AGCO Corporation f/k/a AG-CHEM Equipment, Co. Inc. (In re Fullmer; Case No. 04-14412 ; Adv. No. 05-5013 (Nugent) (June 9, 2006)
ORDER GRANTING SUMMARY JUDGMENT
Facts:
Debtor created Valley Spraying Service, LLC (“Valley Spraying”) in 1997. In early 1998, AGCO Corporation (“AGCO”) sold two sprayers to Valley Spraying for $202,919.78 (“Sprayer #1” & “Sprayer #2”). Debtor, acting as president of Valley Spraying, executed a installment contract and security agreement (“Agreement”) for the purchase. Later in 1998, Debtor withdrew from Valley Spraying and Valley Spraying ceased to conduct business. Debtor retained possession of Sprayer #1 and stored it in an unconcealed location on his father’s farm at all times prior to the bankruptcy filing. Sprayer #2 was retained by Debtor’s partner with whom he started Valley Spraying. On March 16, 2000, Sprayer #2 was transferred to AGCO for a trade-in allowance of $65,000. On July 8, 2004, Debtor sold Sprayer #1 to his father’s company in exchange for a deed to real property located in Dighton, Kansas, without permission or knowledge of AGCO. Debtor included in the Bill of Sale for Sprayer #1 a provision that the transfer was “subject to liens and encumbrances, but only to the extent that said liens and encumbrances are enforceable against” the Debtor. AGCO has not filed any legal proceedings asserting a valid and enforceable security interest in Sprayer #1, nor has it filed a financing statement covering Sprayer #1. Debtor filed Chapter 7 petition and AGCO filed a complaint to determine the dischargeability of the debt attributable to Sprayer #1 pursuant to § 523(a)(6).
Holding:
In order to prevail under § 523(a)(6) a creditor must show by a preponderance of the evidence that 1) the debtor committed a willful act with intent to harm the creditor, and 2) that actual harm results. Although the facts presented establish that Debtor intentionally transferred Sprayer #1, they do not support the conclusion that Debtor willfully intended to injure AGCO or its security interest.
AGCO Corporation f/k/a AG-CHEM Equipment, Co. Inc. (In re Fullmer; Case No. 04-14412 ; Adv. No. 05-5013 (Nugent) (June 9, 2006)
JUDGMENT ON DECISION
Facts:
AGCO alleged that Debtor’s debt is the result of his willful and malicious damage to AGCO’s property interests under § 523(a)(6).
Holding:
Because there is no factual controversy and the facts were insufficient to support a conclusion that Debtor willfully intended to injure AGCO or its interests, the Court finds that Debtor is entitled to judgment as a matter of law.
In re Brent Spencer & Cheryl Spencer; Case No. 05-18421 (Nugent) (June 27, 2006)
MEMORANDUM OPINION
Facts:
On the petition date, debtors had four bank accounts with a total of $6,335.35. Debtors’ schedules reported only three accounts at two banks and failed to specify the addresses of the banks or the account numbers. Debtors scheduled the accounts as having a combined value of $3,300 and claimed the total amount exempt under K.S.A. § 60-2304(a). The trustee did not contest the exemption and now seeks to recover from the debtors $3,035.35, which sum represents the unscheduled amounts contained in the accounts on the petition date. Debtors objected claiming the funds were already committed prior to filing the petition and, that they have no duty to turn over the funds when the trustee has the power to recover the funds from the various payees under § 549.
Holding:
1) K.S.A. § 84-3-408 states that a check does not operate as an assignment of funds until the bank accepts the draft and therefore, collected funds in a debtor’s bank account at the date of filing are property of the estate and prior to the outstanding checks being honored, debtors retain possession, custody, or control of these assets.
2) The trustee is required to collect the property of the estate “as expeditiously as is compatible with the best interests of the parties in interest.” Because of the debtors’ failure to identify the bank branches where the accounts were located, notification under Rule 2015 was made difficult and would have exposed the debtors to the criminal and civil penalties of returned checks. Also, commencing many § 59 actions to recover a few hundred dollars would not have been efficient management of the estate. Therefore, the trustee was correct to seek recovery directly from the debtors.
In re Richard D. Schmutz and Brenda S. Schmutz; Case No. 06-40480 (Karlin) (June 17, 2006)
ORDER DENYING DEBTORS’ MOTION TO RECONSIDER ORDER DENYING APPLICATION FOR WAIVER OF CHAPTER 7 FILING FEE
Facts:
On June 6, 2006, Debtors filed an Application for Waiver of the Chapter 7 Filing Fee that was denied on June 14, 2006. Debtors have now filed an Appeal and Brief of Debtors as to the Order Denying Application for Waiver of Chapter 7 Filing Fee. Debtors currently have income of $2,002.
Holding:
Section 1930(f) provides that a bankruptcy court may waive the filing fee in an individual debtor’s case under Chapter 7 if “the court determines that such individual has income less than 150 per cent of the official income poverty line applicable to a family of the size involved and is unable to pay that fee in installments.” For these Debtors, their monthly income must be less than $1,650 in order to meet the 150% of the HHS Poverty Guidelines. Because the court finds that Debtors have income greater than 150% of the poverty line and they are able to pay the filing fee in installments, their motion for reconsideration is denied.
In re Kelly Ann Monthey; Case No. 06-40288 (Karlin) (June 27, 2006)
MEMORANDUM DECISION AND ORDER DENYING DEBTOR’S MOTION FOR RECONSIDERATION
Facts:
At a hearing on Debtor’s motion to extend the automatic stay pursuant to § 362(c)(3)(B), Creditor asked if there was any dispute on the issue of whether Creditor had commenced some kind of collection “action” between the dismissal of the prior case and the commencement of the instant case. Creditor stated that it had a bank witness available to testify on this issue if necessary, and Debtor’s counsel stated that he was unaware of such “action” requirement and agreed to stipulate to whatever the witness intended to testify. As a result of that stipulation, the witness did not testify and the court held that the automatic stay would terminate as to the Creditor on the 30th day after the filing of the petition. Debtor now seeks reconsideration on the basis that § 362(c)(3)(B) was not implicated because the Creditor had not taken sufficient “action.”
Holding:
Motions for reconsideration are not appropriate if the movant only wants the court to hear new arguments or supporting facts that could have been presented originally. Because Debtor failed to raise the issues contained in the instant motion before or during the hearing, and in fact waived the arguments by stipulation, the Debtor’s Motion for Reconsideration is denied.
In re Heather Rae Lowder; Case No. 05-44802 (Karlin) (June 28, 2006)
Memorandum Order and Opinion Sustaining Toyota Motor Credit Corporation’s Objection to Debtor’s Second Amended Chapter 13 Plan and Overruling Debtor’s Objection to Toyota Motor Credit Corporation’s Claim.
Facts:
Debtor purchased a 2002 Toyota Camry (“Toyota”) from Creditor within 910 days of filing Chapter 13 petition. Debtor uses the Toyota to travel to and from work located 20 miles from Debtor’s residence. Debtor does not use the Toyota within the scope of her employment. Debtor’s Second Amended Chapter 13 Plan proposes to pay Creditor’s claim in full, but without payment of interest. Creditor argues that it should be paid interest at the rate required by Till v. SCS Credit Corp. Creditor has a PMSI in the Toyota in the amount of $23,122.99. Debtor argues that because she uses her Toyota to drive to and from work, it was not acquired for “personal use” and thus the anti-bifrucation language contained within the hanging paragraph in § 1325(a) does not apply.
Holding:
1) § 1325(a) applies to cases where a creditor has a PMSI securing a debt incurred within 910 days of the filing of the petition and the collateral consists of a motor vehicle acquired for personal use.
2) Where a vehicle is not used within the scope of employment and the vehicle is acquired for the joint purpose of traveling to and from work and for conducting a debtor’s private affairs, it is properly classified as “personal use” for purposes of the Bankruptcy Code.
3) § 1325(a) does not render § 1325(a)(5)(B)(ii) inapplicable and the Debtor must satisfy the present value requirement contained in that section by paying Creditor interest pursuant to Till in order to have a plan confirmed.
In re Carole Sue Cool; Case No. 05-43658 (Karlin) (June 29, 2006)
MEMORANDUM AND ORDER GRANTING, IN PART, AND DENYING, IN PART, TRUSTEE’S MOTION TO COMPEL
Facts:
Debtor is employed as an independent insurance agent, and claimed as exempt, 75% of “insurance commissions due and owing.” Debtor provided no detail regarding such commissions on any of her schedules and listed the “current market value of property without deducting exemption” for this property as “$0.00.” Trustee did not file an objection to the claimed exemption. Trustee now moves the court to grant its request for documents related to the commissions in order to determine which of those commissions, if any, were property of the estate. The Debtor opposes the motion on the grounds that because the Trustee failed to object to the claimed exemption, the Trustee is barred from obtaining any commissions of the estate and therefore, the request should be denied because it is futile.
Holding:
Because 25% of the commissions exempted and other non-exempted commissions may exist and potentially belong to the estate, the Trustee is entitled to receive all documents necessary to determine what amount, if any, the estate is entitled to collect.
In re Shane Lynn Wampler & Lori Lynn Wampler; Case No. 05-27659 (Berger) (June 29, 2006)
MEMORANDUM OPINION SUPPLEMENTING ORDER CONFIRMING CHAPTER 13 PLAN
Facts:
Court confirmed Debtors’ Chapter 13 plan over objections from creditors. This decision is now being appealed, and this Court’s Memorandum Opinion supplements the order of confirmation by fully setting forth its conclusions.
Holding:
1) The hanging paragraph in § 1325(a) requires that the allowed claim be paid in full, but by making the provisions of § 506 inapplicable, does not mandate treatment of the claim as an allowed secured claim requiring the payment of unmatured or postpetition interest under § 1325(a)(5)(B)(ii).
2) A Chapter 13 plan may be confirmed even if it does not comport with the requirements of § 1325(a)(5) because § 1325 is not mandatory as §1129 is for Chapter 11 plans.
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