Monthly Archives: April 2015

Lawsuit by Debtor in Bankruptcy

Posted on by

It is generally accepted that the debtor may not waive the automatic stay.  If the debtor affirmatively acts, such as by commencing litigation post-bankruptcy, the defendant is permitted to defend itself without running afoul of the automatic stay (although, in defining the parameters of a defense, many courts distinguish between mandatory counterclaims, which are allowed, and permissible counterclaims, which are not). 

Although the Bankruptcy Code contains a fairly detailed list of actions which are and which are not precluded by the automatic stay, it does not address the ramifications of failing to abide by its dictates, except in one respect. Under Bankruptcy Code section 362(h), any “individual” injured by a willful violation of the stay is entitled to recover actual damages, including attorneys’ fees, and in appropriate circumstances, may recover punitive damages. However, other than providing for a remedy, the Bankruptcy Code does not explain whether actions taken in violation of the stay are void from their inception, and should be deemed never to have occurred, or whether such actions are merely voidable, such that they will be permitted to stand unless and until the debtor, the bankruptcy trustee or some other party-in-interest in the bankruptcy case complains to the court. The distinction is an important one, given the potentially significant legal and property rights and remedies connected with a wide variety of actions that arguably run afoul of the automatic stay, whether they be voluntary, involuntary, knowing or unknowing.

In Kalb v. Feuerstein, the United States Supreme Court examined the issue under the former Bankruptcy Act and held that actions in violation of the automatic stay are void. The circuit courts that have addressed this issue in the context of the present day Bankruptcy Code are split. The minority view is that an act taken in violation of the automatic stay is not void, but merely voidable. The Fifth and District of Columbia Circuits subscribe to this position. A majority of the circuits hold that an action in violation of the automatic stay is void ab initio, although some courts, like the Third Circuit, have recognized that the bankruptcy court’s power to grant relief from the stay retroactively may make a stay violation merely voidable under appropriate circumstances.

Amendment of Indictment to Habitual Offender

Posted on by

Mississippi Circuit Court Rule 7.09:

All indictments may be amended as to form but not as to the substance of the offense charged. Indictments may also be amended to charge the defendant as an habitual offender or to elevate the level of the offense where the offense is one which is subject to enhanced punishment for subsequent offenses and the amendment is to assert prior offenses justifying such enhancement (e.g., driving under the influence, Miss. Code Ann. § 63-11-30). Amendment shall be allowed only if the defendant is afforded a fair opportunity to present a defense and is not unfairly surprised.

Mississippi Rule of Appellate Procedure 4(d)

Posted on by

MRAP 4(d): If any party files a timely motion of a type specified immediately below the time for appeal for all parties runs from the entry of the order disposing of the last such motion outstanding. This provision applies to a timely motion under the Mississippi Rules of Civil Procedure. . . (5) for relief under Rule 60 if the motion is filed no later than 10 days after the entry of judgment. A notice of appeal filed after announcement or entry of the judgment but before disposition of any of the above motions is ineffective to appeal from the judgment or order, or part hereof, specified in the notice of appeal, until the entry of the order disposing of the last such motion outstanding. Notwithstanding the provisions of Appellate Rule 3(c), a valid notice of appeal is effective to appeal from an order disposing of any of the above motions. [Emphasis added]

Core vs. Non-Core Proceedings in Bankruptcy Court

Posted on by

Core proceedings are proceedings or issues that are entirely related to the bankruptcy case. The bankruptcy judge presides over these issues. Core proceedings in a bankruptcy case include:

  • Matters concerning estate administration. For example, the court has jurisdiction over the bankruptcy trustee’s duties in administering the estate.
  • Matters concerning creditors’ claims. For example, if the trustee objects to a creditor’s claim, the court has jurisdiction over the objection.
  • Matters concerning the debtor’s exemptions. For example, if the trustee objects to the debtor’s exemptions, the court has jurisdiction over the objection.
  • Matters concerning the debtor or the trustee obtaining credit. For example, in a Chapter 13 case, the debtor must seek court permission before incurring debt.
  • Matters concerning the debtor or other parties turning over property to the estate. For example, if another person is holding property of the debtor, the court can order that person to turn that property over to the trustee.
  • Proceedings to determine, avoid or recover preferences. The trustee can seek to recover money the debtor paid to creditors during the preference period, and the court will have jurisdiction over the matter.
  • Proceedings to determine, avoid or recover fraudulent transfers. The trustee can seek to recover money the debtor fraudulently transferred, and the court will have jurisdiction over the matter.
  • Motions to terminate, modify, or annul the automatic stay. For example, if a creditor files a motion to lift the automatic stay so the creditor can foreclose or repossess, the court will hear the motion.
  • Proceedings to determine dischargeability or to object to dischargeability of certain debts. For example, if a creditor objects to the debtor’s discharging its particular debt, the bankruptcy court would hear the objection.
  • Proceedings to determine the validity, extent or priority of liens.
  • Confirmation of bankruptcy plans, such as the plan you file in a Chapter 13 case.
  • Matters concerning the use or lease of bankruptcy estate property.
  • Matters concerning the sale of bankruptcy estate property.

This list is non-exhaustive; core proceedings also include any other proceedings that involve the administration of the bankruptcy estate.

Non-Core Proceedings

Non-core proceedings are proceedings that do not arise under bankruptcy law, even if some of the issues in the case relate to the bankruptcy. For example, if the bankruptcy debtor is in the middle of a divorce, the divorce is a non-core proceeding. Although the debtor’s property affects the bankruptcy estate, the bankruptcy judge cannot determine the outcome of a divorce case. Similarly, if a bankruptcy debtor is involved in a personal injury lawsuit, the bankruptcy court has no control over the personal injury case, even though the proceeds may be bankruptcy estate property.

When a bankruptcy case involves a number of core and non-core issues combined, the bankruptcy judge must determine issue by issue whether he or she has jurisdiction over each one.

Motion for a New Trial MRCP 59

Posted on by

MRCP 59(a) provides that the trial court may grant a new trial ” … in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of Mississippi.” In non-jury cases ” … the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings of fact and conclusions, and direct entry of a new judgment.”

Statutory Preference for Administrator

Posted on by

Statutory order of preference for appointment of Administrator.  § 91-7-63, MCA.

  • Surviving spouse.
  • Next of kin, if not otherwise disqualified.
  • Other third party, bank or trust company.
  • If no application is made within 30 days of the decedent’s death, administration may be granted to a creditor or other suitable person.
  • If no application is made and the decedent left property in Mississippi, county administrator or sheriff may be appointed.  § 91-7-79 and -83, MCA.

Fiduciary Duty

Posted on by

There are two types of fiduciary relationships: 1. Those created under the law, (a) as applied to particular relationships governed by statute (such as partner and partnership) or by legal proceedings (such as administrator and heir), or (b) as applied to contractual relationships (such as principal and agent or attorney and client); and 2. Those that are created by case law as a result of the factual circumstances underlying the relationship of the parties and the transactions at issue.

These types of unique fiduciary duties occur in various factual circumstances.1 While there is no definitive description of a fiduciary relationship, one source describes it as:

[T]he acting of one person for another; the having and the exercising of influence over one person by another; the reposing of confidence by one person in another; the dominance of one person by another; the inequality of the parties; and the dependence of one person upon another. In addition, courts have considered weakness of age, mental strength, business intelligence, knowledge of the facts involved or other conditions giving to one an advantage over the other.

Fraudulent Misrepresentation

Posted on by

To establish a claim on fraudulent misrepresentation, the elements of fraud must be proven by clear and convincing evidence. Levens v. Campbell, 733 So. 2d 753 (¶ 35)(Miss. 1999). These elements include: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury.

Opening a Administration Estate

Posted on by

In order to initiate an administration for a decedent who died without a will, a petition must be filed in the county in which the decedent resided.

The decedent’s heirs are given priority to serve as administrators or administratrix of the estate for thirty days.  After 30 days, the appointment of an administrator or administratrix is within the discretion of the court.  In order for letters of administration to be granted, the individual who petitions to be appointed as the administrator or administratrix must meet three requirements.  First, the prospective administrator or  administratrix must be at least eighteen years of age.  Second, the prospective administrator or administratrix must not have been convicted of a felony.  Third, the prospective administrator or administratrix must be of sound mind.  Prior to letters of administration being granted, the petitioner must take an oath that is required by statute.  In addition, unless waived or reduced by the court, the petitioner must give bond in an amount equal to the value of the decedent’s personal estate.

 Three disinterested persons are appointed to compile an inventory and appraise the decedent’s chattels, goods, and personal estate; this requirement excludes money and choses in action.  The inventory and appraisement must be completed thirty days after letters of administration are granted.  In addition, the administrator or administratrix must make an inventory of the decedent’s money that comes into the administrator’s possession and debts owed to the decedent.  In the event that the court waives the appraisal and inventory requirement, the inventory that is prepared by the administrator or administratrix must also list and value any of the decedent’s property that is in his or her possession.

 The administrator or administratrix of an estate must make a diligent effort to identify and notify the decedent’s creditors.   After completing these tasks, the administrator or administratrix must file an affidavit indicating compliance with these mandates.  Subsequently, a notice to creditors must be published once a week for three consecutive weeks.  The preferred means of notification is publication in a newspaper that is circulated in the county of the decedent’s residence.  If the claim of a creditor is not probated and registered with the clerk of the court within ninety days of the first publication, the claim is forever barred.

Mississippi Code Ann §91-7-83 provides that if there are no individuals who qualify to act as administrators, the chancery clerk or court may appoint the sheriff who shall administer the estate.

Waiving Bond in an Administration Estate

Posted on by

Letters of administration are granted when an individual who petitions to be appointed as the administrator or administratrix meets three requirements.  First, the prospective administrator or  administratrix must be at least eighteen years of age.  Second, the prospective administrator or administratrix must not have been convicted of a felony.  Third, the prospective administrator or administratrix must be of sound mind.  The petitioner must then take an oath that is required by statute.  In addition, unless waived or reduced by the court, the petitioner must give bond in an amount equal to the value of the decedent’s personal estate. 

Unless waived for good cause, three disinterested persons are appointed to compile an inventory and appraise the decedent’s chattels, goods, and personal estate; this requirement excludes money and choses in action.  The inventory and appraisement must be completed thirty days after letters of administration are granted.  In addition, the administrator or administratrix must make an inventory of the decedent’s money that comes into the administrator’s possession and debts owed to the decedent.  In the event that the court waives the appraisal requirement, the inventory that is prepared by the administrator or administratrix must also list and value any of the decedent’s property that is in his or her possession.

 The administrator or administratrix of an estate must make a diligent effort to identify and notify the decedent’s creditors.   After completing these tasks, the administrator or administratrix must file an affidavit indicating compliance with these mandates.  Subsequently, a notice to creditors must be published once a week for three consecutive weeks.  The preferred means of notification is publication in a newspaper that is circulated in the county of the decedent’s residence.  If the claim of a creditor is not probated and registered with the clerk of the court within ninety days of the first publication, the claim is forever barred.