Singh v. Cusick (In re Singh)

Summarized by Holly Roark , Roark Law Offices
12 years 10 months ago

Citation:

BAP No. EC-11-1700-DJuMk, Adv. No. 11-02118-RHS, BK. No. 10-28544-RHS

Tag(s):

Ruling:

Debtor has no standing to claim wife's interest in tax refund where he specifically denied that he had any interest in the tax refund, did not schedule or exempt the funds, and the wife had not filed an answer to the complaint(s) of other parties to determine interests in the proceeds. Automatic stay was not in effect when this was the Debtor's third case in one year and no timely motion to extend stay was filed.

Procedural context:

BAP appeal from lower court ruling in adversary proceeding.

Facts:

Trustee received a check from the Tax Board in the amount of $13,881.68, representing a refund due and owing to the Debtor for overpayment of 2009 taxes. The Trustee filed the Interpleader Action seeking a determination from the bankruptcy court as to whom the Proceeds should be disbursed. The Complaint alleged that the Debtor did not schedule a property interest in the Tax Refund in his bankruptcy case. The Complaint named as potential claimants: the Debtor, the Debtor's wife, the Tax Board, Employment Development Department (“EDD”), pursuant to levy for an outstanding obligation owed by the Debtor, and appellee Stephen Lipworth (“Mr. Lipworth”), pursuant to a levy based on Mr. Lipworth’s prepetition judgment against the Debtor. Debtor stated in his answer that he "did not contribute anything to this check and accordingly, this check does not belong to debtor.” The Debtor's answer also denied that the bankruptcy court had jurisdiction over the trustee's Interpleader Action where it previously had announced that the Debtor's chapter 13 bankruptcy case would be dismissed. The Debtor's answer alternatively asserted that if the bankruptcy court did have jurisdiction, and if any part of the Tax Refund belonged to him, then all parties to the Interpleader Action, except for the Debtor and his wife, were violating the automatic stay in trying to “collect” the Proceeds. The Debtor then filed a motion (“Stay Violation Motion”) based on these same grounds in which he requested that the bankruptcy court (1) direct that the Proceeds be “returned” to his wife and (2) award the Debtor sanctions, including punitive damages, for violation of the automatic stay, “against every violator and violator’s attorney.” The Debtor's wife filed no answer to the Complaint.

Judge(s):

Ronald H. Sargis

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