Schoenlein v. Schoenlein

United States Bankruptcy Appellate Panel of The Sixth Circuit

Schoenlein v. Schoenlein

Opinion

(/(&7521,&&,7$7,21 )('$SS3 WK&LU )LOH1DPH ES

%$1.5837&<$33(//$7(3$1(/2)7+(6,;7+&,5&8,7

,QUH  0$5,(&6&+2(1/(,1 'HEWRU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

'$1,(/s6&+2(1/(,1

3ODLQWLII$SSHOOHH

Y 1R

237,2121(0257*$*(&25325$7,21

'HIHQGDQW$SSHOODQW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

$SSHDOIURPWKH8QLWHG6WDWHV%DQNUXSWF\&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLR(DVWHUQ'LYLVLRQDW&ROXPEXV &DVH1R $GYHUVDU\1R 

'DWH6XEPLWWHGRQ%ULHIV 0D\

'HFLGHGDQG)LOHG sXQH

%HIRUH %52:1&22.DQG+2:$5'%DQNUXSWF\$SSHOODWH3DQHOsXGJHV

BBBBBBBBBBBBBBBBBBBB

&2816(/

21 %5,()   'DYLG $ )UHHEXUJ 0F)$''(1  $662&,$7(6 &OHYHODQG 2KLR IRU $SSHOODQW0LFKDHO7*XQQHU+LOOLDUG2KLRIRU$SSHOOHH

1 BBBBBBBBBBBBBBBBBBBB

23,1,21 BBBBBBBBBBBBBBBBBBBB

:,//,$0+286721%52:1%DQNUXSWF\$SSHOODWH3DQHOsXGJH2SWLRQ2QH 0RUWJDJH&RUSRUDWLRQ m2SWLRQ2QHl DSSHDOVWKHRUGHURIWKHEDQNUXSWF\FRXUWJUDQWLQJ D GHIDXOW MXGJPHQW WR 'DQLHO s 6FKRHQOHLQ m$SSHOOHHl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jV RUGHU JUDQWLQJWKH$SSHOOHHjVPRWLRQIRUDGHIDXOWMXGJPHQWDQG5(0$1'WKHSURFHHGLQJ

,,668(621$33($/

7KHLVVXHVRQDSSHDODUHZKHWKHUWKHEDQNUXSWF\FRXUWDEXVHGLWVGLVFUHWLRQLQ JUDQWLQJDGHIDXOWMXGJPHQWDQGZKHWKHUWKHEDQNUXSWF\FRXUWSURSHUO\FRQFOXGHGWKDW VHUYLFHRISURFHVVZDVSURSHUSXUVXDQWWR)HGHUDO5XOHRI%DQNUXSWF\3URFHGXUH $OWKRXJK QRW UDLVHG E\ WKH SDUWLHV WKH 3DQHO VXD VSRQWH DOVR TXHVWLRQV ZKHWKHU WKH EDQNUXSWF\ FRXUW KDG FRUH MXULVGLFWLRQ RYHU WKHVH SDUWLHV DQG WKLV SURFHHGLQJ  %1 7HOHFRPP,QFY/RPD] ,QUH%17HOHFRPP,QF %5 %$3WK&LU   DEVHQWFRQVHQWLIWKHSURFHHGLQJLVQRWFRUHWKHEDQNUXSWF\FRXUWLVGHSULYHGmRI VXEMHFWPDWWHUMXULVGLFWLRQWRHQWHUDILQDORUGHURIGHIDXOWl 

2 3 ,,s85,6',&7,21$1'67$1'$5'2)5(9,(: 7KH%DQNUXSWF\$SSHOODWH3DQHORIWKH6L[WK&LUFXLWKDVMXULVGLFWLRQWRGHFLGHWKLV DSSHDO$ILQDORUGHURIDEDQNUXSWF\FRXUWPD\EHDSSHDOHGE\ULJKWXQGHU86& † D  )RUSXUSRVHVRIDSSHDODQRUGHULVILQDOLILWmHQGVWKHOLWLJDWLRQRQWKHPHULWV DQGOHDYHVQRWKLQJIRUWKHFRXUWWRGREXWH[HFXWHWKHMXGJPHQWl0LGODQG$VSKDOW&RUS Y8QLWHG6WDWHV 86   6&W      FLWDWLRQVRPLWWHG $Q RUGHUJUDQWLQJDPRWLRQIRUDGHIDXOWMXGJPHQWLVDILQDORUGHU6HHHJ0DF3KHUVRQY sRKQVRQ ,QUH0DF3KHUVRQ %5 %$3VW&LU  GHIDXOWMXGJPHQW LVDILQDORUGHU VHHDOVR%DYHO\Y3RZHOO ,QUH%DVNHWW  %5 %$3WK &LU   GHQ\LQJDPRWLRQWRVHWDVLGHDGHIDXOWMXGJPHQWLVDILQDORUGHU  $SSHOODWHUHYLHZRIWKHJUDQWLQJRIGHIDXOWMXGJPHQWVDQGWKHUHIXVDOWRVHWDVLGH VXFKMXGJPHQWVLVXQGHUWKHDEXVHRIGLVFUHWLRQVWDQGDUG,QUH%DVNHWW %5DW 2XUUHYLHZRIWKHEDQNUXSWF\FRXUWjVMXULVGLFWLRQDTXHVWLRQRIODZLVDGHQRYRUHYLHZ

,,,)$&76

7KH$SSHOOHHZKRZDVQRWDGHEWRULQWKHEDQNUXSWF\FDVHILOHGDFRPSODLQWLQKLV ZLIHjVEDQNUXSWF\FDVHRQsXO\FKDOOHQJLQJVHYHUDOFUHGLWRUVjFODLPVDJDLQVWKLP LQFOXGLQJWKHYDOLGLW\RUH[WHQWRIDPRUWJDJHLQWHUHVWFODLPHGE\2SWLRQ2QH7KLVDSSHDO FRQFHUQVRQO\WKHGLVSXWHEHWZHHQWKH$SSHOOHHDQG2SWLRQ2QH2QsXO\WKH FRPSODLQW ZDV PDLOHG E\ WKH $SSHOOHH E\ UHJXODU ILUVW FODVV PDLO WR 2SWLRQ 2QH LQ &DOLIRUQLDWRWKHDWWHQWLRQRIWKH/HJDO'HSDUWPHQWLQFDUHRIsRKQ6WRFNHUsRKQ6WRFNHU LVDFRQWUDFWHPSOR\HHRI2SWLRQ2QHDQGKDGSUHYLRXVO\FRPPXQLFDWHGZLWKWKH$SSHOOHH UHJDUGLQJWKHPRUWJDJH'XHWRZKDWDSSHDUVWRKDYHEHHQDPLVFRPPXQLFDWLRQEHWZHHQ sRKQ6WRFNHUDQG'HERUDKsDPHVRQWKH$VVLVWDQW9LFH3UHVLGHQWDQGFRXQVHOIRU2SWLRQ 2QH2SWLRQ2QHGLGQRWILOHDWLPHO\DQVZHUWRWKHFRPSODLQWQRUGLGLWILOHDUHTXHVWIRU DQH[WHQVLRQRIWLPHWRDQVZHURURWKHUZLVHUHVSRQGWRWKHFRPSODLQW2SWLRQ2QHKDG WXUQHGWKHFODLPDJDLQVWLWRYHUWRLWVWLWOHLQVXUHUDQG0VsDPHVRQH[SHFWHGWKDWLQVXUHU WRGHIHQGWKHDGYHUVDU\SURFHHGLQJ

4 2Q$XJXVWWKHSODLQWLIIILOHGIRUDGHIDXOWMXGJPHQW)RUVRPHXQNQRZQ UHDVRQWKHPRWLRQUHFLWHGWKDW2SWLRQ2QHKDGmDQH[WHQVLRQWRDQVZHUWKHFRPSODLQWIRU GD\VIURP$XJXVWl2SWLRQ2QHjVDQVZHUWRWKHRULJLQDOFRPSODLQWDQGD PRWLRQ WR ILOH LWV DQVZHU LQVWDQWHU ZDV ILOHG RQ 6HSWHPEHU   ZKLFK ZDV DSSUR[LPDWHO\RQHZHHNDIWHUWKHH[WHQVLRQPHQWLRQHGLQWKHPRWLRQIRUGHIDXOW $GHIDXOWKDGQRWEHHQHQWHUHGE\WKHFOHUN7KHEDQNUXSWF\FRXUWKHOGDKHDULQJ RQsDQXDU\DQGFRQFOXGHGWKDW2SWLRQ2QHjVIDLOXUHWRILOHDQDQVZHULQDWLPHO\ PDQQHUZDVPRUHWKDQDPHUHPLVWDNHDQGDPRXQWHGWRQHJOLJHQFH7KHFRXUWKHOGWKDW WKLVQHJOLJHQFHZDVH[DFHUEDWHGZKHQ2SWLRQ2QHDOORZHGWKLUW\GD\VWRSDVVDIWHUWKH PRWLRQIRUGHIDXOWZDVILOHGEHIRUHLWILOHGDQ\UHVSRQVHEXWWKHFRXUWGLGQRWFRPPHQW XSRQWKHDQVZHUEHLQJILOHGZLWKLQRQHZHHNRIWKHH[WHQVLRQPHQWLRQHGE\WKHSODLQWLIILQ KLV PRWLRQ IRU GHIDXOW MXGJPHQW  7KHUHIRUH WKH EDQNUXSWF\ FRXUW JUDQWHG WKH GHIDXOW MXGJPHQWKROGLQJWKDW2SWLRQ2QHZDVQRWHQWLWOHGWRSURWHFWLRQRUUHOLHIIURPLWVRZQ QHJOLJHQFH

,9',6&866,21 7KLV FDVH FRPHV WR WKH %DQNUXSWF\ $SSHOODWH 3DQHO LQ DQ XQXVXDO SRVWXUH 7\SLFDOO\XSRQHQWU\RIDGHIDXOWMXGJPHQWDSSHDOVIROORZWKHWULDOFRXUWjVUHIXVDOWRVHW DVLGH WKH GHIDXOW MXGJPHQW  6HH )HGHUDO 5XOH RI %DQNUXSWF\ 3URFHGXUH  LQFRUSRUDWLQJ)HGHUDO5XOHRI&LYLO3URFHGXUH F ZKLFKSURYLGHVIRUVHWWLQJDVLGHVXFK DMXGJPHQWXQGHU5XOH E VWDQGDUGV$SULRU3DQHOKDVH[SODLQHGWKRVHVWDQGDUGVDQG WKHDSSOLFDWLRQRIH[FXVDEOHQHJOHFWXQGHU5XOH E ,QUH%DVNHWW %5DQGLW LVXQQHFHVVDU\IRUXVWRUHVWDWHWKDWRSLQLRQ$OWKRXJKWKHSDUWLHVKHUHPL[WRJHWKHULQ WKHLUDUJXPHQWVWKHFRQFHSWVRIDEXVHLQHQWHULQJDGHIDXOWMXGJPHQWDQGUHIXVLQJWRVHW LWDVLGHLWZDVQRGRXEWFOHDUWR2SWLRQ2QHIURPWKHEDQNUXSWF\MXGJHjVRUDOUXOLQJWKDWD PRWLRQ WR VHW DVLGH WKH GHIDXOW MXGJPHQW ZRXOG KDYH EHHQ IXWLOH  7KH MXGJPHQW ZDV HQWHUHGE\WKHEDQNUXSWF\MXGJHDIWHUDKHDULQJRQWKHPRWLRQIRUGHIDXOWMXGJPHQWDQG WKDWMXGJPHQWLVDILQDORUGHUIRUDSSHDOSXUSRVHV7KHWULDOFRXUWjVDFWLRQLQHQWHULQJD GHIDXOWMXGJPHQWLVDGLVFUHWLRQDU\RQHDVLQGLFDWHGE\WKHmPD\lODQJXDJHRI5XOH E  6HHDOVR$KHUQ 0DF/HDQ %DQNUXSWF\3URFHGXUH0DQXDO † HG 

5 $OWKRXJKQRPRWLRQWRVHWDVLGHWKHGHIDXOWMXGJPHQWLVEHIRUHWKH3DQHOEHFDXVH RI WKH UHFRUG LQFOXGLQJ WKH WULDO FRXUWjV RUDO UXOLQJ ZH DUH DEOH WR HYDOXDWH ZKHWKHU D GHIDXOWMXGJPHQWVKRXOGKDYHEHHQHQWHUHGDQGZHIDLOWRVHHLWVMXVWLILFDWLRQ7KHWULDO FRXUWVDUHJXLGHGLQWKLVFLUFXLWE\FOHDUDXWKRULW\WKDWmµ>W@ULDOVRQWKHPHULWVDUHIDYRUHGLQ IHGHUDOFRXUWVDQGDµJODULQJDEXVHjRIGLVFUHWLRQLVQRWUHTXLUHGIRUUHYHUVDORIDFRXUWjV UHIXVDOWRUHOLHYHDSDUW\RIWKHKDUVKVDQFWLRQRIGHIDXOWjl,QUH%DVNHWW %5DW TXRWLQJ,1967)LQ*URXS,QFY&KHP1XFOHDU6\V,QF)G    WK&LU   FHUWGHQLHG86    VHHDOVR6KHSDUG&ODLPV6HUY,QFY:LOOLDP 'DUUDK  $VVRFV   )G     WK &LU    m:KHQ WKH JUDQW RI D GHIDXOW MXGJPHQW SUHFOXGHV FRQVLGHUDWLRQ RI WKH PHULWV RI D FDVH µHYHQ D VOLJKW DEXVH >RI GLVFUHWLRQ@PD\MXVWLI\UHYHUVDOjl  FLWDWLRQRPLWWHG $OWKRXJKPXFKRIWKHDXWKRULW\LQWKLV FLUFXLWLVLQWKHFRQWH[WRIUHIXVDOWRVHWDVLGHDGHIDXOWMXGJPHQWWKHSUHIHUHQFHIRUWULDOV RQ WKH PHULWV YHUVXV GHIDXOW LV HTXDOO\ DSSOLFDEOH WR WKH WULDO FRXUWjV HQWU\ RI D GHIDXOW MXGJPHQWZLWKRXWVXIILFLHQWFDXVH 7KH EDQNUXSWF\ FRXUW ZDV MXVWLILDEO\ FRQFHUQHG DERXW ZK\ 2SWLRQ 2QH KDG QRW DQVZHUHGWKHFRPSODLQWEXWLQLWVFRQFHUQWKDWFRXUWIDLOHGWRPHQWLRQWKDW2SWLRQ2QHKDG ILOHG LWV DQVZHU DOPRVW IRXU PRQWKV EHIRUH WKH ILQDO KHDULQJ RQ WKH GHIDXOW PRWLRQ 0RUHRYHUWKHFRXUWjVRUDOUXOLQJGLGQRWFRPPHQWXSRQWKHIDFWVWKDWWKHSODLQWLIIjVGHIDXOW PRWLRQSXUSRUWHGWRJLYH2SWLRQ2QHDQDGGLWLRQDOGD\H[WHQVLRQIURP$XJXVWWR DQVZHUDQGWKDWWKHDQVZHUZDVILOHGZLWKLQRQHZHHNRIWKDWH[WHQVLRQ:KLOHRQO\WKH EDQNUXSWF\FRXUWFRXOGKDYHJUDQWHGDQH[WHQVLRQRIWLPHWRDQVZHUWKHIDFW WKDW WKH SODLQWLIIjVPRWLRQSXUSRUWHGWRJLYH2SWLRQ2QHVXFKDQH[WHQVLRQEHDUVRQWKHRYHUDOO TXHVWLRQRIZKHWKHUWKHSODLQWLIIZDVSUHMXGLFHGE\WKLVVOLJKWGHOD\LQDQVZHULQJ,QWKH FRQWH[WRIWKHIDFWVEHIRUHXVWKHJUDQWLQJRIWKHGHIDXOWMXGJPHQWDSSHDUVWREHDQRYHUO\ KDUVKVDQFWLRQRQHJUDQWHGVROHO\XSRQDILQGLQJWKDW2SWLRQ2QHKDGEHHQQHJOLJHQWLQ IDLOLQJWRWLPHO\DQVZHU,QWKHFRQWH[WRI5XOH F WKH6L[WK&LUFXLWKDVVDLGWKDWPHUH QHJOLJHQFHLVQHYHUHQRXJKWRMXVWLI\UHIXVDOWRVHWDVLGHDGHIDXOW6KHSDUG&ODLPV6HUY ,QF )GDW  WKHGHIDXOWLQJSDUW\jVIDLOXUHPXVWEHZLOOIXODKLJKHUVWDQGDUGWKDQ mFDUHOHVVDQGLQH[FXVDEOHl 7KHEDQNUXSWF\FRXUWjVILQGLQJZDVOLPLWHGWRQHJOLJHQFHDQ LQVXIILFLHQWVWDQGDUGWRMXVWLI\GHIDXOW

6 $OWKRXJKXSRQUHPDQG2SWLRQ2QHj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

)HG5&LY3 K 

7 sRKQ6WRFNHUWKHSDUW\WRZKRVHDWWHQWLRQWKHFRS\RIWKHFRPSODLQWDQGVXPPRQV ZDVDGGUHVVHGLVQRWDQHPSOR\HHRI2SWLRQ2QH+HLVDOVRQRWDQRIILFHUPDQDJLQJRU JHQHUDODJHQWQRULVKHDXWKRUL]HGWRUHFHLYHVHUYLFHRISURFHVVRQEHKDOIRI2SWLRQ2QH sRKQ6WRFNHULVDQLQGHSHQGHQWFRQWUDFWRURI2SWLRQ2QH7KHUHIRUHLWLVFOHDUWKDWWKHUH ZDVQRSURSHUVHUYLFHRISURFHVVSXUVXDQWWRHLWKHU)HGHUDO5XOHRI%DQNUXSWF\3URFHGXUH RU)HGHUDO5XOHRI&LYLO3URFHGXUH K  )HGHUDO5XOHRI&LYLO3URFHGXUH H  SHUPLWVVHUYLFHRISURFHVVmSXUVXDQWWRWKH ODZRIWKHVWDWHLQZKLFKWKHGLVWULFWFRXUWLVORFDWHGRULQZKLFKVHUYLFHLVHIIHFWHGIRUWKH VHUYLFHRIDVXPPRQVXSRQWKHGHIHQGDQWLQDQDFWLRQEURXJKWLQWKHFRXUWVRIJHQHUDO MXULVGLFWLRQ RI WKH 6WDWHl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

2KLR5HY&RGH$QQ†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

 %HFDXVH RXU FRQFOXVLRQV DUH RWKHUZLVH WKDW WKH GHIDXOW MXGJPHQW PXVW EH YDFDWHG ZH ZLOO QRW SXUVXH H[DPLQDWLRQ RI WKH ODZ RI &DOLIRUQLD ZKHUH VHUYLFH ZDV DUJXDEO\ HIIHFWHG 8QGHU WKDW VWDWHjV &RGH RI &LYLO 3URFHGXUH VHUYLFH PD\ EH REWDLQHG XSRQ DXWKRUL]HG RIILFHUV DQG DJHQWV RI FRUSRUDWLRQV E\ ILUVW FODVV RU DLU PDLO &DO &LY 3 ††    :HVW  

8 UHTXLUHGE\WKH2KLRVWDWXWH7KHUHIRUHWKHUHZDVQRSURSHUVHUYLFHRISURFHVVPDGH XSRQ2SWLRQ2QHSXUVXDQWWR2KLRODZ ,W PD\ EH WKDW WKH EDQNUXSWF\ FRXUW ZDV HYDOXDWLQJ VHUYLFH XQGHU DQ mDSSDUHQW DXWKRULW\l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jV MXULVGLFWLRQDO SDUDJUDSKPHUHO\VD\VWKHFRXUWKDVMXULVGLFWLRQXQGHU>SUHVXPDEO\LQWHQGHGWREH @ 86& ††  DQG  WKXV IDLOLQJ WR FRPSO\ ZLWK %DQNUXSWF\ 5XOH  D jV UHTXLUHPHQWWKDWWKHFRPSODLQWmFRQWDLQDVWDWHPHQWWKDWWKHSURFHHGLQJLVFRUHRUQRQ FRUH   l  :H XQGHUVWDQG WKDW EDQNUXSWF\ FRXUWV DUH RIWHQ GHSULYHG RI DQ HIIHFWLYH RSSRUWXQLW\WRGHWHUPLQHZKHWKHUDSURFHHGLQJLVFRUHZKHQWKHSDUWLHVGRQRWDGGUHVVWKDW LVVXH7KHEDQNUXSWF\MXGJHQHYHUWKHOHVVKDVDQLQGHSHQGHQWREOLJDWLRQWRGHWHUPLQH LIDSURFHHGLQJLVFRUH86&† F  7KLVREOLJDWLRQLVKLJKOLJKWHGLQSURFHHGLQJV LQYROYLQJGHIDXOWVFHQDULRV $QRWKHU3DQHODGGUHVVHGVXFKDVFHQDULRLQ,QUH%17HOHFRPP,QF%5 FRQFOXGLQJWKDWWKHEDQNUXSWF\FRXUWj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

9 MXGJPHQWZRXOGEHYRLG  6HH$QWRLQHY$WODV7XUQHU,QF)G WK&LU    )LQDOO\ZHQRWHWKDWWKHMXGJPHQWPD\EHGHILFLHQWLIQRWYRLGGXHWRWKHQDWXUHRI WKHUHPHGLHVVRXJKWLQWKHFRPSODLQW7KHFRPSODLQWVHHNVDOWHUQDWLYHUHPHGLHVDJDLQVW 2SWLRQ2QHHLWKHUDGHWHUPLQDWLRQWKDW2SWLRQ2QHjVPRUWJDJHOLHQLVLQYDOLGRUWKDWLWLV OLPLWHG WR WKH RQHKDOI LQWHUHVW RZQHG E\ WKH SODLQWLIIjV VSRXVH ZKR LV WKH 'HEWRU LQ EDQNUXSWF\7KHGHIDXOWMXGJPHQWPHUHO\VD\VWKDWMXGJPHQWLVHQWHUHGmLQIDYRURIWKH 3ODLQWLII 'DQLHO s 6FKRHQOHLQ DQG DJDLQVW WKH 'HIHQGDQW 2SWLRQ 2QH 0RUWJDJH &RPSDQ\l:HGRQRWNQRZZKDWWKHMXGJPHQWPHDQV:KLFKDOWHUQDWLYHUHPHG\GRHV LWJUDQW"+RZZRXOGLWEHHQIRUFHDEOHLILWZHUHYDOLG"6LQFHLWLVREYLRXVWKDWWKHUHDO GHIHQGLQJSDUW\LV2SWLRQ2QHjVWLWOHLQVXUHUZHZRQGHUZKDWHIIHFWWKHMXGJPHQWZRXOG KDYH XSRQ WKDW LQVXUHUj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

10

Reference

Status
Published