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Qualified Written Request (QWR)

What Is A Qualified Written Request (QWR) And What Does That Do For You Related To Your Mortgage?

A Qualified Written Request (QWR) is a powerful tool when dealing with abusive mortgage servicing companies (Litton Loan, Wells Fargo, Bank of America, etc). This is a right under RESPA – Real Estate Settlement Practices Act – to gain information and to dispute false bills or charges.

A couple of pointers.

First – it must be in writing. Seems obvious from “Qualified WRITTEN Request” but we have seen far too many people try and make this by calling. Don’t do that – instead send it in writing. Certified mail, return receipt requested.

Second – it should be sent to the mortgage servicing company and to other relevant companies. Here’s the deal – send it to everyone you can think of. Former servicing companies. Foreclosure attorneys. Current alleged owner of the note, etc. There have been cases where it was sent to the wrong place and consumers have lost their powerful rights under this law so cover your bases and send it to everyone. Mention that “If this QWR should go to someone else, please let me know so I can forward it directly to that person.”

Third – it should be sent to the correct address. This normally is NOT the billing address. Instead it will be a place listed on your bill or on the website of the servicing company that is described as “For all other written correspondence” or “For billing questions or disputes” etc. You can and should also call the company and ask where is the correct address. Carefully document all of your contacts with the mortgage servicing company.

Fourth – expect a response in about 30 days and then again in about 90 days. The servicing company has 20 business days (in essence 30 days) to let you know it received the QWR and then 60 business days (again basically 90 days) to respond.

OK, so what do you put in a QWR? Here are some suggestions:

1. Identify who you are, your loan, account number, property address, etc. so the servicer can find you in its system.
2. Whatever information that you legitimately need to determine if the servicer has been properly applying payments, charging fees, etc.
3. If you legitimately dispute a charge or the way the company handled a payment (particularly a lump sum payment as these are often handled illegally) then clearly state that in the QWR letter. We’ll talk about this more later but remember that charges are automatically imposed on your account and to eliminate a bogus charge requires a human being to manually do this so you can see why so often illegal charges are not removed but continue to be added against your account.

While your dispute is pending, the disputed part cannot be shown as late onyour credit report.

You will find a QWR a powerful tool to gain information about your account and to dispute bogus charges.

If you have any questions about how to draft a QWR or your legal remedies if a QWR is not properly handled by the servicing company and you live in California, please feel free to contact us. You can call us at 866-225-4028 or send us an email through this blog or through our website or you can join us for our foreclosure seminar tomorrow night at 4pm in which we will discuss QWRs.

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Opposition to a motion for relief from the automatic stay

Opposition to a motion for relief from the automatic stay

This blog post will discuss the filing of an opposition to a motion for relief from the automatic stay in United States Bankruptcy Court. Note that the deadline for filing an opposition to a motion for relief from automatic stay varies with each individual Court but as a general rule the opposition should be served and filed at least fourteen (14) calendar days before the hearing, unless the notice of motion states otherwise, or the Court has otherwise ordered.

It must be stressed that the failure to file and serve a timely opposition to a motion for relief from the automatic stay may be construed by the Court as an admission that the motion has merit and should be granted. Thus a party who wishes to oppose the motion for relief from the automatic stay should do everything possible to ensure that a timely opposition is served and filed.

The automatic stay prevents creditors from taking certain actions once a petition for relief under the Bankruptcy Code has been filed.

11 U.S.C . 362a states in relevant part: “Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of–(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title…”

The party requesting relief from the automatic stay bears the burden of establishing a prima facie case that “cause” exists for relief from the automatic stay. If the moving party fails to meet its initial burden relief should be denied.

“The burden of proof on a motion to modify the automatic stay is a shifting one. To obtain relief from the automatic stay, the party seeking relief must first establish a prima facie case that “cause” exists for relief under § 362(d)(1). Once a prima facie case has been established, the burden shifts to the debtor to show that relief from the stay is unwarranted. If the movant fails to meet its initial burden to demonstrate cause, relief from the automatic stay should be denied.” In re Plumberex Specialty Products, Inc. 311 B.R. 551, 557 (Bkrtcy.C.D.Cal.,2004) (internal citations and quotations omitted).

The moving party must establish a factual and legal right to the relief that it is seeking.

“A prima facie case requires the movant to establish “a factual and legal right to the relief that it seeks.” In re Plumberex Specialty Products, Inc. , supra at FN 11.

In some cases the moving party will have to show that the debtor’s actions constitute a clear abuse of the bankruptcy process, in other words bad faith on the part of the debtor.

“The existence of good faith depends on an amalgam of factors and not upon a specific fact. The test is whether the debtor is attempting to unreasonably deter and harass creditors or attempting to effect a speedy, efficient reorganization on a feasible basis. Good faith is lacking only when the debtor’s actions constitute a clear abuse of the bankruptcy process.” In re Plumberex Specialty Products, Inc. , supra at 559.

Any party that is served with a motion for relief from the automatic stay should carefully review the motion and supporting documents to determine if the moving party has met its initial burden. Many times a party will file a motion for relief with very little if any, supporting facts to support their motion.

The author of this article, Stan Burman, is a freelance paralegal who has worked in California litigation since 1995. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Motion to dismiss an adversary complaint under section § 727 for denial of discharge

Motion to dismiss an adversary complaint under section § 727 for denial of discharge

This blog post will discuss the filing of a motion to dismiss an adversary complaint to deny the Debtor a discharge under 11 U.S.C. § 727 in United States Bankruptcy Court. The motion is made pursuant to Federal Rules of Bankruptcy Procedure § 7012(b)(6), (“FRBP”) which is the section used in Bankruptcy Court instead of the Federal Rules of Civil Procedure § 12(b)(6).

The motion is made on the grounds that the adversary complaint fails to state a claim for relief. Note that the author works on cases in California so the case law cited herein is from the Ninth Circuit Court of Appeals. Readers living in a State located within the jurisdiction of a different Circuit Court of Appeals should do legal research for their particular Circuit Court of Appeals.

The facts discussed in this case are taken from an actual case that the author worked on in which a creditor filed an adversary complaint alleging that the Debtor deliberately failed to list the creditor on hisbankruptcy schedules. The adversary complaint requested a denial of discharge under 11 U.S.C. § 727(a)(4) due to an alleged false oath by the Debtor in that he failed to list the creditor.

The Debtor in the case filed a voluntary Petition for bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code. And the Chapter 7 Trustee filed their Final Report under FRBP 5009 which stated that there was no property available for distribution. Thus, the Chapter 7 Trustee determined that this was a no-asset case.

Unfortunately an unsecured judgment creditor was omitted from the bankruptcy petition. The Debtor denied that the failure to list the creditor was deliberate or done with fraudulent intent

The Debtor filed a motion to dismiss and contended that the Complaint fails to state a claim for relief as it fails to state facts sufficient to show that: (1) the debtor made a false oath in connection with the case; (2) the oath related to a material fact; (3) the oath was made knowingly; and (4) the oath was made fraudulently.

The Debtor also contended that the Complaint failed to state a claim for relief as it also failed to state facts sufficient to show that (1) the debtor made the representations, e.g., a false statement or omission in bankruptcy schedules; (2) at the time he knew they were false; and (3) he made them with the intention and purpose of deceiving the creditors.

Finally, the Debtor also contended that had the creditor waited until after the bankruptcy case was closed they would not be entitled to have the case re-opened because relief would be unnecessary as case law in the Ninth Circuit is clear that reopening to add an omitted creditor is not necessary in a Chapter 7 “no asset/no bar date” case where the court sends a notice directing creditors not to file a proof of claim. Relief is unnecessary because if the omitted debt is dischargeable, it was already discharged.

Because the creditor was objecting to the discharge of the Debtor they bear the burden of proving by a preponderance of the evidence that the discharge should be denied as the Court construe § 727 liberally in favor of debtors and strictly against the party objecting to discharge.

“Those objecting to discharge bear the burden of proving by a preponderance of the evidence that the debtor’s discharge should be denied. In keeping with the fresh start purposes behind the Bankruptcy Code, courts should construe § 727 liberally in favor of debtors and strictly against parties objecting to discharge.” In re Retz (9th Cir. 2010) 606 F. 3d 1189, 1196 (internal citations and quotations omitted.)

In order for the creditor to prevail on their claim they must show four elements which are discussed below.

“To prevail on this claim, a plaintiff must show, by a preponderance of the evidence, that: (1) the debtor made a false oath in connection with the case; (2) the oath related to a material fact; (3) the oath was made knowingly; and (4) the oath was made fraudulently.”. In re Retz, supra at 1197.

The adversary complaint merely made conclusory allegations without any showing of the four elements discussed In re Retz.

And the false oath must relate to a material fact. The adversary complaint failed to detail how the alleged false oath relates to any material fact, other than the fact that the creditor was not listed. The adversary complaint failed to state how that “omission” relates to any material fact.

“Section 727(a)(4)(A) requires that the relevant false oath relate to a material fact. A fact is material if it bears a relationship to the debtor’s business transactions or estate, or concerns the discovery of assets, business dealings, or the existence and disposition of the debtor’s property. An omission or misstatement that detrimentally affects administration of the estate is material.” In re Retz, supra at 1198.

The creditor had not alleged how the failure to list them as a creditor has detrimentally affected the administration of the estate.

“On an objection to Chapter 7 discharge on grounds of false oath, to demonstrate fraudulent intent, a plaintiff bears the burden of showing that (1) the debtor made the representations, e.g., a false statement or omission in bankruptcy schedules; (2) at the time he knew they were false; and (3) he made them with the intention and purpose of deceiving the creditors.” In re Retz, supra at 1198-1199.

Because the adversary complaint failed to state any facts which showed that the Debtor made any false oath or omission with the knowledge at the time he made it that it was false, and that he made it with the intention and purpose of deceiving the creditors, the creditor failed to meet their burden of showing that the discharge of the Debtor should be denied.

The interpretation of this case by Debtor was that in a no asset case, omission of a creditor by the debtor will not prejudice the claim since there are no assets to distribute even if the creditor was scheduled in the Petition.

The Ninth Circuit Court of Appeals has in fact stated that if there are no assets to distribute then the omission of a creditor does not result in any prejudice to them.

Reopening to add an omitted creditor is not necessary in a Chapter 7 “no asset/no bar date” case where the court sends a notice directing creditors not to file a proof of claim. Relief is unnecessary because if the omitted debt is dischargeable under § 523(a)(3)(A), it was already discharged under § 727; if nondischargeable under § 523(a)(3)(B), it was not discharged. Amending the schedules does nothing in this situation. In re Beezley (9th Cir. 1993) 994 F.2d 1433, 1434; see also In re Hicks (BC CD CA 1995) 184 BR 954, 961—reopening case to amend schedules to add omitted debts not required to bring debt within scope of discharge.

This case was deemed a no asset case, as evidenced by the Final Report filed by the Chapter 7 Trustee which was in fact admitted in the adversary complaint.

Conclusory allegations or legal conclusions are not sufficient to prevent a motion to dismiss. The adversary complaint made conclusory allegations that Debtor made a false oath but provided no factual allegations of fraudulent intent on the part of Debtor.

Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss. Stac Electronic Securities Litigation v. Anderson (9th Cir. 1993) 89 F.3d 1399, 1403. (citing text).

And the Ninth Circuit has stated that even though leave to amend is liberally granted, liberality in granting leave to amend is subject to several limitations.

“Liberality in granting leave to amend is subject to several limitations. Leave need not be granted where the amendment of the complaint would cause the opposing party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or creates undue delay.” Ascon Properties v. Mobil Oil Co. (9th Cir. 1989) 866 F.2d 1149, 1160. (emphasis added).

And even “artful pleading” in an insubstantial case will not necessarily prevent a motion to dismiss. Ascon Properties v. Mobil Oil Co., supra at 1155.

And the Ninth Circuit in Ascon Properties v. Mobil Oil Co., supra at 1155, stated that, “We have, however, also recognized that conclusory allegations without more are insufficient to defeat a motion to dismiss for failure to state a claim.”

Legal research was unable to locate any cases that have dealt with the particular situation discussed in this blog post. The motion to dismiss contended that allowing the credit leave to amend would in fact constitute an exercise in futility and therefore requested that the Court grant the motion to dismiss without leave to amend, or in the alternative, that the creditor be required to provide a more definite statement. The Court has not yet ruled on the motion to dismiss.

The author of this article, Stan Burman, is a freelance paralegal who has worked in Bankruptcy litigation since 1995. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Motion for leave to amend an adversary complaint

Motion for leave to amend an adversary complaint

This blog post will briefly discuss the issues involved for a party that wants to file a motion for leave to amend an adversary complaint in United States Bankruptcy Court.  Note that as the author is located in California, the cases cited below are from the Ninth Circuit Court of Appeals, and a reader who is located in a state that is located in another circuit should research the cases for their particular circuit.

Federal Rules of Bankruptcy Procedure 7015 and 7016 expressly provide that Rules 15 and 16 respectively, of the Federal Rules of Civil Procedure apply in bankruptcy proceedings.

Rule 15 of the Federal Rules of Civil Procedure (“FRCP”) states in pertinent part that,

“A party may amend its pleading once as a matter of course within:

(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.

(2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.”

And the claims in the first amended adversary complaint relate back to the original complaint if they assert claims arising out of the conduct, transactions and occurrences that were set out, or attempted to be set out in the original complaint. See FRCP Rule 15[c](1)(B).

Under Rule 15(a), leave to amend should be granted as a matter of course, at least until the defendant files a responsive pleading. After that point, leave to amend should be granted unless amendment would cause prejudice to the opposing party, is sought in bad faith, is futile, or creates undue delay. Johnson v. Mammoth Recreations, 975 F.2d 604, 607 (9th Cir. 1992).

However, the situation changes once the Court has issued a pre-trial scheduling order. Once a pre-trial scheduling order has been issued the Court must look to the pre-trial scheduling order to determine what standards to apply to any motion to amend.  Johnson, supra at 608.  If no pre-trial scheduling order has been issued which makes any mention of any timetable for amending pleadings then a very good argument can be made that the more liberal standards of Rule 15 should apply.

Rule 15′s policy favoring amendments is applied liberally by us.  Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989).  Note that the Court in Ascon at 1160 also stated that leave to amend could be denied where plaintiff has previously amended their complaint.  Thus it is imperative that a party seeking leave to amend their original complaint ensure that their amended complaint does in fact state a claim.

The author of this article, Stan Burman, is a freelance paralegal with over 15 years of experience in civil litigation in California and Federal Courts. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Motion to dismiss adversary complaint for fraud

Motion to dismiss adversary complaint for fraud

This blog post will outline the issues involved for a party that wants to file a motion to dismiss an adversary complaint for fraud filed against them in a bankruptcy court on the grounds that the adversary complaint fails to state a claim. This type of motion is often called a 12(b)(6) motion as it is based on Federal Rule of Civil Procedure § 12(b)(6) (FRCP), or Federal Rule of Bankruptcy Procedure § 7012(b)(6) (FRBP. A party may also request in the alternative, that the party be required to provide a more definite statement under FRCP § 12(e) or FRBP § 7012(e).

FRCP and FRBP§§12 (e) state in pertinent part that, “A party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response. The motion must be made before filing a responsive pleading and must point out the defects complained of and the details desired”.

The motion for a more definite statement may be joined with the motion to dismiss pursuant to FRCP and FRBP §§ 12(g).

Most adversary complaints filed in bankruptcy courts are made under 11 U.S.C. § 523(a)(2) on the grounds of fraudulent representations. Note that FRCP 9(b) states in pertinent part that, “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake”.

“It is established law, in this circuit and elsewhere, that Rule 9(b)’s particularity requirement applies to state-law causes of action. “While a federal court will examine state law to determine whether the elements of fraud have been pled sufficiently to state a cause of action, the Rule 9(b) requirement that the circumstances of the fraud must be stated with particularity is a federally imposed rule.” Vess v. Ciba-Geigy Corp. 317 F. 3d 1097, 1103 (9th Cir. 2003) (internal citations omitted).

The reason for the particularity requirement is due to the fact that fraud is a serious charge against another party.

As the author resides in Southern California most of the cases he works on are in the Central District of California and any fraud claims would most likely be a California cause of action.

California law requires that four (4) elements be specifically pleaded in any cause of action for fraud.

“A complaint for fraud must allege the following elements: (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages. Every element must be specifically pleaded.” Service by Medallion, Inc. v. Clorox Co. 44 Cal.App.4th 1807, 1816 (1996).

Whatever form it takes, injury or damage from fraud must not only be distinctly alleged but its causal connection with reliance on representations must be shown…. In order to recover for fraud, as in any other tort, the plaintiff must plead and prove the detriment proximately caused by the defendant’s tortious conduct. Deception without resulting loss is not actionable fraud. Whatever form it takes, the injury or damage must not only be distinctly alleged but its causal connection with the reliance on the representations must be shown. Service by Medallion, Inc. at 1818.

And in California, pursuant to Code of Civil Procedure § 338(d) there is a three-year statute of limitations for an action for relief on the ground of fraud or mistake. The cause of action is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.

An action based on fraud may be brought more than three years after the fraud occurred if the plaintiff shows not only that he did not discover the facts but he could not with reasonable diligence have discovered them within that time. The complaint must set forth specifically (1) the facts of the time and manner of discovery; and (2) the circumstances which excuse the failure to have made an earlier discovery. Olson v. County of Sacramento 274 Cal.App 2d 316, 327 (1969) (internal citations omitted).

While leave to amend is usually granted if a motion to dismiss is successful, the Ninth Circuit has ruled that leave to amend does not need to be granted where amending the complaint would be futile, and that any discretion to deny leave to amend is particularly broad where plaintiff has previously amended their complaint.

Leave need not be granted where the amendment of the complaint . . . constitutes an exercise in futility,” and “the district court’s discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint.” Ascon Properties v. Mobil Oil Co. 866 F.2d 1149, 1160 (9thCir. 1989).

A motion to dismiss and/or a motion for a more definite statement are very useful when used in the right situation as many adversary complaints for fraud are filed but fail to allege the fraud with particularity, or they are so vague and ambiguous that the defendant cannot reasonably prepare a proper response.

The author of this article, Stan Burman, is a freelance paralegal with over 15 years of experience in civil litigation in California and Federal Courts. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Requests for admission under Rule 36

Requests for admission under Rule 36

An adversary proceeding is a lawsuit filed within a bankruptcy case. It is an action commenced by a plaintiff filing a complaint against one or more defendants. An adversary proceeding resembles a typical civil case from state court. The plaintiff is the person, partnership or corporation initiating the lawsuit.

Discovery in adversary proceedings is permitted pursuant to the Federal Rules of Civil Procedure (FRCP). While depositions are permitted the use of other discovery methods is often more cost effective.

The scope of discovery under Rule 26(b) is very broad. “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

 
 
REQUESTS FOR ADMISSION UNDER RULE 36 OF THE FRCP
 
Requests for admission as to the truth of facts or genuineness of documents are permitted. There is no numerical limit to the number of requests but a party served with excessive requests may seek leave of court to limit the number of requests.

A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to:

(A) facts, the application of law to fact, or opinions about either; and

(B) the genuineness of any described documents.

Each matter must be separately stated. A request to admit the genuineness of a document must be accompanied by a copy of the document unless it is, or has been, otherwise furnished or made available for inspection and copying.

A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney.

If a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it. A denial must fairly respond to the substance of the matter; and when good faith requires that a party qualify an answer or deny only a part of a matter, the answer must specify the part admitted and qualify or deny the rest. The answering party may assert lack of knowledge or information as a reason for failing to admit or deny only if the party states that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny.

The grounds for objecting to a request must be stated. A party must not object solely on the ground that the request presents a genuine issue for trial.

The requesting party may move to determine the sufficiency of an answer or objection. Unless the court finds an objection justified, it must order that an answer be served. On finding that an answer does not comply with this rule, the court may order either that the matter is admitted or that an amended answer be served. The court may defer its final decision until a pretrial conference or a specified time before trial.

A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended. Subject to Rule 16(e), the court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits. An admission under this rule is not an admission for any other purpose and cannot be used against the party in any other proceeding.

The author of this article, Stan Burman, is a freelance paralegal with extensive experience in adversary proceedings in bankruptcy court.  Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Request for production of documents under Rule 34

Request for production of documents under Rule 34

An adversary proceeding is a lawsuit filed within a bankruptcy case. It is an action commenced by a plaintiff filing a complaint against one or more defendants. An adversary proceeding resembles a typical civil case from state court. The plaintiff is the person, partnership or corporation initiating the lawsuit.

Discovery in adversary proceedings is permitted pursuant to the Federal Rules of Civil Procedure. (FRCP) While depositions are permitted the use of other discovery methods is often more cost effective.

The scope of discovery under Rule 26(b) is very broad. “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

 

 

PRODUCTION AND INSPECTION OF DOCUMENTS AND TANGIBLE THINGS UNDER RULE 34 OF THE FCRP

 

 

Demanding production and inspection of documents and tangible things, as well as entering onto land for inspection and other purposes is permitted under Rule 34 of the Federal Rules of Civil Procedure. There is no numerical limit to the number of requests but a party served with excessive requests may seek leave of court to limit the number of requests.

Requests for production and inspection of documents and tangible things are very useful in that they allow a party to review in detail all relevant documents and tangible things that support the opposing party’s claims or defenses.

A party may serve on any other party a request within the scope of Rule 26(b):

(1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding party’s possession, custody, or control:

(A) any designated documents or electronically stored information including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form; or

(B) any designated tangible things; or

(2) to permit entry onto designated land or other property possessed or controlled by the responding party, so that the requesting party may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it.

The request:

(A) must describe with reasonable particularity each item or category of items to be inspected;

(B) must specify a reasonable time, place, and manner for the inspection and for performing the related acts; and

(C) may specify the form or forms in which electronically stored information is to be produced.

The party to whom the request is directed must respond in writing within 30 days after being served.

For each item or category, the response must either state that inspection and related activities will be permitted as requested or state an objection to the request, including the reasons.

An objection to part of a request must specify the part and permit inspection of the rest.

The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form or if no form was specified in the request the party must state the form or forms it intends to use.

Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information:

(I) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

(ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and

(iii) A party need not produce the same electronically stored information in more than one form.

The author of this article, Stan Burman, is a freelance paralegal with extensive experience in adversary proceedings in bankruptcy court.  Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Written interrogatories under Rule 33

Written interrogatories under Rule 33

An adversary proceeding is a lawsuit filed within a bankruptcy case. It is an action commenced by a plaintiff filing a complaint against one or more defendants. An adversary proceeding resembles a typical civil case from state court. The plaintiff is the person, partnership or corporation initiating the lawsuit.

Discovery in adversary proceedings is permitted pursuant to the Federal Rules of Civil Procedure (FRCP). While depositions are permitted the use of other discovery methods is often more cost effective.

The scope of discovery under Rule 26(b) is very broad. “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

WRITTEN INTERROGATORIES UNDER RULE 33 OF THE FRCP
 
 Written interrogatories to the other party are permitted pursuant to Rule 33 of the Federal Rules of Civil Procedure.

However, unless leave of court is obtained a party may serve on any other party no more than 25 written interrogatories, including all discrete subparts.

Written interrogatories are extremely useful in obtaining the facts, witnesses and existence of documents that support the opposing party’s claims or defenses.

An interrogatory may relate to any matter that may be inquired into under Rule 26(b). An interrogatory is not objectionable merely because it asks for an opinion or contention that relates to fact or the application of law to fact, but the court may order that the interrogatory need not be answered until designated discovery is complete, or until a pretrial conference or some other time.

The responding party must serve its answers and any objections within 30 days after being served with the interrogatories. Each interrogatory must, to the extent it is not objected to, be answered separately and fully in writing under oath.

The grounds for objecting to an interrogatory must be stated with specificity. Any ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure.

The person who makes the answers must sign them, and the attorney who objects must sign any objections.

The author of this article, Stan Burman, is a freelance paralegal with extensive experience in adversary proceedings in bankruptcy court.  Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Motion to Dismiss under Rule 12(b)(6)

Motion to Dismiss under Rule 12(b)(6)

A Motion to Dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure as used in the Federal Courts is analogous to a general demurrer as is used in California Courts. The Motion seeks to have a Complaint dismissed on the grounds that it fails to state facts sufficient to constitute a cause or causes of action.

While Motions to Dismiss under Rule 12(b)(6) are often filed they are rarely successful as numerous Appellate Courts have ruled that a Motion to Dismiss under Rule 12(b)(6) is disfavored and is rarely granted.

A motion to dismiss under Rule 12(b)(6) is disfavored and rarely granted. Harris v. Am. , 198 F.3d 245 (6th Cir. 1999) (unpublished) (citing Conley, 355 U.S. at Postal Workers Union 45- 46); see also S. Christian Leadership Conference v. Supreme Court, 252 F.3d 781, 786 (5th Cir. 2001) (stating that dismissals for failure to state a claim under Rule 12(b)(6) are disfavored); Lone Star Indus., Inc. v. Horman Family Trust, 960 F.2d 917, 920 (10th Cir. 1992) (“A motion to dismiss for failure to state a claim is viewed with disfavor, and is rarely granted.”) (internal quotations omitted); Hall v. City of Santa Barbara, 833 F.2d 1270, 1274 (9th Cir. 1986) (“It is axiomatic that ‘[t]he motion to dismiss for failure to state a claim is viewed with disfavor and is rarely granted.’”) (quoting 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure 1357, at 598.

The issue is not whether the plaintiff will prevail or not. The issue is whether the plaintiff is entitled to offer evidence in support of their claims.

The U.S. Supreme Court has stated: “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence in support of the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely, but that is not the test.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Rather, “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

In reviewing the allegations, this Court construes the complaint in a light most favorable to the plaintiff, accepting all of the factual allegations as true and determines whether the plaintiff can prove no set of facts in support of his claims that would entitle him to relief.” Arrow v. Fed. Reserve Bank of St. Louis, 358 F.3d 392, 393 (6th Cir. 2004).

Even a cause of action for fraud which must be specifically pleaded satisfies the particularity requirement for fraud if it identifies circumstances constituting fraud so that defendant can prepare an adequate answer from the allegations. Deutsch v. Flannery, (9th Cir.1987), 823 F.2d 1361, 1365.

And Courts rarely grant a dismissal of a complaint without leave to amend.

“Dismissal without leave to amend is improper unless it is clear, upon de novo review, that the complaint could not be saved by any amendment.” Schneider v. California DOC, 151 F.3d 1194, 1196 (9th Cir. 1998).

“Amendment should be refused only if it appears to a certainty that plaintiff cannot state a claim.” Wright and Miller, Federal Practice and Procedure, vol 5A, 1357.

The author of this article, Stan Burman, is a freelance paralegal with extensive experience in adversary proceedings in bankruptcy court.Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.

Bankruptcy Court Adversary Proceedings

Bankruptcy Court Adversary Proceedings

An adversary proceeding is a lawsuit filed within a bankruptcy case. It is an action commenced by a plaintiff filing a complaint against one or more defendants. An adversary proceeding resembles a typical civil case from state court. The plaintiff is the person, partnership or corporation initiating the lawsuit.  The defendant is the person, partnership or corporation being sued.

Two of the most common adversary proceedings are (1) a complaint to determine the dischargeability of a debt under 11 U.S.C. § 523[c], and (2) a complaint to deny the Debtor a discharge under 11 U.S.C. § 727.

A complaint to determine the dischargeability of a debt is generally filed for one of two reasons; (1) the debt is based on fraud or false representations, see 11 U.S.C. § 523(a)(2), or the debt is based on willful or malicious injury to another, see 11 U.S.C. § 523(a)(2).

The deadline to file a complaint to determine the dischargeability of a debt under 11 U.S.C. § 523[c] is no later then sixty (60) days after the date first set for the meeting of creditors. See Fed. R. Bankr. P. 4007[c]. If the complaint is not timely filed it is barred unless a request for extension of time is granted by the bankruptcy court before the deadline.

A complaint to deny the Debtor a discharge is less common as it requests that the bankruptcy court deny the Debtor a discharge, if the request is granted the Debtor is denied a discharge and all of the debts listed on the bankruptcy petition are then declared non-dischargeable. This complaint is generally used when a creditor cannot file a complaint to determine the dischargeability of a debt because the debt is not based on any of the reasons specified in 11 U.S.C. § 523.

The deadline to file a complaint to deny the Debtor a discharge under 11 U.S.C. § 727 is also no later then sixty (60) days after the date first set for the meeting of creditors. See Fed. R. Bankr. P. 4004[a]. If the complaint is not timely filed it is barred unless a request for extension of time is granted by the bankruptcy court before the deadline.

Once the summons and complaint are filed they must be served on the defendant within 120 days from the date the complaint was filed or the case will be subject to dismissal. See Fed. R. Civ. P. 4(m).

The defendant must answer the complaint within thirty (30) days after issuance of the summons unless a different date is specified by the court. See Fed. R. Bankr. P. 7012[a].

If the defendant does not answer the complaint by the date set forth in the summons they are in default. The Plaintiff can then obtain a default judgment for the relief requested in the complaint.

If the defendant does answer the complaint then discovery is permitted pursuant to the Federal Rules of Civil Procedure.

The author of this article, Stan Burman, is a freelance paralegal with extensive experience in adversary proceedings in bankruptcy court. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.