Tag: jurisdiction

E.D.N.C.: U.S. v. Cox- In rem Jurisdiction for Judicial Foreclosure

Summary:

Mr. And Mrs. Cox, through their then attorney, entered into a settlement agreement in a civil forfeiture action brought for the collection of taxes, wherein they agreed to pay the government more than $3 million and granted Deeds of Trust against thirty-five tracts of land located throughout Alabama and North Carolina. After entering into this settlement, the government then initiated criminal prosecution of both of the Coxes and they subsequently pleaded guilty, with Mr. Cox being sentence to 33 months imprisonment, Mrs. Cox to 3 years probation, and each being fined $50,000. The when the Coxes failed to pay the agreed amount (perhaps in part because they were in prison), the government sought to judicially foreclose on the properties.… Read More

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Bankr. E.D.N.C.: In re McGregor – Lack of Jurisdiction to Enforce Order following Dismissal

Summary:

Turnover of a vehicle held by a Raeford Collision and subject to a possessory mechanic’s lien was resolved subject to a Consent Order, which required the MacGregor to provide the title to the vehicle so that a lien could be recorded with the North Carolina DMV. When the MacGregor’s Chapter 13 case was dismissed and they failed to produce the title, Raeford Collision sought an order “divesting title” or to sequester the vehicle and to hold the McGregors in contempt.

The bankruptcy court held that, while it would have had authority to grant relief in an open case, because a dismissal is a final appealable order and neither had a reservation of jurisdiction nor had been appealed, the bankruptcy court not able to “affect the rights of litigants before it .… Read More

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M.D.N.C.: Brown v. Western Sky- Forum Selection and Tribal Exhaustion

Summary:

Plaintiffs brought a class action against various payday lenders for violations of North Carolina law forbidding high interest rate loans either through by telephone or internet. The loan agreements all included forum selection clauses granting almost exclusive jurisdiction to the Cheyenne River Sioux Tribe (“CRST”), upon which the Defendants sought dismissal of the action, arguing that the district either lack of jurisdiction to hear the matter or, alternatively, that the CRST should make the initial determination regarding the enforcement of the forum selection clause.

Beginning from Atl. Marine Const. Co. v. U.S. Dist. Court for the W. Dist. of Texas, 571 U.S.… Read More

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Bankr. E.D.N.C.: Bolton v. Jacobson (In re Province Grande Olde Liberty)- Mandatory Abstention Factors

Summary:

Plaintiffs had brought suit against Howard A. Jacobson (“Jacobson”), Envision Sales & Marketing Group LLC (“Envision”), CILPS Acquisition LLC (“CILPS”), and the debtor (collectively “business court defendants”) and it was designated a mandatory complex business case and assigned to the North Carolina Business Court pursuant to N.C. Gen. Stat. § 7A–45.4(b). The dispute arose out of the plaintiffs’ investments in high–yield and fixed–return real estate investment groups that were allegedly established and utilized by Jacobson as vehicles to facilitate an elaborate Ponzi scheme.

28 U.S.C. § 1334 sets forth the situations where a bankruptcy court must abstain and when it may abstain in favor of state court adjudication of a particular issue or action.… Read More

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4th Circuit: McFadden v. Fannie Mae- Complete Diversity Jurisdiction; Dual-Tracking of Loan Modification and Foreclosure

Summary:

The McFaddens obtained a mortgage from Flagstar in July 2007 for $116,500.00, secured by their real property located in Virginia. The note provided that it could be freely transfered by Flagstar and that the agreements in the Deed of Trust would bind and benefit successors and assignees of the note. Before August 2009, the note was transferred to Fannie Mae and around the same time the McFaddens fell delinquent on their payments. The McFaddens attempted to complete a HAMP modification, but the application took several months due to missing documents, with the parties disputing who was responsible for the missing documents.… Read More

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Bankr. E.D.N.C.: C.R. Peele Construction v. DTC Engineers- Post-Confirmation “Related To” Jurisdiction

Summary:

Debtor brought an Adversary Proceeding against Defendants alleging unpaid invoices a little more than two months after its Chapter 11 plan was confirmed. Defendants moved to dismiss the complaint for lack of subject matter jurisdiction.

Pursuant to 28 U.S.C. §§ 1334(b) and 157(a) a matter “is within the jurisdiction of [a Bankruptcy] Court if it is ‘arising under,’ ‘arising in,’ or ‘related to’ the corresponding bankruptcy case.” Citing to In re Celotex Corp., 124 F.3d 619, 625 (4thCir. 1997) (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3rdCir. 1984)), the bankruptcy court held that “[t]he usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.” Both confirmation and then later substantial consummation of the debtor’s plan, however, narrows the ‘related to’ jurisdiction such that an action “must affect an integral aspect of the bankruptcy process—there must be a close nexus to the bankruptcy plan or proceeding.” Valley Historic Ltd.  … Read More

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Bankr. E.D.N.C.: In re Blohm- Forum for Determination of Domestic Support Obligation

Summary:

The Debtor contested large portions of the Domestic Support Obligation (DSO) claim filed by his ex-wife, who was also seeking dismissal of his Chapter 13 plan. The bankruptcy court held that the Indiana Superior Court where this claim originated was best suited for deciding the issues, See Caswell v. Lang, 757 F.25 608, 610 (4th Cir. 1985), and continued the matter for three months to allow for such decision.

Commentary:

No matter how unpleasant bankruptcy cases can be, the clear preference of bankruptcy judges to punt these issues back to state court shows that domestic cases are far worse.

For a copy of the opinion, please see:

Blohm- Forum for Determination of Domestic Support Obligation.pdf Read More

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Bankr. M.D.N.C.: In re Freeway Foods- Application of Stern v. Marshall

Summary:

Not quite half-way through this exhaustive opinion, the bankruptcy court, in discussing Stern v. Marshall, states that “[t]he facts of Stern are interesting but not particularly helpful to the task before this Court.”  Similarly,  the facts here are interesting but not particularly helpful to the task of summarizing and digesting this case, largely because the opinion addresses so many variations that a complete, item by item summary would be no shorter than the actual case.

The generally holding by the bankruptcy court is  that  Stern provides for a two-prong test: “the question is whether the action at issue stems from the bankruptcy itself or would necessarily be resolved in the claims allowance process.” Stern, 131 S.Ct.… Read More

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Bankr. EDNC: New Bern Riverfront v. Weaver Cooke- No Implied Consent to Non-Core Jurisdiction

Summary:

The complaint and anser both failed, in contravention of Rules 7008(a) and 7012(b), to state whether the proceeding was core or  non-core, and if non-core, where the parties consented to the bankruptcy court entering  final orders or judgments.  The Court held that, in light of Stern v. Marshall, 564 U.S. ___, 131 S.Ct. 2594 (2011), it could not  that the parties have impliedly consented to its jurisdiction over non-core matters.  Consequently, it gave the parties thirty days to file a statement concerning whether the matter was core or non-core and whether the parties consented to the bankruptcy court’s conclusive jurisdiction.… Read More

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