Category: Eastern District

Bankr. E.D.N.C.: In re Green – Determination of Noncontingent and Liquidated Debts for Eligibility under 11 U.S.C. § 109(e)

Summary:

In determining whether Mr. Green was eligible, under 11 U.S.C. § 109(e), to be a Chapter 13 debtor due to debt limitations, the bankruptcy court reviewed several types of claims to determine whether each was “noncontingent” or “liquidated”.

While determination of whether a debt is “noncontingent” or “liquidated” is a question of law, See In re Goralnick, 81 B.R. 570, 571 (9th Cir. BAP 1987) the amount of a debt is a question of fact. “[A] debt is noncontingent if all of the events necessary to give rise to liability for it take place prior to the filing of the petition.” In re Sappah, No.… Read More

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Bankr. E.D.N.C.: In re Taylor- Private Citizens Enforcing Federal Statutes Not Exempt from the Automatic Stay as Governmental Units

Summary:

In a case involving a hog farm and related claims of environmental pollution, Sound Rivers, Inc.’s and Waterkeeper Alliance, Inc. sought an order confirming that the automatic stay does not apply or, in the alternative, for relief from the automatic stay in order to continue their lawsuit filed in the federal district Court. The Movants contended that the automatic stay does not apply with respect to the district court lawsuit under the governmental regulatory exclusion to the stay at § 362(b)(4), which provides that the automatic stay does not preclude the continuation of an action “by a governmental unit…to enforce such governmental unit’s … police and regulatory power….” While admittedly not “governmental units in the most narrow and traditional definition,” the Movants argue that private citizens bringing compliance suits pursuant to a government unit’s “police power” may constitute “governmental units” for purposes of §362(b)(4) if the law giving rise to the action are for the “public safety and welfare,” See Universal Life Church, Inc. Read More

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Bankr. E.D.N.C.: In re Regenhardt- Homestead Exemption for Adjacent Property

Summary:

Mr. and Mrs. Regenhardt sought to claim their residence and the adjacent property as fully exempt under the available homestead exemption, with the Trustee asserting that the adjacent property was not part of the homestead and only partially exempt using their wildcard.

In reviewing the case law from the district, specifically In re Stox, No. 10-08123-8-RDD, 2011 WL 5902882, at *6 (Bankr. E.D.N.C. May 27, 2011) and In re Rogers, No. 16-02884-5-JNC, 2016 WL 5794707, at *4 (Bankr. E.D.N.C. Oct. 3, 2016), the bankruptcy court reiterated that the controlling facts in determining whether adjacent property was part of the homestead “was the actual use of the subject properties through and as of the petition date, not a past simultaneous acquisition in one deed.” Based on testimony from Mr.… Read More

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E.D.N.C.: Mungo-Craig v. Navient Solutions- Student Loan Servicer not a Debt Collector

Summary:

Ms. Mungo-Craig brought suit against Navient, first in state court and then after removal in federal district court, alleging violations of the FDCPA and North Carolina Debt Collection Act. The district court denied her motion to remand, finding that it did have federal question jurisdiction to hear claims brought under the FDCPA and supplemental jurisdiction for the other state law claims, as they arose from the same common nucleus of facts. It then granted the Motion to Dismiss brought by Navient finding that Ms. Mungo-Craig had not alleged sufficient facts and could not, in fact, show that Navient, as there was no showing that it had commenced servicing of the student loans after to default, was a “debt collector” under the FDCPA.… Read More

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Bankr. E.D.N.C.: Burgess v. Citimortgage, Inc. – Rooker-Feldman Doctrine & Collateral Estoppel Effect of Foreclosure

Summary:

Mr. Burgess, who had previously been the president of the mortgage lender that originated the loan at question in this case, sought to avoid the mortgage, challenging the chain of assignments, on the basis that an unauthorized party endorsed the note, that eventually lead to Citimortgage foreclosing on his residence and asserting claims in his Chapter 11 case.

In ruling on the Motion to Dismiss filed by Citimortgage, the bankruptcy court first addressed questions of whether the Rooker-Feldman doctrine deprived it of jurisdiction, particularly in light of recent opinions by the North Carolina Supreme Court in In re Lucks, — N.C.… Read More

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Bankr. E.D.N.C.: In re Edwards- Dismissal under 11 U.S.C. § 707(a)

Summary:

Mr. and Dr. Edwards, whose combined monthly gross income as health care professionals is $25722.67, filed Chapter 7, listing nearly $850,000 in general unsecured debts, which were primarily business debts. Dr. Dori Thomas, with whom Dr. Edwards had previously been in medical practice and was a co-guarantor, and Wells Fargo, which held a third lien for $695,000 against property, sought dismissal of the case under 11 U.S.C. § 707(a), as § 707(b) did not apply since the Edwards did not have primarily consumer debts.

Following In re Marino, 388 B.R. 679, 682 (Bankr. E.D.N.C. 2008), the bankruptcy court began that “[c]ause for dismissal under § 707(a) has been held to include a lack of good faith in filing the petition.” The factors from Marino include:

1.… Read More

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Bankr. E.D.N.C.: In re Ward- Debtor’s Independent Knowledge of Supports Tax Value

Summary:

In a counter to McDuffie v. West (In re West), No. 5:15-CV-557-FL, 2016 WL 4186853 (E.D.N.C. July 15, 2016), where the debtor testified solely as to the tax value for property, “but … failed to provide any competent independent knowledge to establish as a basis for a court to accept the third-party assessment appraisal as the actual value of the subject property”, in the present case Ms. Ward started by stating the tax value. She continued that based on her “independent knowledge of sales and events affecting home values in her neighborhood”, the tax value was accurate.

For a copy of the opinion, please see:

Ward- Debtor’s Independent Knowledge of Supports Tax Value Read More

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Bankr. E.D.N.C.: Kozek v. Murphy- Bankruptcy Court Authority to Determine Personal Injury Tort Claim

Summary:

Following the filing of Ms. Murphy’s Chapter 7 bankruptcy, her ex-husband, Mr. Kozek, brought an adversary proceeding against her for malicious prosecution, seeking both monetary damages and a determination that any such award was nondischargeable pursuant to 11 U.S.C. § 523(a)(6). After a bench trial, to which both parties explicitly consented, the bankruptcy court found Ms. Murphy liable to Mr. Kozek in the amount of $8,274.94, which was nondischargeable. While the written judgment was pending, Ms. Murphy brought a Motion to Dismiss, alleging that the bankruptcy court lacked subject matter jurisdiction pursuant to 28 U.S.C. § 157(b)(5) to decide the malicious prosecution claim, as a personal injury tort.… Read More

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Bankr. E.D.N.C.: In re KGC Homeowners, Inc.- Pleading Requirements for Negligence and Breach of Fiduciary Duty, Economic Loss Doctrine

Summary:

KGC Homeowners, Inc. (“KGC”) brought suit against William Douglas Management, Inc. (“WDM”) alleging breach of contract, negligence and breach of fiduciary duty. While conceding that the complaint sufficiently alleged a breach of contract, WDM moved to dismiss the negligence and breach of fiduciary duty claim, pursuant to Rule 12(b)(6) and Iqbal/Twombly.

The elements of a negligence claim are:
(1) The Defendant owed a duty to plaintiff;
(2) The Defendant breached the duty by failing to conform to the required standard of conduct,
(3) The breach of duty resulted in injury to the plaintiff; and
(4) An actual injury to the interests of the plaintiff occurred.… Read More

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E.D.N.C.: Myrick v.  Equifax- FCRA Dispute Resolution and Bankruptcy Discharge

Summary:

Following the entry of a discharge in 2011 of his Chapter 13 case, First Federal Bank (“FFB”) continued to report on Mr.  Myrick’s credit report with Equifax that he owed an outstanding balance of $41,603 that was past due by $2,000.  In November 2014, Mr.  Myrick submitted a dispute with Equifax regarding this balance, raising his bankruptcy discharge.  Equifax sent a Automated Consumer Dispute Verification (“ACDV”) to FFB, which responded that the balance information was correct.  Later in February 2015, Mr.  Myrick again disputed the FFB trade line, this time attaching a copy of his discharge order.  As the discharge order does not specifically list discharged claims, Equifax requested additional details regarding the account names, numbers and nature of the dispute.  … Read More

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