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All debt is generally discharged in a chapter 7 bankruptcy case with certain important exceptions. A recent case decided during January, 2014 by the Bankruptcy Court in Miami involved the dischargeability of a dental malpractice claim.
In this case, a former dental patient obtained a judgment for dental malpractice in the Dade-County Circuit Court in 2011. In 2012, the dentist filed for chapter 7 bankruptcy relief. The former patient sought to except the dental malpractice claim from the chapter 7 discharge on the alleging that the dentist obtained his fee under "false pretenses, a false representation, or actual fraud..." 11 U.S.C. § 523(a)(2)(A). The Court noted that the action for exception from discharge was not brought under 11 U.S.C. § 523(a)(6) on an allegation of "will and malicious injury by the debtor to another entity or to the property of another entity." The former dental patient alleged that there was a "false representation" or "fraud" claiming that the dentist did not disclose his drug dependency and lapse in malpractice insurance.
The bankruptcy court judge explained that to establish a "false representation" under 11 U.S.C. § 523(a)(2)(A) requires proof of a false or misleading statement with the intent to deceive, inducing a person to turn over money or property. The court stated that the establishment of a "false representation" requires an "expressed misrepresentation - oral or written" and that "[s]ilence, or lack of communication, cannot deliver proof by a preponderance of the evidence." Hanft v. Church, (In re Hanft, N.D., P.A.), 315 B.R. 617 (S.D. Fla. 2002). In this case, the court did not find that the dentist had made any misrepresentations that were intended to deceive the former patient and cause her to turn over money or property. The court noted that the dentist performed the services while licensed and insured.
The court also found that there was a lack of "actual fraud." The court reviewed that the establishment of "actual fraud" under this section "refers to common law fraud, and requires" the proof by a preponderance of the evidence that 1. there was a false representation made with the purpose and intent of deception, 2. that the representation was relied upon, 3. that the reliance was justifiably founded, and 4. that the person was damaged as a result of the false statement. Field v. Mans, 516 U.S. 59, (1995). The court noted that "actual fraud" may be proven by a misrepresentation that is express or implied, but proof of actual fraud is required and not fraud merely implied in law. The court found that the former patient did not prove express or implied "actual fraud" was committed.
The Court also rejected the former patient's argument that the dentists silence or omissions regarding his drug use or lapse in insurance coverage constituted "fraud" giving rise to an exception to discharge. The Court held that there was no proof that the dentist was under "any duty to disclose facts regarding either his drug use or his business' fiscal operations..." The court stated that no "statute or legal case was presented to prove that illnesses, weaknesses or impairments must be disclosed by medical professionals to their patients."
The Court also held that the dentist's failure to disclose the lapse of the malpractice insurance did not of itself constitute "fraud." The Court distinguished case law presented with regard to the lapse of malpractice insurance involving physicians as opposed to dentists as the Florida regulations as to each profession differ. The Court noted that dentists are cover by the provisions of Chapter 466 of Florida Statutes while physicians are governed by the provisions of Chapter 458. The Court pointed out that while physicians are required to disclose the failure to carry insurance, dentists are not.
Finally, the Court rejected that former patient's argument that malpractice judgments should be excepted from bankruptcy discharge when there was reckless action or their was a lack of malpractice insurance as the U.S. Supreme Court has already rejected that argument in the case of Kawaauhau v. Geiger, 523 U.S. 57 (1998).
The Court though did express sympathy for the unfortunate victim of the dentist's malpractice and suggest that it may be appropriate for the Florida legislature to require dentists to disclose the lack of malpractice insurance as is required of physicians or for the Board of Dentistry to establish a fund "like that established by the Florida Bar for victims of a lawyer's misappropriation or embezzlement."
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
Bankruptcy court decisions are normally appealed to the location's federal district court. Certain standards are used by a district court in making its decision upon appeal.
When a district court reviews the bankruptcy court's decision, the bankruptcy court's factual findings are accepted unless they are "clearly erroneous" with due regard being given to the bankruptcy court's opportunity to judge the credibility of the witness. In re Englander, 95 F.3d 1028, 1030 (11th Cir. 1996).
The bankruptcy court's legal conclusions are reviewed de novo - that is afresh or anew. Mixed questions of law and fact are also reviewed de novo. In re Lentek Int'l, Inc., 346 Fed. Appx. 430, 433 (11th Cir. 2009). Under "de novo" review, the district court independently examines the law and draws its own conclusions after apply the law to the facts of the case without regard to the decision made by the bankruptcy court. In re Piper Aircraft Corp., 244 F.3d 1289, 1295 (11th Cir. 2001).(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
There are income qualifications for filing Chapter 7 bankruptcy. If you are over the median for your state then you are subject to a means test. If it is determined that you have the ability to pay back at least 25% over the next three to five years, then you will not qualify for Chapter+ Read MoreThe post Your Monthly Income Is A Factor In Qualifying For A Chapter 7 Bankruptcy appeared first on David M. Siegel.
In the case of General Lending Corp. v. Jesus Cancio, et al., Case No. 13-21030-CIV-Marra (SD Fla. 2014), the court reviewed a ruling by the Bankruptcy Court dealing with the issue of the eligibility amounts allowed for filing under chapter 13 and whether these eligibility amounts restrictions may be waived.
In an appeal to the district court from the bankruptcy court's ruling, the district court must accept the bankruptcy court's factual findings unless they are "clearly erroneous" but review the bankruptcy court's legal conclusions de novo. The bankruptcy court's findings of fact, whether based on oral or documentary evidence are not to be set aside unless "clearly erroneous" and with "due regard" given to the opportunity of the bankruptcy court to judge the "credibility of witnesses." The United States Supreme Court in U.S. v. U.Su Gypsum Co., 333 U.S. 364, 395 (1948) held that a finding is "clearly erroneous" when although there is evidence to support it, the reviewing court upon examining the entire evidence is left with the definite and firm conviction that a mistake has been committed.
Under de novo review, the district court "independently examines the law and draws its own conclusions after applying the law to the facts of the case, without regard to decisions made by the Bankruptcy Court." In re Piper Aircraft Corp., 224 F.3d 1289, 1295 (11th Cir. 2001). Mixed questions of law and facts are also reviewed de novo.
The District Court reviewed the bankruptcy code's provision for eligibility to be a debtor under chapter 13 as set forth in 11 USC § 109 (e) which limits chapter 13 relief to individuals with "regular income" owing secured debts of less than $1,081,400. and unsecured debts less than $360,475.00. Only "noncontingent" and "liquidated" debts are included in making this calculation. The Court noted that this eligibility determination is to be made as of the petition date. In re De La Hoz, 451 B.R. 192, 194 (Bankr. M.D. Fla. 2011). The Court noted that normally these restrictions are "strictly construed".
The Court further noted that the 11th Circuit Court of Appeals has not yet addressed the issue of whether this "eligibility" limitation is "jurisdictional" but that the majority of the courts that have addressed the issue have found this it is not jurisdictional in nature. The Court adopted the majority view of the courts that the eligibility limitations may be waived if a creditor fails to raise an objection to the debtor's eligibility in a timely manner. Rudd v. Laughlin, 866 F.2d 1040 (8th Cir. 1989).
The District Court upheld the Bankruptcy Court's ruling rejecting the creditor's argument that its objections were not barred by laches. The Court explained that laches arises after an "unreasonable and inexcusable delay." The Court noted that laches is a doctrine whereby one side's inaction and the other side's legitimate reliance may bar claims for equitable relief.
The District Court unheld the Bankruptcy Court's ruling finding no error under the applicable standards of review.
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
A man behind an investment scheme meant to defraud investors was charged with two counts of bankruptcy fraud. William Marshall Wolfe, 44, of Ridgeland appeared in federal court and indicted on charges related to bankruptcy fraud following a federal investigation involving multiple government agencies. Documents related to the court indictment claim Wolfe devised a scheme […]
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a … Continue reading →
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File Chapter 7 Bankruptcy To Protect Property The first reason why somebody would want to file Chapter 7 bankruptcy is if they have something they want to protect. What I’m talking about here is something of value that is subject to a taking if a bankruptcy case is not file. This could be wages. If someone is+ Read MoreThe post There Are Three Main Reasons Why Somebody Would Want To File Chapter 7 Bankruptcy appeared first on David M. Siegel.
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