Scotus: Three Denials and a Pending

Posted by NCBRC - April 5, 2021

The Supreme Court recently denied cert petitions in three bankruptcy-related cases: Hull v. Rockwell, No. 20-499 (pet’n denied Feb. 22, 2021); GE Capital Retail Bank v. Belton, 20-481 (pet’n denied March 8, 2021); and Marino v. Ocwen Loan Servicing, No. 20-409 (pet’n denied March 22, 2021).

In Hull, the trustee/petitioner sought to overturn the First Circuit’s holding that a debtor with a legitimate homestead exemption at the time of filing chapter 13 bankruptcy retains that exemption despite post-petition sale of the property, conversion to chapter 7, and failure to reinvest in a new homestead within six months as required by state homestead exemption law. Rockwell v. Hull (In re Rockwell), No. 19-2074 (1st Cir. July 30, 2020).

Rockwell petition for cert

In Belton, the issue presented was “[w]hether provisions of the Bankruptcy Code providing for a statutorily enforceable discharge of a debtor’s debts impliedly repeal the Federal Arbitration Act, 9 U.S.C. § 1 et seq.” There, the petitioner, GE Capital Retail Bank sought to overturn the Second Circuit’s finding, according to its own precedent, that a debtor could not be compelled to arbitrate his contempt motion for violation of the discharge injunction. Belton v. GE Capital Retail Bank, No. 19-648 (2d Cir. June 16, 2020).

Belton Peition for cert

Belton 2d Cir June 2020

The issue presented in Marino was “[w]hether, under 11 U.S.C. 105(a), debtors may recover attorney’s fees incurred on appeal to remedy a discharge violation.” In that case, the Ninth Circuit held that, based on its earlier decision, In re Del Mission Ltd., 98 F.3d 1147 (9th Cir. 1996), section 105(a) does not authorize an award of appellate attorney’s fees. Ocwen Loan Servicing, LLC v. Marino (In re Marino), Nos. 18-60005, 18-60006, 18-60040, & 18-60041 (9th Cir. Feb. 10, 2020).

Marino petition for cert

Marino 9th Cir

Still pending in the Supreme Court is a cert petition in the case of McCoy v. U.S.A., No. 20-886 where the debtor/petitioner seeks to reverse the Fifth Circuit’s application of the Brunner test in a student loan discharge case. In re McCoy, No. 19-40269 (5th Cir. June 5, 2020). The petition points out the inconsistent standards courts have applied to the issue of undue hardship. When applying the Brunner test, many courts require a showing of “total incapacity” to repay the debt in the future, whereas when applying a totality of circumstances test, courts may consider whether the debtor’s “reasonable future financial resources will sufficiently cover payment of the student loan debt[] while still allowing for a minimal standard of living.” NACBA submitted an amicus brief in support of the petitioner.

McCoy petition for cert

McCoy Amicus SCt Jan 2021




Post a Comment

You must be logged in to post a comment.