, in which the Court held that the bankruptcy courts’ statutory authority to enter final judgments on certain counterclaims against creditors violates Article III of the Constitution. It was prepared by the authors as a report to the fall 2011 annual meeting of the National Bankruptcy Conference.
The Stern decision is enigmatic. While stressing the narrowness of the issue decided, the Court’s opinion rests on a rationale that, carried to its logical conclusion, could have broad implications for the exercise of bankruptcy jurisdiction specifically and more generally for the authority of other non-Article III decision makers.… Read More
Real property was titled as “Margaret D. Smith and D. Reed and wife, Judy C. Reed Joint Tenants with rights of survivorship.” Only Ms. Reed signed the Deed of Trust and mortgage note with Countrywide. After Ms. Smith died and the mortgage was in default, Countrywide sought reformation of the Deed of Trust.
The Court of Appeal held that originally Ms. Smith owned a one-half interest in the property with the Reeds as Joint Tenants with the rights of survivorship. The Reeds owned their one-half interest as tenants by the entireties.
Pursuant to N.C.G.S. § 41-2(a) (2011) “[u]pon conveyance to a third party by less than all of three or more joint tenants holding property in joint tenancy with right of survivorship, a tenancy in common is created among the third party and the remaining joint tenants, who remain joint tenants with right of survivorship as between themselves.” Because North Carolina is a “title theory state”, a “mortgagee does not receive a mere lien on the mortgage real property, but receives legal title to the land for security purposes.” Neil Realty Co.… Read More
Plaintiff brought a complaint against Defendant for monies allegedly owed on a credit card. Defendant answered and raised counterclaims, to which Plaintiff failed to reply. Consequently, default was entered on the counterclaims with $4,500.00 in actual damages, plus $17,912.11 in costs, including attorneys’ fees. Defendant appealed, questioning, among other things, the reasonableness of the attorney’s fees.
The Court of Appeal held that the standard for reviewing an award of attorneys’ fees was that “the record must contain findings of fact as to the time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney based on competent evidence.” West v. … Read More
The pro se Debtor attacked a foreclosure on several fronts, first appealing the Clerk of Court authorization of the foreclosure to the Superior Court and then to the Court of Appeals. The Debtor did not file a motion to stay the foreclosure pending the appeal and the property was sold at auction.
The Court of Appeals held that the foreclosure auction mooted the subsequent appeal, leaving nothing to be heard.
For a copy of the opinion, please see:
Wilson- Failure to Enjoin Foreclosure Pending Appeal.pdf… Read More
Plaintiff Harris did not disclose any ownership interest in T-WOL, which had been incorporated in 2000, when he filed bankruptcy in 2001. Following suit in 2009, the Defendants moved for summary judgment arguing that Plaintiff Harris should be judicially estopped from asserting ownership in T-WOL.
The purpose of judicial estoppel is “to protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment.” Whitacre P’Ship v. Biosignia Inc., 358 N.C. 1 (2004) Relying on Bioletti v. Bioletti, 204 N.C. App. 270 (2010), the Court of Appeals refused to allow Plaintiff Harris “to derive an unfair advantage from his inconsistent positions” by first failing to disclose an asset in a bankruptcy (regardless of “the effect that any understatement [of assets] may have … on the out come of [the] bankruptcy proceeding” Bioletti at 278-279) and then asserting such ownership in later litigation.… Read More
The Chapter 11 plan, confirmed in 2001, provided that the liability of the guarantors was capped at the amount of the Recapitalized Debt. The creditor, originally Wachovia, however, argued that this provision was impermissible and should not be given effect now.
The bankruptcy court found that this argument was fallacious. First, the terms of the confirmation order had been fully negotiated by a sophisticated creditor with an experienced attorney from a large law firm.
That aside, pursuant to both A.H. Robins Company, Inc. v Mabey, 880 F. 2d 694 (4th Cir. 1989) and the more recent Behrmann v. National Heritage Foundation, 663 F.… Read More
The Debtor was filed in an involuntary Chapter 7 bankruptcy, which was eventually dismissed. The bankruptcy court, later affirmed by the district court, awarded the Debtor $24,678.41 in attorneys’ fees and costs.
After the award was affirmed, however, BB&T a creditor, asserted that as a judgment creditor it was entitled to the money. The bankruptcy court found to the contrary, holding that while a “judgment creditor acquires a lien on the judgment debtor’s real estate by docketing. But he acquires no lien on the personalty until there has been a valid levy.” Community Credit Co. Of Lenoir v. Norwood, 257 N.C.… Read More
Debtor was first found by a civil court to be the slayer of Michelle Young, his wife. He later filed a Chapter 7 bankruptcy, claiming 401k accounts as exempt. While the bankruptcy was pending, he was convicted of the first degree murder of Ms. Young.
First the Court found that the Debtor was, pursuant to N.C.G.S. § 31A-3 (3)(a) and (b), as slayer to both the civil adjudication and the criminal conviction. As such, he did own the 401k accounts as “[n]o person should be permitted to profit from his own wrong”, Prudential Ins. Co v. Tull, 690 F.2d 848, 849 (4th Cir.… Read More
The Debtors executed an adjustable rate mortgage note on May 5, 2006, and received several disclosures, including a Truth in Lending Disclosure Statement, a Notice of Right to Cancel, a Variable Rate Mortgage Program Disclosure, a HUD-1 Settlement Statement and a First Payment Letter.
On April 5, 2009, the Debtors, through counsel, sent a letter to GMAC, the subservicer on the note, seeking to rescind the note pursuant to 15 U.S.C. § 1635 (f), which provides an extended 3-year right of rescission . GMAC refused the rescission. On September 14, 2009, while a foreclosure was pending, the Debtors filed suit to enjoin the foreclosure and to enforce their rescission rights.… Read More