Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

The issue before the Tenth Circuit Court of Appeals in this case concerned whether the amount of a federal tax refund equivalent to the "nonrefundable" portion of the child tax credit was exempt from a bankruptcy debtor's estate under Colorado law. The Bankruptcy Panel for the Tenth Circuit held that the disputed funds were exempt; upon review, the Tenth Circuit Court of Appeals disagreed and reversed, finding that the nonrefundable portion was "property" of the bankruptcy estate within the meaning of 11 U.S.C. 541(a). View "In re: Borgman, et al" on Justia Law

Tracy Broadcasting is a Nebraska corporation that operated an FM radio station in Wyoming. In 2008, Tracy Broadcasting executed a promissory note for a $1,596,100 loan from Valley Bank & Trust Company (Valley Bank). The note was secured by an agreement dated December 13, 2007, which granted Valley Bank a security interest in various assets, including Tracy Broadcasting's general intangibles and their proceeds. In 2009, Spectrum Scan, LLC obtained a judgment in Nebraska federal court against Tracy Broadcasting in the amount of $1,400,000. Seven months later, Tracy Broadcasting filed a petition under Chapter 11 in Colorado bankruptcy court. The two primary creditors of Tracy Broadcasting were Valley Bank and Spectrum Scan, which was unsecured. The most valuable asset listed was the broadcasting license. The schedules stated that the “proceeds” of the license were “secured to Valley Bank.” Spectrum Scan brought an adversary action to determine the extent of Valley Bank’s security interest. The bankruptcy court ruled that Valley Bank had no priority in the proceeds of the sale of Tracy Broadcasting’s license. The United States District Court for the District of Colorado affirmed. The issue before the Tenth Circuit centered on whether a creditor with a security interest in the general intangibles (and their proceeds) had priority over unsecured creditors in the proceeds of the sale of the license. The bankruptcy court and the district court held that it did not. Upon review, the Tenth Circuit disagreed: "Federal law permits a licensee to grant a security interest in the economic value of its license, and Nebraska law recognizes that a security interest in the proceeds of a license sale attaches when the licensee enters into the security agreement, regardless of whether a sale is contemplated at that time." View "Tracy Broadcasting Corp. v. Spectrum Scan, LLC" on Justia Law

Stephanie and Kenneth Woolsey attempted to discharge a second mortgage on their home held by Citibank, N.A. through Chapter 13 bankruptcy. In their plan, they took the position that the bankruptcy code voided Citibank’s lien because it was unsupported by any current value in the home. The bank objected to the Woolseys’ plan and eventually persuaded the bankruptcy court to reject it. The district court affirmed the bankruptcy court, and the Woolseys appealed to the Tenth Circuit. In their argument on appeal, "[t]hey choose to pursue instead and exclusively a line of attack long foreclosed by Supreme Court precedent. To be sure, the Woolseys argue[d] vigorously and with some support that the Supreme Court ha[d] it wrong. But, as Justice Jackson reminds us, whether or not the Supreme Court is infallible, it is final." The Tenth Circuit was "obliged" to apply the Supreme Court's current case law and affirmed the district and bankruptcy court's decisions. View "Woolsey, et al v. Citibank, N.A." on Justia Law

At the behest of the Oklahoma Department of Securities, Oklahoma courts found early investors in a Ponzi scheme carried out by a third party to have been unjustly enriched and required disgorgement. Judgments were entered against those investors. The issue before the Tenth Circuit was whether the judgments entered against Robert Mathews, Marvin Wilcox, and Pamela Wilcox qualified as a nondischargeable debt under 11 U.S.C. 523(a)(19). The bankruptcy court decided the debts were nondischargeable because they were in violation of securities laws. The district court affirmed. Upon review, the Tenth Circuit reversed and remanded: "the Department's position conveniently serves its ends (and in the abstract) a public good. But the language of the statute cannot reasonably be stretched that far." View "Oklahoma Dept. of Securites v. Wilcox, et al" on Justia Law

The three cases before before the Tenth Circuit on appeal arose from bankruptcy proceedings initiated by debtor Steve Paige in 2005. Search Market Direct, Inc. (SMDI) and ConsumerInfo.com (ConsumerInfo).both sought control of the internet domain name "freecreditscore.com" (the Domain Name), which once belonged to Paige. SMDI purchased the Domain Name from a third party shortly after Paige filed for bankruptcy. In May 2006, the estate's trustee Gary E. Jubber instituted an Adversary Proceeding (AP) to recover it. In December 2006, the bankruptcy court entered a Sale Order approving an Asset Purchase Agreement (APA) under which ConsumerInfo agreed to provide funds to repay the estate's creditors and litigate the AP in exchange for the estate's promise to give ConsumerInfo the Domain Name if it was recovered. The bankruptcy court resolved the Adversary Proceeding in the Liquidating Trustee's favor in 2009. The Liquidating Trustee transferred the Domain Name to ConsumerInfo and a Joint Plan was otherwise substantially consummated. Over objections from SMDI, the Trustee and his law firm received compensation for their work on behalf of the estate. Upon review, the Court rejected SMDI's arguments for reversing the bankruptcy court's confirmation of the Joint Plan, for depriving ConsumerInfo of the Domain Name, and for denying the Trustee and his firm certain fees. The Court reversed the district court's mootness ruling in the Adversary Appeal; in all other regards the Court affirmed the district court's decisions upholding the bankruptcy court's judgments in the Confirmation Appeal and Adversary Appeal. View "Search Market, et al v. Jubber, et al" on Justia Law

After Deutsche Bank National Trust Company (Deutsche Bank) brought a foreclosure action against the home owned by Appellants Mark and Jamileh Miller and obtained an Order Authorizing Sale (OAS) from a Colorado court, the Millers filed a Chapter 13 bankruptcy petition. Upon the filing of their petition, an automatic stay entered, halting the foreclosure proceedings. Deutsche Bank obtained an order from the bankruptcy court relieving it from the stay to permit the foreclosure to continue. The Tenth Circuit Bankruptcy Appellate Panel (BAP) affirmed the bankruptcy court’s order granting Deutsche Bank relief from the automatic stay. The Millers appealed the BAP’s order affirming relief from stay. The issue before the Tenth Circuit was whether Deutsche Bank established that it was a "party in interest" entitled to seek and obtain relief from the stay. Because the Court concluded that Deutsche Bank did not meet its burden of proof on this issue, the Court reversed the BAP’s order and remanded for further proceedings. View "Miller, et al v. Deutshce Bank National Trust" on Justia Law

Plaintiffs-Appellants George and Georgia Diamond filed an adversary proceeding against Chapter 7 debtor Scott Bakay alleging that Bakay fraudulently induced them to loan him money. The bankruptcy court entered summary judgment in favor of the Diamonds and declared the loan nondischargeable, but denied the Diamonds' postjudgment motion for prejudgment interest. The Diamonds appealed the latter decision, and the Bankruptcy Appellate Panel of the Tenth Circuit (BAP) affirmed the decision of the bankruptcy court. Finding no abuse of discretion in the bankruptcy court's decision, the Tenth Circuit affirmed the postjudgment motion for prejudgment interest.

Defendant-Appellant James Moser was convicted by a jury on several counts of bankruptcy fraud and sentenced to 121 months' imprisonment. He appealed to the Tenth Circuit, arguing that several counts of the indictment were multiplicitous, and that there was insufficient evidence to convict him on one of the counts. Defendant and his wife filed a voluntary Chapter 7 bankruptcy petition. He failed to disclose a lease agreement and the sale of certain tools and collectibles to third parties to the bankruptcy trustee. The attorney who worked with Defendant on his petition testified that at the time of the discharge of his debts, there continued to be confusion regarding Defendant's assets, "partially due to his unwillingness to be forthright." Finding that based on the evidence, a reasonable trier of fact could have found Defendant guilty of bankruptcy fraud, the Tenth Circuit affirmed Defendant's conviction and sentence.

Carolina Internet Ltd. appealed the entry of default judgment against it in favor of TW Telecom Holdings Inc. for more than three million dollars. During the pendency of this appeal, Carolina Internet filed a voluntary Chapter 11 bankruptcy petition. The Tenth Circuit had previously interpreted the automatic stay provisions in section 362 of the Bankruptcy Code as not preventing a Chapter 11 debtor-in-possession (like Carolina Internet) from pursuing an appeal even f it was an appeal from a creditor's judgment against the debtor. Nine other circuit courts disagreed with the Tenth Circuit's interpretation, holding that a bankruptcy filing automatically stays all proceedings, even appellate proceedings where the debtor has filed an appeal from a judgment entered in a suit against the debtor. The Court overruled its prior interpretation of the automatic stay provisions in the Bankruptcy Code, which prevented it from proceeding with Carolina Internet's appeal of the default judgment against it. This case was stayed pending bankruptcy court proceedings.

Pro se Plaintiff Ronald Nagim appealed the grant of summary judgment in favor of Defendant Equifax Information Services, LLC, Experian Information Solutions, INc. and Transunion, LLC. In 2005, Plaintiff filed for bankruptcy, which discharged some of his credit accounts. Almost four years later, Plaintiff filed a complaint against Defendants, three credit reporting agencies (CRAs), alleging Defendants had violated the Fair Credit Reporting Act (FCRA) by including inaccurate information on Plaintiff’s credit report and improperly depressing his credit scores. This allegedly inaccurate information included an account that was discharged in Plaintiff’s bankruptcy and references to the bankruptcy in general. All three defendants moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure and a magistrate judge held that summary judgment was proper. After a thorough review of the record, the Tenth Circuit concluded Plaintiff "has provided absolutely no competent summary judgment evidence. Accordingly, we affirm the district court’s grant of summary judgment."