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Friday, December 27, 2013

Ind. Decisions - 7th Circuit decides one Indiana case today, re bankruptcy, and it is a reversal

In DAWN MARIE ADAMS, Creditor‐Appellant v. JAMES GREGORY ADAMS, Debtor‐Appellee (SD Ind., Lawrence), an 11-page opinion, Judge Hamilton writes:

In this bankruptcy appeal, creditor Dawn Marie Adams appeals from the bankruptcy court’s denial of her claim against the estate of debtor James Gregory Adams, her former husband and business partner. (Since the parties have the same last name, we refer to them here as Dawn and Greg.) The state courts of Georgia decided three times in three final judgments that Greg still owed money to Dawn after they divorced and unwound their “monster truck” business. The bankruptcy court heard evidence on the merits of Dawn’s claim, though, and denied it as inequitable. The district court affirmed, and Dawn appeals.

Because the decisions of the bankruptcy court and the district court were final orders as to Dawn’s claim, we have jurisdiction over her appeal pursuant to 28 U.S.C. §158(d). We find that the issues concerning the validity of Dawn’s claim were previously adjudicated in the state courts and that the doctrine of issue preclusion prevented the bankruptcy court from rehearing those issues. Accordingly, we reverse and remand for further proceedings. * * *

In sum, though Greg Adams had the opportunity to appeal the Georgia state court judgments, he did not avail himself of that opportunity. Instead, he filed for bankruptcy, but that is not a substitute for timely appeals of the state court judgments. The doctrine of issue preclusion (collateral estoppel) bars him from using the bankruptcy system to have his defenses reheard despite the state courts’ rejection of those defenses.

Posted by Marcia Oddi on December 27, 2013 01:17 PM
Posted to Ind. (7th Cir.) Decisions