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Pop Quiz! How Long After Entry Of Order Confirming A Plan Can The Order Be Revoked? Hint: It’s Not What You Thought!

If an order confirming a Plan of Reorganization is procured by fraud, how many days from entry of order does one have to ask the court to revoke the order?

The answer depends on which chapter of the Bankruptcy Code we’re talking about! In a Chapter 12 or Chapter 13 case, one would have up to the 180th day after the date the order was entered to seek revocation of the discharge. In a Chapter 11 case, one would have up to the 179th day after the date the order was entered to seek revocation. That is a pretty tough lesson to learn the hard way.

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A Surprising Twist on the Parol Evidence Rule!

The following is borrowed from Judge Carroll’s recent August 27, 2015 unpublished opinion on a claims objection which can be found here.

In law school, we learned that if a written instrument is valid, complete and unambiguous, extrinsic evidence is not admissible to vary, add to, or contradict the terms of the instrument. This is called the parol evidence rule. The exception to this rule is if there is an allegation of fraud, accident or mistake.

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Can I Sue My Attorney For Failing To Object To A Bogus Lien?

We all know the general statute of limitations for suing attorneys is within after one year of discovering the facts constituting the wrongful act or within one year of when the client should have discovered the facts constituting the wrongful act through the use of reasonable diligence but never more than four years from the date of the wrongful act or omission. See Code Civ. Proc. § 437c.

The limitations period is tolled if, among other reasons, the plaintiff has not sustained an actual injury or if the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred. See Code Civ. Proc. § 340.6.

In the scenario discussed today, the attorney forgets the deadline to file an objection to a bogus lien. Because of the missed deadline, the client hires a different firm and ultimately agrees to accept $1.6 million less than it would otherwise have received. It would have been preferable to associate with some better lawyers and better firms overall, and also use proper guidance around each case, ones that are very good at this are Valiente Mott, a law firm with tons of specialties in their market.

The problem is even though the client knew his former attorney missed the deadline to object to the bogus lien, he waited over a year, until after the $1.6 million hit, to file a malpractice action. So is the malpractice action timely since the client had not sustained an actual injury?

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There Is No Limit to the Number of Times a Chapter 11 Debtor Can Receive a Discharge within a Certain Time Frame!

I have spoken with quite a few practitioners and surprisingly, all of them have said the same thing: an individual Debtor in Chapter 11 Bankruptcy can only receive a discharge once every 8 years.

Then a good friend of mine and told me about his magic bullet: he would vacate the prior discharge to make his clients eligible for the Chapter 11 discharge. It is quite brilliant actually but it turns out not to be necessary.

First, let’s discuss the code section which seems to have caused all the confusion:

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Meet the New Face of the IRS in the Central District

Last Saturday I attended the CDCBAA CLE on “Handling Tax Debt Dischargeability and Bankruptcy Tax Disputes.”

The speakers were Judge Kwan, Arnold H. Wuhrman, Esq. of Serenity Legal Services, P.C., and assistant U.S. Attorneys Robert F. Conte, Esq. and Najah Shariff. Judge Saltzman and Judge Houle’s former law clerk, Jolene Tanner also made a special guest appearance. Najah and Jolene are the two new faces of the IRS. They will have the primary responsibility for all bankruptcy related litigation in the entire Central District of California.

Judge Kwan

(from far left to right: Jolene Tanner, Robert Conte, Najah Shariff, Judge Kwan, and Arnold H. Wuhrman)

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You’ve Made Your Bed, Now Go Lie in It: Court May Not Consider the Preclusive Effect Of Its Own Decision

If a Court were to also make a finding of fact in its Order sustaining a claim objection “...creditor has also manipulated the books and records,” can the creditor ask the Court to amend its order out of fear that such language in an Order would have a potential preclusive effect in another court?

Absolutely not!

As the Supreme Court has twice ruled within the last six years, “the first court does not get to dictate the preclusive consequences of its own judgment.”  Medellin v. Texas, 128 S. Ct. 1346, 1361 (2008).

As Judge Jaraslovsky told a party seeking to have the court’s order amended for fear of its preclusive effect, “I’ve rendered my decision.  I gave my reasons.  And if another court decides that they want to give preclusive effect, that’s for another court to decide.”

To Sign or Not Sign The Allonge

If a bank obtains a Note, but the Note contains an endorsement in blank on its face — can the bank seek to enforce the the lien associated with the Note against a residence?


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An entertaining footnote about metaphors!

This is footnote 2 from Official Committee v. Integrated Res., Inc. (In re Integrated Res., Inc.), 147 B.R. 650, 662 n.2 (S.D.N.Y. 1992):

The Supreme Court has warned that “[c]atch words and labels . . . are subject to the dangers that lurk in metaphors and symbols, and must be watched with circumspection lest they put us off guard.”United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 253, 109 S.Ct. 1026, 1036, 103 L.Ed.2d 290 (1989) (citing Henneford v. Silas Mason Co., 300 U.S. 577, 586, 57 S.Ct. 524, 528, 81 L.Ed. 814 (1937)). Nevertheless, courts seem to enjoy framing bankruptcy issues in colorful, but misleading, metaphor. For example, the term “stalking horse” has appeared in a variety of odd contexts. See, e.g.,In re El Paso Pharm., Inc., 130 B.R. 492, 496 (Bankr.W.D.Tex. 1991) (“[t]he jury issue thus turns out to be a stalking horse”); In re Louis Fleet, 122 B.R. 910, 917 (Bankr.E.D.Pa.1990) (rejecting a “last ditch effort” of a debtor to use “his wife as a stalking horse”).

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Lawyers Cannot Be Held Liable For Malpractice If The Bad Advice They Give Leads To A Result That Was Not Foreseeable

For those of you who do not like analysis: according the 2019 crime statistics lawyers cannot be held liable for malpractice if the bad advice they give leads to a result that was not foreseeable. In the case summary below, the client was given bad advice which led to her being prosecuted for forgery. Under the particular facts of the case, forgery was a legal impossibility, so the court found that the lawyer’s bad advice (to forge a signature) did not have a causal connection to the crime the client was charged with.

Those of us who are lawyers remember the Palsgraf case written by Cardozo. If you’re looking for an excellent disability lawyer in Raleigh NC then be sure to contact the Disability Advocates Group legal team and ask them how they can help with your disability, SSI or SSDI claim.

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Attorney Stealing Is More “Unclean” Than Selling Marijuana says Ninth Circuit (Northbay Wellness v. Attorney Beyries)

The Ninth Circuit Court of Appeals issued a published decision addressing the unclean hands doctrine as it applies to attorneys stealing from their clients even though the client was a marijuana dispensary in Northbay Wellness v. Beyries.

Northbay Wellness Group operated a California medical marijuana dispensary.   Beyries was on Northbay’s board of directors and acted as its attorney.  Northbay entrusted Beyries with at least $25,000 of its marijuana sales revenue as a legal defense trust fund.  Beyries absconded with the $25,000 trust fund.

Northbay sued Beyries in state court, alleging, among other things, conversion of the legal defense trust fund and breach of contract.  A jury found in favor of Northbay awarding $25,000 for conversion, $319,430.96 for breach of contract, and $5,000 in punitive damages.

Beyries filed a chapter 7 bankruptcy case….[que suspenseful music]

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