Consumer Bankruptcy Journal Summer 2015 - Page 17

SCOTUS Update a tuition credit agreement with a forprofit institution was not excepted from discharge under section 523(a)(8) (A)(ii). Institute of Imaginal Studies v. Christoff,  No. 14-1336 (B.A.P. 9th Cir. March 27, 2015).  The appeal turned on the language of section 523(a)(8)(A)(ii) excepting from discharge, “an obligation to repay funds received.” The court found that “funds received” was not equivalent to “loans received” as used elsewhere in section 523(a)(8). Christoff is currently on appeal, No. 15-60026 (9th Cir.). Fourth Circuit Addresses CashCall’s Arbitration Clause In a per curiam opinion, the Fourth Circuit affirmed in part and reversed in part a district court decision declining to enforce CashCall’s arbitration clause that any dispute under the agreement would be resolved by arbitration conducted by a representative of the Cheyenne River Sioux Tribe applying Indian Tribal law.  Moses v. CashCall, No. 14-1195 (4th Cir. March 16, 2015). Ultimately, the court found that Moses’ complaint for declaratory judgment that the underlying debt agreement was illegal and therefore void was not appropriately subject to tribal arbitration but that Moses’ damages claim based on the state Fair Debt Collection laws was. Judge Davis dissented overall on the basis that the bankruptcy court should have permitted CashCall to moot the entire conflict by withdrawing its proof of claim. NACBA filed an amicus brief in support of the debtor in this case. McCoy Marches On The First Circuit agreed with McCoy v. Miss. State Tax Comm’n, 666 F.3d 924 (5th Cir. 2012), that an instruction in the state tax filing law with respect to the time for filing a return is an “applicable filing requirement,” within the meaning of the hanging paragraph to section 523(a), thereby rendering a return filed outside that time nondischargeable unless filed in cooperation with the IRS under IRC section 6020(a). Fahey v. Mass. Dept. of Rev., No. 14-1328;  Perkins v. Mass Dept. of Rev., No. 14-1350, Gonzalez v. Mass. Dept. of Rev.  No. 14-9002;  Brown v. Mass. Dept. of Rev. No. 14-9003 (February 18, 2015). The Tenth Circuit reached a similar conclusion in  In re Mallo, 2014 WL 7360130 (10th Cir. Dec. 29, 2014). avoidable under 548(a)(1)(B) as a constructively fraudulent transfer. Result: Pending Lump Sum Rollover from IRA to Annuity Not “Premium” In re New Century TRS Holdings, No. 14-3923 (3rd Cir.) The Eighth Circuit found that the debtor’s individual retirement annuity funded by a lump sum rollover contribution from his IRA was properly exempted from his chapter 7 bankruptcy estate under section 522(b)(3)(C). Running v. Miller (In re Miller), No. 13-3682 (8th Cir. Feb. 13, 2015). The court found that the funding of the IRA did not violate either the requirement that the premiums not be fixed or that the annual premium not exceed the amount specified in section 219(b)(1)(A) of the IRC. Because the initial rollover contribution was not a “premium” within the meaning of the relevant sections of the IRC, the debtor’s annuity was properly exempted from his bankruptcy estate.  NACBA filed an amicus brief in support of the debtor in this case. Date: March 20, 2015 Description: Whether borrowers received adequate notice of company bankruptcy  to allow them to file timely proofs of claim. Result: Pending NACBA Amicus Activity: Date: January 15, 2015 Description: Whether, under section 109(e), the amount remaining due on a promissory note secured by a mortgage which is in excess of the value of the property securing that note must be included as a “debt” which is “owed,” where the borrower has previously obtained a chapter 7 discharge. Result:  Judgment affirmed, April 27, 2015 NCBRC has been active in filing amicus briefs in a number of important cases on behalf of the NACBA membership, including: Smith v. SIPI, LLC, No. 15-1166 (7th Cir.) Date: May 7, 2015 Description: Whether Chapter 13 debtors received reasonably equivalent value for property sold at a tax sale conducted in accordance with Illinois law, so that sale was not National Association of Consumer Bankruptcy Attorneys Summer 2015 Heritage Bank v. Woodward, No. 156001 (B.A.P. 8th Cir.) Date: May 12, 2015 Description: Whether absolute priority rule applies to individual debtors in chapter 11. Result: Pending Charbono v. Sumski, No. 14-2151 (1st Cir.) Date: February 25, 2015 Description: Whether bankruptcy court had authority to impose a monetary sanction on the chapter 13 debtor for failure to provide copy of his request for extension of time for filing federal tax return. Result: Pending In re Fitzgerald, No. 14-2349 (4th Cir.) CONSUMER BANKRUPTCY JOURNAL 17