Case Summary:
The Plaintiff brought a prepetition suit against the Chapter 7 Debtor in state court, alleging that the debtor stole nearly $300,000 from the Plaintiff, her employer. During the pendency of the proceeding, the state commenced a criminal proceeding against the Debtor, and she invoked the privilege against self-incrimination. The state court granted the Plaintiff’s motion for summary judgment as to fraud and unjust enrichment in a minute entry, but made no factual findings. Later, the state court held the Debtor’s marital community liable for unlawful acts, including racketeering. The Plaintiff then moved for summary judgment in the adversary proceeding and argued that the doctrine of collateral estoppel barred the debtor from litigating the issue of nondischargeability. The Court agreed with the Plaintiff and found that the state court’s two holdings, taken together, should be given preclusive effect as to the Plaintiff’s § 523(a)(2), (4), and (6) claims. The Court held that the minute entry order constituted a final judgment and rejected the Debtor’s argument that she was prevented from litigating the state court suit due to her invocation of the privilege against self-incrimination.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
Ariz. Rev. Stat. § 13-1802

Key Terms:
Collateral Estoppel
Embezzlement
Final Judgment
Fraud
Jurisdiction
Larceny
Self-Incrimination Privilege
Unjust Enrichment
Willful and Malicious - Defined

Case Summary:
The Chapter 7 Debtor was a member of the Ho-Chunk Nation. The Court entered an order on the Debtor’s default directing the Nation to turnover future per capita payments due the Debtor. The Nation refused, and the Chapter 7 Trustee moved for turnover of future per capita payments received by the Debtor. The Court denied the motion, holding that future per capita payments were not property of the estate. Federal and tribal law determined the nature of the Debtor’s property interest in the future per capita payments. Under tribal law, the Debtor had no interest in a per capita payment until the payment was received. Therefore, the Debtor had no interest in future per capita payments at the time of filing that entered the bankruptcy estate. The Court also held that law of the case doctrine did not prevent it from reconsidering a previous order, entered on the Debtor’s default, that future per capita payments were property of the estate.

Statute/Rule References:
11 U.S.C. § 346(f) -- Trustee Tax Withholding Obligations
11 U.S.C. § 541(a)(1)
11 U.S.C. § 541(a)(5)
Wis. Stat. § 705.01(6)
Wis. Stat. § 705.03(2)
Wis. Stat. § 851.17

Key Terms:
Law of the Case
per capita Payments
Property of the Estate

Case Summary:
The Debtors were housemates and filed separate Chapter 7 petitions. Together, their incomes exceeded the median income; separately, their incomes were below the median income. The U.S. Trustee filed a motion to dismiss pursuant to § 707(b)(2) and (3). The Court denied the U.S. Trustee’s motions without prejudice. The Court found that the U.S. Trustee had not carried its burden of demonstrating that some or all of each debtor’s income was used to pay household expenses of the other debtor and should have been included as “income” for purposes of the means test. The Court concluded that ability to pay, standing alone, is not sufficient to serve as the basis of a finding of abuse under the totality of the circumstances inquiry of § 707(b)(3). The Court also found that the U.S. Trustee had not carried its burden to demonstrate that the totality of the circumstances supported a finding of abuse pursuant to § 707(b)(3).

Statute/Rule References:
11 U.S.C. § 101(10)(a)
11 U.S.C. § 101(10)(b)
11 U.S.C. § 101(15)
11 U.S.C. § 707(b)(1)
11 U.S.C. § 707(2)
11 U.S.C. § 707(3)
11 U.S.C. § 707(7)(a)

Key Terms:
Ability to Pay
Abuse
Bad Faith
Income
Means Test
Motion to Dismiss
Substantial Abuse