Opinions

The Southern District of Illinois offers a database of opinions. These opinions were entered between the period of 2/1987 and the present. To conduct a detailed search, enter a keyword or case number in the search box to the right.

 

Opinions can also be viewed via the U.S. GPO's Federal Digital System

Date Filedsort ascending Summary Case Number PDF
02/16/2018

In re: Michael S and Alicia F Eubanks

Summary: Chapter 13 debtors filed a five-year plan that proposed to pay general unsecured creditors 100% of their claims.  Trustee objected to confirmation because the plan payments did not include all of the debtors’ disposable income.  The trustee argued that for the plan to be confirmed, the debtors must agree that in post confirmation modifications of the plan, they would provide a minimum pool to unsecured creditors in an amount equal to the difference between their disposable income at confirmation and their actual plan payment, multiplied by the number of months that passed as of the effective date of the modification.   The trustee argued that the court could require such a pledge pursuant to the good faith provision of §1325(a)(3), or through the equitable powers granted to bankruptcy courts by §105(a).  The trustee also argued that if debtors refused such a pledge, then their plan payment must be increased to include the full amount of their disposable income.  Finally, the trustee argued that if debtors would not contribute all disposable income to their plan, general unsecured creditors would be entitled to interest on their allowed claims.   The court found that the plan complied with the requirements set forth in §1325(b)(1), that the plan was filed in good faith and that the debtors were not required to pay interest under §1325(b)(1)(A).

17-40027 View
01/26/2018

In re: Delagrange v. TrustBank

Summary: A chapter 7 pro se debtor filed a complaint against a mortgage creditor seeking to obtain clear title to his residence. The creditor had obtained a foreclosure judgment on the property prior to the filing of the bankruptcy case. Debtor alleged that the foreclosure judgment was null and void because it was obtained without due process. Creditor filed a motion for summary judgment. The Court found that under the Rooker-Feldman doctrine, it had no authority to review the state court judgment. Summary judgment was granted and the complaint was dismissed.

17-04016 View
11/20/2017

In re: Tenholder et al v. United States of America, Internal Revenue Service

Summary: At issue was whether the Debtors’/Plaintiffs’ income tax debt for tax year 2011 was dischargeable under 11 U.S.C. § 507(a)(8), which provides that a tax for which a return is last due after three years before the date of the filing of a bankruptcy petition is dischargeable. However, located at the end of §507(a)(8) is the so called “flush language,” which tolls the three year period for any period during which a governmental unit is prohibited under applicable non-bankruptcy law from collecting a tax as a result of a request by the debtor for a hearing and an appeal of any collection action taken or proposed against the debtor, plus 90 days. Both parties were in agreement that if the three year period was tolled, then the debt was non-dischargeable. They also agreed on the opposite. The Debtors/Defendants requested a collection due process hearing pursuant to 26 U.S.C. § 6330 to determine their tax liability, which prohibited the Defendant from collecting this tax by levy during the pendency of the collection due process hearing. The Debtors/Plaintiffs argued that the Defendant must be completely prohibited from collecting the tax in order to invoke the “flush language” of § 507(a)(8). However, the Court held that the Defendant’s inability to collect the tax by levy was enough to toll the three year time period for determining dischargeability, and therefore the debt to the Internal Revenue Service for the Debtors’/Plaintiffs’ 2011 income tax is non-dischargeable.

17-03021 View
09/21/2017

In re: Lisa and Daniel Garrett 17-40064

Summary: Creditor filed a motion to set off a potential award in debtors' favor in District Court litigation against creditor's claim in debtors' chapter 7 bankruptcy proceeding. Debtors objected on the basis that the creditor could not set off its potential debt to debtors against a debt that was discharged in bankruptcy. The Court held that debtors lacked standing to object. The Court further held that even assuming debtors had standing, setoff was appropriate. Debtors’ counter claims and third party claims in the District Court litigation became an asset of the bankruptcy estate, and the creditor had a right to set off its claim in the bankruptcy case against any recovery the estate might receive in the District Court litigation.

17-40064 View
06/06/2017

In re: David and Misty Koshinski 16-31494

Summary: Debtors David and Misty Koshinski filed a chapter 7 petition on September 29, 2016 and an order of discharge was entered on January 18, 2017.  On January 31, 2017, creditor Ross Signorino (“Signorino”) filed a motion to vacate the discharge order and/or for additional time to file a complaint to determine dischargeability of debt.  He claimed that he did not receive notice of the chapter 7 in time to timely file a complaint objecting to dischargeability of debt.  The authority relied on by Signorino’s counsel for vacating the discharge was unclear. The Court found no basis for doing so and accordingly, Signorino’s request to vacate the discharge order was denied.  The Court granted Signorino’s request to file a dischargeability complaint under §523(a)(3), but reserved ruling on the issue of whether Signorino had timely notice or actual knowledge of the debtors’ chapter 7 case.  The Court noted that should Signorino file a dischargeability complaint, issues of notice and knowledge would be litigated in that proceeding.

16-31494 View
05/08/2017

In re: Karl and Jenna Blake 16-60425

Summary: This Chapter 12 case came before the Court on the Objection to Debtors' Motion to Use Cash Collateral filed by First Financial Bank. The Court granted Debtors' Motion to Use Cash Collateral. The Court found that while it concurred with other Courts that have held that a bare replacement lien on future crops is not sufficient to provide adequate protection for the use of a creditor's cash collateral pursuant to 11 U.S.C. § 1205, the facts before the Court in the instant case were distinguishable. In Blake, the Court found that Debtors' assignment of government payments, crop insurance proceeds and the provision of a priority administrative expense claim in favor of the bank, together with a replacement lien on 2017 crops, provided sufficient adequate protection to allow the Debtors to use the bank's cash collateral.

16-60425 View
01/23/2017

In re: Scott R Hewitt 16-30375

Summary: Chapter 7 trustee sought turnover of post-petition voluntary separation incentive payments (VSI payments) payable to the debtor from the U.S. Department of Defense.  Debtor opposed the motion on the basis that the payments were excluded from the bankruptcy estate under 11 U.S.C. §§ 541(a)(6) or 541(c)(2).  Alternatively, debtor argued that even if the VSI payments constitute estate property, they were exempt under state law as retirement benefits.  The Court found that based on the 7th Circuit’s decision in Matter of Haynes, 679 F.2d 718 (7th Cir. 1982), the VSI payments were excluded from the estate under § 541(a)(6).  The trustee’s motion for turnover was denied.

16-30375 View
12/08/2016

In re: Harley T Roehm 13-41385 & Sandra L Schlueter 14-40163

Summary: In 2 cases involving the same issue, the Court denied the Chapter 13 Trustee's motion to modify confirmed plans to increase the plan base. The Court held that after deducting the Trustee's fee, the benefit to the unsecured creditors from the additional payments they would receive is relatively small compared to the difficulty, if not hardship, of the debtors living and making additional payments with social security as their only source of income. The debtors had paid their respective plan bases off early in anticipation of reduced income. The Trustee sought modification to require the debtors to make additional payments to cover the remaining months under the terms of their confirmed plans pursuant to 11 U.S.C. § 1329. The Court found that the Trustee had failed to establish cause to modify the debtors' plans under the unique facts presented in each case.

13-41385 14-40163 View
09/15/2016

In re: Alan Lee Presswood 12-60237

Summary: The Chapter 7 debtor objected to the Trustee’s proposed settlement of a class action lawsuit in which the debtor was the class representative and sole class member.  The lawsuit was filed on February 25, 2015, nearly three years after the debtor filed his bankruptcy petition. Although the suit involved a prepetition claim, it was not initially scheduled or otherwise disclosed.  Upon learning of the suit, the Trustee, moved to settle the estate’s interest in claims against the class action defendant for $10,000.  The debtor objected on the grounds that the claim was worth no more than $500, was fully exempt, and that the settlement offer represented an attempt by the class action defendant to “buy off” the class represented in the pending litigation.  The Trustee countered that the debtor had no standing to object to the settlement.

The Court agreed with the Trustee that a Chapter 7 debtor must have a pecuniary interest in the outcome of a case in order to object.  However, in this case it was necessary to value the class action claim because, if it was worth no more than the claimed exemption, the estate would have no interest to settle.

Relying on In re Polis, 217 F.3d 899 (7th Cir. 2000), the Court found that when determining the fair market value of a legal claim in advance, it is necessary to multiply the amount of the judgment the plaintiff would recover if he litigated and won by the probability of prevailing.  Because the evidence submitted in support of the settlement figure assumed the maximum possible recovery in the class action and did not adjust for uncertainty that this value would actually be realized, the Court determined that it did not accurately reflect the actual value of the claim.  Accordingly, the debtor’s objection was sustained and the proposed settlement was not approved.
 

12-60237 View
05/16/2016

In re: Deere and Company v Grabowski et al

Summary: Debtors/defendants Paul and Tonya Grabowski filed a Chapter 12 bankruptcy case on April 22, 2015. The Notice of Chapter 12 Bankruptcy Case, Meeting of Creditors, & Deadlines fixed the deadline to file a complaint to determine dischargeability of certain debts as July 27, 2015. On January 8, 2016, the Plaintiff, Deere and Company; John Deere, f.s.b. filed a Complaint to Determine Dischargeability of Debt pursuant to 11 U.S.C. §§ 523(a)(2)(a) and 523(a)(2)(B), alleging that the Defendants had sold its collateral years before the bankruptcy filing. The Defendants moved to dismiss the Complaint, arguing that it was time-barred pursuant to Federal Rules of Bankruptcy Procedure 4007(c) and 9006(b)(3), which require that a complaint to determine the dischargeability of a debt be filed “no later than 60 days after the first date set for the meeting of creditors,” unless the party seeking to object to dischargeability files a motion for an extension of time “before the time has expired.” The Plaintiff argued that its late-filed Complaint should be allowed pursuant to the doctrine of equitable tolling.

The Court determined that the facts did not justify applying the doctrine and granted the Defendants’ Motion to Dismiss. The Plaintiff became aware that its collateral had been sold on September 28, 2015, but did not file its complaint until almost four months later. Equitable tolling is only permitted “until the fraud or concealment is, or should have been, discovered.” Therefore, the Plaintiff’s Complaint was still filed too late.

16-04000 View

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