Tuesday, July 29, 2014

9th Cir. Published - Court determined that BK Court can award money damages in objection to discharge proceeding

The panel adopted the BAP’s opinion as its own. The BAP held that, even after Stern v. Marshall, 131 S.Ct. 2594 (2011), the bankruptcy court had the constitutional authority to enter a final judgment determining both the amount of the Fords’ damage claims against the debtor Shawn Deitz, and determining that those claims were excepted from discharge. The BAP also held that the bankruptcy court did not err in concluding that the debt owed by Deitz to the Fords was nondischargeable under 11 U.S.C. §§ 523(a)(2)(A), (a)(4), and (a)(6).

The panel noted that dischargeability actions are central to federal bankruptcy proceedings and are necessarily resolved during the process of allowing or disallowing claims against the state, and that the dischargeability determination therefore constitutes a public rights dispute that the bankruptcy courts may decide.

In re Deitz (9th Cir. 2014)

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