Contract was not validly
terminated where party did not properly notice the debtor of termination:
IN RE: MAYAGUEZ ADVANCED RADIOTHERAPY CENTER) MAYAGUEZ
MEDICAL CENTER - DR. RAMONE METERIO BETANCES, INC., vs. MAYAGUEZ ADVANCED
RADIOTHERAPY CENTER, 2012 Bankr.
LEXIS
2543
(Bankr. D.P. R. 6/4/12)(Brian K. Tester, Bankruptcy Judge).
PROCEDURAL POSTURE: Plaintiff creditor brought an adversary proceeding against
defendant bankruptcy debtor
seeking relief related to a contract, and the creditor moved for
reconsideration of rulings that the debtor was not properly notified of the
termination of the contract and that the contract could not be unilaterally
terminated without notice.
OVERVIEW: The creditor contended that the debtor received notification of
the contract termination even if the exact contractual procedure was not
followed, and that the contract could be unilaterally terminated without
notice. The bankruptcy court
held that reconsidering the issues was not warranted since the creditor's
arguments were previously considered and rejected by the court. The contract
clearly established the notification procedure to be followed in the event of a
termination and, since the procedure was not followed, the termination was
contractually invalid.
OUTCOME: Motion for Reconsideration DENIED.
OUTCOME: Motion for Reconsideration DENIED.
Reconsideration denied:
(IN
RE: MEDICAL EDUCATIONAL AND HEALTH SERVICES) MEDICAL EDUCATIONAL AND HEALTH
SERVICES, Plaintiff vs. MUNICIPALITY OF MAYAGUEZ, ET ALS., 2012 Bankr. LEXIS
2539 (Bankr. D.P. R. 6/4/12)(Brian K. Tester Bankruptcy Judge)
PROCEDURAL POSTURE: Plaintiff bankruptcy
debtor brought an adversary proceeding against defendant city related to a
contract, and the city moved for reconsideration of rulings that notice of
termination of the contract was invalid and that the city could not
unilaterally terminate the contract.
OVERVIEW: The city contended that, although exact procedures for notice of termination were not followed, the debtor was actually notified of the termination and, in any event, the city could unilaterally terminate the contract without notice. The bankruptcy court held that reconsideration of the issues was not warranted since the city's arguments were already considered and rejected by the court. The contract clearly established the notification procedure to be followed in the event of a termination and, since the procedure was not followed, the termination was contractually invalid, and the contract did not allow the city to terminate the contract unilaterally without notice.
OUTCOME: The city's motion for reconsideration was denied.
OVERVIEW: The city contended that, although exact procedures for notice of termination were not followed, the debtor was actually notified of the termination and, in any event, the city could unilaterally terminate the contract without notice. The bankruptcy court held that reconsideration of the issues was not warranted since the city's arguments were already considered and rejected by the court. The contract clearly established the notification procedure to be followed in the event of a termination and, since the procedure was not followed, the termination was contractually invalid, and the contract did not allow the city to terminate the contract unilaterally without notice.
OUTCOME: The city's motion for reconsideration was denied.
Request to amend findings denied:
(IN
RE: MEDICAL EDUCATIONAL AND HEALTH SERVICES, INC.)MAYAGUEZ MEDICAL CENTER DR
RAMON E BETANCES, INC., v. MEDICAL EDUCATIONAL AND HEALTH SERVICES, INC., 2012 Bankr. LEXIS 2728 (Bankr. D.P.R. 6/14/12)(Brian K. Tester,
Bankruptcy Judge).
OPINION AND ORDER:
This proceeding is before the Court upon Defendant's Motion to Amend Findings and Judgment Pursuant to Rule 7052 and the Plaintiff's Opposition to the Defendant's Motion. In essence, the Defendant requests that the Court reconsider its findings of facts and conclusions of law entered on March 12, 2012, under Federal Rules of Bankruptcy Procedure 7052 and Federal Rules of Civil Procedure 52. Rule 52(b) permits "the correction of any manifest errors of law or fact that are discovered, upon reconsideration, by the trial court." National Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 122 (1st Cir. 1990). Rule 52(b) motions apply only when a party demonstrates a manifest error of law or fact, or in limited situations to present newly discovered evidence. In re Braithwaite, 197 B.R. 834, 835 (Bankr. N.D. Ohio 1996) (citing Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir. 1986)). "A motion to amend the Court's findings [*3] of fact should be based on a 'manifest error of law or mistake of fact, and a judgment should not be set aside except for substantial reasons.'" In re Novak, 223 B.R. 363, 371 (Bankr. M.D. Fla. 1997) (citing Ramos v. Boehringer Manheim Corp., 896 F. Supp. 1213, 1214 (S.D.Fla. 1994)). Manifest error is defined as "an error that is obvious and indisputable and that warrants reversal on appeal." Merriam-Webster's Dictionary of Law (1st ed. 2001).
Motions to amend should not be "employed to introduce evidence that was available at trial but was not proffered, to relitigate old issues, to advance new theories, or to secure a rehearing on the merits," Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir. 1986). Rule 52(b) was not created to allow litigants to relitigate old issues. National Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1990). In the Defendant's Motion to Amend Findings and Judgment Pursuant to Rule 7052, the Defendant did not demonstrate the existence of manifest errors of law or fact in this Court's original findings. Also, the Defendant did not present newly discovered evidence.
This proceeding is before the Court upon Defendant's Motion to Amend Findings and Judgment Pursuant to Rule 7052 and the Plaintiff's Opposition to the Defendant's Motion. In essence, the Defendant requests that the Court reconsider its findings of facts and conclusions of law entered on March 12, 2012, under Federal Rules of Bankruptcy Procedure 7052 and Federal Rules of Civil Procedure 52. Rule 52(b) permits "the correction of any manifest errors of law or fact that are discovered, upon reconsideration, by the trial court." National Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 122 (1st Cir. 1990). Rule 52(b) motions apply only when a party demonstrates a manifest error of law or fact, or in limited situations to present newly discovered evidence. In re Braithwaite, 197 B.R. 834, 835 (Bankr. N.D. Ohio 1996) (citing Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir. 1986)). "A motion to amend the Court's findings [*3] of fact should be based on a 'manifest error of law or mistake of fact, and a judgment should not be set aside except for substantial reasons.'" In re Novak, 223 B.R. 363, 371 (Bankr. M.D. Fla. 1997) (citing Ramos v. Boehringer Manheim Corp., 896 F. Supp. 1213, 1214 (S.D.Fla. 1994)). Manifest error is defined as "an error that is obvious and indisputable and that warrants reversal on appeal." Merriam-Webster's Dictionary of Law (1st ed. 2001).
Motions to amend should not be "employed to introduce evidence that was available at trial but was not proffered, to relitigate old issues, to advance new theories, or to secure a rehearing on the merits," Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir. 1986). Rule 52(b) was not created to allow litigants to relitigate old issues. National Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1990). In the Defendant's Motion to Amend Findings and Judgment Pursuant to Rule 7052, the Defendant did not demonstrate the existence of manifest errors of law or fact in this Court's original findings. Also, the Defendant did not present newly discovered evidence.
Genuine issue of material fact, precluding SJ, where debtor avers she
did not know the information she provided to creditor was not true on Section 523(a)(2)(B)
Discharge Objection regarding her intent to deceive:
(In re: DUNBAR) LEOMINSTER
HOUSING AUTHORITY v. DUNBAR, 2012 Bankr. LEXIS 2838 (Bankr. D. Mass.
6/21/12)(Melvin S. Hoffman, Bankruptcy Judge).
PROCEDURAL POSTURE: Plaintiff housing authority filed
an adversary proceeding against defendant Chapter 13 debtor, seeking a
determination that the debtor owed the authority a debt that was
nondischargeable under 11 U.S.C.S. §
523(a)(2)(A) and (B).
The housing authority filed a motion for summary judgment.
OVERVIEW: The housing authority rented public housing to the debtor, and the debtor agreed in writing that she would provide information about the number of people who lived in her apartment and their incomes so the authority could adjust her rent. The authority learned that the debtor did not provide complete and accurate information about income she earned and income her son earned, and after the debtor declared bankruptcy, it sought a determination that the debtor owed additional rent and that the debt was nondischargeable under 11 U.S.C.S. § 523(a)(2)(A) and (B). The court found that the authority had not stated a claim for relief under § 523(a)(2)(A), and the authority was not entitled to summary judgment on its claim under § 523(a)(2)(B) because the debtor's assertion that she did not know information she provided to the authority was false raised an issue of fact concerning her intent to deceive that had to be resolved at trial. Subsections 523(a)(2)(A) and (B) were mutually exclusive and only § 523(a)(2)(B) applied because an application for continued occupancy the debtor signed and pay stubs she submitted were intended to reflect the state of her income.
OUTCOME: The court denied the housing authority's motion for summary judgment on its claims under 11 U.S.C.S. § 523(a)(2)(A) and (B), and stated that it would schedule a trial on the issue of whether the debt in question was nondischargeable under § 523(a)(2)(B) because the debtor acted with intent to deceive.
OVERVIEW: The housing authority rented public housing to the debtor, and the debtor agreed in writing that she would provide information about the number of people who lived in her apartment and their incomes so the authority could adjust her rent. The authority learned that the debtor did not provide complete and accurate information about income she earned and income her son earned, and after the debtor declared bankruptcy, it sought a determination that the debtor owed additional rent and that the debt was nondischargeable under 11 U.S.C.S. § 523(a)(2)(A) and (B). The court found that the authority had not stated a claim for relief under § 523(a)(2)(A), and the authority was not entitled to summary judgment on its claim under § 523(a)(2)(B) because the debtor's assertion that she did not know information she provided to the authority was false raised an issue of fact concerning her intent to deceive that had to be resolved at trial. Subsections 523(a)(2)(A) and (B) were mutually exclusive and only § 523(a)(2)(B) applied because an application for continued occupancy the debtor signed and pay stubs she submitted were intended to reflect the state of her income.
OUTCOME: The court denied the housing authority's motion for summary judgment on its claims under 11 U.S.C.S. § 523(a)(2)(A) and (B), and stated that it would schedule a trial on the issue of whether the debt in question was nondischargeable under § 523(a)(2)(B) because the debtor acted with intent to deceive.
RI Bankruptcy Court disallows automatic $200 clunker expense on means test for older autos, citing to Hargis case:
In
re: VELOSO, Debtors, 2012 Bankr.
LEXIS 2482 (Bankr. D.R. I. 6/1/12)(Arthur N. Votolato, Bankruptcy Judge).
ORDER DENYING CONFIRMATION: Heard
on the Trustee's Objection to Confirmation, on the grounds that: (1) the
Chapter 13 plan does not provide for all of the Debtors' disposable income to
be applied to plan payments as required by 11 U.S.C. §
1325(b)(1)(B); and (2) the proposed plan payments do not satisfy the
requirements of the "means test" under 11 U.S.C. § 707.
The Trustee's objection is directed at the Debtors' attempt to take two
"old car" expense deductions of $200 each per month, in addition to
allowable (and unobjected to) transportation expenses already taken on Official
Form B-22C, upon which the "means test" is calculated. Debtors conceded on other matter and focused
their argument solely on whether the “old car” additional expenses deduction is
available to them. For the reasons
argued by the Trustee in his oral and written submissions, which are adopted
and incorporated herein by reference, and which are supported by a majority of
the courts that have addressed this issue, the Trustee's objection to
confirmation is SUSTAINED. See
In re Hargis, 451 B.R. 174
(Bankr. D. Utah 2011).
This is a summary of the Hargis case:
This is a summary of the Hargis case:
In re: HARGIS,
451 B.R. 174 (Bankr. D. Utah 2011)(Joel T. Marker, Bankruptcy Judge).
PROCEDURAL POSTURE: The Chapter 13 Trustee objected
to confirmation of debtors' plan. The Assistant U.S. Trustee argued at the
hearing in support of the Chapter 13 Trustee's position.
OVERVIEW: The issue before the court was whether these above-median income debtors were entitled to an automatic and unreviewable additional operating expense deduction of $200 per vehicle on Line 27A of their Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (Form 22C) for older or well-worn vehicles unencumbered by any secured debt. The court concluded as a matter of statutory interpretation that the $200 additional operating expense was not an expense "specified under the Local Standards" within the meaning of 11 U.S.C.S. § 707(b)(2)(A)(ii)(I). The court concluded that above-median income chapter 13 debtors were not automatically entitled to an additional $200 operating expense deduction on Line 27A of Form 22C for each vehicle over six years old or with more than 75,000 miles; however, such an expense could be claimed on Line 60 of Form 22C in appropriate circumstances and subject to review and objection by parties in interest. In the present case, the evidence only supported an additional operating expense of $100 per vehicle.
OUTCOME: Based on debtors' stipulations at the conclusion of the hearing to increase their plan payments to $460 per month and to return $24,043 to general unsecured creditors, the court concluded that the Third Amended Plan filed on February 17, 2011 now met all the elements of 11 U.S.C.S. § 1325(a) and was therefore confirmed.
OVERVIEW: The issue before the court was whether these above-median income debtors were entitled to an automatic and unreviewable additional operating expense deduction of $200 per vehicle on Line 27A of their Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (Form 22C) for older or well-worn vehicles unencumbered by any secured debt. The court concluded as a matter of statutory interpretation that the $200 additional operating expense was not an expense "specified under the Local Standards" within the meaning of 11 U.S.C.S. § 707(b)(2)(A)(ii)(I). The court concluded that above-median income chapter 13 debtors were not automatically entitled to an additional $200 operating expense deduction on Line 27A of Form 22C for each vehicle over six years old or with more than 75,000 miles; however, such an expense could be claimed on Line 60 of Form 22C in appropriate circumstances and subject to review and objection by parties in interest. In the present case, the evidence only supported an additional operating expense of $100 per vehicle.
OUTCOME: Based on debtors' stipulations at the conclusion of the hearing to increase their plan payments to $460 per month and to return $24,043 to general unsecured creditors, the court concluded that the Third Amended Plan filed on February 17, 2011 now met all the elements of 11 U.S.C.S. § 1325(a) and was therefore confirmed.
DISCUSSION: This Court is only aware of one written post-Ransom decision on the issue, In re Baker,
No. 10-61317-13, 2011 Bankr. LEXIS 490, 2011 WL 576851 (Bankr. D. Mont. Feb. 9,
2011), but the major point of contention in that case involved the
applicability of the Administrative Procedures Act.
Having concluded that the $200 additional operating expense is not an automatic statutory entitlement that can be properly claimed on Line 27A of Form 22C, the Court must determine whether such an expense can be claimed in another fashion. There are at least three possibilities—on Line 57, on Line 60, or through a Lanning analysis based on substantially changed circumstances—each of which presents some difficulties. Line 57 deals with "special circumstances" under § 707(b)(2)(B), but it is unclear whether vehicle operating expenses would qualify as special circumstances when the non-exclusive statutory examples include "a serious medical condition or a call or order to active duty in the Armed Forces." There must also be "no reasonable alternative" to the additional expense, and the documentation requirements are both mandatory and onerous. Line 57 thus appears to be too narrow to encompass additional vehicle operating expenses. Conversely, allowing such expenses under a Lanning analysis based on substantially changed circumstances would be painting with too broad a brush. A difference in one means test line-item expense is simply insufficient to overcome the presumption that a debtor's monthly disposable income is accurately calculated on Line 59. 21
This leaves Line 60. The difficulty with Line 60 is that § 707(b)(2)(A)(ii)(I) is its statutory basis, which could bring the analysis full circle to the National Standards, Local Standards, and Other Necessary Expenses. But this Court takes Ransom's guidance on this point in finding that the IRM, while neither incorporated nor imported into the Bankruptcy Code, is instructive on the issue. Just as the IRS views the additional operating expenses for older or high-mileage vehicles as reasonable deductions when working out offers in compromise with taxpayers, the Court believes that such expenses may be appropriately deducted when determining a chapter 13 debtor's reasonable ability to repay creditors the maximum that he or she can afford under a feasible plan. The Court also believes that $200 per vehicle is an appropriate cap for any claimed additional operating expense that a chapter 13 debtor actually incurs. Accordingly, this Court holds that above-median income chapter 13 debtors may claim an expense on Line 60 of Form 22C for additional vehicle operating expenses that they actually incur up to $200 per vehicle subject to review and objection by the Chapter 13 Trustee and holders of allowed unsecured claims.
For these reasons, the Court concludes that above-median income chapter 13 debtors are not automatically entitled to an additional $200 operating expense deduction on Line 27A of Form 22C for each vehicle over six years old or with more than 75,000 miles; however, such an expense may be claimed on Line 60 of Form 22C in appropriate circumstances and subject to review and objection by parties in interest. In the present case, the evidence only supported an additional operating expense of $100 per vehicle.
Having concluded that the $200 additional operating expense is not an automatic statutory entitlement that can be properly claimed on Line 27A of Form 22C, the Court must determine whether such an expense can be claimed in another fashion. There are at least three possibilities—on Line 57, on Line 60, or through a Lanning analysis based on substantially changed circumstances—each of which presents some difficulties. Line 57 deals with "special circumstances" under § 707(b)(2)(B), but it is unclear whether vehicle operating expenses would qualify as special circumstances when the non-exclusive statutory examples include "a serious medical condition or a call or order to active duty in the Armed Forces." There must also be "no reasonable alternative" to the additional expense, and the documentation requirements are both mandatory and onerous. Line 57 thus appears to be too narrow to encompass additional vehicle operating expenses. Conversely, allowing such expenses under a Lanning analysis based on substantially changed circumstances would be painting with too broad a brush. A difference in one means test line-item expense is simply insufficient to overcome the presumption that a debtor's monthly disposable income is accurately calculated on Line 59. 21
This leaves Line 60. The difficulty with Line 60 is that § 707(b)(2)(A)(ii)(I) is its statutory basis, which could bring the analysis full circle to the National Standards, Local Standards, and Other Necessary Expenses. But this Court takes Ransom's guidance on this point in finding that the IRM, while neither incorporated nor imported into the Bankruptcy Code, is instructive on the issue. Just as the IRS views the additional operating expenses for older or high-mileage vehicles as reasonable deductions when working out offers in compromise with taxpayers, the Court believes that such expenses may be appropriately deducted when determining a chapter 13 debtor's reasonable ability to repay creditors the maximum that he or she can afford under a feasible plan. The Court also believes that $200 per vehicle is an appropriate cap for any claimed additional operating expense that a chapter 13 debtor actually incurs. Accordingly, this Court holds that above-median income chapter 13 debtors may claim an expense on Line 60 of Form 22C for additional vehicle operating expenses that they actually incur up to $200 per vehicle subject to review and objection by the Chapter 13 Trustee and holders of allowed unsecured claims.
For these reasons, the Court concludes that above-median income chapter 13 debtors are not automatically entitled to an additional $200 operating expense deduction on Line 27A of Form 22C for each vehicle over six years old or with more than 75,000 miles; however, such an expense may be claimed on Line 60 of Form 22C in appropriate circumstances and subject to review and objection by parties in interest. In the present case, the evidence only supported an additional operating expense of $100 per vehicle.
Insurance policy of debtor wife on the life of her child was not exempt
under Mass. Statutes:
In re: CHUNG-I
LIANG AND YU-CHI CHAO, 2012 Bankr. LEXIS 2902 (Bankr. D. Mass. 6/26/12)(Melvin
S. Hoffman, Bankruptcy Judge).
PROCEDURAL POSTURE: The chapter 7 trustee in this
case objected to debtors' claim of exemption in a life insurance policy owned
by debtor wife.
OVERVIEW: The court examined the Massachusetts statutes upon which debtors based their exemption claim, and if the policy effectuator and beneficiary were the same, the value of the policy was not exempt from the effectuator's creditors; and another statute applied to married women only, was broader. This provision was silent as to who could be the insured under the policy. This omission gave rise to the present dispute. Debtors asserted the statute protected a life insurance policy for the benefit of a married woman regardless of who was the insured. The court found that the insurance policy of debtor wife on the life of her child was not exempt, and the statute applies to policies where not only the married woman's spouse but anyone was the insured would have expanded exponentially the protection for married couples who sought to shelter their assets from creditors. This was a result the court did not believe was intended by the statute. Courts were required to ascertain the intent of a statute from all its parts and from the subject matter to which it related.
OUTCOME: The insurance policy of debtor wife on the life of her child was not exempt.
OVERVIEW: The court examined the Massachusetts statutes upon which debtors based their exemption claim, and if the policy effectuator and beneficiary were the same, the value of the policy was not exempt from the effectuator's creditors; and another statute applied to married women only, was broader. This provision was silent as to who could be the insured under the policy. This omission gave rise to the present dispute. Debtors asserted the statute protected a life insurance policy for the benefit of a married woman regardless of who was the insured. The court found that the insurance policy of debtor wife on the life of her child was not exempt, and the statute applies to policies where not only the married woman's spouse but anyone was the insured would have expanded exponentially the protection for married couples who sought to shelter their assets from creditors. This was a result the court did not believe was intended by the statute. Courts were required to ascertain the intent of a statute from all its parts and from the subject matter to which it related.
OUTCOME: The insurance policy of debtor wife on the life of her child was not exempt.
Notice is critically important for terminating the contract.
ReplyDeleteTermination Letter Templates