Drivers responsibility fines and bankruptcy discharge.

May 31, 2011
To: terry@attorneybankert.com
From Subject (Thread Messages) Date Size

DRIVER RESPONSIBILITY ACT AND BANKRUPTCY DISCHARGE

Q: CAN A DEBTOR DISCHARGE THE FINES UNDER A DRIVERS RESPONSIBILITY ACT IN CHAPTER 7 BANKRUPTCY?
A:NO

Terry R. Bankert
terry@attorneybankert.com
http://www.attorneybankert.com
1000 Beach St Flint Mi 48503
810-235-1970

In Michigan Driver Responsibility penalties are found in MCL 257.732 (a) Public Act 165 of 2003 taking effect 10/01/2003 and amended  Public Act 52 of 2004 and Public Act 460 of 208.

The Acts purpose is to act as a deterrent to bad driving and to fund the marginal cost to society. Violations for drunk driving or not having proper insurance trigger the fees.

Several states have these types of fines.

In Michigan the act makes drivers who reach certain points against their driving record, do not have proof of insurance, or ticketed for drunk driving and other acts to pay an extra $100-500 annual fee to maintain their license in addition to other costs.[nc 2005]

In most cases failure to pay the yearly assessment on time results in license suspension. The license re instatement will cost another $125.00.[nc 2005]

Driver responsibility programs mean big money for the states who have tried them.[nc 2005]

Several of the  Michigan Fees are;
$100 per year for as long as the license has 7 points,
$1,000 for 2 years for DUI,
$200 for 2 years for expired insurance,
$150 for 2 years for having an expired license.

These fines are not dischargable in Bankruptcy.
The United States Bankruptcy Code identifies governmental fine,  penalties and forfitures as non dischargable in bankruptcy. 11 USC 523  ( a) (7), 727 1141 a, 1228 b, 1328 b.

In a Texas Bankruptcy Court the drivers responsibility surcharge was found to no be dischargable.  In  a CHapter 7 the debtor had scheduled the penalties as an unsecured creditor not a priority.

In Texas a surcharge is imposed on persons convicted of traffic violations. Sec. 708.102 and 708.13. The debtor pled that the $5,960 surcharge was dischargable and the State had violated the automatic stay.

The Bankrutcyu court relied on    11 USC 523 ( a) (7) and  that Drivers Responsibility  surcharges have been identified by previous decisions as fines and penalties.
see Celotex Corp v Catrell 477 US 317, 1986, and US v Kolstad ( In re Kolstad 101 BR 492, 493, Bankr SD Texas 1989.

Terry R. Bankert
terry@attorneybankert.com
http://www.attorneybankert.com
1000 Beach St Flint Mi 48503
810-235-1970

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*FLINT BANKRUPTCY LAWYER

May 6, 2011

OVERVIEW

LINK TO THIS PAGE https://dumpmycreditors.wordpress.com/2011/05/06/flint-bankruptcy-lawyer/

LECTURE 1 A SUMMARY OF THE BANKRUPTCY SYSTEM

*  WHAT YOU NEED TO KNOW AT YOUR FIRST MEETING WITH YOUR BANKRUPTCY ATTORNEY

LECTURE 2  CONSUMERS IN  CHAPTER 13 BANKRUPTCY

LECTURE 3 CONSUMERS IN CHAPTER 7 LIQUIDATION BANKRUPTCIES

LECTURE 4 CONSUMER BANKRUPTCY CASES

LECTURE 5  TRUSTEE DUTIES IN CHAPTER 7

LECTURE 6  THE SMALL BUSINESS AND BANKRUPTCY

LECTURE 7  WHAT THE CREDITORS CAN DO N CHAPTER 11

LECTURE 8 LIQUIDATION IN  BANKRUPTCY

FORMS AND EXHIBITS


BANKRUPTCY COST? ONE HUNDRED DOLLAR DOWN ( $100) BANKRUPTCY! FLINT ATTORNEY BANKERT (810) 235-1970. WHY WAIT CALL THE FLINT BANKRUPTCY LAWYER NOW!

April 29, 2011

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Q: IN MY FLINT BANKRUTPCY CAN I CHANGE ATTORNEYS. A: YES. FOR MORE BANKRUPTCY INFORMATION CALL (810) 235-1970

April 23, 2011

United States Bankruptcy Court
Eastern District of Michigan
Southern Division
In re:
Axxxxx, Case No. 08-57865-R
Debtor. Chapter 7
_________________________________/
Opinion and Order Granting Stay
I.
The debtor filed for chapter 7 relief on July 24, 2008. He was represented by Edward J.Gudeman of Weik and Assoc., P.C. On December 2, 2010, the debtor filed a motion to remove Gudeman as his attorney. The motion was granted by order dated January 31, 2011.
On March 22, 2011, the debtor, through his new attorney, Jay Kalish, filed a motion,
pursuant to § 329 and Rule 2017, for a determination of the propriety of his fee agreement with Gudeman and for disgorgement of fees. The debtor also filed a motion seeking to remove a state court action that Gudeman had filed against the debtor for collection of fees for the bankruptcy case.
The Court conducted a hearing on the motions on April 11, 2011. The Court denied the debtor’s motion for removal as untimely and requested briefs from the parties on the issue of whether the Court’s jurisdiction under § 329 is exclusive.
II.
Federal district courts, and their bankruptcy courts by delegation, have exclusive jurisdiction “of all cases under title 11.” 28 U.S.C. § 1334(a). Pursuant to § 1334(e), the district courts also have exclusive jurisdiction over property of the debtor, property of the estate, and all claims and causes of action relating to § 327. In all other cases “arising under title 11, or arising in or related  to cases under title 11,” the district courts “shall have original but not exclusive jurisdiction[.]” 28 U.S.C. § 1334(b).
An exception to the general rule of concurrent jurisdiction is found in § 523(c)(1), which grants bankruptcy courts exclusive jurisdiction to determine the dischargeability of debts described in § 523(a)(2), (4) and (6) of the Code. See 11 U.S.C. § 523(c); Dollar Corp. v. Zebedee (In re Dollar Corp.), 25 F.3d 1320, 1325 (6th Cir. 1994) (“Congress intended ‘to take the determinations governed by 11 U.S.C. § 523(c) away from state courts and grant exclusive jurisdiction in the
bankruptcy courts.’”) (quoting Spilman v. Harley, 656 F.2d 224, 226 (6th Cir.1981)).

“[T]he operative language ‘unless the court determines such debt to be excepted from discharge,’ which was carried forward from a 1970 amendment to the prior Bankruptcy Act, is understood to deprive nonbankruptcy courts of jurisdiction.” Moncur v. Agricredit Acceptance Co. (In re Moncur), 328 B.R. 183, 189 (B.A.P. 9th Cir. 2005).
Likewise, § 329 contains the same restrictive language. That section provides, in pertinent part, that an attorney representing a debtor must file with the court a statement of compensation paid or agreed to be paid and that “if such compensation exceeds the reasonable value of any such services, the court may cancel any such agreement, or order the return of any such payment, to the
extent excessive[.]” 11 U.S.C. § 329(b) (emphasis added).
Section 329 “was enacted because ‘payments to a debtor’s attorney provide serious potential for evasion of creditor protection provisions of the bankruptcy laws, and serious potential for overreaching by the debtor’s attorney, and should be subject to careful scrutiny.’” In re Campbell, 259 B.R. 615, 625 (Bankr. N.D. Ohio 2001) (quoting H.R .Rep. No. 95–595, at 329 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6285). It enables courts to carefully scrutinize compensation paid to
debtors’ attorneys, providing protection to debtors and creditors and preventing overreaching by attorneys. Jensen v. United States Trustee (In re Smitty’s Truck Stop, Inc.), 210 B.R. 844, 848 (B.A.P. 10th Cir. 1997). See also In re Busy Beaver Bldg. Ctrs., Inc., 19 F.3d 833, 844 (3rd Cir. 1994) (“Disagreeable as the chore may be, the bankruptcy court must protect the estate, lest overreaching attorneys or other professionals drain it of wealth which by right should inure to the
benefit of unsecured creditors.”).
The court in In re Williams, 2003 WL 22722841 (Bankr. D. Vt. 2003), explained:
Ensuring that the relationship between a debtor and his or her
attorney is fair is one of the primary duties the bankruptcy courts
must perform in their capacity as guardians of the integrity of the
bankruptcy system. Clients seeking bankruptcy advice are frequently
in particularly vulnerable situations, where they have both a desperate
need for immediate financial relief and very little understanding of
the complexities of bankruptcy law. Therefore, court review of
transactions between debtors and their attorneys require sensitivity to
these vulnerability factors, acknowledgment of the very different
bargaining position of each party in the professional relationship, and
a heightened level of scrutiny.
Id. at *3.

Given the plain language of § 329 and the important role of the bankruptcy court in
monitoring the relationship between debtors and professionals, the Court concludes that it is within the sole province of the bankruptcy court to determine the propriety of a debtor’s fee agreement with his or her attorney.
Further support for this conclusion is found in Elias v. United States Trustee (In re Elias), 188 F.3d 1160, 1165 (9th Cir. 1999), wherein the court explained:
[B]ankruptcy courts have recognized that fee issues, and control of
the parties and their representatives, can be central to the proper
conduct of bankruptcy proceedings. We expressed a similar view in
a different context when we pointed out that regulation of the
activities of parties before the bankruptcy court should be in the
hands of that court alone. See MSR Exploration, Ltd. v. Meridian
Oil, Inc., 74 F.3d 910, 915 (9th Cir.1996). Bankruptcy courts surely
have the most expertise and interest in controlling their own
proceedings and in regulating the behavior of professionals who seek
to appear before them or work on cases under their tutelage. It is
those courts that help prevent distressed debtors, and their creditors,
from becoming cheerless carrion for voracious vultures, who would
pick the estate clean. In my opinion, there is a need for exclusivity
and I would require it . . . .
Id. at 1165. See also In re Williams, 2003 WL 22722841, *2 (Bankr. D. Vt. 2003) (“Bankruptcy courts, through the United States district courts, have exclusive jurisdiction over the matter of
 attorney’s fees in a bankruptcy proceeding.” citing Edgewater Sun Spot, Inc. v. Pennington & Haben
P.A. (In re Edgewater Sun Spot, Inc.), 183 B.R. 938, 943 (N.D. Fla.1995), aff’d, 84 F.3d 438 (11th Cir.1996)).
Accordingly, the Court concludes that it has exclusive jurisdiction over the debtor’s claim under 11 U.S.C. § 329, and that therefore the state court matter of Gudeman & Associates, P.C. vs.Axxxxx, Oakland County Circuit Court Case No. 2010-110550-CK, shall be stayed pending this Court’s resolution of that claim.
For Publication
.
Signed on April 22, 2011


BANKRUPTCY FLINT, BAY CITY, OWOSSO, LAPEER (810) 235-1970.Question cost of bankruptcy ? Call out Sam for chapter seven bankruptcy protection. Plea to Lee for Free consultation about bankruptcy evaluation. Stop repossession, stop foreclosure, stop garnishment because its www.nojokebeingbroke.com.

April 19, 2011

BANKRUPTCY FLINT, BAY CITY, OWOSSO, LAPEER (810) 235-1970.Question cost of bankruptcy ? Call out Sam for chapter seven bankruptcy protection. Plea to Lee for Free consultation about bankruptcy evaluation. Stop repossession, stop foreclosure, stop garnishment because its www.nojokebeingbroke.com.

The BANKRUPTCY plaintiff in this adversary proceeding is the Chapter 7 trustee. The BANKRUPTCY trustee filed this adversary proceeding seeking a declaratory judgment that the defendant insurance company is required to provide coverage for certain claims asserted against the Chapter 7 debtor. The defendant filed a motion for summary judgment based upon its contention that the insurance policy at issue does not provide coverage for the claims identified by the trustee. For the reasons explained in this opinion, the Court grants the defendant’s motion for summary judgment.


Source-UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION (DETROIT) ,In re: Chapter 7 ,Romeo Montessori School Association, Inc., Case No. 09-63398 ,Debtor. Hon. Phillip J. Shefferly,Stuart A. Gold, Trustee, Adversary Proceeding No. 10-04884-PJS,Plaintiff, v.Consolidated Insurance Company, Defendant.OPINION GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT- Presented for consumer education by Flint Bankrutpcy lawyer Terry Bankert. Bankruptcy attorney Bankert contribution CAPS or cite [trb] see www.attorneybankert.com
.—

Jurisdiction
NON CORE PROCEEDING

This is a non-core proceeding related to a bankruptcy case over which the Court has
jurisdiction under 28 U.S.C. §§ 1334(b) and 157(c)(1). The parties consent to have the Bankruptcy Court enter orders and judgment under 28 U.S.C. § 157(c)(2) and Local District Rule 83.50(a)(3)(A) (E.D. Mich.).
Facts

The following facts are not in dispute. Romeo Montessori School Association, Inc.
(“Debtor”) is a corporation that operated a preschool through elementary private educational facility.
On July 28, 2009, the Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. The Debtor ceased operating the educational facility at that time. Stuart A. Gold (“Trustee”) was appointed as the Chapter 7 trustee. After the case was filed, many of the parents and families (collectively referred to as “Parents”) whose children attended the school filed proofs of claims with the Bankruptcy Court indicating that they held claims against the Debtor because they had prepaid
tuition or for other educational services for the 2009-2010 school year. Although other proofs of claims have also been filed by other creditors in this bankruptcy case, a review of the claims register in the Debtor’s case indicates a total of 48 proofs of claims filed by Parents who prepaid tuition or other payments for the 2009-2010 school year in an aggregate amount of $178,458.69.

BANKRUPTCY TRUSTEES FINDS INSURANCE POLICIES

After his appointment, the Trustee discovered in the Debtor’s books and records various insurance policies issued by the defendant, Consolidated Insurance Company (“Consolidated”). One of the policies issued by Consolidated provided “school leaders errors and omissions liability and employee benefits liability coverage” for the period beginning October 1, 2008 and ending October 1, 2009 (“School Leaders Policy”).

TRUSTEE DEMANDS THE INSURANCE COMPANY TO PAY UP.

After reviewing the Parents’ proofs of claims and the terms of the School Leaders Policy, the Trustee demanded in writing that Consolidated provide coverage under the School Leaders Policy for the claims filed by the Parents. On November 30, 2009, Consolidated wrote to the Trustee to inform him that it did not believe that the School Leaders Policy provided coverage for the claims identified by the Trustee based upon the proofs of claims filed by the Parents in the Debtor’s bankruptcy case.

INSURANCE  COMPANY DENIES CLAIM

The letter explained specific reasons why Consolidated denied that there was coverage for those claims under the School Leaders Policy, but
also stated that by identifying specific reasons why there was no coverage, Consolidated was not waiving its right to raise other insurance policy language or other issues in determining coverage, and expressly reserved for Consolidated the right to raise additional policy language and issues.

BANKRUPTCY TRUSTEE SUES THE INSURANCE COMPANY.
On March 15, 2010, the Trustee filed this adversary proceeding against Consolidated.
The complaint contains one count, and alleges that Consolidated breached the terms of the School Leaders Policy by failing and refusing to provide coverage for the loss of the prepaid tuition and other amounts set forth in the proofs of claims filed by the Parents. On April 29, 2010, Consolidated filed an answer and affirmative defenses. On May 19, 2010, Consolidated filed amended affirmative
defenses.

In addition to the reasons set forth in its November 30, 2009 letter denying coverage, Consolidated set forth in its affirmative defenses a number of other reasons why it does not believe that the Parents’ claims are entitled to coverage under the School Leaders Policy.
On December 28, 2010, Consolidated moved for summary judgment (docket entry no. 20).

The motion is based on one specific defense. The motion alleges that the Parents’ claims are in substance breach of contract claims and, therefore, are within an exclusion to coverage set forth in section I, C.7. of the School Leaders Policy. That provision of the School Leaders Policy excludes from coverage “any ‘claim’ alleging breach of contract.” The Trustee makes two arguments in response.

First, the Trustee argues that Consolidated has either waived, or is estopped from relying on, the contractual liability exclusion in the School Leaders Policy because Consolidated failed to raise that exclusion in its November 30, 2009 letter that denied the Trustee’s demand for coverage.

Second, the Trustee argues that even if Consolidated has not waived and is not estopped from relying on the contractual liability exclusion, Consolidated is still not entitled to summary judgment because the Parents’ proofs of claims do not expressly allege breach of contract but may be based upon theories of liability other than breach of contract. Therefore, the Trustee argues, the contractual liability exclusion contained in the School Leaders Policy does not apply.

On April 4,  2011, the Court heard Consolidated’s motion for summary judgment and, at the conclusion of the hearing, took the motion under advisement.
Standard for Summary Judgment Under Rule 56(c) Fed. R. Civ. P. 56 for summary judgment is incorporated into Fed. R. Bankr. P. 7056.
Summary judgment is only appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Id. at 247-48. A “genuine” issue is present “‘if the evidence
is such that a reasonable jury could return a verdict for the nonmoving party.’” Berryman v. Rieger, 150 F.3d 561, 566 (6th Cir. 1998) (quoting Anderson, 477 U.S. at 248).
“The initial burden is on the moving party to demonstrate that an essential element of the non-moving party’s case is lacking.” Kalamazoo River Study Group v. Rockwell International Corp., 171 F.3d 1065, 1068 (6th Cir. 1999) (citation omitted). “The burden then shifts to the non- moving party to come forward with specific facts, supported by evidence in the record, upon which a reasonable jury could return a verdict for the non-moving party.” Id. (citing Anderson, 477 U.S.
at 248). “The non-moving party, however, must provide more than mere allegations or denials . . . without giving any significant probative evidence to support” its position. Berryman v. Rieger, 150 F.3d at 566 (citing Anderson, 477 U.S. at 256).

Applicable Law

Insurance contracts are interpreted by reference to state substantive law. Policy provisions often identify the state from which governing law derives. The School Leaders Policy contains no such provision. Nevertheless, Consolidated points out that Michigan law should govern, and the Trustee apparently agrees by relying upon the state’s case law and statutes to argue his case.
Therefore, the School Leaders Policy shall be interpreted in accordance with Michigan law. See Irons Home Builders, Inc. v. Auto-Owners Ins. Co., 839 F. Supp. 1260, 1264 (E.D. Mich. 1993) (“In cases involving the construction of an insurance contract, Michigan law requires the court to apply the law of the state where the insurance policy was issued.”).
Has Consolidated Waived or is it Estopped From Relying on
the Contractual Liability Exclusion in the School Leaders Policy?

Generally, in Michigan, “once an insurance company has denied coverage to an insured and stated its defenses,” the insurance company may be found to have waived or be estopped from raising new reasons to deny liability. Kirschner v. Process Design Assocs., Inc., 592 N.W.2d 707, 709 (Mich. 1999) (citations omitted); see also Mich. Comp. Laws Ann. § 500.2122(1) (2011) (“An insurer or agent, upon making a declination of insurance, shall inform the applicant of each specific
reason for the declination.”). However, application of the doctrines of waiver and estoppel is limited in Michigan, and ordinarily “the doctrines will not be applied to broaden the coverage of a policy to protect an insured against risks that were not included in the policy or that were expressly excluded from the policy.” Kirschner v. Process Design, 592 N.W.2d at 709-10 (citations omitted).

In Lee v. Evergreen Regency Co-Op Management Systems, Inc., 390 N.W.2d 183, 186 (Mich. Ct. App. 1986), the Michigan Court of Appeals identified two exceptions to the rule that coverage cannot be created by application of the doctrines of waiver and estoppel. The first exception is where an insurer has denied coverage and declined to defend an insured in underlying litigation. The second exception is where equity favors making an insurer provide coverage because the insurer misrepresented the terms of the policy to the insured, or defended the insured without
a reservation of rights. The two exceptions noted in Lee v. Evergreen Regency Co-Op were subsequently recognized by the Michigan Supreme Court in Kirschner v. Process Design, 592 N.W.2d at 709-10. Michigan law is well settled that except in these two limited circumstances, the doctrines of waiver and estoppel may not be applied to extend the scope of a policy to protect an insured against a risk that was not provided for in the policy, or to force an insurance company
to pay a loss for which it charged no premium.
The Trustee does not contend that either of the exceptions articulated in Lee v. Evergreen Regency Co-Op and Kirschner v. Process Design is applicable in this case. Therefore, the fact that Consolidated did not identify the contractual liability exclusion when it denied the Trustee’s demand for coverage in its November 30, 2009 letter does not mean that the Trustee can now prevail on its
complaint if coverage is not otherwise provided by the School Leaders Policy. In short, under Michigan law, Consolidated’s failure to identify the contractual liability exclusion in the November 30, 2009 letter is not fatal to Consolidated’s defense to the Trustee’s complaint, and Consolidated has neither waived nor is it now estopped from raising the contractual exclusion defense.

There are additional reasons why the doctrines of waiver and estoppel are not applicable in this case. First, Consolidated’s November 30, 2009 letter plainly stated that [b]y raising any policy provisions or issue [sic] in this letter Consolidated Insurance Company is not waiving the right to raise other policy language or issues in
determining coverage. Consolidated Insurance Company expressly reserves the right
to raise additional policy language and issues.
Although it may have been preferable for Consolidated to identify each and every defense to the Trustee’s demand in its November 30, 2009 letter, it is clear that Consolidated expressly reserved the right to raise additional defenses not specifically identified in the letter. That express reservation independently compels the Court to reject the Trustee’s arguments for application of the doctrines of waiver and estoppel.
Finally, Consolidated did expressly raise the contractual liability exclusion as a defense in its answer and affirmative defenses that it filed in this adversary proceeding on April 29, 2010.

Consolidated raised this defense in its first responsive pleading in this adversary proceeding, nearly a year ago. There was no unreasonable delay in asserting the defense in this adversary proceeding, and there certainly is no evidence that the Trustee has suffered any prejudice by reason of the fact that Consolidated did not specifically identify the contractual liability exclusion defense in its
November 30, 2009 letter. In sum, the Court rejects the Trustee’s arguments that Consolidated has either waived or is now estopped from asserting the contractual liability exclusion contained in the school Leaders Policy.

Are the Parents’ Claims Against the Debtor Within the
Contractual Liability Exclusion of the School Leaders Policy?

Section I, A.1. of the School Leaders Policy is titled “Coverage.” It provides that
Consolidated “will pay those sums that the insured becomes legally obligated to pay because of ‘loss’ arising from a ‘wrongful act’ to which this insurance applies.”

Section I, C. of the School Leaders Policy is titled “Exclusions.” It lists a number of specific exclusions to insurance coverage under the School Leaders Policy, including an exclusion in paragraph 7. titled “Contractual Liability.” Section I, C.7. provides that “[t]his insurance does not apply to . . . [a]ny ‘claim’ alleging
breach of contract.” Consolidated asserts that this exclusion applies to any loss that the Debtor may suffer in having to pay the Parents’ proofs of claim.
Consolidated argues that a review of the Parents’ proofs of claims reveals that all of those claims in substance allege a breach of contract. According to Consolidated, the Parents prepaid tuition and other payments in exchange for the Debtor’s agreement to provide educational services to their children. For support, Consolidated points to the documents that are attached to some of the Parents’ claims. First, Consolidated identifies an Enrollment Agreement pursuant to which the
Debtor agreed to provide educational and child-care services in exchange for payment (Exhibit D to Consolidated’s motion). Second, Consolidated identifies a Child Placement Contract (Exhibit E to Consolidated’s motion). Third, Consolidated identifies a School Summer Camp Registration Form (Exhibit F to Consolidated’s motion). Consolidated argues that these documents are, on their
face, contracts, because they memorialize an agreement of the Debtor to provide educational and child-care related services in exchange for payment of tuition by the Parents of the children enrolled in the educational facility. Therefore, these documents constitute contracts within the common,
everyday meaning of the term “contract.” Because the Parents’ claims filed in the bankruptcy case are all based upon the Parents prepaying tuition or other payments to the Debtor, Consolidated concludes that the claims of the Parents are necessarily claims for breach of contract, arising as a result of the Debtor’s failure to provide the agreed upon educational services when it closed its business and filed bankruptcy on July 28, 2009.
Although there are two express exceptions to the contractual liability exclusion in the School Leaders Policy, the Trustee does not argue that the Parents’ claims for which the Trustee seeks coverage are within either of these two express exceptions. Also, the Trustee does not dispute that the Enrollment Agreement, Child Placement Contract, and School Summer Camp Registration Form
are themselves contracts. Nor does the Trustee dispute that the Debtor’s failure to provide educational services after receiving the prepaid tuition is a breach of contract. Instead, the Trustee argues that the Parents’ proofs of claims filed in the bankruptcy case for the tuition and other amounts that they prepaid to the Debtor do not constitute a “claim alleging breach of contract.”
The Trustee focuses on the specific language in the School Leaders Policy that sets forth the contractual liability exclusion. Section I, C.7. of the School Leaders Policy describes the contractual liability exclusion as “[a]ny ‘claim’ alleging breach of contract.” The Trustee then makes two basic points in arguing that there is a genuine issue of material fact. First, even though the Trustee does not deny that the Parents that filed these proofs of claims had entered into contracts with the Debtor
to provide educational services to their children in exchange for payment, nowhere do the Parents’ proofs of claims explicitly say “breach of contract,” which the Trustee argues is required by the contractual liability exclusion. Second, the Trustee posits that it is “possible” that the Parents’  claims against the Debtor could also conceivably be grounded in a tort theory, such as conversion or breach of fiduciary duty, or a quasi-contractual theory such as unjust enrichment. Because these
possible, albeit unarticulated, alternate theories of recovery may exist in favor of the Parents, even though they have not been explicitly stated by the Parents, the Trustee asserts that the Parents’ claims are not within the contractual liability exclusion in the School Leaders Policy. To support his two arguments, the Trustee relies upon the Parents’ proofs of claims and upon his own affidavit.
Although the Trustee does not list in his complaint the specific claims that he considers to be the “Parents’ claims,” and for which he is demanding coverage, the Trustee attached copies of the first page of 48 proofs of claims to the Trustee’s brief in opposition to Consolidated’s motion for summary judgment. As noted earlier, the claims register in the Debtor’s bankruptcy case reveals
a total of 48 claims filed by Parents who describe the basis for their claims, in one way or another, as tuition that they paid to the Debtor for the 2009-2010 school year or for other educational services during that school year. To consider the Trustee’s argument that the Parents’ claims do not allege breach of contract, the Court examined each of these proofs of claims. They are very similar to one
another. For example, in proof of claim no. 1-1 filed by Kristy Slanec, the basis for claim is described as “monies provided in advance for school term 2009-2010 and camp.” There are no documents attached to that proof of claim. Proof of claim no. 2-1 filed by Joe and Ban Dindo describes the basis of their claim as “tuition paid for 2009-2010 school year.” There are documents attached to that proof of claim, including documents on the Debtor’s letterhead describing the
required amounts and payments for tuition for the 2009-2010 school year. Proof of claim no. 3-1
filed by Oscar and Alma Catarino describes the basis for claim as “2009-2010 tuition and summer camp,” and attaches a copy of an “Enrollment Agreement 2009-2010” on the Debtor’s letterhead
that explains the amounts and dates of the payments required for enrollment of a child in the Debtor’s educational facility. Proof of claim no. 5-1 filed by Kim and Chuck Rummier describes  the basis for claim as “Deposit + pre-payment for 2009-2010 school year tuition.” This proof of claim also has attached to it an agreement between the Parents and the Debtor with respect to the
amounts and timing of the payments required for tuition, as well as other documents. The Court has reviewed all 48 of the Parents’ proofs of claims. They do not all use the same precise verbiage in describing the basis for their claims, but it can fairly be said that all of the Parents’ proofs of claims
are based on the fact that the Parents paid the Debtor tuition or for other educational services for the 2009-2010 school year that the Debtor failed to provide to the Parents’ children once the Debtor closed the school.
Even though the Parents’ proofs of claims themselves may not contain the specific words “breach of contract,” it is obvious to the Court that the claims are squarely grounded in a breach of contract theory. The Parents claim that they prepaid tuition and other payments in exchange for the educational services for their children. They did not receive the bargained for educational services
because the Debtor closed the school. While the Parents’ proofs of claims may not expressly use the words “breach of contract,” and do not separately identify every possible legal theory of recovery in the same way that a complaint might, it is sophistry to argue that the Parents’ proofs of
claims do not allege a breach of contract by the Debtor. A review of the proofs of claims, with the asserted basis in all of them being prepaid tuition and other payments for educational services that
 they did not receive, demonstrates that, in substance, these proofs of claims do allege breach of contract. Therefore, the Court finds that they fall within the exception to coverage under section I.C.7. of the policy as “‘claim[s]’ alleging breach of contract.”
The Trustee’s second argument is that because the Parents may conceivably have other theories of recovery in addition to a breach of contract theory, the fact that the claims are found to  Consolidated misconstrues the Trustee’s second argument as somehow being based  upon a theory of dual or concurrent causation, where multiple acts or events are the proximate cause of an injury. As a result, Consolidated’s reply to the Trustee’s brief in opposition to Consolidated’s motion for summary judgment extensively discusses case law dealing with dual or concurrent causation. That case law is irrelevant to Consolidated’s motion for summary judgment since the Trustee does not argue that there may be more than one act or event that is
the cause of the Parents’ loss. Instead, the Trustee argues that there may be other legal theories of recovery, in addition to breach of contract, that the Parents might be able to assert against the Debtor that are based upon the same acts and events that give rise to the breach of contract: the advance payments for tuition and for other educational services that the Debtor failed to deliver.
be within the breach of contract exclusion set forth in the School Leaders Policy does not end the Court’s inquiry. In other words, even if the Parents’ claims do allege breach of contract, summary judgment is not appropriate because there may be other non-contractual theories of recovery that the Parents may be able to assert, for which there is no exclusion in coverage. The Trustee correctly
points out that unlike a complaint filed in a lawsuit, a proof of claim filed in a bankruptcy case is not required to describe specific theories of liability. Instead, official bankruptcy form B10 requires only that the claimant set forth in paragraph 2 of the official form the “basis for claim.”1 In support of this second argument, the Trustee relies primarily on Northland Insurance Co. v. Stewart Title Guaranty Co., 327 F.3d 448 (6th Cir. 2003). Applying Michigan insurance law, the Sixth Circuit Court of Appeals did not stop its analysis in that case when it found that a breach
of contract claim was excluded from the insurance policy at issue in that case. Instead, because the underlying complaint also alleged multiple tort claims such as conversion, embezzlement, and breach of fiduciary duty, the court examined each of those theories to determine whether coverage extended to the insured. The Trustee argues that summary judgment is premature in this case because similar theories of recovery may possibly be alleged by the Parents in this case.
There are two problems with the Trustee’s position. First, the Northland Insurance case is easily distinguishable. It addressed the extent of coverage for purposes of considering the insurer’s duty to defend. 327 F.3d at 455-58. The duty to defend is independent of and much broader than the duty to indemnify. Dochod v. Central Mutual Ins. Co., 264 N.W.2d 122, 123 (Mich. Ct. App. 1978) (citing City Poultry & Egg Co. v. Hawkeye Casualty Co., 298 N.W. 114 (Mich. 1941)).
“[T]he insurer must defend a lawsuit even if there are theories of liability that the policy does not cover, so long as there are theories of recovery that fall within the policy’s scope.” Employers Ins. of Wausau v. Petroleum Specialties, Inc., 69 F.3d 98, 102 (6th Cir. 1995) (citing Dochod v. Central Mutual, 264 N.W.2d at 123). An “insurer has a clear duty to defend the state court action suit until
all possible theories of recovery which could be covered by the policy are eliminated.” Northland Insurance, 327 F.3d at 457 (citations omitted). “When considering whether the insurer has a duty to defend the insured, it must be remembered that the duty to pay is severable from the duty to defend. The one is not dependent on the other.” Dochod v. Central Mutual, 264 N.W.2d at 123
(citing Zurich Ins. Co. v. Rombough, 180 N.W.3d 775 (Mich. 1979)).

“That an insurer may ultimately be found not liable, therefore, is a matter separate and apart from its obligation to defend the insured.” Id.
In the case before the Court, unlike Northland Insurance, the Trustee’s complaint only asks for a declaration that Consolidated is required to provide coverage for the claims asserted by the Parents, not that Consolidated has a duty to defend those claims. In addition, the Trustee
 cknowledges that the Debtor is liable to the Parents for the pre-paid tuition. So not only is there no request to defend, but there is no question as to the liability of the insured. Accordingly, this Court need not undertake the close examination conducted by the court in Northland Insurance, in combing through the underlying complaint, in this case the Parents’ proofs of claims, for any facts on which any possible theory of recovery might be based.
Second, as the nonmoving party responding to a motion for summary judgment, the Trustee “must present affirmative evidence to defeat a properly supported motion for summary judgment.”
 Cox v. Kentucky Dept. of Transportation, 53 F.3d 146, 150 (6th Cir. 1995) (citations omitted). The Trustee “must do more than simply show that there is some metaphysical doubt as to the material facts.” Id. (quotation marks and citation omitted). As noted, in response to Consolidated’s motion
for summary judgment, the Trustee provided only his own affidavit.
The Trustee’s affidavit swears to certain uncontested facts, such as the existence of policies; that the Parents pre-paid for tuition; that the school closed prior to the beginning of the school year;
that the Parents’s claims exceed $160,000; and that the Trustee made a demand on Consolidated to provide coverage, which Consolidated denied. In addition, the Trustee’s affidavit states, in conclusory terms, that the funds paid by the Parents “were to be held by the Debtor for the purpose of providing educational services during the 2009-2010 school year.” The Trustee’s affidavit goes
on to state that “on information and belief . . . the Debtor utilized [the funds] for purposes other than providing educational services . . . and therefore those funds are not available for refunding to the Parents.” Most of the Trustee’s affidavit simply parrots allegations from the complaint.
The Trustee’s affidavit does not contain any probative evidence to support any alternate theories of recovery for the Parents. The Trustee supplied no affidavits from the Parents providing any explanation for the basis of their claims. Nor did the Trustee provide any affidavits from anyone else. The Trustee’s affidavit does not state any factual basis either for the Trustee’s assertion that the funds were “to be held by the Debtor” for a specific purpose, or for his “belief” that the funds
were not used for that purpose. Although speculating that the Parents might be able to assert some theory of recovery against the Debtor other than breach of contract, the Trustee’s response to Consolidated’s motion for summary judgment does not point to a single fact in the record that supports an alternative theory of recovery. The Trustee does not identify a single document or a
single witness who could provide any evidence to support some alternative theory of recovery against the Debtor. The Trustee merely tosses out names of other types of causes of action such as conversion and breach of fiduciary duty, but offers no affidavits, documents or facts of any kind to support any of those causes of action or to make them anything more than unsupported metaphysical possibilities. Discovery in this adversary proceeding has closed. Summary judgment is the time “to
put up or shut up.” Cox v. Kentucky Dept. of Transp., 53 F.3d at 149. The Trustee cannot oppose Consolidated’s motion for summary judgment with bare allegations and speculation about other factual possibilities. In sum, the Trustee has not come forward with any probative evidence to support the Trustee’s assertion that the Parents may hold claims other than or in addition to their breach of contract claims.
Conclusion
Where the issue is one of insurance coverage and not one of a duty to defend, Consolidated
is correct that one exclusion from the obligation to pay for a loss under the policy ends the inquiry.
Although “[e]xclusionary clauses in insurance policies are strictly construed in favor of the
insured[,] . . . coverage under a policy is lost if any exclusion within the policy applies to an
insured’s particular claim.” Auto-Owners Ins. Co. v. Churchman, 489 N.W.2d 431, 434 (Mich.
1992) (citation omitted); see also Hayley v. Allstate Ins. Co., 686 N.W.2d 273, 275 (Mich. Ct. App.
2004) (finding that coverage requiring an insurer to pay a claim “is lost if any exclusion in the policy
applies to an insured’s particular claims . . . because an insurance company cannot be liable for a
risk it did not assume”) (quotation marks and citation omitted). The School Leaders Policy in this
case covers a loss arising from a wrongful act to which the insurance applies. But the insurance
policy expressly excludes coverage for a claim alleging a breach of contract.
The Court holds that the Parents’ proofs of claims upon which the Trustee bases his
complaint for declaratory relief against Consolidated do allege breach of contract by the Debtor.
It is irrelevant that they do not contain the label “breach of contract” since the substance of the
claims is clearly based upon breach of contract. The Parents’ claims against the Debtor, identified
in the Trustee’s complaint for declaratory relief against Consolidated, are all within the contractual
liability exclusion set forth in section I.C.7. of the School Leaders Policy. The Trustee’s bare
speculation that there may be facts to support other theories of recovery that could also form a basis
for the Parents’ claims against the Debtor is not only unsupported, but is irrelevant. The
section I.C.7. exclusion is dispositive. Auto-Owners Insurance v. Churchman, 489 N.W.2d at 434.
The Court finds that there are no genuine issues of material fact, and that Consolidated is entitled
to summary judgment as a matter of law. The Court will enter an order consistent with this opinion.
.
Signed on April 19, 2011


BANKRUPTCY COST IN FLINT,BAY CITY,LAPEER, OWOSSO CALL (810) 235-1970

April 18, 2011

WHAT DOES BANKRUPTCY COST?
The filing fee for a Chapter 7 Bankruptcy is $299.00. If you cannot afford the fee you will have to file for a waiver. There are costs for a credit report and for your court required credit counseling (another est.) $100.00. There are a range of prices for a bankruptcy attorney on 4/8/2011 my  fee is $750.00.

To check out the rules for getting a waiver see www.uscourts.gov//bankruptcycourts/resources.html

Our first meeting is free.

If you wish to proceed their will be a minimal ‘ serious money” deposit to cover costs of $200.00 and at the second meeting (that you set when ready) your questionaire will be reviewed. Another meeting may be necessary to bring back more material. Nest your  material is committed to preparation. Usuall another payment on the retainer and costs is made. Finally you come in for the signing of your bankruptcy petition. The retainer and all costs have to be paid before your petition is filed.

** GENESEE COUNTY BANKRUTPCY ATTORNEY or LAWYER 810-235-1970 , Terry Bankert, will answer JACKSON COUNTY Flint MI, Bay City, Owosso, Lapeer and Corunna questions from people in debt that just need some answers. The topics you can ask as as follows. Remember we know its http://www.nojokebeingbroke.com/  **

Contact me at (810) 235-1970 or through

www.attorneybankert.com


BANKRUPTCY FLINT, BAY CITY, OWOSSO,AND LAPEER 810-235-1970 FREE CONSULT

April 18, 2011

BANKRUTPCY ATTORNEY or LAWYER 810-235-1970 , Terry Bankert, will answer Flint MI, Bay City, Owosso, Lapeer  and Corunna question from people in debt that just need some answers. The topics you can ask as as follows. Remember we know its www.nojokebeingbroke.com

ASK QUESTIONS ABOUT;

bankruptcy foreclosure

foreclosure vs bankruptcy

CAN BAY CITY OR FLINT HOME FORECLOSURE BE PREVENTED?

If a FLINT OR BAY CITY RESIDENT  gets behind on his or her house payments, the creditor may call the loan in default, accelerate the debt, and begin foreclosure proceedings. DO NOT GIVE UP YET IN FLIONT OR BAY CITY. When a debt is accelerated, the full balance of the note, WHO CAN PAY THAT,  not just the monthly payments, is due, in full, immediately. This is usually preceded by the creditor’s refusal to accept monthly payments.

In the event a creditor begins foreclosure, BAY CITY AND FLINT DEBTORS  will receive a notice of the foreclosure proceeding. Unless the creditor is willing to accept payments to reinstate the loan, DEBTORS will have to either pay the full balance remaining on the loan, or file bankruptcy for protection to stop the foreclosure. One additional option is to contact HUD for mortgage assistance. Sometimes creditors will agree to stop foreclosure while HUD is reviewing your file.

The beginning of a FLINT OR BAY CITY bankruptcy case, if before the foreclosure sale date, will stop the foreclosure sale from taking place.

Under a Chapter 13 plan, you can make regular monthly payments and be given a reasonable period of time to bring your loan payments up to date to save your property.

Bankruptcy may be the best solution for extreme financial hardship. However, it should be used as a last resort, since it can have long- lasting consequences in relation to your credit.

ASK MORE QUESTION ABOUT THE FOLLOWING

bankruptcy vs foreclosure

pros and cons of bankruptcy

foreclosure bankruptcy

bankruptcy and foreclosure

foreclosure bankruptcy auction

foreclosure process

what is bankruptcy

does bankruptcy stop foreclosure

foreclosure

foreclosures

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pre foreclosure

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about bankruptcy

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foreclosure homes

filing bankruptcy online

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how to claim bankruptcy

credit counseling for bankruptcy

is bankruptcy right for me

stop foreclosure

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foreclosure law

should I file for bankruptcy

To reach me on line SEE  HTTP://WWW.NOJOKEBEINGBROKE.COM

OR

http://attorneybankert.com/

OR

https://dumpmycreditors.wordpress.com/

OR

http://goodmorningflint.blogspot.com/