Category: Western District

W.D.N.C.: Morgen v.  Student Loan Finance Corporation- Forum Selection ClauseW.D.N.C.: Morgen v.  Student Loan Finance Corporation- Forum Selection Clause

Summary:

Ms.  Morgen brought suit alleging violations of the Fair Credit Reporting Act and Student Loan Finance (“SLF”) moved for a change of venue to South Dakota based on a forum selection clause in the contract.
Ms.  Morgen’s initial objection that the loan applications and promissory notes proffered by SLF  had no affidavits from record keepers   denied as the court held that such would be precluded as evidence in a consideration of a motion for summary judgment, but, in part because “there is no plausible contention that these documents are inauthentic,”  allowed them for determination of venue.

In evaluating the forum selection clause,   the  court  first determined  whether it was  mandatory or permissive, with only mandatory forum selection being binding. … Read More

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Bankr. W.D.N.C.: In re Moe’s Rx Clinic, Inc.- Dismissal of Pharmaceutical Asset Case

Summary:

A pharmacy filed Ch. 7, with its primary asset being $40-50,000 in drug inventory. Upon the motion of the Trustee, the court found that the FDA and NC Pharmacy Board had specific procedures regarding the proper handling and disposal of prescription drugs that those entities were better able to follow than the Trustee. Accordingly, as there were no other assets, dismissal was proper to allow the Pharmacy Board to dispose of the drugs. (This case was subsequently appealed, but that was dismissed with the agreement of the debtor.)

Commentary:

It does not appear that either abandonment of these drugs by the bankruptcy estate pursuant to 11 U.S.C.… Read More

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Bankr.  W.D.N.C.: In re Leviner- Characterization of Claim as Domestic Support Obligation

Summary:

After nearly 35 years of marriage,  Thomas Leviner and Kathy Leviner divorced and negotiated a Settlement where the parties prior marital residence was retained jointly for their children to inherit,  but with Mr.  Leviner to make the mortgage payments and Ms.  Leviner to retain the property during her lifetime (unless she remarried.)  Mr.  Leviner was also pay alimony of $300 a week until Ms.  Leviner turned 67 years old.  In 2015, after refinancing the house, Mr.  Leviner sought to offset the mortgage payments from the alimony being paid.  This was rejected by Ms.  Leviner, through her domestic attorney, and Mr.  … Read More

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Bankr.  W.D.N.C.: In re Grand Dakota Partners, L.L.C.- Transfer of VenueBankr.  W.D.N.C.: In re Grand Dakota Partners, L.L.C.- Transfer of Venue

Summary:
Grand Dakota Partners (“GDP”) and Grand Dakota Hospitality (“GDH”) filed a Chapter 11 bankruptcy in the Western District of North Carolina, largely because its owners and management were located in Charlotte.  The hotel, bar and restaurant operated by GDP and GDH are located in Dickinson, North Dakota.
Venue in North Carolina was proper under 28 U.S.C. § 1408, as Charlotte was the “principal palce of business” for the corporations, since that is where the “decision makers are located”.  See The Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010).  That notwithstanding, the bankruptcy court then determined whether transfer of venue under 28 U.S.C.… Read More

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Bankr. W.D.N.C.: In re Mergentime- Transferred Social Security Benefits

Summary:

Ms. Mergentime received $62,417.80 as a lump sum payment for retroactive Social Security benefits, approximately 4 months after filing her Chapter 7 bankruptcy. She had not disclosed those potential funds in her petition. Pursuant to her equitable distribution agreement, she paid half of those funds to her ex-husband. The Trustee sought to recovery those transferred funds and to deny Ms. Mergentime’s discharge, arguing that even though those funds would have been fully protected, the transfer to her ex-husband changed the nature of those funds such that they were no longer protected.

The bankruptcy court rejected this argument as the Social Security benefits were not, pursuant to 42 U.S.C.… Read More

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W.D.N.C.: Deal v. Trinity Hope Associates, LLC- Default Judgment under FDCPA

 

Summary:

Default Judgment was entered in favor of Ms. Deal for violations of the FDCPA by Trinity Hope Associates, which failed to respond to the Complaint.

Commentary:

The only aspect that is interesting is that this is a 10-page opinion finding default, where the defendant did not answer.

For a copy of the opinion, please see:

Deal v. Trinity Hope Associates, LLC- Default Judgment under FDCPA Read More

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W.D.N.C.: Garvey v. Seterus – FDCPA Demand for Verification Limited to Statutory Requirements; Statute of Limitations for FDCPA

Summary:

Leaving aside the multiple foreclosure proceedings and subsequent appeals, Mr. Garvey eventually filed a short-lived, pro se Chapter 13 bankruptcy. Attorneys for Seterus filed a Notice of Appearance and Objection to Confirmation. Mr. Garvey then sent a demand to the attorneys, as debt collectors, pursuant to 15 U.S.C. § 1692g, provide verification under penalty of perjury to substantiate that the alleged debt was owed to Seterus and further stating that failure to comply within seven days would constitute a waiver of all claims against him.

Following the dismissal of the bankruptcy, Mr. Garvey commenced suit in federal district court, which held that, pursuant to 15 U.S.C.… Read More

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Bankr. W.D.N.C.: In re Bronikowski- Employment Bonus is an Expectation of Payment not Contingent Interest

Summary:

Ms. Bronikowski disclosed a potential employment bonus in her November 11, 2016, bankruptcy petition, asserting that it was not an asset of her bankruptcy estate, as the award of the bonus was at the complete discretion of the employer, and, in the alternative and out of caution, claimed it as exempt as wages of the debtor under N.C.G.S. § 1-362. The Trustee objected to the exemption and argued that the potential employment bonus was a contingent interest and asset of the estate.

After a thorough review of case from across the country, the bankruptcy court held “that the discretion of the employer is the most important consideration for determining whether an anticipated bonus is property of the estate.” See Klein-Swanson, 488 B.R.… Read More

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W.D.N.C.: Cooper v. Crow- Procedures for Amendment to Exemptions Governed by State Law

Summary:

Ms. Crow filed a Chapter 13 bankruptcy, but after a creditor raised issue with her exceeding the §109(g) debt limits, converted to Chapter 7. Eight months after the initial filing of her voluntary bankruptcy petition, Ms. Crow sought to amend her schedules to claim an exemption in an individual retirement account (IRA) that had been omitted from her original petition, but would otherwise indisputably have been exempt. The Trustee opposed this amendment, arguing that Ms. Crow failed to show the change in circumstances required for modifications of exemptions by N.C.G.S. § 1C-1603(g). The bankruptcy court found that the omission was inadvertent due to the complexity of the case (which involved Ms.… Read More

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Bankr. W.D.N.C.: In re Duvall- Impact of Abandonment on Debtor is Not Relevant

Summary:

The Trustee sought to abandon LLCs of inconsequential value to avoid tax liabilities of more than $1 million due to recaptured pass through losses. Abandonment of these assets would shift the tax liability to the debtor, who contended that this would improperly burden his fresh start. The bankruptcy court rejected this as the “[i]mpact on the debtor is not … one of the factors to be considered in authorizing abandonment, which suggests that impact on the debtor is not a necessary
consideration.” In re Johnston, 49 F.3d 538, 541 (9th Cir. 1995)

For a copy of the opinion, please see:

Duvall- Impact of Abandonment on Debtor is Not Relevant Read More

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