Tag: standing

Bankr. E.D.N.C.: McInnis v. Phillips- Determination of Whether Debts are Primarily Consumer; Creditor Does Not Have Standing to Bring Avoidance Actions

Summary:

In determining whether 11 U.S.C. § 707(b) was applicable, the bankruptcy court held that despite the debtors having thirteen consumer debts totaling $296,775.43 and eight business debts totaling $294,595.56, “[b]ecause of how easily a mortgage can skew the claims in favor of consumer debt” the debt secured by real property should be excluded from this consideration. In re Jones, 2009 WL 102442, *1 (Bankr. E.D.N.C. Jan. 12, 2009) (citing In re Booth, 858 F.2d 1051, 1054 (5th Cir. 1998)). After this adjustment, the debtors had primarily non-consumer debts and 11 U.S.C. § 707(b) did not apply.

Additionally, the bankruptcy court held that only a Trustee and not a creditor had authority to bring avoidance actions under 11 U.S.C.… Read More

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4th Circuit: Jones v. College of Southern Maryland- Only Chapter 7 Trustee Has Standing in Non-exempt Personal Injury Case

Summary:

Ms. Jones brought suit against the College of Southern Maryland under the Family and Medical Leave Act and subsequently filed a Chapter 7 bankruptcy petition, eventually listing the lawsuit as an asset in her schedules. The Trustee then settled the lawsuit with the College of Southern Maryland for $75,000, with $25,000 to the attorney, as she was the only party having standing to pursue the claim. Ms. Jones objected to this settlement.

The Court of Appeal affirmed that the Trustee was the sole party with standing to prosecute and settle the claim.

Commentary:

This would not be an issue in North Carolina, unlike Maryland, where personal injury claims, even for non-bodily injuries, also unlike the federal exemption, such as the FMLA, would be fully exempt.… Read More

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4th Cir.: Trapp v. SunTrust Bank – Spokeo and ECOA

Summary:

SunTrust denied the application for credit to purchase a boat made by the Trapps due to issues with Mr. Trapp’s Social Security number being linked to a deceased person. The Trapps brought suit under the Equal Credit Opportunity Act (ECOA), 15 U.S.C.A. §§ 1691 to 1691f.

While a party may have an actionable claim if he “ suffers a concrete informational injury where he is denied access to information required to be disclosed by statute, and he suffers, by being denied access to that information, the type of harm Congress sought to prevent by requiring disclosure” Dreher v. Experian Info. Read More

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Bankr. M.D.N.C.: In re Carter- Standing in Involuntary Bankruptcy; Good Faith in Filing Involuntary Bankruptcy

Summary:

The Debtor caused a fatal motor vehicle accident while under the influence and was subsequently pleaded guilty to felony death by motor vehicle. At the time of the collision, the Debtor was covered by his own insurance with State Farm and the Allstate insurance policy held by the owner of the car the Debtor was driving. The decedent’s estate settled with both Allstate, but after being unable to reach terms with State Farm, ultimately obtained a wrongful death verdict for approximately $2.8 million. When collection efforts failed, the Estate commenced an involuntary Chapter 7, with the Trustee employing special counsel to pursue automobile liability claims against State Farm and Allstate.… Read More

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Bankr. E.D.N.C.: Church v. Nabors – Standing of Owner of Corporation to Bring § 523(a)(6) Claim on Individually rather than by the Corporation

Summary:

Church, who is married to the debtor, Nabors, ex-wife, owns Private Ridge Wealth Management, LLC (“PRWM”). Nabors filed a complaint with the Better Business Bureau, making allegations against PRWM, which Church alleged cost PRWM $6,000 in revenue. Church then in his individual capacity, brought suit against Nabors for making a false claim and obtained a default judgment holding that Nabors had caused malicious injury to PRWM. After Nabors filed bankruptcy, Church, acting without an attorney, brought an adversary proceeding seeking to have Nabors’ obligation to Church declared non-dischargeable pursuant to 11 U.S.C. § 523(a)(6). Nabors moved to dismiss the complaint arguing that Church lacked standing to bring the suit individually, rather than in the name of PRWM.… Read More

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4th Cir.: Jones v. Fulton Bank- Breach of Contract Requires Actual Damages; Standing to Object to Appointment of Substitute Trustee

Summary:

The Joneses brought a breach of contract claim against Fulton Bank, alleging that Fulton Bank failed to send them a proper thirty-day pre-acceleration notice. See Bayview Loan Servicing, LLC v. Simmons, 654 S.E.2d 898, 901 (Va. 2008). The Joneses also challenged the appointment by Fulton Bank of a Substitute Trustee with instructions to commence foreclosure as not complying with the Deed of Trust. In their third cause of action, the Joneses contended that Fulton Bank breached the implied covenant of good faith and fair dealing under the Uniform Commercial Code. Lastly, the Joneses sought to quiet title to the property.… Read More

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Bankr. E.D.N.C.: In re Gene Express- Standing as a Party in Interest

Summary:

AccuGenomics, Inc.’s (“AccuGenomics”) sought a determination pursuant to 11 U.S.C. § 365(p)(1)of whether certain patent rights under the license agreement between the debtor and the University of Rochester (“Rochester”) were considered property of the estate. The Chapter 7 Trustee objected, arguing that AccuGenomics lacked standing because it was neither a creditor or party in interest in this proceeding.

A “party in interest,” is not defined by the Bankruptcy Code, but “is generally understood to include all persons whose pecuniary interests are directly affected by the bankruptcy proceedings” Yadkin Valley Bank & Trust Co. v. McGee (In re Hutchinson), 5 F.3d 750, 756 (4th Cir.… Read More

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Bankr. EDNC: Robinson- Blank Indorsement of Note

Summary:

Debtor executed a promissory note and Deed of Trust in favor of First Citizens in 2004, but since the loans inception made payments to (or through) Cenlar.  After the Debtor filed Chapter 13 in 2007,    Cenlar filed a proof of claim, including a copy of the note, but without any indorsement.  In 2008, the Debtor fell behind on payments and a consent order resolving such delinquency was entered, stating, among other things, that Cellar was the holder or servicer of the note.  In March of 2011, Residential Credit Solutions (“RCS”) filed a transfer of claim for other than security to notify the Debtor, Trustee and Court that Cenlar had transferred its claim to RCS.… Read More

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