Legal News

Case Summaries

Bankruptcy Law

[01/06] In Re: Smart World Techs., LLC
In the bankruptcy context, pre-approval of a fee agreement under 11 U.S.C. section 328(a) depends on the totality of the circumstances, including whether the professional's application, or the court's order, referenced section 328(a), and whether the court evaluated the propriety of the fee arrangement before granting final, and not merely preliminary, approval. In the circumstances of this case, the circuit court rules that: 1) the bankruptcy court's Retention Order was a pre-approval within the meaning of 11 U.S.C. section 328(a); and 2) no subsequent developments warranted modifying the terms of appellee-firm's retention.

[12/31] In the Matter of: Owens
Bankruptcy court did not abuse its discretion in dismissing debtor's bad-faith Chapter 11 case rather than converting it to Chapter 7. When deciding between dismissal and conversion under 11 U.S.C. section 1112(b), the court must consider the interests of all the creditors; here, the other creditors would fare worse under Chapter 7 because the accompanying discharge would deny them access to debtor's future income.

[12/31] In re: Belcher
District court erred in allowing bankrupt husband to claim a homestead exemption in marital home because wife's name alone appeared on the title. Husband's potential equitable property interests in the home under divorce law, and his "possessory interest" in the family residence as spouse of the homeowner, were insufficient to permit him to claim the homestead exemption.

[12/30] In re: Marshall
Balance transfers from one credit card to another, made by debtors during the ninety-day period prior to the filing of their Chapter 7 petition, are preferential transfers under 11 U.S.C. section 547(b). Such payments constitute transfers of "an interest of the Debtor in property," because the debtor exercises control over the loaned proceeds even if he is never in actual possession of them, and such transactions deplete the bankruptcy estate.

[12/17] In re: Ross-Tousey
A Chapter 7 debtor who owns his car free and clear may take the IRS Local Standard vehicle ownership expense deduction under the 11 U.S.C. section 707(b)(2)(A)(ii)(I) means test.

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Tax Law

[12/24] Davis v. Pac. Capital Bank, N. A.
A creditor who imposes a flat finance charge that does not vary with the term of a Refund Anticipation Loan does not have to refund a portion of the charge as "unearned interest" under 15 U.S.C. section 1615 when the loan is repaid earlier than anticipated in the loan agreement.

[12/19] Ford v. Pryor
Orders denying plaintiff relief relating to the attempts of the Internal Revenue Service (IRS) to assess and collect income taxes from plaintiff are affirmed over plaintiff's meritless claims. Also, the court finds that both of plaintiff's appeals were frivolous, bordering on vexatious, and brought to delay and obstruct, and consequently imposes monetary sanctions and filing restrictions on plaintiff.

[12/19] Russell v. US
In an action to quiet title in plaintiffs' real property on which the government holds a recorded federal tax lien, a judgment for plaintiffs is reversed where a provision of the Internal Revenue Code, 26 U.S.C. section 7425(b), preempts state law and leaves federal tax liens undisturbed where the government did not receive notice of a nonjudicial sale.

[12/17] In re: Ross-Tousey
A Chapter 7 debtor who owns his car free and clear may take the IRS Local Standard vehicle ownership expense deduction under the 11 U.S.C. section 707(b)(2)(A)(ii)(I) means test.

[12/12] Sklar v. Comm'r of Internal Revenue
A tax court decision affirming the IRS's disallowance of deductions plaintiffs claimed for tuition and fees paid to their children's Orthodox Jewish day schools is affirmed where: 1) plaintiffs' 1995 tuition payments were not deductible as charitable contributions under the Internal Revenue Code; and 2) a closing agreement between the IRS and Church of Scientology does not constitutionally and administratively require the IRS to allow charitable deductions for plaintiffs' tuition payments.

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Banking Law

[12/31] Alpine Bank v. Hubbell
In a lawsuit arising after plaintiffs failed to repay a construction loan made by plaintiff-bank, summary judgment against defendants-homeowners on all claims and on their counterclaims is affirmed where: 1) a contract counterclaim, based on an alleged breach of the contractually implied duty of good faith and fair dealing arising from bank's failure to oversee the construction, was barred by a provision in the parties' agreement; 2) for purposes of negligent-misrepresentation counterclaims, one alleged misrepresentation regarding the contractor was nonactionable puffery and the others lacked the requisite state of mind; 3) bank did not have a duty to disclose negative information regarding the construction or the contractor; and 4) bank's advertising slogan did not violate the Colorado Consumer Protection Act.

[12/30] In re: Marshall
Balance transfers from one credit card to another, made by debtors during the ninety-day period prior to the filing of their Chapter 7 petition, are preferential transfers under 11 U.S.C. section 547(b). Such payments constitute transfers of "an interest of the Debtor in property," because the debtor exercises control over the loaned proceeds even if he is never in actual possession of them, and such transactions deplete the bankruptcy estate.

[12/30] Helms v. CPC Acquisition, Inc.
Corporate-debtor's proceeds from lawsuit against its insurance broker for failure to obtain business-loss insurance are not considered "proceeds of collateral" under the UCC, and therefore the bank holding a security interest in debtor's damaged collateral was not entitled to proceeds from that lawsuit. Bank's secondary argument, that it is entitled to lawsuit's proceeds because it holds a security interest in all of debtor's commercial tort claims by virtue of provision in loan agreement, fails because the bank did not list the lawsuit among the "commercial tort claims" in which it holds a security interest.

[12/30] Mirfasihi v. Fleet Mortgage Corp.
District court properly approved settlement of class action involving claims brought by customers against mortgage company who sold their personal information to telemarketers, even though the settlement provided no payment to members of a sub-class consisting of customers who did not purchase anything from telemarketers to whom customers' information was sold. The state law claims of that sub-class were worthless, any claims they belatedly asserted under the Fair Credit Reporting Act were frivolous, and attorneys for objectors were not entitled to additional attorneys' fees because they provided little or no benefit to the sub-class.

[10/15] US v. Armstead
A sentence for bank fraud is vacated and case remanded for resentencing where the district court: 1) miscalculated the number of victims under United States Sentencing Guidelines (U.S.S.G.) section 2B1.1(b)(2); and 2) erred by failing to apply U.S.S.G. section 5G1.3(b)(1) for time served. (Amended opinion)

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Property Law & Real Estate

[12/31] Alpine Bank v. Hubbell
In a lawsuit arising after plaintiffs failed to repay a construction loan made by plaintiff-bank, summary judgment against defendants-homeowners on all claims and on their counterclaims is affirmed where: 1) a contract counterclaim, based on an alleged breach of the contractually implied duty of good faith and fair dealing arising from bank's failure to oversee the construction, was barred by a provision in the parties' agreement; 2) for purposes of negligent-misrepresentation counterclaims, one alleged misrepresentation regarding the contractor was nonactionable puffery and the others lacked the requisite state of mind; 3) bank did not have a duty to disclose negative information regarding the construction or the contractor; and 4) bank's advertising slogan did not violate the Colorado Consumer Protection Act.

[01/05] Episcopal Church Cases
In a property dispute arising after a parish disaffiliated itself from the Episcopal Church after the national church ordained an openly gay man as a bishop, a court of appeals decision reversing a ruling in favor of parish defendants is affirmed where: 1) the action was not subject to a special motion to strike under Code of Civil Procedure section 425.16 (anti-SLAPP); and 2) on the merits and applying a "neutral principles of law" approach, the higher church authorities and not the parish defendants own the disputed property.

[12/31] Anderson v. US Dep't of Hous. & Urban Dev.
Class certification was incorrectly granted to a group of displaced residents of four storm-damaged public housing developments in New Orleans. District court's authority to certify a class under Rule 23 does not permit it to structure a class around claims that the displaced residents never pled.

[12/31] In re: Belcher
District court erred in allowing bankrupt husband to claim a homestead exemption in marital home because wife's name alone appeared on the title. Husband's potential equitable property interests in the home under divorce law, and his "possessory interest" in the family residence as spouse of the homeowner, were insufficient to permit him to claim the homestead exemption.

[12/30] McAllister v. California Coastal Comm'n
In a property dispute between neighbors, grant of a coastal development permit is reversed and remanded where: 1) the California Coastal Commission (the Commission) did not make the findings necessary to justify that action or even consider whether denying a permit would constitute a taking; and 2) in granting the permit, the Commission failed to proceed in the manner required by law and abused its discretion.

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