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
10/23/2014

In re: Meyer v. Walters et al

Summary: Debtors/defendants entered into an Agreement for Sale of Real Estate with plaintiff.  The Agreement obligated the defendants to purchase certain real estate from the plaintiff.  The property was later damaged in a hail storm.  The defendants received a check from their insurer and represented to the plaintiff that (1) the insurance proceeds would be used to purchase building materials to repair the hail damage and (2) defendant Thomas Walters, a skilled carpenter, would make the necessary repairs. Based on these representations, the plaintiff authorized the defendants to endorse the check on the plaintiff’s behalf and to deposit the insurance proceeds into their bank account.  In the defendants’ bankruptcy case, the plaintiff filed a complaint objecting to the dischargeability of a debt under 11 U.S.C. §523(a)(2)(A). Trial was held. The Court found in favor of the plaintiff and entered judgment in the amount of $19,516.22, representing homeowner's insurance proceeds misappropriated by the debtors.

14-3035 View
10/02/2014

In re: Altmeyer

Summary: Debtor David Altmeyer moved to sell a parcel of commercial real estate free and clear of liens pursuant to 11 U.S.C. § 363(f).  When the debtor filed his Chapter 13 petition on May 17, 2010, the property was encumbered by a first mortgage in favor of Regions Bank (“Regions”), a second mortgage in favor of USAA Federal Savings Bank (“USAA”) and several real estate tax liens in favor of the county taxing authority.  Although the confirmed Chapter 13 plan provided for surrender of the property to Regions, due to the property’s poor condition, Regions refused to take possession. In an effort to relieve himself of the ongoing burden of maintaining the property, the debtor sought to sell the property free and clear of creditors’ liens.  However, because the proposed purchase price was substantially less than the value of the liens against the property, second mortgage holder USAA objected to the sale.

In denying the debtor’s motion, the Court held that it did not have the authority to authorize a sale free and clear of liens after plan confirmation because the property was no longer property of the bankruptcy estate. The Court further concluded that property should not be sold free and clear of liens unless the proposed sales proceeds are sufficient to fully compensate the secured lienholders and produce some equity for the benefit of the debtor’s bankruptcy estate.

10-60275 View
08/28/2014

In re: Schablowsky

Summary:  The debtors objected to a secured claim filed by FLS Physical Therapy Associates, PC (FLS) alleging that a lien claimed by FLS in an award the debtors had received from the Client Protection Fund of the Illinois Attorney Registration and Disciplinary Commission was invalid. The debtors asserted that no lien can be perfected against awards under the Client Protection Fund. The debtors further asserted that FLS had likewise failed to perfect a lien on settlement funds from a pre-petition personal injury action which had been wrongfully converted by their personal injury attorney.

The Court held that under Illinois Supreme Court rules there can be no lien in favor of a third party on awards under the Client Protection Fund. The Court further held that FLS had failed to perfect a lien under 770 ILCS 23/10 (The Illinois Health Care Services Lien Act) on the settlement funds of the debtors’ personal injury action. The Court sustained the debtors’ objection as to FLS’ secured claim but allowed FLS an unsecured claim in the amount of $10,947.17.

 

13-31378 View
07/16/2014

In re: Downer

Summary:  Debtor objected to a claim filed by his ex-spouse, alleging that the debt at issue was based on debt allocation in the Dissolution Judgment and was not in the nature of alimony, maintenance, or support (and therefore the claim should be allowed only as a general unsecured non-priority claim). In the same vein, the ex-spouse objected to the debtor’s proposed first amended plan because it did not provide for payment of her priority claim of $1,758.26.  She alleged that the claim was for medical expenses and additional healthcare costs of the parties’ child, and that debtor was previously ordered to pay these costs.  She argued that the claim was entitled to priority treatment under § 507(a)(1)(A) as a domestic support obligation.

The Court held that the obligation of the debtor to pay these medical and health care costs was in the nature of child support and therefore constituted a domestic support obligation as defined by 101(14A).  As such, the claim filed by debtor’s ex-spouse was entitled to priority treatment.  The Court overruled the debtor’s objection to claim and sustained the objection to confirmation filed by the debtor’s ex-spouse.

13-40939 View
07/02/2014

In re: Johnson

Summary:  The trustee moved for turnover of all indicia of debtor Jerry Johnson’s fractional “working interest” in an oil well, and of all revenue received by Jerry Johnson from that oil well since the commencement of the chapter 7 case.    The trustee argued that, under Illinois law, the “working interest” was an interest in realty and that the revenue earned from sale of the oil were proceeds of that freehold estate.  The debtors opposed the motion on the basis that Jerry Johnson had only a contractual right to payment under the oil and gas assignment, with the result that the revenue was excluded from the bankruptcy estate as income.  The Court concluded that the “working interest” was not an interest in real estate but was a personal property interest that included both the oil extracted pre-petition and Jerry Johnson’s contractual rights to profits earned post-petition.  The Court also held that because the revenue did not arise from personal services performed by the debtors post-petition, it was not excluded from the bankruptcy estate   under § 541(a)(6). 

The trustee also moved for turnover of a trust of which Jerry Johnson was the settlor, the trustee and a beneficiary with retained powers to amend or revoke the trust and to use the profits and/or principal of the trust without restriction.  The Court held that the trustee assumed these powers upon commencement of the case and could use them for the benefit of the bankruptcy estate.  The Court held further that the trust corpus was not excluded from property of the estate under § 541(b)(1) because Jerry Johnson’s powers under the trust were not for the exclusive benefit of a non-debtor.  The Court also rejected the debtors’ argument that equitable considerations should prevail in deciding the issues raised.

13-40605 View
02/12/2014

In re: Buford v. US Bank National Association

Summary: The debtors/plaintiffs moved for default judgment on a complaint to avoid the defendant's lien on their residence.  They relied on 11 U.S.C.  § 506(a)(1) and argued that, because there was no value in the property for the lien to attach to, it was totally unsecured and could therefore be avoided.  The Court asked the plaintiffs to brief the matter given the Seventh Circuit's decision in In re Ryan, 725 F.3d 623 (2013), which extended In re Dewsnup, 502 U.S. 410 (1992) to Chapter 13.  The Court found that the plaintiffs’ reliance on § 506(a)(1) was misplaced.  The Court further found that the lien could be avoided pursuant to 11 U.S.C. § 506(d) because the claim was not an allowed secured claim.  (In the underlying bankruptcy case, the debtors objected to the defendant's claim on the basis that the claim had been fully satisfied through a HAMP mortgage refinancing. The objection was sustained and the claim was disallowed.)  Default judgment was granted.

13-03091 View
01/31/2014

In re: Ryan R McBeth

Summary: The United States Trustee filed a motion for sanctions and contempt against Wendell Taylor, a bankruptcy petition preparer.  After an evidentiary hearing, the Court found that Mr. Taylor had violated the terms of a prior Consent Judgment entered in a separate bankruptcy case, as well as various provisions of section 110 of the Bankruptcy Code.  The Court granted the motion in part and entered statutory fines against Mr. Taylor.  The Court denied the United States Trustee’s request to certify the case to District Court for possible criminal contempt proceedings.

13-30672 View
09/30/2013

In re: Hagan v. Angus Ink

Summary:  Ernest Bingman published a magazine called Angus Topics, Inc., the Debtor in this case.  When the magazine began losing money, Bingman formed a new company to publish a new magazine.  Angus Topics, Inc. later filed a chapter 7 case and the Trustee filed a complaint against Bingman, the new publisher and the new magazine to avoid fraudulent transfers under 11 U.S.C. §§ 548(a)(1)(A) and (B) and 550.  The Trustee alleged that the defendants transferred to themselves funds that should have been deposited into the Debtor’s account, and used the Debtor’s tangible assets for their benefit.  She further alleged that the defendants transferred the Debtor’s accounts receivable, subscriber list, advertiser list and good will.  At trial, the Trustee failed to prove that a transfer occurred and failed to prove that the assets which were allegedly transferred had any value.  

12-04043 View
08/30/2013

In re: Marcus T Koger

Summary: A bank sought relief from the automatic stay to proceed with collection of its nondischargeable judgment against the debtor while his chapter 13 case was pending.  The bank contended that the debtor's plan of reorganization did not provide for payment of the debt, thus depriving the bank of adequate protection and giving cause to grant relief from the automatic stay.  The Court held that the bank, as a general unsecured creditor, had not presented a prima facie case showing that it was entitled to relief from the automatic stay.  Because 11 U.S.C. §§362(d)(1) and 361 provide for adequate protection of a creditor's "interest in property," adequate protection is not available to unsecured creditors.  With no "interest in property" deserving of adequate protection, there was no merit in the bank's contention that lack of adequate protection justified lifting the automatic stay on its behalf.  The Court also rejected the bank's argument that its nondischargeable debt entitled it to different and better treatment than the other general unsecured creditors who were receiving $0.00 under the plan.  

12-31409 View
08/20/2013

In re: Anna F. Robinson

Summary: The debtor claimed a valuable copy of the Book of Mormon as an exempt bible pursuant to the Illinois exemption statute, 735 ILCS 5/12-1001(a).  This section allows for the exemption of a debtor’s necessary wearing apparel, bible, school books, and family photos. Debtor possessed other bibles as well. The Trustee argued that allowing the exemption of the valuable book would violate the purpose and intent of the statute.

After examining the relevant case law, as well as the context of the statute’s language, the Court sustained the Trustee’s objection.  The Illinois exemption statute was passed, at least in part, with the intent to protect the bare necessities of a debtor.  A bible was included in the exemption statute to protect the debtor’s daily devotional aid.  The exemption of the rare and valuable book failed to fulfill the intent of the legislature or purpose of the statute.

13-40176 View

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