Latest 3 Cases This Week: Chicago v. Fulton (U.S.), Evolve Federal Credit Union v. Barragan-Flores (5th Cir.), Courtney v. KeyBank N.A. (8th Cir.)

Double Jeopardy: Answers to Six Questions About Donald Trump’s Second Impeachment Trial

DEAN FALVY

Dean Falvy, a lecturer at the University of Washington School of Law in Seattle, addresses six key questions about Donald Trump’s second impeachment trial. Falvy provides clear and supported answers to frequently asked questions such as whether the Senate can act to remove Trump from the presidency, whether it can hold a trial after his term expires, who should preside, and whether he will lose his presidential perks.

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Chicago v. Fulton

Court: US Supreme Court

Docket: 19-357

Opinion Date: January 14, 2021

Judge: Samuel A. Alito, Jr.

Areas of Law: Bankruptcy

The debtors each filed a bankruptcy petition and requested that the city return his vehicle, which had been impounded for failure to pay fines. The filing of a bankruptcy petition automatically “creates an estate,” 11 U.S.C. 541(a), that is intended to include any property made available by other provisions of the Bankruptcy Code. Section 542 provides that an entity in possession of bankruptcy estate property “shall deliver to the trustee, and account for” that property. The filing of a petition also automatically “operates as a stay, applicable to all entities,” of efforts to collect prepetition debts outside the bankruptcy forum, section 362(a), including “any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate.” Vacating a Seventh Circuit holding, the Supreme Court held that the mere retention of estate property after the filing of a bankruptcy petition does not violate section 362(a). That section prohibits affirmative acts that would disturb the status quo of estate property as of the time when the bankruptcy petition was filed. Reading section 362(a)(3) to cover mere retention of property would contradict section 542, which carves out exceptions to the turnover command. Under the debtors’ reading, an entity would be required to turn over property under section 362(a)(3) even if that property were exempt from turnover under section 542.

Evolve Federal Credit Union v. Barragan-Flores

Court: US Court of Appeals for the Fifth Circuit

Docket: 18-50420

Opinion Date: January 14, 2021

Judge: Priscilla R. Owen

Areas of Law: Bankruptcy

After debtor filed for Chapter 13 bankruptcy, his bankruptcy plan proposed retention of his GMC Sierra, "cram down" of the loan for the purchase of the Sierra, and surrender of the Toyota Camry as collateral for the purchase of the Camry. The bankruptcy court approved the plan, but the district court reversed. The Fifth Circuit affirmed the district court's judgment. The court explained that the text of 11 U.S.C. 1325(a)(5) does allow debtors to select a different option "with respect to each allowed secured claim." However, allowing a debtor to select a different section 1325(a)(5) option for each claim is different from allowing a debtor to select different options for different collateral securing the same claim. While section 1325(a)(5) allows the former, it does not allow the latter: its use of the conjunction "or" between the options provided in subsection (A), (B), and (C) makes it clear that debtors may choose only one of those three options for each claim. The court stated that a plan violates that requirement when it selects different options for different collateral securing the same claim. Furthermore, Williams v. Tower Loan of Mississippi, 168 F.3d 845 (5th Cir. 1999), which held that debtors must select the same section 1325(a)(5) option for all of the collateral securing a single claim, supports the court's decision. In this case, for the plan to be approvable under section 1325(a)(5), the plan must select the same section 1325(a)(5) option for both items of collateral securing the Camry Loan—the Camry and the Sierra.

Courtney v. KeyBank N.A.

Court: US Court of Appeals for the Eighth Circuit

Docket: 20-6016

Opinion Date: January 14, 2021

Judge: Dow

Areas of Law: Bankruptcy

The Eighth Circuit affirmed the bankruptcy court's order denying relief requested by debtor for wrongful foreclosure in equity, holding that the record supports the bankruptcy court's conclusion that debtor could not have been lulled by the Bank into a false sense of security regarding the foreclosure sale. In this case, debtor stipulated that "KeyBank advised Plaintiff that she had to contact KeyBank's foreclosure counsel to obtain a written payoff statement that included legal costs and fees;" the notes from the Bank's telephone records, a stipulated exhibit, indicate that debtor was so advised and nowhere in debtor's briefing does she dispute that; the call notes also establish that debtor called the Bank's foreclosure department as instructed; and while there is no evidence proving debtor's receipt of the Reinstatement Notice, there is evidence that the Bank advised her that the correct amount would be forthcoming in a letter. Therefore, the court found that the bankruptcy court's conclusion that debtor was advised by the Bank about the inaccuracy of the notification statement was not clearly erroneous.