Court Opinion

ID: 997296
Source: CourtListenerOpinion
Date Created: 2013-07-04 16:54:04.9215+00
Date Added: 2024-06-11T15:11:36.910486
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: LEO C. LOEVNER,
Debtor.

LEO C. LOEVNER,
Debtor-Appellant,

                                                               No. 97-2568
v.

LUCIUS LAMAR; JEANNE C. MURPHY;
D. & J. OSTROWSKY,
Claimants-Appellees,

GREY HODNETT, Trustee,
Trustee-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
T.S. Ellis, III, District Judge.
(CA-97-899-A, CA-97-919-A, BK-95-11782-SSM)

Argued: October 30, 1998

Decided: December 1, 1998

Before WILLIAMS and MOTZ, Circuit Judges, and
STAMP, Chief United States District Judge for the
Northern District of West Virginia, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: David Edgar Jones, Fairfax, Virginia, for Appellant. Law-
rence Thomas Brooke, Fairfax, Virginia; Bernard Fensterwald, III,
Vienna, Virginia, for Appellees. ON BRIEF: Mark A. Bayer, Wash-
ington, D.C., for Appellee Hodnett.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Leo C. Loevner appeals an order of the district court affirming
United States Bankruptcy Judge Stephen S. Mitchell's dismissal of
appellant's petition pursuant to Chapter 13 of the Bankruptcy Code,
11 U.S.C. § 1301, et seq. Finding no error in the district court's opin-
ion, we affirm.

I.

Appellees, Greg Hodnett, Lucius Lamar, Jeanne C. Murphy and
David Ostrowski ("Creditors"), were customers of Loevner who
worked as an investment advisor. After Loevner lost certain money
that the Creditors had entrusted to him, the Creditors each filed suit
against Loevner in the Circuit Court of Fairfax County, Virginia. In
1992, the circuit court rendered judgments in favor of each creditor.
In 1993, Loevner filed for bankruptcy pursuant to Chapter 7, seeking
discharge of all of his debts. The Creditors instituted adversary pro-
ceedings to establish that the state court judgments were not dis-
chargeable. United States Bankruptcy Judge Douglas O. Tice, Jr.
ruled that the judgments were not dischargeable debts. In 1994, Judge
Tice issued separate orders in each creditor's case. Each order
excepted from discharge the amount of the applicable state court
judgment. Those amounts totaled $213,645.50.

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In 1995, Loevner filed Chapter 13 proceedings and the Creditors
filed proofs of claims. Those claims included interest amounts that
had accrued from the time the state court judgments were rendered.
Those claims totaled $309,870.19. Loevner objected to those amounts
and United States Bankruptcy Judge Stephen S. Mitchell overruled
the objections and dismissed the Chapter 13 petition because under
Chapter 13 bankruptcy, a debtor may not owe more than $250,000 in
non-contingent, liquidated, unsecured claims on the date the petition
was filed. 11 U.S.C. § 109(e). Judge Mitchell found that the claims
should be allowed in the amounts as stated. United States District
Judge T.S. Ellis, III, affirmed Judge Mitchell's decision.

Noting that "interest is an integral part of a non-dischargeable debt
under Section 523 of the Bankruptcy Code . . . ." (J.A. at 117), the
district court found that Judge Mitchell had construed Judge Tice's
orders correctly and likewise found that Judge Tice had not entered
new judgments but simply refused to discharge existing judgments
that included interest dating from the date of the state court judgment.

Both parties to this appeal agree that the Creditors are entitled to
post-judgment interest as a part of the non-dischargeable debt. The
parties dispute whether that interest began to accrue from the date of
the state court judgments or from the date of Judge Tice's orders.
Loevner urges this Court to find that Judge Tice entered new judg-
ments and because he did not expressly state that the state court judg-
ments "plus interest" were excepted from discharge, post-judgment
interest accrued from the date of Judge Tice's orders and not the date
of the state court Chapter 13 bankruptcy because he would not owe
more than $250,000 in non-contingent, liquidated, unsecured claims
on the date the petition was filed.

It is clear to this Court after reviewing the record in this matter that
the bankruptcy court did not enter new judgments against Loevner;
rather, it simply refused to discharge existing judgments. The bank-
ruptcy court's memorandum opinions and orders referred to excepting
from discharge the individual state court judgments. Moreover, with
respect to Hodnett's claims, Judge Tice noted that the state court
judgment had been partly satisfied which indicates that the bank-
ruptcy court was simply refusing to discharge the judgment as
opposed to entering a new judgment. With respect to the claims of

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Lamar, Murphy, and Ostrowski, the bankruptcy court noted that
because the judgments were excepted from discharge pursuant to Sec-
tion 523(a)(4) of the Bankruptcy Code that attorney's fees and other
ancillary costs were appropriately included in the proofs of claims.
These considerations indicate that it was the state court judgment as
it existed that the bankruptcy court refused to discharge and that the
court was not entering new judgments. This Court also finds that post-
judgment interest from the date of the state court judgments was prop-
erly included in the claims filed in the Chapter 13 proceedings.

Jennen v. Hunter (In re Hunter), 771 F.2d 1126 (8th Cir. 1985),
upon which Loevners relies, does not compel a different result. Loev-
ner argues that Jennen stands for the proposition that if a creditor fails
to assert its entitlement to interest on a non-dischargeable debt before
the bankruptcy court, the creditor foregoes its entitlement to such
interest. Under this rationale, according to Loevner, the Creditors
have foregone that interest which accrued from the date of the state
court judgments to the date of the judgments rendered by Judge Tice
because they failed to seek that interest in the bankruptcy proceed-
ings. Had the court in Jennen decided this issue, Loevner's argument
might be persuasive. However, the court "decline[d] to reach or
decide this claim [which was] raised for the first time on appeal" and
remanded the issue to the bankruptcy court. 771 F.2d at 1132.

As previously noted, the district court found that the bankruptcy
court had not entered new judgments against Loevner but merely
found that existing judgments plus interest accrued thereon were non-
dischargeable. This Court finds no error in that ruling.

II.

We have carefully considered the briefs and oral argument of the
parties and those portions of the record pertinent to the various argu-
ments. Having done so, we find no reversible error in the opinion and
decision of the district court. Accordingly, we affirm on the reasoning
of the district court.

AFFIRMED

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