Business Law Insolvency Law Committee

In Easley v. Collection Serv. of Nev., 910 F.3d 1286 (9th Cir. 2018), the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) expanded the holding in In re Schwartz-Tallard, 803 F. 3d 1095 (9th Cir. 2015) (en banc), to mean that debtors are entitled to recover appellate attorneys’ fees when successfully challenging an initial award of fees and costs awarded to them under section 362(k) for a willful violation of the automatic stay, not only when defending such award. Read more

In Bank of New York Mellon v. Lane (In re Lane), 589 B.R. 399 (9th Cir. BAP 2018), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit (the "BAP") held that disallowance of a claim for lack of standing by the claimant did not also void the underlying lien under 11 U.S.C. section 506(d) because no argument had been made by the debtor that the lien or underlying obligation was substantively invalid. Read more

The United States Bankruptcy Appellate Panel for the Ninth Circuit held that in a case converted from chapter 13 to chapter 7, the relevant date for determining a debtor’s homestead exemption was fixed on the date of the chapter 13 filing. Klein v. Good (In re Good) BAP No. WW-18-1125-KuTaB, 2018 Bankr. LEXIS 3609 (9th Cir. BAP 2018). The BAP affirmed the bankruptcy court’s ruling denying the chapter 7 trustee’s objection to the Debtors’ homestead exemption as untimely, and found no abuse of discretion in its ruling that equitable estoppel was not applicable. Read more

Summary: A district court in North Dakota has held that under the Seventh Amendment, a plaintiff's corporate veil-piercing claim was for the jury to decide, rather than for the judge. [Marchan vs. John Miller Farms, Inc., 2018 Westlaw 6518660 (D. N.D.).] Read more

Summary: A bankruptcy court in Georgia has held that an erroneous and false satisfaction recorded by an unauthorized third party interloper nevertheless destroyed a security deed held by an innocent mortgage lender because the erroneous satisfaction incorrectly stated that the interloper was the assignee of the original loan. [In re Bowers, 2018 Westlaw 6824023 (Bankr. M.D. Ga.).] Read more

Summary: A California appellate court has held that a trial court had the power to authorize "super-priority" status for a loan to a receiver, which enabled the receiver to remediate illegal conditions on a parcel of real property, even though the new loan pushed the refinancing lender's lien into second place. [City of Sierra Madre vs. SunTrust Mortgage, Inc., 2019 Westlaw 926096 (Cal.App.).] Read more

Summary: Resolving a split in the circuits, the United States Supreme Court held in Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___, 2019 WL 2166392 (May 20, 2019), in an 8-1 opinion with broad implications for executory agreements in bankruptcy proceedings, that a debtor/licensor’s rejection of a trademark license agreement did not deprive the licensee of the right to continue to use the trademark within the scope the agreement. (The dissent argued the appeal was moot.) Read more

Summary: The Second Circuit has held that despite an express "delayed accrual" clause, claims stemming from breach of warranties by a seller of residential mortgage-backed securities began to run at the moment of the sale, not upon discovery; therefore, the buyer's claims against the seller were therefore time-barred. [Lehman XS Trust, Series 2006-GP2 by U.S. Bank N.A. vs. GreenPoint Mortgage Funding, Inc., 2019 Westlaw 452888 (2nd Cir.).] Read more

Summary: A bankruptcy court in New York has held that a liquidated damages clause based on "stipulated loss value" contained in an equipment lease was void because the lessee's liability was not connected to any losses caused by the lessee's default; further, the clause could not be enforced against a guarantor, even though the guarantee contained broad waivers. [In re Republic Airways Holdings, Inc., 2019 Westlaw 630336 (Bankr. S.D.N.Y.).] Read more

Summary: The California Supreme Court has held that when a creditor proffers a declaration in lieu of live testimony in a limited civil case, the affiant must be available for service of process within 150 miles of the place of trial, under some circumstances. [Meza v. Portfolio Recovery Associates, LLC, 2019 Westlaw 641517 (Cal.).] Read more