2019 Judge Kaplan - Opinions
Judge Michael B. Kaplan -- Opinions signed in 2019
In re: In re: Goione, 18-26805 1/8/2019
Opinion Summary: After a foreclosure judgment was entered in state court, a dispute arose between the debtor and Amboy Bank (“Amboy”) over the correct amount due on first and second mortgage obligations owing to Amboy. Amboy argued that as an oversecured creditor, it was entitled to the contractual interest rate, and that, to permit the postjudgment interest to accrue at the lower legal rate would confer an impermissible benefit on the debtors. Amboy also argued that the debtors’ proposed plan impermissibly sought to modify its secured claims in the debtors’ principal residence as prohibited by § 1322(b)(2). The Court held that the loan documents under which the contractual interest rate arose merged with the foreclosure judgment so that Amboy was no longer the beneficiary of an agreement under which the contractual interest rate arose. As a result, the legal rate of interest is appropriate in this case. Additionally, the Court found that the bar against modification of secured claims found in § 1322(b)(2) did not apply, as the mortgage was paid off prior to confirmation.
Dobin v. Golden, Adversary Proceeding No.18-01531
(In re: Lynn Z. Smith, Case No. 17-34862) 4/9/2019
Opinion Summary: The chapter 7 trustee (the “Trustee”) filed a complaint against the Sheriff of Monmouth County (the “Sheriff”) objecting to the Sheriff’s asserted statutory commission on the sale price of the debtor’s former residence. The Sheriff sought a statutory commission pursuant to N.J. Stat. Ann. 22A:4-8, for his efforts in the foreclosure process, notwithstanding that those efforts were interrupted when the Debtor filed for bankruptcy, and that the foreclosure judgement was ultimately satisfied from proceeds of an auction sale conducted by the Trustee. The Court held that such a sale and satisfaction is a “settlement” within the meaning of N.J. Stat. Ann. 22A:4–8 and that the statute is not in conflict with the goals of chapter 7. The Court further held that the commission must be calculated on the amount received by the creditor in cancellation of the debt, rather than the sale price.
In re: Peralta, 16-21251 (RG) 4/16/2019
Opinion Summary: The Court denies Movants’ a motion for an extension of time to file an adversary proceeding. Prior to bankruptcy, Movants/Creditors were engaged in state court litigation against one of the Debtors. Upon filing for bankruptcy, the Debtors’ attorney sent to the Movants directly a notice of the bankruptcy which included the deadline for filing an adversary proceeding challenging dischargeability of debt. The deadline for filing an adversary proceeding passed and Movants did not file an adversary proceeding. Several months after the deadline expired, Movants filed the instant motion alleging that the notice they received was deficient, and requesting that the Court equitably toll the deadline and permit them to file an adversary proceeding. The Court determines that Movants actually raise two separate arguments: one alleging a due process violation, and one in favor of equitable tolling. The Court finds that Movants received proper notice of the bankruptcy filing and of the deadline to file an adversary proceeding; therefore, there was no due process violation. Debtors were under no obligation to provide notice in the bankruptcy case to Movants’ counsel in the state court action. Further, there are no circumstances in this case which warrant the application of the equitable tolling doctrine.
In re: Hollister Construction Services, LLC, Case No. 19-27439, 1/23/2019
Opinion Summary: Newark Warehouse Urban Renewal, LLC and Newark Warehouse Redevelopment Company, LLC (collectively, “NWR”) seeks an order determining: (1) that certain parties have violated the automatic stay under 11 U.S.C. § 362(a); (2) that certain asserted liens filed post-petition are void ab initio; and (3) that the automatic stay applies to ongoing state litigation involving enforcement of certain construction liens. Relying on the Third Circuit’s holding in In re Linear Elec. Co., Inc., 852 F.3d 313 (3d Cir. 2017), the Court determines that any party who files a post-petition construction lien, or who attempts to enforce a pre-petition construction lien, or who attempts to collect on a bonded construction lien claim violates the stay. However, the Court declines to extend the holding in Linear Electric beyond the construction lien context. Therefore, to the extent the subcontractors seek state law remedies against a non-debtor property owner that do not affect the bankruptcy estate—such as quantum meruit or unjust enrichment claims—there is no stay violation. Accordingly, NWR’s motion is Granted In Part and Denied In Part.
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