Williams v. King (In re King)

Summarized by Lars Fuller , BakerHostetler
13 years 4 months ago

Citation:

Williams & Wyse v. King, No. 12-6014 (BAP 8th Cir. 2012)

Tag(s):

Ruling:

The 8th Circuit B.A.P. affirmed an Order of the Bankruptcy Court for the Western District of Missouri denying a motion to reconsider an Order awarding sanctions and directing a creditor to dismiss a claim pending in state court as violating the debtor's Chapter 7 discharge.

Procedural context:

The 8th Circuit B.A.P. considered an appeal from two appellants of an Order from the U.S. Bankruptcy Court for the Western District of Missouri. The bankruptcy court first granted a motion for sanctions against appellants, and then denied appellants motion to reconsider. Appellants appealed both the Order for sanctions and the Order denying the motion to reconsider. The BAP indicated that the appeal of the motion for sanctions was likely untimely, but the timeliness was not necessary for disposition, given the affirmation of the bankruptcy court's Order on the merits, and the timely appeal of the denial of the motion to reconsider.

Facts:

Debtor (King) filed a chapter 13 petition on February 18, 2010. King voluntarily converted the case to chapter 7 on April 12, 2010. On April 19, 2010, a week after King's conversion to chapter 7, King entered into an agreement with creditor Williams setting forth provisions for repayment of an $81,000 loan. The bankruptcy court ultimately determined that the April 19, 2010 agreement was an unapproved reaffirmation of a debt that King had incurred prior to his bankruptcy. After King obtained his discharge, creditor Williams, through attorney Wyse, filed a collection action in state court seeking payment on the balance of the $81,000 obligation, among claims for additional loans made after debtor's conversion to Chapter 7. Debtor reopened his bankruptcy case and filed a motion for sanctions against Williams and Wyse. Debtor only served Wyse, however. Wyse appeared and opposed the sanctions. After the Court entered a $1,500 sanction against attorney Wyse, and directed Williams to dismiss his claims in state court on the $81,000 debt as being discharged, Wyse and Williams filed a motion to reconsider. The bankruptcy court denied the motion to reconsider, finding that service upon Wyse was sufficient to impose sanctions against Williams, and finding that the $81,000 debt was discharged, and the postconversion agreement was an uneforceable attempt at reaffirmation. The Court of Appeals reviewed the notice issues and affirmed that attorney Wyse's appearance in court on behalf of Williams was sufficient to constitute representation of Williams and to confer the professional responsibility upon Wyse to provide notice to Wyse of the motion for sanctions.

Judge(s):

8th Cir BAP: Kressel, Schermer, and Nail; U.S. Bankruptcy Judge for the Western District of Missouri: Dennis R. Dow.

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