Summaries of Selected Opinions, 0517 COBJ, Vol. 46 No. 5 Pg. 85

46 Colo.Law. 85

Summaries of Selected Opinions

Vol. 46, No. 5 [Page 85]

The Colorado Lawyer

May, 2017

U.S. Court of Appeals for the Tenth Circuit

Summaries of Selected Opinions

Summaries of selected Tenth Circuit Court of Appeals Opinions appear on a space-available basis. The summaries are prepared for the Colorado Bar Association (CBA) by Katherine Campbell and Frank Gibbard, licensed Colorado attorneys. They are provided as a service by the CBA and are not the official language of this Court. The CBA cannot guarantee the accuracy or completeness of the summaries. Full copies of the Tenth Circuit decisions are accessible from the CBA website: ww.cobar.org (click on “Opinions/Rules/Statutes”).

No. 15-1413. WD Equipment, LLC v. Cowen (In re Cowen). 2/27/2017 D Colo. Judge McKay Bankruptcy-Automatic Stay-Dismissal of Underlying Bankruptcy Case-Adversary Proceeding-Bankruptcy Court’s Constitutional Authority to Enter Final Judgment-Passive Holding Does Not Violate Stay.

Two creditors took possession of the debtor’s commercial trucks because he had defaulted on loans. One creditor set August 6 as the pay-off deadline and the other set August 8. The debtor filed his Chapter 13 bankruptcy petition on August 6, which invoked the automatic stay. About a month later, the bankruptcy court granted debtor’s motions to show cause why defendants should not be held in contempt for violating the automatic stay and ordered defendants to return the trucks to debtor. When defendants did not comply, the debtor instituted an adversary proceeding claiming violations of the automatic stay. The bankruptcy court dismissed the underlying bankruptcy case because without the trucks, the debtor had no income, and was thus ineligible for Chapter 13 relief However, the bankruptcy court retained jurisdiction over the adversary proceeding, ultimately finding that defendants manufactured paperwork, likely forged documents, and gave perjured testimony, and ruling that defendants violated the Bankruptcy Code. The court imposed actual and punitive damages. The district court reversed on the calculation of damages, but otherwise affirmed the bankruptcy court’s order.

On appeal, defendants argued that the bankruptcy court erred in retaining jurisdiction over the adversary proceeding after dismissal of the underlying bankruptcy. The Tenth Circuit ruled that dismissal of the underlying bankruptcy case did not divest the bankruptcy court of jurisdiction over the adversary proceeding, because a court must have power to address violations of the automatic stay, even after the conclusion of the underlying bankruptcy case.

Defendants also argued that the bankruptcy court did not have constitutional authority to enter a final judgment in t he adversary proceeding. A claim for an automatic stay violation derives directly from the Bankruptcy Code, and the bankruptcy court did not exceed its constitutional authority by entering final judgment in the adversary proceeding.

On the merits, the Tenth Circuit reasoned that passively holding an asset does not constitute exercising control over it in violation of the automatic stay. Therefore, defendants did not violate the automatic stay by retaining possession of debtor’s trucks.

The judgment was reversed and the case was remanded to consider the creditors’ actions under the proper application of 11 U.S.C. §§ 362(a)(3) and 105(a), which allow bankruptcy courts to sanction conduct that abuses the judicial process.

Nos. 15-3130 & 15-3134. United States v. Lopez. 2/27/2017. D.Kan. Judge Hartz. Fourth Amendment— Reasonable Suspicion for Dog Sniff Search.

A highway patrolman pulled over defendants for speeding. The passenger, who...

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