Cases for Zip , California Northern District Bankruptcy Court

Ninth Circuit Cases

• In re Chavez

Bankr. D.Ariz. - 430 B.R. 890 - 2010-02-23 - 7 ,

Plaintiffs had an award for damages from a previous suit against the debtor (the plaintiff's former employee). When debtor filed for Chapter 7 relief (before the damage award was confirmed by the state court), the plaintiffs claimed that their damage award was excepted from discharge under Section 523(a)(4). The court held that employer-employee relationships do not rise to a level of "acting in a fiduciary capacity" for purposes of Section 523(a)(4), so the damage award was not excepted from discharge.

• State Bar v. Findley (In re Findley)

9th Cir. 2/1/2010 - 593 F.3d 1048 - - ,

Debtor was an attorney who had professional disciplinary sanctions imposed on him prior to his filing for bankruptcy. In addition to suspending his license to practice law, the debtor also had to pay a fee to cover the disciplinary proceedings.

Here, the bankruptcy court held that the costs imposed in attorney disciplinary proceedings were not for actual pecuniary loss (but rather a and therefore were nondischargeable.

Other Circuits

• In re Tarone

Bankr. E.D.N.Y. - 434 B.R. 41 - 2010-07-26 - ,

Attorneys fees are nondischargeable part of divorce settlement.
"It is undisputed that the maintenance and attorneys' fees awarded by the State Court are debts that were incurred by the Debtor in the course of the divorce proceedings. As such, it is irrelevant whether those awards constitute true support obligations, because even if not encompassed within § 523(a)(5), they are nondischargeable pursuant to § 523(a)(15). Additionally, it should be noted that the fact that the attorneys' fees are payable directly to JR & A and N & A, and not to Mrs. Tarone, does not remove these debts from the scope of § 523(a)(15). See Prensky v. Clair Greifer LLP, No. 09-6200, 2010 WL 2674039, at *6-8 (D.N.J. June 30, 2010); Golio, 393 B.R. at 63. Because these debts are payable to JR & A and N & A for Mrs. Tarone's benefit, the requirement of § 523(a)(15) that the debts be owed to a former spouse of the debtor is satisfied. See Prensky, 2010 WL 2674039, at *6-8; Golio, 393 B.R. at 63."

• In re Wodark

Bankr. 10th Cir. - 425 BR 834 - 2010-03-22 - ,

Court affirmed that a marital obligation owed to a third party was excepted from discharge by Section 523(a)(15).

• American Express Cneturion Bank v. Kanan (In re Kanan

Bankr. N.D. Ill. - No. 09-33071 - 2010-03-18 - 7 ,

Evidence of debtor's excessive credit card charges within three months before filing for Chapter 7 relief, established abuse under Section 523(a)(2). The court held these credit card charges to be non-dischargeable.

The relevant part of the statute reads: "consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable."

The court said, "While the precise nature of what was purchased may not be clear from the account statements provided, the amount of the charges, and the fact that the charges were made at various department stores and specialty retailers, leads this Court to conclude that the charges were incurred for luxury items, not reasonably necessary for the maintenance and support of the defendant or his dependents... in the present case, a review of the evidence presented proves that the defendant intended to defraud American Express at the time he made the charges at issue or he acted with reckless disregard for the truth as to constitute willfulness."

• In re Young

Bankr.E.D.Tex. - 425 B.R. 811 - 2010-03-08 - ,

The court didn't need to find that plaintiff acted in bad faith or frivolously to support its order that plaintiff pay debtor's attorney's fees. "The court must only make the determination that the plaintiff proceeded past a point where it knew, or should have known, that it could not carry its burden of proof."

• In re Turner

Bankr. E.D.Mich. - No. 09-53722-wsd - 2010-03-05 - 7 ,

Penalty for receiving unemployment benefits while still employed was non-dischargeable. The court said, "The debt arose from a penalty for wrongfully receiving unemployment benefits. It is not compensation for the actual pecuniary loss (which was covered by the ordered repayment of the [benefit amount] received; it is payable to a governmental unit... and it is for the benefit of that governmental unit."

• In re Doyal

Bankr. W.D. Tex. - No. 09-10114-CAG - 2010-03-04 - ,

"A finding of fraud does not require an affirmative statement it may be predicated on a failure to disclose a material fact. Courts have overwhelmingly held that a debtor's silence regarding material fact can constitute a false representation actionable under Section 523(a)(2)(A)."

• In re Rowles

Bankr. W.D.Mo. - No. 08-21567-DRD-7 - 2010-02-24 - 7 ,

Before bankruptcy, the debtors got a loan from the bank by lying about assets they had (to secure the loan). The court excepted the bank's claim from discharge under Section 523(a)(2)(B).

• In re Ramirez

Bankr. S.D. Tex. - No. 09-70051 - 2010-02-22 - 7 ,

Prior to this bankruptcy filing, a state court found debtor liable for attempted murder and awarded almost $20 million in damages. Here, the plaintiff's claim of these damages was excepted from discharge.

• In re Sullivan

Bankr. E.D. Mo. - 423 B.R. 881 - 2010-02-22 - ,

The court held that the plaintiff's claim for attorney's fees against the debtor was excepted from discharge by Section 523(a)(5).

"Attorney's fees which arise from litigation involving child support are considered 'domestic support' obligations, even if paid directly to the attorney, as long as the obligation is in the nature of support of the child."

• In re Abramowitz

Bankr.D.Mass. - No. 08-42847-JBR - 2010-02-18 - ,

Debts from reckless or negligent infliction of injuries do not fall into the "willful and malicious" language of 523(a)(6).

Here, a judgment of $24,766 against debtors (from a suit over debtors recklessly cutting down trees on neighbors' property) was dischargeable because it did not fall under Section 523(a)(6).

• In re Abram

Bankr.D.Kan. - No. 09-20877 - 2010-02-17 - ,

The debtors sold collateral and spent the proceeds, even after being told not to by the creditor-bank. The court granted summary judgment to the bank, saying that the bank's claim was excepted from discharge by Section 523(a)(6).

• In re Darnell

Bankr. N.D. Ala. - BK 08-72432-CMS-7 - 2010-02-12 - 7 ,

The debtor was going to surrender collateral, but it was stolen before he could do so. The court held that the debtor had no control over what had happened, and so the actions were not willful or malicious (as they would have to be under Section 523(a)(6).

• In re Abir

Bankr. E.D.N.Y. - No. 08-70566-478 - 2010-02-01 - 7 ,

Debtor's federal income tax liability was excepted from discharge under Section 523(a)(1) and 507(a)(8)(A).

• In re Powell

Bankr. N.D.Tex. - 423 B.R. 201 - 2010-01-05 - 7 ,

The elderly debtor ran into trouble paying back his bank loans on the cattle he owned. While debtor kept a hand written "tally book" of the number of cattle he owned, the bank found that there were in fact fewer cattle than in the book. The bank argued that debtor's debts should be non-dischargeable because of "willful and malicious" behavior under Section 523(a)(6), but the court found that the bank showed no evidence of such motivation on debtor's part. Instead, the court found that the cattle was on rough grazing terrain, and the bank ought to have realized that the debtor could not physically have kept more accurate track of the herd's numbers. The court held the debt to be dischargeable.

• Beaumont v. VA (In re Beaumont)

10th Cir. - 586 F.3d 776 - 2009-10-15 - ,

VA could recoup overpayment on veteran's pension from future benefits. (Bad precedent. Lots of arguments to be made other way. Call NACBA if you have this kind of issue (e.g. compare social security recoupment cases that do not allow this practice.)

• In re Moreo

Bankr. E.D.N.Y. - No.: 07-71258-478 - 2009-09-10 - 7 ,

Debtor was denied a discharge of debt, because, despite her lack of prior business experience, she failed to adequately maintain financial books and records.

• In re Kosobud

Bankr. S.D.Tex. - Case No. 08-36581 - 2009-08-13 - ,

Debtor owed plaintiff damages from a suit over debtor's invasion of plaintiff's privacy. The court found that "the intentional act of invading [the plaintiff's] privacy in such an invasive and pernicious manner constitutes a per se 'willful and malicious' injury."

• In re Morrison

5th Cir. - 555 F.3d 473 - 2009-01-16 - ,

Under Section 523(a)(2)(B), debtor was fined $500,000 for falsifying his company's financial statements.

• In re Porter (Sells v. Porter)

8th Cir. - 539 F.3d 889 - - ,

The court held that a judgment from an employment retaliation case was non-dischargeable under Section 523(a)(6) (the debtor had willfully and maliciously harmed the plaintiff to whom he owed the judgment debt).

• In re Mitchell

Bankr. S.D. Iowa - - - ,

Debtor took out a loan to buy a tractor. When that tractor was stolen, the bank reminded debtor that he had to give any insurance proceeds from the theft to the bank. Instead of turning it over, debtor kept the insurance money in his personal bank account and filed for bankruptcy less than six months later. The court held that the bank-creditor's claim was exempt from discharge under Section 523(a)(6) since debtor purposely hid the insurance proceeds from the bank with the intent to avoid turning the money over to the bank.

• In re Tarone

Bankr. E.D.N.Y. - 434 B.R. 41 - 2010-07-26 - ,

Attorneys fees are nondischargeable part of divorce settlement.
"It is undisputed that the maintenance and attorneys' fees awarded by the State Court are debts that were incurred by the Debtor in the course of the divorce proceedings. As such, it is irrelevant whether those awards constitute true support obligations, because even if not encompassed within § 523(a)(5), they are nondischargeable pursuant to § 523(a)(15). Additionally, it should be noted that the fact that the attorneys' fees are payable directly to JR & A and N & A, and not to Mrs. Tarone, does not remove these debts from the scope of § 523(a)(15). See Prensky v. Clair Greifer LLP, No. 09-6200, 2010 WL 2674039, at *6-8 (D.N.J. June 30, 2010); Golio, 393 B.R. at 63. Because these debts are payable to JR & A and N & A for Mrs. Tarone's benefit, the requirement of § 523(a)(15) that the debts be owed to a former spouse of the debtor is satisfied. See Prensky, 2010 WL 2674039, at *6-8; Golio, 393 B.R. at 63."

• In re Wodark

Bankr. 10th Cir. - 425 BR 834 - 2010-03-22 - ,

Court affirmed that a marital obligation owed to a third party was excepted from discharge by Section 523(a)(15).

• American Express Cneturion Bank v. Kanan (In re Kanan

Bankr. N.D. Ill. - No. 09-33071 - 2010-03-18 - 7 ,

Evidence of debtor's excessive credit card charges within three months before filing for Chapter 7 relief, established abuse under Section 523(a)(2). The court held these credit card charges to be non-dischargeable.

The relevant part of the statute reads: "consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable."

The court said, "While the precise nature of what was purchased may not be clear from the account statements provided, the amount of the charges, and the fact that the charges were made at various department stores and specialty retailers, leads this Court to conclude that the charges were incurred for luxury items, not reasonably necessary for the maintenance and support of the defendant or his dependents... in the present case, a review of the evidence presented proves that the defendant intended to defraud American Express at the time he made the charges at issue or he acted with reckless disregard for the truth as to constitute willfulness."

• In re Young

Bankr.E.D.Tex. - 425 B.R. 811 - 2010-03-08 - ,

The court didn't need to find that plaintiff acted in bad faith or frivolously to support its order that plaintiff pay debtor's attorney's fees. "The court must only make the determination that the plaintiff proceeded past a point where it knew, or should have known, that it could not carry its burden of proof."

• In re Turner

Bankr. E.D.Mich. - No. 09-53722-wsd - 2010-03-05 - 7 ,

Penalty for receiving unemployment benefits while still employed was non-dischargeable. The court said, "The debt arose from a penalty for wrongfully receiving unemployment benefits. It is not compensation for the actual pecuniary loss (which was covered by the ordered repayment of the [benefit amount] received; it is payable to a governmental unit... and it is for the benefit of that governmental unit."

• In re Doyal

Bankr. W.D. Tex. - No. 09-10114-CAG - 2010-03-04 - ,

"A finding of fraud does not require an affirmative statement it may be predicated on a failure to disclose a material fact. Courts have overwhelmingly held that a debtor's silence regarding material fact can constitute a false representation actionable under Section 523(a)(2)(A)."

• In re Rowles

Bankr. W.D.Mo. - No. 08-21567-DRD-7 - 2010-02-24 - 7 ,

Before bankruptcy, the debtors got a loan from the bank by lying about assets they had (to secure the loan). The court excepted the bank's claim from discharge under Section 523(a)(2)(B).

• In re Chavez

Bankr. D.Ariz. - 430 B.R. 890 - 2010-02-23 - 7 ,

Plaintiffs had an award for damages from a previous suit against the debtor (the plaintiff's former employee). When debtor filed for Chapter 7 relief (before the damage award was confirmed by the state court), the plaintiffs claimed that their damage award was excepted from discharge under Section 523(a)(4). The court held that employer-employee relationships do not rise to a level of "acting in a fiduciary capacity" for purposes of Section 523(a)(4), so the damage award was not excepted from discharge.

• In re Ramirez

Bankr. S.D. Tex. - No. 09-70051 - 2010-02-22 - 7 ,

Prior to this bankruptcy filing, a state court found debtor liable for attempted murder and awarded almost $20 million in damages. Here, the plaintiff's claim of these damages was excepted from discharge.

• In re Sullivan

Bankr. E.D. Mo. - 423 B.R. 881 - 2010-02-22 - ,

The court held that the plaintiff's claim for attorney's fees against the debtor was excepted from discharge by Section 523(a)(5).

"Attorney's fees which arise from litigation involving child support are considered 'domestic support' obligations, even if paid directly to the attorney, as long as the obligation is in the nature of support of the child."

• In re Abramowitz

Bankr.D.Mass. - No. 08-42847-JBR - 2010-02-18 - ,

Debts from reckless or negligent infliction of injuries do not fall into the "willful and malicious" language of 523(a)(6).

Here, a judgment of $24,766 against debtors (from a suit over debtors recklessly cutting down trees on neighbors' property) was dischargeable because it did not fall under Section 523(a)(6).

• In re Abram

Bankr.D.Kan. - No. 09-20877 - 2010-02-17 - ,

The debtors sold collateral and spent the proceeds, even after being told not to by the creditor-bank. The court granted summary judgment to the bank, saying that the bank's claim was excepted from discharge by Section 523(a)(6).

• In re Darnell

Bankr. N.D. Ala. - BK 08-72432-CMS-7 - 2010-02-12 - 7 ,

The debtor was going to surrender collateral, but it was stolen before he could do so. The court held that the debtor had no control over what had happened, and so the actions were not willful or malicious (as they would have to be under Section 523(a)(6).

• In re Abir

Bankr. E.D.N.Y. - No. 08-70566-478 - 2010-02-01 - 7 ,

Debtor's federal income tax liability was excepted from discharge under Section 523(a)(1) and 507(a)(8)(A).

• In re Powell

Bankr. N.D.Tex. - 423 B.R. 201 - 2010-01-05 - 7 ,

The elderly debtor ran into trouble paying back his bank loans on the cattle he owned. While debtor kept a hand written "tally book" of the number of cattle he owned, the bank found that there were in fact fewer cattle than in the book. The bank argued that debtor's debts should be non-dischargeable because of "willful and malicious" behavior under Section 523(a)(6), but the court found that the bank showed no evidence of such motivation on debtor's part. Instead, the court found that the cattle was on rough grazing terrain, and the bank ought to have realized that the debtor could not physically have kept more accurate track of the herd's numbers. The court held the debt to be dischargeable.

• In re Grafton

Bankr.N.D.Miss. - 421 B.R. 765 - 2009-12-23 - 13 ,

The debtor had an agreement with his ex-wife that the amounts he owed to her in their divorce settlement would be non-dischargeable if he ever filed bankruptcy. The court, however found that this structure, and debtor's subsequent bankruptcy filing, too conveniently allowed debtor to avoid paying his other five secured creditors, and that his plan was not in good faith. The court found this plan unconscionable, and denied the plan.

• Beaumont v. VA (In re Beaumont)

10th Cir. - 586 F.3d 776 - 2009-10-15 - ,

VA could recoup overpayment on veteran's pension from future benefits. (Bad precedent. Lots of arguments to be made other way. Call NACBA if you have this kind of issue (e.g. compare social security recoupment cases that do not allow this practice.)

• In re Moreo

Bankr. E.D.N.Y. - No.: 07-71258-478 - 2009-09-10 - 7 ,

Debtor was denied a discharge of debt, because, despite her lack of prior business experience, she failed to adequately maintain financial books and records.

• In re Kosobud

Bankr. S.D.Tex. - Case No. 08-36581 - 2009-08-13 - ,

Debtor owed plaintiff damages from a suit over debtor's invasion of plaintiff's privacy. The court found that "the intentional act of invading [the plaintiff's] privacy in such an invasive and pernicious manner constitutes a per se 'willful and malicious' injury."

• In re Morrison

5th Cir. - 555 F.3d 473 - 2009-01-16 - ,

Under Section 523(a)(2)(B), debtor was fined $500,000 for falsifying his company's financial statements.

• State Bar v. Findley (In re Findley)

9th Cir. 2/1/2010 - 593 F.3d 1048 - - ,

Debtor was an attorney who had professional disciplinary sanctions imposed on him prior to his filing for bankruptcy. In addition to suspending his license to practice law, the debtor also had to pay a fee to cover the disciplinary proceedings.

Here, the bankruptcy court held that the costs imposed in attorney disciplinary proceedings were not for actual pecuniary loss (but rather a and therefore were nondischargeable.

• In re Porter (Sells v. Porter)

8th Cir. - 539 F.3d 889 - - ,

The court held that a judgment from an employment retaliation case was non-dischargeable under Section 523(a)(6) (the debtor had willfully and maliciously harmed the plaintiff to whom he owed the judgment debt).

• In re Mitchell

Bankr. S.D. Iowa - - - ,

Debtor took out a loan to buy a tractor. When that tractor was stolen, the bank reminded debtor that he had to give any insurance proceeds from the theft to the bank. Instead of turning it over, debtor kept the insurance money in his personal bank account and filed for bankruptcy less than six months later. The court held that the bank-creditor's claim was exempt from discharge under Section 523(a)(6) since debtor purposely hid the insurance proceeds from the bank with the intent to avoid turning the money over to the bank.

All Cases A to Z

• American Express Cneturion Bank v. Kanan (In re Kanan, No. 09-33071 , (Bankr. N.D. Ill. ) 2010-03-18, #16533073110527546019
• Beaumont v. VA (In re Beaumont), 586 F.3d 776 , (10th Cir. ) 2009-10-15, #16958637779267885968
• In re Abir, No. 08-70566-478 , (Bankr. E.D.N.Y. ) 2010-02-01, #2117390644447879542
• In re Abram, No. 09-20877 , (Bankr.D.Kan. ) 2010-02-17, #18352802700922054743
• In re Abramowitz, No. 08-42847-JBR , (Bankr.D.Mass. ) 2010-02-18, #11919187316728051389
• In re Chavez, 430 B.R. 890 , (Bankr. D.Ariz. ) 2010-02-23, #10060722705178886557
• In re Darnell, BK 08-72432-CMS-7 , (Bankr. N.D. Ala. ) 2010-02-12, #5922301183392975971
• In re Doyal, No. 09-10114-CAG , (Bankr. W.D. Tex. ) 2010-03-04, #7112951637398203238
• In re Grafton, 421 B.R. 765 , (Bankr.N.D.Miss. ) 2009-12-23, #3932655998037805152
• In re Kosobud, Case No. 08-36581 , (Bankr. S.D.Tex. ) 2009-08-13, #7972670815554071263
• In re Mitchell, , (Bankr. S.D. Iowa ) , #
• In re Moreo, No.: 07-71258-478 , (Bankr. E.D.N.Y. ) 2009-09-10, #1803013129209508781
• In re Morrison, 555 F.3d 473 , (5th Cir. ) 2009-01-16, #9801724131463009012
• In re Porter (Sells v. Porter), 539 F.3d 889 , (8th Cir. ) , #16670597928725473311
• In re Powell, 423 B.R. 201 , (Bankr. N.D.Tex. ) 2010-01-05, #8078796024932954822
• In re Ramirez, No. 09-70051 , (Bankr. S.D. Tex. ) 2010-02-22, #4703637052709840007
• In re Rowles, No. 08-21567-DRD-7 , (Bankr. W.D.Mo. ) 2010-02-24, #5462561826917423564
• In re Sullivan, 423 B.R. 881 , (Bankr. E.D. Mo. ) 2010-02-22, #10738700986253242617
• In re Tarone, 434 B.R. 41 , (Bankr. E.D.N.Y. ) 2010-07-26, #18338729507320752239
• In re Turner, No. 09-53722-wsd , (Bankr. E.D.Mich. ) 2010-03-05, #7509464865873934031
• In re Wodark, 425 BR 834 , (Bankr. 10th Cir. ) 2010-03-22, #11757097257793581647
• In re Young, 425 B.R. 811 , (Bankr.E.D.Tex. ) 2010-03-08, #7713961149388448041
• State Bar v. Findley (In re Findley), 593 F.3d 1048 , (9th Cir. 2/1/2010 ) , #