Wednesday, November 17, 2021

Fifth Circuit Binds Debtor to Plan Terms in Subsequent Case

 Recently I wrote about a Fifth Circuit case where a creditor tried to escape the terms of a confirmed plan in a subsequent case. Now the Court has written an opinion about a debtor that tried to do the same thing. Fortunately the result was the same in both cases: res judicata applied. BVS Construction, Inc. v. Prosperity Bank (Matter of BVS Construction, Inc.), Case No. 21-50274 (5th Cir. 11/15/21). You can find the decision here

Monday, November 15, 2021

Fifth Circuit Reminds Courts About Summary Judgment Standard

Summary judgment was intended to be a method of disposing of cases where there are not any disputed issues for the court to trial. Sometimes it seems that summary judgment is a way to get rid of cases that the court doesn't want to try. In a new opinion about insurance coverage, the Fifth Circuit has reminded lower courts that no genuine issue of material fact means exactly that. Guzman v. Allstate Assurance Company, Case No;. 20-11247 (5th Cir. 11/10/21).  While this is not a bankruptcy case, it has important lessons for attorneys practicing in the federal system.

Fifth Circuit Binds Creditor To Plan Terms in Subsequent Case

Third party releases are a controversial topic with Congress considering legislation to ban them. However, Judge Greg Costa, writing for the Fifth Circuit, has distinguished between an impermissible third-party release and a plan provision reducing a guarantor's liability in a new opinion.  New Falls Corporation v. LaHaye (Matter of LaHaye), No. 19-30795 (5th Cir. 11/12/21) which can be found here.

Sunday, November 07, 2021

Exaggerated Allegations Lead to Sanctions in Stay Violation Case

Many consumer debtor attorneys have chosen to enhance their revenue by filing suit on relatively minor violations of the automatic stay or discharge. There is nothing inherently wrong with these suits since they vindicate the rights that debtors receive when they file bankruptcy. However, some practitioners have resorted to filing form complaints which go on for hundreds of paragraphs with boilerplate allegations about the callousness of the particular creditor. Recently, a creditors' lawyer fought back against exaggerated allegations in a complaint against his client and succeeded in recovering sanctions under Fed.R.Bankr.P. 9011. Defeo v. Winyah Surgical Specialists, P.A. (In re Defeo). 2021 Bankr. LEXIS 2685 (Bankr. D. S.C. 9/27/21).  

Thursday, November 04, 2021

Texas Courts Move Closer to Federal Standard in Proving Up Attorneys' Fees

Federal court practitioners, particularly those appearing in bankruptcy court, are familiar with the requirements of the lodestar method for proving up attorneys' fees. Under Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974) and subsequent cases, attorneys were used to producing contemporaneous time sheets in sufficient detail to describe the work performed and the rate charged. For many years, practice in Texas state courts seemed much looser in that an attorney could simply state that he was an expert and opine that an amount of attorneys' fees was reasonable. In 2012, the Texas Supreme Court expressly endorsed the lodestar method for calculating attorneys' fees in El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012). A new opinion from the Austin Court of Appeals reinforces that lodestar review cannot be evaded by redacting time entries to the point that they are meaningless. Person v. MC-Simpsonville, SC-1-UT, LLC, 2021 Tex. App. LEXIS 7155 (Tex. App.--Austin, 8/27/21).