Judge Jacobvitz's Opinions

INDEX TO OPINIONS                                                                                                                                        

ABSTENTION

  1. Court considers both mandatory and permissive abstention statutes.  Court  exercises permissive abstention over non-core proceeding that questioned the propriety of state court foreclosure action and whether the mortgage company is the holder of the note and mortgage.   
    Hernandez v. Lasalle Bank, N.A. (In re Hernandez), 2010 WL 5155011 (Bankr.D.N.M.  Dec. 14, 2010).

ADVERSARY PROCEEDINGS - PROCEDURAL MATTERS

  1. Application of Rule 56(d) to establish facts not genuinely at issue for purposes of tial. Southwest Financial Services v. Tarrango, 2010 WL 2178751 (Bankr.D.N.M. 2010, J. Jacobvitz).

AGENCY LIABILITY

  1. Discusses when an attorney may be held personally liable as an agent for an undisclosed principal. 
    In re Texas Reds, Inc., __ B.R. __, 2010 WL 3037504 (Bankr.D.N.M. 2010, J. Jacobvitz).

 ATTORNEYS FEES

  1. The Court reduced the hourly rate for chapter 13 debtor's counsel from $250 to $200
    In re Romero., 2010 WL 964209 (Bankr.D.N.M. 2010, J. Jacobvitz)

  2. Flat fee of $2,400 charged by debtor's counsel was not reasonable under the circumstances presented. Court reduced fee to $1,600.00.   In re Parsons, 2010 WL 3547601 (Bankr.D.N.M.  Sept. 9, 2010).

  3. Discusses  reasonableness of attorneys' fees charged by debtor's counsel in Chapter 13 case.  In re Weaver,  2011 WL 867136 (Bankr.D.N.M. Mar. 11, 2011).

 AUTOMATIC STAY (362(h))

  1. The stay terminates by operation of law under 11 U.S.C. § 362(h) if the debtor fails to timely file a statement of intention in a converted chapter 7 case commenced under another chapter.
    In re Padilla, 2010 WL 4735820 (Bankr.D.N.M. 2010, J. Jacobvitz)

AVOIDANCE ACTIONS

  1. There is no presumption of insolvency when trustee pursues a fraudulent transfer action under 11 U.S.C. § 548(a)(1)(B). Insolvency may not be inferred solely from fact that debtor commenced bankruptcy case five weeks after transfer. Also contains a brief discussion of the four ways to establish the fourth element of a fraudulent transfer claim under § 548(a)(1)(B)(ii). Ryan v. Montoya (In re Gonzales) , 2011 WL 2619609 (Bankr.D.N.M. 2011 J. Jacobvitz).
  2. An individual who does not normally rent out her home, but rents to debtor when debtor's home burns down and then delays collecting rent until insurance proceeds have been received and receives payment on the eve of a bankruptcy filing, cannot sustain an "ordinary course of business or financial affairs" defense to trustee's claim of an avoidable preference under 11 U.S.C. § 547(c)(2)(A). Montoya v. Battaglia (In re Weber) , 2011 WL 2632171 (Bankr.D.N.M. 2011 J. Jacobvitz).

 BANKRUPTCY PETITION PREPARERS

  1. Bankruptcy petition preparer (BPP) who adivised clients whether to elect state or federal exemption scheme gave legal advice in violation of 11 U.S.C. § 110.  Injunction issued against BPP prohibiting him from giving legal advice.  Court did not enjoin BPP from acting as a BPP under 11 U.S.C. § 110(j)(2)(B).  In re Sanchez, 446 B.R. 531 (Bankr.D.N.M. 2011).

CHAPTER 11

  1. Dismissal or Conversion Under 11 U.S.C. §1112(b)
    In re Melendez Concrete Inc., 2009 WL 2997920 (Bankr.D.N.M. 2009, J. Jacobvitz)

  2. Retention of Professionals - No Adverse Interest and Rule 2014(a) Requirements
    In re Platinum Oil Properties, LLC, 2009 WL 5201851(Bankr.D.N.M. 2009, J. Jacobvitz)

  3. Use of Cash Collateral - Court authorizes debtor in possession to use cash collateral to develop irrigation on new farm; plant, cultivate and harvest crop on existing irrigated farmland; and acquire, graze and care for cattle. In re Podzemny, 2011 WL 576591 (Bankr.D.N.M. Feb. 8, 2011).

  4. Automatic Stay Post Confirmation
    In re Price, Case No. 05-10321 (Docket No. 374) (Bankr.D.N.M. 01/07/10, J. Jacobvitz)

  5. A confirmed Chapter 11 plan is binding on all parties described in 11 U.S.C. § 1141(a) who received proper notice. Sovereign immunity is abrogated thereunder as well, pursuant to 11 U.S.C. § 106(a)(1). Additionally, under 11 U.S.C. § 1123(a)(5), applicable nonbankruptcy laws that would interfere with a debtor's means for implementing a plan can be preempted, although this area of law is unsettled. In re Platinum Oil , 2011 WL 3585828 (Bankr.D.N.M. 2011 J. Jacobvitz).

COLLATERAL ESTOPPEL

  1. Discusses the privity requirement to use collateral estoppel to establish facts in a non-dischargeability action; no privity found.
    In re Blackwell, 2010 WL 3037583 (Bankr.D.N.M. 2010, J. Jacobvitz)

  2. Addresses application of collateral estoppel to establish facts in a non-dischargeability action based on a jury verdict. In re Eastburg, __ B.R. __, 2010 WL 4623798 (Bankr.D.N.M. 2010, J. Jacobvitz)

DAMAGES

  1. Consequential Damages When Injury is Suffered by an Affiliate.
    In re Integrated Technology Solutions, Inc., 417 B.R. 643 (Bankr.D.N.M. 2009, J. Jacobvitz)

  2. Considers proximate cause and damages calculation for non-dischargeability claim under 11 U.S.C. § 523(a)(2)(A) against contractor who performed unlicensed plumbing work.    Cabrera v. Larranaga (In re Larranaga), 2011 WL 1344561 (Bankr.D.N.M. April 8, 2011). 

DISCHARGE

  1. A large number of material misstatements, inconsistencies, and omissions in debtors' Schedules and Statement of Financial Affairs culminate in finding of requisite knowledge and fraudulent intent that rises to the level of a "false oath" under 11 U.S.C. § 727(a)(4). Discharge was thusly denied.
    Bishop v. Mulholland (In re Mulholland) 2011 WL 4352293 (Bankr.D.N.M. 2011 J. Jacobvitz)
  2. The best interests of creditors is not the only factor the Court must consider when ruling on a debtor's motion for waiver of discharge under 11 U.S.C. § 727(a)(10). Some other factors include the potential for expensive duplicative litigation in multiple fora, whether the creditors are seeking a monetary judgment, and whether continuing proceedings would result in expensive litigation.
    In re Ferri 2011 WL 3962117 (Bankr.D.N.M. 2011 J. Jacobvitz)

DISCHARGEABILITY

  1. Addresses legal standard for non-dischargeability under 11 U.S.C. § 523(a)(2)(A), and when the principal is liable for fraud of an agent
    Southwest Financial Services of Las Cruces, Inc. v. Tarango, 424 B.R. 479 (Bankr.D.N.M. 2010)

  2. Inclusion of words "in trust' in security agreement is insufficient in and of itself to create fiduciary relationship within the meaning of 11 U.S.C. § 523(a)(4).  Liabilitly cannot be imputed to debtor who does not participate in alleged wrongdoing for purposes of non-dischargeability under 11 U.S.C. § 523(a)(6).  Opinion also discusses imputed liability under 11 U.S.C. § 523(a)(2)(A).  First New Mexico Bank v. David Bruton and Charlene Bruton, 2010 WL 2737201 (Bankr.D.N.M., 2010 J. Jacobvitz)

  3. False pretenses under 11 U.S.C. § 523(a)(2)(A) can include an implied misrepresentation.  A claim that the debtor applied the creditor's funds to pay for substandard work does not state a claim under 11 U.S.C. § 523(a)(4) for breach of fiduciary duty.  The case also discussed the standard for establishing an objection to dischargeability under 11 U.S.C. § 523(a)(4) based on embezzlement.In re Larranaga, 2010 WL  3521732 (Bankr.D.N.M. 2010, J. Jacobvitz).  See also, Larranaga II, below. 

  4. Discusses whether a claim for non-dischargeability is negated when a loan procured by fraud is novated or refinanced and consolidated with other loans not procured by fraud.  In re Martinez, 2010 WL 3069978 (Bankr.D.N.M. 2010, J. Jacobvitz).

  5. Discusses whether the doctrine of equitable tolling applies to extend the deadline for filing a dischargeability complaint.  Alam v. Hossain, Adv. No. 10-1183 (Bankr.D.N.M. 2010, J. Jacobvitz).

  6. An attorney's duty to hold client funds in a trust account is a fiduciary duty within the meaning of 11 U.S.C. § 523(a)(4).  In re Mucci, 2010 WL 2683128 (Bankr.D.N.M. 2010, J. Jacobvitz). 

  7. Judgment for overpayment of spousal support could not support a claim under 11 U.S.C. § 523(a)(2)(A) where plaintiff knew of defendant-debtor's alleged misrepresentation at the time he sought to recover the overpayment.  Debt for overpayment of spousal support does not automatically retain its character as support for purposes of 11 U.S.C. § 523(a)(5).  Debt for overpayment of spousal support could support a non-dischargeability claim under 11 U.S.C. § 523(a)(15).  Taylor v. Taylor (In re Taylor), 2011 WL 1748617 (Bankr.D.N.M. May 5, 2011). 

  8. Whether a debt arising from a divorce proceeding is non-dischargeable under 11 U.S.C. § 523(a)(5) or 11 U.S.C. § 523(a)(15) determines whether a debt is entilted to prioirty treatment under 11 U.S.C §507(a).  Relevant time for determining the nature of the debt is at the time of the divorce; plaintiff's intent to use the funds as support under her present financial circumstances is not relevant.   Fact issues regarding the intent of the parties and the purpose the debt was intended to serve at the time of the divorce precluded summary judgment.   Comstock v. Rodriguez (In re Rodriguez), 2011 WL 2119008 (Bankr.D.N.M. May 27, 2011).

  9. Considers proximate cause and damages calculation for non-dischargeability claim under 11 U.S.C. § 523(a)(2)(A) against contractor who performed unlicensed plumbing work.    Cabrera v. Larranaga (In re Larranaga), 2011 WL 1344561 (Bankr.D.N.M. April 8, 2011).

  10. The Retainage Act, §57-28-1 et. seq., NMSA 1978, does not impose a fiduciary duty on subcontractors to suppliers of the type contemplated by 11 U.S.C. § 523(a)(4). In re Ramos, 2010 WL 3788242 (Bankr.D.N.M. 2010, J. Jacobvitz).

  11. Sole named managing member and de facto manager of limited liability company acted within a fiduciary capacity for purposes of 11 U.S.C. §523(a)(4). Hawks Holdings, LLC v. Kalinowski (In re Kalinowski), __ B.R. ___, 2011 WL 841185 (Bankr.D.N.M. March 8, 2011).

  12. Ability to pay is not relevant under 11 U.S.C. § 523(a)(15).  Debt arising from Final Decree and Minute Order issued in dissolution of marriage proceeding is either non-dischargeable under 11 U.S.C. § 523(a)(5) because it is a domestic support obligation, or it is nondischargeable under 11 U.S.C. § 523(a)(15) because it is not a domestic support obligation.  Whether plaintiff could enforce her non-dischargeable judgment against defendant's Veteran's Disability Benefits is an issue for the state court.   Valentine v. Valentine (In re Valentine), 2012 WL 830621 (Bankr.D.N.M. March 3, 2011).

  13. Equitable tolling does not apply to extend deadlines for commencing adversary proceedings under 11 U.S.C. §§ 523 and 727 when the plaintiff has actual knowledge of bankruptcy proceedings in time to commence such an action. McNaughton v. Maytorena, et al. , 2011 WL 5509194 (Bankr.D.N.M. 2011 J. Jacobvitz).

DISCHARGE INJUNCTION

  1. The case discusses the circumstances under which a plaintiff may continue to prosecute a cause of action against a debtor in state court after the debtor is granted a discharge and while a creditor's non-dischargeability action is pending. In re Eastburg, __ B.R. __, 2010 WL 3371091 (Bankr.D.N.M. 2010, J. Jacobvitz).

DISMISSAL

  1. Credit Counseling Taken Outside the 180-Day Period.
    In re Crawford, 420 B.R. 833 (Bankr.D.N.M. 2009, J. Jacobvitz)

  2. Dismissal for Abuse - 11 U.S.C. § 707(b).  Above median-income debtors whose actual mortgage payment was greater than the IRS local standards could not take both deductions and could not claim college expenses of adult children as an allowable expendse deduction under the means test.   Payment of adult children's college expenses did not constitute a "special circumstance" sufficient to rebut the presumption of abuse.  Court gives debtors an opportunity to convert to Chapter 13.   In re Linville, 446 B.R. 522 (Bankr.D.N.M. 2011).

  3. Third Chapter 13 Case Dismissed Without Prejudice.
    In re Gray, 2009 WL 3849710 (Bankr.D.N.M. 2009, J. Jacobvitz)

 

DISMISSAL OR CONVERSION

  1. Under 11 U.S.C. §1112(b).
    In re Melendez Concrete Inc., 2009 WL 2997920 (Bankr.D.N.M. 2009, J. Jacobvitz)

  2. Under 11 U.S.C. §1307(c), whether dismissal or conversion of debtor's chapter 13 case to chapter 7 was in the best interest of creditors and the estate.
    In re Carol Ferri, 2010 WL 1418147 (Bankr.D.N.M. 2010, J. Jacobvitz)
  3. Due to bad faith acts, the Court denies debtor's motion to convert from chapter 7 to 11 under 11 U.S.C. § 706(a). However, because it is possible for debtor to submit chapter 11 plan that offers significantly more to creditors than they would receive under chapter 7, the denial is without prejudice.
    In re Joung. (Bankr.D.N.M. 2011, J. Jacobvitz)

EXEMPTIONS

  1. Court denies objection to claim of exemption. The objection was based on conversion of nonexempt assets to exempt form (a Roth IRA) shortly prior to commencement of the chapter 7 case while a creditor was in hot pursuit.
    In re Channon, 424 B.R. 895 (Bankr. D.N.M. 2010)

  2. Debtor did not act in bad faith by amending her Schedule C to elect state exemption scheme.  Debtor could claim New Mexico homestead exemption in warehouse also used as debtor's "dwelling."
    In re Hamilton, __ B.R. __, 2011 WL 1048363 (Bankr.D.N.M. Mar. 8, 2011).

  3. Debtors could not claim homestead exemption in property adjacent to their residence.   Adjacent property had separate address, was separated from the debtors' residence by a chain link fence, and was used by the debtors as a rental property. 
    In re Ramey, Case No. 7-10-13155 JR.

INJUNCTIONS

  1. Bankruptcy courts have authority to enjoin the prosecution of state court actions involving state law claims asserted by the plaintiff to be non-dischargeable in a pending adversary proceeding, but the Court declined to issue an injunction under the circumstances.
    In re Eastburg, __ B.R. __, 2010 WL 4623798 (Bankr.D.N.M. 2010 J. Jacobvitz)

JUDICIAL ADMISSIONS DOCTRINE

  1. Lopez v. Lopez, 2009 WL 3754204 (Bankr.D.N.M. 2009, J. Jacobvitz)

JUDICIAL LIENS - AVOIDANCE

  1. In re Morgan, 2009 WL 3617613 (Bankr.D.N.M. 2009, J. Jacobvitz)

JURISDICTION

  1. Court did not have jurisdiction over debtor's state law claim against lender's counsel; debtor's bankruptcy case had already been dismissed.
    In re Kline, _B.R. _, 2009 WL 4406056 (Bankr.D.N.M. 2009, J. Jacobvitz)

  2. Court has jurisdiction to hear claim of the trustee to collect receivables that are property of the estate; does not decide whether the matter is a core proceeding.
    In re Texas Reds, Inc., 2010 WL 398912 (Bankr.D.N.M. Jan 14, 2010, J. Jacobvitz)

  3. Court has subject matter jurisdiction over claims between third parties and rules that mandatory abstention does not apply; Court sua sponte permissively abstains.
    The Scoular Company v. Dalhart Consumers Fuel Association, Inc. and 7-H Cattle Feeders, Inc., 2010 WL 1795269 (Bankr.D.N.M. May 3, 2010, J. Jacobvitz)

  4. Court’s exercise of personal jurisdiction over Defendant does not violate the Fifth Amendment.
    Texas Reds, Inc. v. Miller, 2010 WL 1711112 (Bankr.D.N.M. April 26, 2010, J. Jacobvitz)

  5. Remedy for willful stay violation under the Bankruptcy Code does not preclude debtor-plaintiff from also asserting a claim under the federal Fair Debt Collection Practices Act (FDCPA) or other state law.  However, debtor-plaintiff's claims under the FDCPA and state law did not fall within the Court's "related-to" jurisdiction. Atwood v. GE Money Bank (In re Atwood), ___ B.R. ___, 2011 WL 1331974 (Bankr.D.N.M. Apr. 7, 2011).

LIMITATION OF ACTIONS

  1. Limitations period was revived under New Mexico revival statute.
    In re Texas Reds, Inc., 2010 WL 398918 (Bankr.D.N.M. Jan 15, 2010, J. Jacobvitz)

PROFESSIONALS - CONFLICT OF INTEREST

  1. In re Platinum Oil Properties, LLC, 2009 WL 5201851(Bankr.D.N.M. 2009, J. Jacobvitz)

PROFESSIONALS - RULE 2014(a) DISCLOSURE

  1. In re Platinum Oil Properties, LLC, 2009 WL 5201851(Bankr.D.N.M. 2009, J. Jacobvitz)

PROPERTY OF THE ESTATE

  1. Unscheduled causes of action remained property of the estate after the case was closed.
    In re Wright, 2009 WL 3633811 (Bankr.D.N.M. 2009, J. Jacobvitz)

REAFFIRMATION AGREEMENTS

  1. Reaffirmation Agreements are unenforceable if attorney fails to make all three certifications as required under 11 U.S.C. § 524(c).  Court has no power to render the agreement enforceable by approving it.   Creditor may not exercise remedies under 11 U.S.C. § 521(d) or § 362(h) where debtor has taken all required steps to reaffirm the debt, notwithstanding the unenforceability of the agreement.    In re Perez, 2010 WL 2737187 (Bankr.D.N.M. 2010, J. Jacobvitz).

RECUSAL

  1. A bankruptcy judge is not required to recuse himself when a debtor sues him for actions taken in a judicial capacity. Unless pervasive bias is shown, the alleged bias requiring recusal must be based on extra-judicial conduct. In re Bollinger , 2011 WL 3276240 (Bankr.D.N.M. 2011 J. Jacobvitz).

RELIEF FROM STAY

  1. Summary judgment denying a motion for relief from stay under 11 U.S.C. § 362(d)(1) and (2) wherein the debtor had equity in the collateral and withdrawals from a family-owned LLC were held to meet the business judgment standard. Additional money caused to be set aside for tax purposes in order to adequately protect secured creditor. In re Young. 2011 WL 3799245 (Bankr.D.N.M. J. Jacobvitz August 29, 2011).
  2. An ongoing post-petition default in a debtor's payment of regular mortgage payments can constitute sufficient cause for relief from the automatic stay under 11 U.S.C. § 362(d). The bankruptcy court enjoys wide latitude in crafting or conditioning relief from the automatic stay. In re Bollinger , 2011 WL 1380218 (Bankr.D.N.M. 2011 J. Jacobvitz).

SALE OF ASSETS § 363

  1. Court denies approval of a sale of assets by a chapter 11 debtor as not being a reasonable exercise of the debtor’s business judgment.
    In re Premier Concrete, Inc., 2010 WL 1780046 (Bankr.D.N.M. May 4, 2010, J. Jacobvitz)

STANDING

  1. By Creditor in Chapter 7 Case
    In re Runnels Broadcasting Systems, LLC. 2009 WL 4611447 (Bankr.D.N.M. 2009, J. Jacobvitz)

  2. Debtors who had been denied access by a bank to funds in a bank account lacked standing to pursue a claim against the bank for willful violation of the stay where the debtors had made a claim of exemption as to the funds, but the exemption had not yet been allowed.  
    In re Bucchino, __ B.R. __, 2010 WL 3911369 (Bankr.D.N.M. 2010 J. Jacobvitz)

STAY - ANNULMENT

  1. Annulment of stay denied when sought solely to defeat a claim for damages for willful violation of the stay.
    In re Kline, USBC, DNM, Adversary No. 09-1035 (Bankr. D.N.M., 03-04-2010, J. Jacobvitz)

STAY VIOLATION

  1. Knowledge of loan servicer (agent) can be imputed to lender (principal) for purposes of determining whether lender willfully violated the stay
    In re Kline, 420 B.R. 541 (Bankr.D.N.M. 2009)

  2. When failure to dismiss an action commenced in technical violation of the stay becomes a willful violation of the stay
    In re Kline, __ B.R. __, 2010 WL 519820, (Bankr. D.N.M. 2010, J. Jacobvitz)

  3. A financial institution does not violate the stay by denying the debtors access to funds claimed as exempt before the exemption is allowed under circumstances in which the financial institution did not deny the chapter 7 trustee access to the funds, and within 24 hours after denying the debtors access to the funds, honored the trustee's request to release the funds to the debtors.  In re Bucchino, __ B.R. __, 2010 WL 3911369 (Bankr.D.N.M. 2010 J. Jacobvitz)  
  4. Failure to re-serve an amended state court case complaint after the termination of the automatic stay (having previously served the amended complaint in technical violation - but without actual knowledge -of the automatic stay) does not constitute a willful violation of the automatic stay. Kline v. Deutsche Bank , 2011 WL 3879485 (Bankr.D.N.M. 2011 J. Jacobvitz).

SUMMARY JUDGMENT

  1. Motion Not Properly Supported by Evidence
    Cago Inc. v Slade, Adversary No. 08-1065 (Docket No. 17) (Bankr.D.N.M. 09/18/09, J. Jacobvitz)
     Affidavit not made on personal knowledge is insufficient to support a motion for summary judgment, In re Slade, 2010 WL 3239131 (Bankr.D.N.M. 2010, J. Jacobvitz)
    Los Alamos National Bank v. Martinez, Adversary No. 08-1143 (Docket No. 28) (Bankr.D.N.M. 01/08/10, J. Jacobvitz)
    Northern New Mexico School Employees Federal Credit Union v. Moya, Adversary No. 09-1155 (Docket No. 8) (Bankr.D.N.M. 04/02/10, J. Jacobvitz)
    Wright v. Vanderbilt Mortgage and Finance, Inc., Adversary No. 09-1048 (Docket No. 59) (Bankr.D.N.M. 03/18/10, J. Jacobvitz)
  2. Summary Judgment Denied when Genuine Issue of Material Fact Exists
    Billings v. Escalante , 2011 WL 2600717 (Bankr.D.N.M. J.Jacobvitz June 29, 2011). Plaintiff's Motion for Summary Judgment on section 523(a)(2)(A) claim denied when Defendant's deposition testimony and answers to interrogatories put at issue whether Plaintiff had actual knowledge about the falsehood in Defendant's alleged false pretenses. If Plaintiff had knowledge, Plaintiff could not demonstrate reliance, a necessary element of a claim under section 523(a)(2)(A).

WAIVER

  1. Acceptance of payment after expiration of the cure period waived right to terminate a real estate contract based on failure to cure by timely making the payment that was accepted.
    In re Draper., 2010 WL 963987 (Bankr.D.N.M. 2010, J. Jacobvitz)