Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in granting plaintiff’s motion for summary judgment in action seeking to enforce guaranty in which defendant had agreed to pay plaintiff upon default of mortgage loan by debtor, where plaintiff sought difference between what it had paid for land (that was subject of mortgage) in foreclosure sale and unpaid balance of debt. Fact that Georgia state court refused to confirm that auction used in foreclosure sale conformed to Georgia law did not require different result since plaintiff could properly enforce terms of guaranty against defendant regardless of whether plaintiff had previously proceeded against debtor.

In contract and property action by plaintiffs-land owners seeking recovery of damages for harm caused by defendants-oil companies in attempting to clean up pollution at gas stations that plaintiffs had leased to defendants, Dist. Ct. erred in dismissing breach of contract claim with respect to two properties in which complaint alleged that defendants had failed to make simple repairs to buildings that in turn caused buildings on said properties to be condemned, where parties’ contract required that defendants leave properties in condition reasonably useful for future commercial use. Moreover, Dist. Ct. erred in failing to double jury’s award for waste damages associated with four other properties, where such doubling was required under Michigan statute, and where record showed that defendants qualified as “tenants for years” for purposes of application of instant Michigan statute under provisions of relevant leases that were extended for indefinite period to allow for completion of remediation of properties.

Dist. Ct. did not err in granting defendant-debt collector’s motion to dismiss plaintiff-debtor’s Fair Debt Collection Practices Act (Act) action, alleging that defendant’s dunning letter violated notice provisions set forth in section 1692g(a)(4) of said Act. While plaintiff argued that instant letter, which informed plaintiff that “If you notify this office within 30 days from receiving this notice, this office will obtain verification of debt,” was misleading because it created risk that unsophisticated consumer might request verification of debt within applicable period and lose out on ability to dispute debt, consumer’s request for verification of debt was tantamount to registering “dispute” under Act, so that any request for verification of debt would provide plaintiff with same protections afforded under Act as if he had written to dispute debt. Ct. further rejected plaintiff’s claim that phrase “we believe you want to pay your just debt” improperly implied that judgment had already been rendered against plaintiff.

In action in which jury found that defendant breached contract to pay full contract price for steel railcar deck manufactured by plaintiff, even though said deck sustained fracture, Dist. Ct. did not commit reversible error in granting plaintiff’s motion in limine to exclude any reference to “Charpy impact test” performed on deck, where parties’ contract did not specify any Charpy toughness criteria. While defendant contended that evidence of Charpy test was relevant on its counterclaims for breaches of implied warranties of merchantability and fitness for particular purpose to show that weld material used at location of inclusion had low fracture toughness, any error was harmless, where defendant’s experts were repeatedly allowed to testify that material in location of inclusion was brittle. As such, proposed evidence about Charpy test would not have affected outcome of trial.

Bankruptcy Ct. did not err in approving auction sale of certain assets of debtor for $2.5 million, where only objector to said sale was potential buyer of assets. Potential buyer lacked standing to object to instant sale, where it had not participated in auction, since: (1) it could not have obtained debtor’s assets regardless of what other bidders had done; and (2) potential buyer was not creditor for purposes of receiving any reduced payment as result of instant sale. Moreover, potential bidder’s bare claim that two other bidders had formed joint venture was insufficient by itself to establish any forbidden collusion.

Dist. Ct. did not err in awarding plaintiff only $3,750 in attorneys’ fees arising out of her efforts to resist IRS’s claims for back taxes that had previously been discharged in bankruptcy. Most of plaintiff’s attorneys’ fee request was uncollectible because fees had been generated outside applicable two-year limitations period. Moreover, Bankruptcy Ct. properly calculated fee at $150 per hour statutory rate under 26 USC section 7430. Ct. rejected plaintiff’s contention that Bankruptcy Ct. should have found that fee request was recoverable under section 7433, which has no statutory per hour fee limitation, and that she was entitled to all of her requested fees because she was prevailing party.

Dist. Ct. did not err in dismissing plaintiff’s lawsuit seeking recovery on bearer bonds that Germany had issued or guaranteed before World War II began, where: (1) 1953 Treaty entered into between US and West Germany provided that foreign debt contracted before end of World War II would be paid if found by validation panel to be legitimate; and (2) one plaintiff failed to submit said bonds to validation panel, and other plaintiff submitted bonds to validation panel, which found bonds to be ineligible for payment. Instant Treaty was binding on plaintiffs, such that they could not seek collection on un-validated bonds. Ct. further found that instant lawsuit had been filed beyond applicable statute of limitations period since plaintiffs should have submitted bonds to validation panel decades ago.

Bankruptcy Ct. did not err in finding that tax purchaser’s interest in debtor’s home was secured claim that is treatable in bankruptcy and was modifiable in debtor’s Chapter 13 plan, even though tax purchaser had previously acquired “Certificate of Purchase” by paying debtor’s unpaid assessments imposed by County. Moreover, tax purchaser was unable to obtain tax deed, even though redemption had subsequently expired, where debtor had filed for bankruptcy protection during redemption period, and where debtor eventually paid full amount of assessment as specified in plan. Ct. rejected tax purchaser’s argument that: (1) automatic stay provisions of Chapter 13 did not apply because his interest in “Certificate of Purchase” was real property interest that was not part of debtor’s bankruptcy estate; and (2) if automatic stay provisions did apply, they should have been modified to permit him to obtain tax deed once redemption period had expired.

Dist. Ct. did not err in granting defendant’s motion to dismiss plaintiff’s action seeking review of decision by FDIC to deny plaintiff’s claims against his bank that had gone into receivership, where said lawsuit was filed more than 60 days after date FDIC sent its notice of decision. Instant 60-day period, as set forth in Financial Institutions, Reform, Recovery and Enforcement Act, was jurisdictional prerequisite for filing lawsuit and was not mere claim-processing requirement. Moreover, Ct. rejected plaintiff’s claim that 60-day period did not start until he actually received said notice and held that instant complaint was untimely since it was filed more that 60 days after date FDIC mailed notice of its decision to address he maintained at bank. Fact that plaintiff did not actually receive notice until after 60-day period had expired did not require different result.