Type: Amicus
Date: July 25, 2016
Description: Whether equitable estoppel under state law may prevent a debtor’s amendment of claimed exemptions.
Result: Pending
LVNV Funding, LLC v. Harling, No 16-1346, LVNV v. Rhodes, No. 16-1347 (4th Cir.)
Type: Amicus
Date: August 22, 2016
Description: Whether provision in confirmed chapter 13 plan, which reserved the debtors’ right to object to proofs of claim was sufficient to reserve the debtors’ right to object to unsecured creditor’s proof of claim for time-barred debt.
Result: Pending
Ingram v, AAA Cooper Transportation, No. 16-11440 (11th Cir.)
Type: Amicus
Date: June 16, 2016
Description: Whether Chapter 13 debtors have a free-standing duty to amend their bankruptcy schedules to reflect the post-petition acquisition of a legal claim. Whether judicial estoppel is appropriately applied against former Chapter 13 debtors who attempt to amend their bankruptcy schedules.
Results: Pending
Nondischargeability Based on Collateral Estoppel
Issue preclusion provided a short-cut to finding that the debtor’s liability for the costs and penalties incurred under state consumer protection laws was nondischargeable in bankruptcy under Section 523(a)(6). O’Rorke v. Porcaro (In re Porcaro), No. 15-26 (B.A.P. 1st Cir. Feb. 3, 2016). [Read more…] about Nondischargeability Based on Collateral Estoppel
Eighth Circuit Takes Hard Line on Judicial Estoppel
Applying little analysis beyond recitation of bullet points, the Eighth Circuit found that bankruptcy debtors have an obligation to report lawsuits filed during the life of the Chapter 13 plan and that failure to do so justifies application of judicial estoppel. Jones v. Bob Evans Farms, Inc, No. 15-2068 (8th Cir. Jan. 26, 2016). [Read more…] about Eighth Circuit Takes Hard Line on Judicial Estoppel
Debtor Equitably Estopped from Claiming Homestead Exemption
The debtor’s unfair manipulation of her state homestead exemption claim justified the denial of the claim under the principles of equitable estoppel. Lua v. Miller (In re Lua), No. 15-04026 (C.D. Cal. Nov. 10, 2015). [Read more…] about Debtor Equitably Estopped from Claiming Homestead Exemption
Inadvertence as Subjective/Objective Question in Judicial Estoppel Analysis
In the context of judicial estoppel, courts are divided on the issue of whether, for purposes of analyzing the defense of mistake or inadvertence, a plaintiff’s subjective intent matters. Several recent cases touch on this issue. [Read more…] about Inadvertence as Subjective/Objective Question in Judicial Estoppel Analysis
Parties’ Agreement to Extend Time Not Binding
An agreement between the debtor and a creditor to extend the deadline for filing an adversary complaint seeking denial of discharge under Section 727 will not stand against later challenge based on untimeliness where the extension was never ordered by the bankruptcy court. Shahrestani v. Alazzeh (In re Alazzeh), No. 13-1350 (B.A.P. 9th Cir. Apr. 24, 2014). [Read more…] about Parties’ Agreement to Extend Time Not Binding
Creditor’s AP Amendment Denied Due to Delay
The creditor waited too long to amend his adversary complaint, and, therefore, the bankruptcy court’s denial of the motion to amend was not an abuse of discretion. Zullo v. Lombardo (In re Lombardo), No. 13-9004 (1st Cir. June 13, 2014). The case involved an apprentice plumber (Debtor) who passed himself off as a master, did a poor job, and cost the creditor (Zullo) additional money to fix his work. Zullo sued and won in state court. After the debtor filed a Chapter 7 bankruptcy petition, Zullo sought an order of nondischargeability of the state court judgment under Section 523(a)(6), which excepts from discharge debts caused by willful injury. After losing a motion for summary judgment and being informed by the court that a claim under Section 523(a)(2)(A), which excepts debts based on fraud, might have fared better, Zullo moved to amend to add a claim under that section. The timing of the motion was seventeen months after filing the complaint and one week before trial.
The court found that “undue delay in moving to amend, even standing alone, may be . . . an adequate reason” for denial of the motion. Citing Acosta-Mestre v. Hilton Int’l of P.R., Inc., 156 F.3d 49, 51-52 (1st Cir. 1998). The court recognized the tension between efficient resolution of cases and liberally permitting appeals to ensure that all relevant claims are addressed, and found that the unwarranted delay in this case resolved that tension in favor of the non-movant/debtor. No extenuating circumstances justified the delay: there had been no change in law or recent discovery of facts since the state court judgment. Any foot-dragging by the debtor in discovery was irrelevant as the facts and law were plain from the outset.
The court concluded that, while the bankruptcy court might have been justified in granting the motion to amend, it was not an abuse of discretion to have denied it.
Judge Thompson filed a dissenting opinion. He opined that Fed. R. Civ. P. 15(a)(2) requires granting permission to amend in the absence of justification to deny. Because all the facts of the case were established, the claim Zullo sought to add was not so different from the original claim or from the claim litigated in state court; it would not have unduly burdened the debtor or the court to address the new claim. Mere delay was an insufficient reason to deny the motion
Fifth Circuit Applies Judicial Estoppel Doctrine
In a disturbing trend favoring personal injury defendants over debtors who, without actual intent to deceive, fail to inform the bankruptcy court of a potential lawsuit, the Fifth Circuit applied the doctrine of judicial estoppel to prevent the debtor from benefiting from her state lawsuit. Flugence v. Axis Surplus Ins.(In re Flugence), No. 13-30073 (5th Cir. Oct. 4, 2013). [Read more…] about Fifth Circuit Applies Judicial Estoppel Doctrine