Month: May 2014

4th Circuit: BB&T v. Construction Supervision Services- Subcontractor Lien on Funds

Summary:

Construction Supervision Services (“CSS”) filed a Chapter 11 bankruptcy in January 2012, after which several subcontractors, which had previously provided stone, concrete, and fuel to CSS on an open account, sought to serve notice of liens on funds owed by others to CSS, thereby perfecting such liens. BB&T, which had lent CSS money, objected to the Subcontractors’ post-petition notice and perfection, arguing that such actions violated 11 U.S.C. § 362(a)(4).

The Court of Appeals, affirming the bankruptcy and district courts in the instant case, but reversing In re Mammoth Grading, Inc., No. 09-01286-8-ATS (Bankr. E.D.N.C. July 31, 2009), In re Harrelson Utilities, Inc., No.… Read More

Tagged with: , ,

4th Circuit: Scheider v. Deutsche Bank- Assignment of the Note carries with it Assignment of the Mortgage; Choice of Law

Summary:

The Scheiders refinanced their South Carolina home in 2006 with a $1.178 million adjustable rate note payable to Mortgage Network, granting a mortgage securing the note, which provided that MERS would act as the nominee for Mortgage Network. Mortgage Network subsequently transferred the note, with an endorsement that read “Pay to the order of ______ Without Recourse.” , with the blank later being filled with “IndyMac Bank F.S.B.” Indy Mac later endorsed the note in blank, without recourse, and it is currently held by Deutsche Bank. Some of these transfers occurred during the securitization of the note, which was effectuated by a Pooling and Servicing Agreement (“PSA”), governed by New York law, and provided that Indy Mac would deliver to Deutsche Bank an endorsement in blank.… Read More

Tagged with: , , , , , ,

N.C. Court of Appeals: FIA Card Services v. Caviness- Implied Contract for Credit Card

Summary:

FIA brough suit against Caviness for a credit card debt in the amount of $10,150.19. Lacking the actual credit card agreement, it present as evidence monthly billing statements from November 2008 through March 2011, copies of checks from Caviness (and his business), as well as from a third party, and an affidavit from its authorized representative. Caviness appealed the summary judgment, arguing both that the third part check contradicted the allegation that a contract existed between himself and FIA and that the affidavit from an employee of FIA was inherently suspect. Due to these defects, Caviness argued, FIA failed to establish the existence of a valid contract.… Read More

Tagged with: , ,

Bankr. M.D.N.C.: Rutledge v. Wells Fargo Bank, N.A.- State Law Claims for Failure Related to HAMP Modification

Summary:

The Debtor, after various alleged inconsistencies and shenanigans by Wells Fargo in application of her payments and insurance proceeds, as well as failures in the review of her loan modification application, filed bankruptcy and brought suit alleging, among other causes of action, breaches of contract and duties of good faith & fair dealing and fiduciary duty, fraud and constructive fraud, and violations of the North Carolina Unfair and Deceptive Trade Practice Act. Wells Fargo sought dismissal for failing to state a claim. Following Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), the bankruptcy court examined the treatment of allegations of state law violations arising from failures under federal regulations related to the providing and servicing of mortgages, finding that the cases fell into three categories: 1.… Read More

Tagged with: , , , , , , , , , ,

Bankr. W.D.N.C.: In re Nelson- Denial of Objection to Conversion from Chapter 7 to Chapter 13

Summary:

The Chapter 7 Trustee discovered that the Female Debtor was the 50% beneficiary of her late father’s springing trust, with her share being worth approximately $100,000, that had not been listed in the petition. The Trustee also cam to believe, based on a valuation by a realtor, that real property valued at $10,000 by the Debtors was actually worth as much as $44,900. After discovery and belated disclosure of these, the Debtors sought to convert their case to Chapter 13, with the Trustee objecting. At the hearing on the conversion, the Male Debtor testified that he had based the value of the real property on the opinion of another realtor.… Read More

Tagged with: , ,

Bankr. E.D.N.C.: In re Amerson- Violation of the Automatic Stay; Termination of Automatic Stay in an Individual Chapter 11

Summary:

Despite having received notice of the bankruptcy filing and notice of the proof of claims deadline well before the expiration of the deadline and approximately thirteen months prior to confirmation of the Amerson’s Second Amended Plan, Flanders, who was represented by counsel during much toe the Chapter 11 proceeding, did not take any action in the bankruptcy proceeding to request relief from the automatic stay or to file a proof of claim. Despite that knowledge, Flanders made direct, post-petition threats to Amerson, including asserting multiple causes of action against Amerson.

As this was a Chapter 11 filed by individuals, the discharge was not entered at the time of confirmation, and Amerson did not request an early discharge.… Read More

Tagged with: , , ,

Study- Twomey, Tara: Crossing Paths: The Intersection of Reverse Mortgages and Bankruptcy

Abstract:

The senior population of the United States is expected to grow rapidly over the next twenty years. Rather than enjoying their golden years, increasingly older Americans are struggling with less income, greater debt and insufficient retirement savings. The average amount of debt held by seniors has soared over the last decade. Many now rely on credit cards to cover their basic living expenses. Rising mortgage debt has compromised the use of home equity as a retirement nest egg. There are few easy solutions. Two tools available to seniors to combat financial distress are reverse mortgages and bankruptcy. Reverse mortgages allow seniors to tap their home equity to pay off outstanding debts or supplement monthly income.… Read More

Tagged with:

Law Review: Gotberg, Brook- Conflicting Preferences: Avoidance Proceedings in Bankruptcy Liquidation and Reorganization

Abstract:

The law of preferential transfers permits the trustee of a bankruptcy estate to avoid transfers made by the debtor to a creditor on account of a prior debt in the 90 days leading up to the bankruptcy proceeding. The standard for avoiding these preferential transfers is one of strict liability, on the rationale that preference actions exist to ensure that all general creditors of the bankruptcy estate recover the same proportional amount, regardless of the debtor’s intent to favor any one creditor or the creditor’s intent to be so favored. However, preference law also permits certain exceptions to strict preference liability and gives the estate trustee discretion in pursuing preference actions.… Read More

Tagged with:

N.C. Court of Appeals: Hensel v. Xerox Business Services- Accord and Satisfaction of Student Loan

Summary:

Hensel had student loans of more that $90,000. In November 2012, he received two bills for late fees in the total amount of $68.28. In response, on December 9, 2012, Hensel sent XBS a check for $68.28 attached to a letter that asserted the late fees violated the FDCPA, that assessment of the late fees had harmed his ability to purchase a home, and proposing to release his claims if XBS cancelled his remaining student loans, with cashing of the $68.28 to constitute acceptance. XBS did deposit the check and Hensel eventually sought a declaratory judgment that the student loans had been settled through accord and satisfaction.… Read More

Tagged with: , , , ,

4th Circuit: Santoro v. Accenture Federal Services, L.L.C- No Invalidation of Arbitration for Non-Whistle Blower Claims by Dodd-Frank

Summary:

Santoro brought suit against Accenture, alleging violations of the Age Discrimination in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), the Employee Retirement Income Security Act (ERISA), and the District of Columbia Human Rights Act. Accenture moved to compel arbitration under the employment contract with Santoro, who countered that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 invalidated all arbitration agreements by publicly-traded companies that lack a carve-out for Dodd-Frank whistle blower claims, even if the plaintiff is not a whistle blower.

The Court of Appeals rejected this as an over-extension of Dodd-Frank, which only invalidated arbitration provisions relating only to whistle blower claims “arising under” 7 U.S.C.… Read More

Tagged with: ,
Top