Defendant’s non-appearance for trial led to entry of a default judgment against him. 364 days after the entry of the default judgment, Defendant filed a motion for relief from the judgment pursuant to Fed. R. Civ. P. 60(b)(1), (5), or (6). Though he demonstrated a meritorious defense to the claims against him, Defendant did not demonstrate eligibility for relief from  under the standards imposed by the relevant subparts of Rule 60(b). The motion is denied. adver

A plaintiff who files a nondischargeability action premised on unliquidated tort claims submits to the equitable jurisdiction of the Bankruptcy Court, which will determine issues of fact dispositive of liability and damages inherent to the issue of dischargeability. Plaintiff’s complaint in this case constitutes an informal proof of claim as to which there is no right to a jury trial. Regardless of whether Plaintiff’s tort claims qualify as “personal injury torts,” under the Rules of Bankruptcy Procedure Plaintiff impliedly consented to this Court trying them.  

Debtor sought to strike an amended proof of claim filed after the claims bar date which substituted the named creditor. The Court denied the motion, determining that the claim was properly amended to substitute the name of the correct creditor and related back to the date of the filing of the original claim where 1) the original claim gave Debtor adequate notice of the existence, nature, and amount of  the claim, 2) except for the name of the creditor, the amended claim did not materially change the original claim, 3) the creditor filing the amended claim bore a substantial relationship to the original claimant inasmuch as both creditors where wholly owned by the same two individuals, and the same counsel represented both creditors and filed the proof of claim and the amended claim, 4) the mistaken identity of the claimant in the original claim should have been obvious to the Debtor for a variety of reasons; and 5) the amendment did not prejudice the Debtor or other creditors.

Recognizing a split in the case law, the Court held that under the Uniform Commercial Code a security interest does not attach to rights under an agreement settling a commercial tort claim or in the settlement funds unless the commercial tort claim that was settled, the settlement agreement, or the settlement funds are specifically described original collateral. A general security interest in commercial tort claims, general intangibles, payment intangibles, accounts and contract rights is insufficient. The Court also held that an after-acquired property clause in a security agreement was valid, despite some redundant language. Therefore, the security party has a security interest in the debtor’s after-acquired accounts receivable.