Plaintiff sought summary judgment on her claim that an Oregon state court default judgment against Debtor is nondischargeable. In support of her motion, plaintiff relied on the principles of claim and issue preclusion. Claim preclusion does not apply to Section 523(a) claims. Although issue preclusion may apply to such claims, the judgment in this case does not satisfy the requisite standards. Plaintiff’s nondischargeability claim is based on fraud, false pretenses, and false representation. The state court judgment was based on Plaintiff’s Oregon state law claim of “financial abuse of a vulnerable person.”  The judgment does not demonstrate an identity of issues between this and the former proceeding, nor it show that the issues underlying Plaintiff’s nondischargeability claim were actually litigated and essential to the state court judgment. Plaintiff’s motion for summary judgment is denied.  

Plaintiff sought a judgment that two promissory notes (the “Notes”) and two mortgages (the “Mortgages”) securing the Notes are valid and enforceable against Jesse Lane Properties, LLC (“JLP”) and its Property, including that Debtor Belenda M. Lane had either actual or apparent authority to execute such contracts on behalf of JLP. During the negotiations for the first promissory note, the lender received an opinion letter, purportedly from an attorney, in which the author represented that Ms. Lane had authority to execute the first note and mortgage on behalf of JLP. The purported opinion letter did not contain the usual elements of opinion letters by attorneys. The Court found that genuine disputes of material facts persist as to 1) whether Ms. Lane acted in whole or in part for the benefit of JLP, and therefore within the scope of her actual authority, when she executed the Notes and Mortgages and 2) whether it was reasonable for Plaintiff to rely on Ms. Lane’s representations of her authority after it received the purported opinion letter. The Court denied Plaintiff’s motion for summary judgment and, under Rule 7056(g) and pursuant to Plaintiff’s request, deemed the facts not in genuine dispute set forth in the Court’s opinion to be established for all purposes in this case, including for trial.sum

The Court denied creditor’s request for relief from the automatic stay under § 362(d)(1) and § 362(d)(4). Debtor filed a prior chapter 7 case six years earlier, failed to disclose a second rental property on two loan modification applications submitted to creditor, made only one payment on the two loan modifications, and filed a second bankruptcy case under chapter 13 on the eve of a scheduled foreclosure trial. Creditor asserted that debtor intentionally undervalued the property subject to the creditor’s second lien in her bankruptcy schedules so that she could seek to strip off creditor’s mortgage through her chapter 13 plan. The Court could not determine the value of the property because creditor’s appraiser made an extraordinary assumption concerning the property’s condition. The Court determined that debtor’s conduct did not rise to the level of bad faith necessary to constitute “cause” for relief from the stay under § 362(d)(1) and did not evidence a scheme to hinder, delay, or defraud creditor sufficient to grant in rem stay relief under § 362(d)(4). Debtor’s schedules showed changed circumstances in her financial condition, and property valuation would be determined at confirmation.

Debtor filed a motion for an order instructing the New Mexico Court of Appeals that the automatic stay does not prevent it from resolving pending appeals from a state district court order. The automatic stay was previously modified to allow the state district court to rule on the matters at issue in the pending appeals. When the Court modified the automatic stay to allow the state district court to rule, it did not intend to deny any party the right to appeal an adverse ruling. Although the stay modification order was silent on this point, the order implicitly and necessarily included the right to appeal. The Court granted Debtor’s motion accordingly.