- Case Type:
- Case Status:
- 17-6009 (8th Circuit, Sep 06,2017) Published
- A debtor who has avoided dischargeability litigation by a settlement with the plaintiff-creditor cannot rely on weather or other "the dog ate my homework" excuses for his or her failure to strictly comply with the settlement agreement. As a result, the bankruptcy court properly rejected the debtor's impracticability defense regarding his failure to make the first payment due under the settlement. Likewise, the bankruptcy court properly rejected the debtor's UCC Article 2 and state-law liquidated damage defenses.
- Procedural context:
- The bankruptcy court previously had affirmed a settlement agreement between a plaintiff-creditor and the debtor, resulting in the plaintiff-creditor's dismissal of nondischargeability litigation against the debtor. When the debtor failed to make the first payment due under the settlement agreement, the plaintiff-creditor filed an affidavit of default with the bankruptcy court and asked that the court enter an order denying the debtor a discharge. The debtor objected, asserting an impracticability defense. The bankruptcy court rejected the defense and entered judgment denying the debtor a discharge. The debtor timely appealed.
- Charles Gabus Motors, Inc. (Gabus) filed an adversary proceeding in Tirrell's bankruptcy, alleging that Tirrell's debt was nondischargeable and that Tirrell should not receive a discharge. Before the trial of the adversary proceeding, Gabus and Tirrell entered into a settlement agreement that required Tirrell to make five payments to Gabus, with the first payment due on January 3, 2017. If Tirrell failed to make a payment as and when due, Gabus coiuld (i) file an affidavit of default with the bankruptcy court and (ii) ask the court to enter an order denying Tirrell a discharge. Tirrell missed the January 3 payment. Gabus filed an affidavit of default and requested that the court enter a nondischargeability judgment against Tirrell. Tirrell objected, and submitted an affidavit that he was prevented by weather-related travel delays from making the January 3 payment. Tirrell further stated that he was ready to make the payment on January 4, but did not submit any corroborating evidence. Tirrell also asserted a state-law liquidated damages defense at the hearing, which the bankcuptcy court implicitly rejected.
- SALADINO, SCHERMER, NAIL
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