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In Re: Sherman C. Imler Iii and Lisa R. Imler v. Marsha L. Combs-Skinner

August 23, 2011

IN RE: SHERMAN C. IMLER III AND LISA R. IMLER, DEBTORS/APPELLANTS,
v.
MARSHA L. COMBS-SKINNER, CHAPTER 13 STANDING TRUSTEE, APPELLEE.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

E-FILED

Tuesday, 23 August, 2011 04:03:22 PM

Clerk, U.S. District Court, ILCD

OPINION

This is an appeal from an Order entered by the United States Bankruptcy Court for the Central District of Illinois, in Bankruptcy Case No. 02-90582, brought pursuant to 28 U.S.C. § 158(a). Following this court's careful review, this court affirms the Order of the Bankruptcy Court.

FACTS

In 2001, the Debtors, Sherman C. Imler III and Lisa R. Imler, were sued by Central Mutual Insurance Company (Central Mutual) in this court in Case No. 01-CV-2013. The case was assigned to Senior United States District Judge Harold A. Baker. Central Mutual sought a declaratory judgment that, under the terms of the applicable insurance policy, the Debtors were entitled to repair of their roof, which had been damaged in a hail storm, rather than the replacement of their roof. On February 25, 2002, the Debtors filed for bankruptcy relief under Chapter 13 of Title 11 of the United States Code, in Bankruptcy Case No. 02-90582.

On February 21, 2003, judgment was entered in Case No. 01-CV-2013, in favor of the Debtors in the amount of $137,517.00. No appeal was filed. On September 23, 2003, a hearing was held before United States Bankruptcy Judge Gerald D. Fines. At the hearing, Judge Fines ordered the Debtors to sign two checks issued in complete payment of the $137,517.00 judgment. One of the checks was turned over to Charles C. Hall, who originally represented the Debtors in the case before Judge Baker, for payment of his attorney's fees. The other check was turned over to Bill T. Walker, who also represented the Debtors in the case before Judge Baker, for disbursement. According to the Debtors, a significant portion of the judgment amount was disbursed to Walker and other professionals involved in that case. However, the Debtors' did not appeal Judge Fines' order requiring them to sign the checks.

The Debtors later filed an objection to an application for additional compensation filed by Richard F. Kurth, who was their attorney in the bankruptcy proceedings. On February 3, 2005, United States Bankruptcy Judge Gerald D. Fines entered an Opinion and did not allow the additional compensation requested by Kurth. Judge Fines also stated:

[I]n essence, the Debtors wish to have this court find that Attorney

Kurth was guilty of malpractice in his representation of them in the instant Chapter 13 proceeding. In considering this request, the Court finds that the Debtors have not properly plead a malpractice action against Attorney Kurth, and that such matter would more properly be raised in a State Court proceeding. Furthermore, this Court finds that the Debtors' desire to have this Court revisit rulings and orders issued by the United States District Court for the Central District of Illinois is without merit and beyond the scope of authority of this Court.

On March 28, 2005, the Debtors filed a pro se Complaint on their own behalf, on behalf of their business, Grant Manor, and on behalf of their minor children, against various defendants, including Central Mutual, in the circuit court of Vermilion County. The Debtors sought damages based upon claimed violations of the Illinois Consumer Fraud and Deceptive Business Practices and Uniform Deceptive Trade Practices Act and based upon allegations of negligence. In their lengthy pro se Complaint, the Debtors discussed Hall and Walker, the attorneys who represented them in the 2001 action in federal court, and complained about the representation provided by these attorneys. The Debtors also mentioned that Kurth represented them in their bankruptcy proceeding. However, the Complaint did not include a legal malpractice claim against Hall, Walker or Kurth. On April 27, 2005, Central Mutual removed the case to this court in Case No. 05-CV-2101. The case was assigned to Judge Baker. On September 26, 2005, Judge Baker entered an Order and remanded the case back to the circuit court of Vermilion County.

On February 21, 2006, the Debtors received a discharge of their obligations and, on March 9, 2006, the bankruptcy case was closed. After the bankruptcy case was closed, James R. Geekie retired from his position as Chapter 13 Standing Trustee for the Bankruptcy Court, Central District of Illinois, ...


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