Sikes v. James et al

Filing 27

ORDER granting 20 Motion for Reconsideration re 19 Judgment, 18 Memorandum Ruling. Signed by Judge S Maurice Hicks on 10/31/2016. (crt,ThomasSld, T)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
TODD S. JOHNS

CIVIL ACTION NO. 15-1865

VERSUS

JUDGE S. MAURICE HICKS, JR.

MICHAEL CHAD JAMES AND
SANTANDER CONSUMER USA, INC.

MAGISTRATE JUDGE HORNSBY

ORDER
Before the Court is a Joint Motion for Reconsideration by Todd S. Johns1 and
Michael Chad James (Record Document 20). The parties seek clarification of the Court’s
Memorandum Ruling and Order (Record Documents 18 and 19) in which the Court
affirmed in part and reversed in part the Bankruptcy Court’s judgment. Specifically, the
parties seek clarification of whether the Court’s holding permits the Bankruptcy Court to
implement a policy that allows, but does not require, the Chapter 13 Bankruptcy Trustee
to receive insurance proceeds prior to payment of the insurance proceeds to a secured
creditor when the bankruptcy debtor’s property is destroyed.
The sole issue related to the Bankruptcy Court’s unwritten policy before this Court
in its previous Memorandum Ruling and Order (Record Documents 18 and 19) was
whether the Bankruptcy Code permitted a policy that required all payments of insurance
proceeds from the destroyed property of the debtor to be paid to the Trustee before being
paid to the secured creditor. See Sikes v. James, 2016 U.S. Dist. LEXIS 133756 at *1617 n.3 (W.D. La. 2016). This Court held that the Bankruptcy Code does not permit a policy

1

Todd S. Johns was appointed as Chapter 13 Trustee for the Shreveport Division of the
Bankruptcy Court on October 1, 2016, and was substituted as the appellant in the instant
case for former Trustee Lucy G. Sikes on October 17, 2016. See Record Document 20
at ¶ 13; see Record Document 26.

that requires all payments of insurance proceeds from destroyed property of the debtor
to first be paid to the Trustee. See id. at *15-21. Thus, the Court’s prior ruling permits the
Bankruptcy Court to implement a written policy that allows the Chapter 13 Bankruptcy
Trustee to receive insurance proceeds prior to payment of the insurance proceeds to a
secured creditor, so long as the policy does not require the Trustee to receive the
insurance proceeds.
Accordingly, IT IS ORDERED that the Joint Motion for Reconsideration (Record
Document 20) be and is hereby GRANTED.
THUS DONE AND SIGNED at Shreveport, Louisiana, this the 31st day of October,
2016.