Hart v. Southern Heritage Bank (In re Hart)

Summarized by Thomas DeCarlo , John Steinberger & Associates, PC
11 years 10 months ago

Citation:

Case Number 13-6188 (6th Cir. 2014)

Tag(s):

Ruling:

Bankruptcy Court has jurisdiction to enter money judgment in adversary proceeding to except debt from discharge.

Procedural context:

Creditor brought adversary proceeding to except debt from discharge under Section 523(a)(2). Bankruptcy Court entered judgment in creditor's favor, declaring debt to be non-dischargeable and entering corresponding money judgment liquidating amount of debt. Debtor appealed to to the District Court, arguing that the Bankruptcy Court exceeded is jurisdiction under Stern in entering money judgment, and the District Court affirmed. Debtor appealed to the Sixth Circuit which affirmed.

Facts:

Creditor brought adversary proceeding to except debt from discharge and seeking money judgment liquidating claim. Bankruptcy court entered judgment and Debtor appealed, claiming that entry of money judgment exceeded Court jurisdiction under Stern, as claim was entirely state law based. Sixth Circuit affirmed the Bankruptcy Court, finding that liquidation of claim as part of Section 523 action was essential part of Section 523 action and also was central to claims allowance process, all of which fall within the scope of the Bankruptcy Court's decision. While debtor may have had counterclaims that would have placed case within scope of Stern holding, debtor did not assert those counterclaims. The possibility that the debtor may have had unasserted counterclaims did not defeat Court's jurisdiction over adversary proceeding or power to enter final judgment liquidating the claim.

Judge(s):

Daughtrey, McKeague and Donald

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