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
01/22/2015

In re: Chartrand

Summary: Chapter 13 plaintiff/debtor Charles R. Chartrand filed a complaint for injunctive relief against defendant Bank of America, N.A. asking the Court, primarily, to enjoin the defendant from taking any further action during the bankruptcy case to foreclose on its mortgage on the debtor’s residence.  Plaintiff relied on 11 U.S.C. § 105(a) as the source of the Court’s authority to grant such relief.  The Court had entered an order in the debtor’s bankruptcy case determining that there was no automatic stay in effect pursuant to 11 U.S.C. §§ 362(c)(3) and (j).  The debtor had not appealed that order.  The Court held that under the pronouncements of Law v. Siegel, ___ U.S. ___, 134 S. Ct. 1188, 1194-95 (2014), § 105(a) does not allow the Court to disregard provisions under § 362 that control the existence or absence of the automatic stay.  Therefore, the complaint failed to state a claim upon which relief could be granted and was dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).

14-3096 View
12/29/2014

In re: Early

Summary: The Trustee objected to confirmation of the debtor’s Chapter 13 Plan. The above-median debtor’s actual expenses exceeded her allowed deductions pursuant to 11 U.S.C. §§ 1325(b)(3) and 707(b)(2)(A) and (B), as detailed on Official Form B22C. Her Schedules I and J listed a monthly net income of $158.22; however, her monthly disposable income, as indicated on line 59 of Form B22C, was $815.53. The debtor proposed to make monthly payments of $158 to unsecured creditors during the length of her 60-month plan. The Trustee objected to the debtor’s proposed monthly payments, arguing that by proposing to pay less than her disposable income into the plan for the benefit of her unsecured creditors the debtor’s plan was in violation of § 1325(b). He contended that the debtor was required to propose monthly payments of $815.53, amounting to a total pool for unsecured creditors of $48,931.80. In response, the debtor argued that, under the United States Supreme Court’s decision in Hamilton v. Lanning, 560 U.S. 505, 130 S.Ct. 2464, 177 L.Ed.2d 23 (2010), debtors may deviate from Form B22C in calculating projected disposable income if their actual expenses are greater than their allowed deductions. The Court sustained the Trustee’s objection, holding that the Supreme Court’s opinion in Lanning requires adherence to the means test except in unusual cases when, due to significant changes in a debtor’s financial circumstances that are known or virtually certain, the means test does not represent the debtor’s post-confirmation income or expenses. A mere discrepancy between the debtor’s actual expenses and her allowed statutory deductions does not warrant deviation from the means test.

14-30785 View
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

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