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WD Equipment, LLC v. Cowen (In re Cowen)

United States Court of Appeals for the Tenth Circuit

February 27, 2017, Filed

No. 15-1413


 [*945]  McKAY, Circuit Judge.

Plaintiff Jared Trent Cowen's 2000 Peterbilt 379, a commercial truck, was in need of repair. To cover the cost, Mr. Cowen borrowed money from Defendant WD Equipment, which is owned and managed by Defendant Aaron Williams, in exchange for a lien on the truck and the promise of repayment. After the Peterbilt broke down again only a few weeks after the repairs, it was towed to a local repair company, which estimated that fixing the truck again would cost $9,000—more than Mr. Cowen could afford.

Because his Peterbilt was in the shop, Mr. Cowen could not make installment payments to WD Equipment. So, in early August, 2013, Mr. Cowen began taking steps to refinance the loan; he met with his bank and with his parents in an attempt to secure refinancing, and he exchanged several text messages on August 1 and 2 with Mr. Williams about paying off the loan. During [**2]  the course of that exchange, however, Mr. Williams gave Mr. Cowen several, contradictory responses as to how much Mr. Cowen would need to pay to settle the debt, and he accelerated the payoff date several times, before ultimately setting August 6 as the deadline.

Around the same time, Mr. Cowen defaulted on another loan secured by another one of his trucks, a 2006 Kenworth T600. This loan was owed to Defendant Bert Dring, the father-in-law of Mr. Williams, who held a purchase-money security interest in the truck. On July 29, Mr. Dring lured Mr. Cowen under false pretenses to his place of business to repossess the Kenworth. Mr. Dring asked Mr. Cowen, who had brought along his young son, to leave the keys in the ignition, engine running, and to step out of the truck. As Mr. Cowen exited the vehicle, Mr. Dring jumped in, grabbed the keys, and declared the truck "repossessed." When Mr. Cowen asked what was going on, Mr. Dring told him to take his son and leave—immediately. A group of five men gathered around Mr. Dring while he brandished a can of mace above his head and threatened to use it if Mr. Cowen did not leave. Mr. Cowen pushed his young son behind him to protect him, and the two [**3]  left the lot on foot. Three days later, Mr. Cowen received a letter from Mr. Dring giving him ten days to pay off the Kenworth.

 [*946]  Instead, Mr. Cowen filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code on August 6, which was the deadline for paying off the Peterbilt, and which was within the ten-day cure period for the Kenworth. He notified Defendants of the filing and requested the immediate return of both trucks. But Defendants refused: Mr. Williams claimed that he had changed the title to his name on August 1. (At no time during the text message exchanges on August 1 and 2 did Mr. Williams ever inform Mr. Cowen of the title change.) And Mr. Dring claimed that he sold the Kenworth sometime prior to the bankruptcy filing. (Initially, he claimed he had sold the Kenworth to an unknown Mexican national for cash in an undocumented sale just days before Mr. Cowen filed for bankruptcy. Later, Mr. Dring produced bill of sale, purporting to show that he sold the Kenworth to a Mr. Garcia for $16,000 in cash on August 4.)

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849 F.3d 943 *; 2017 U.S. App. LEXIS 3486 **; 77 Collier Bankr. Cas. 2d (MB) 438; 63 Bankr. Ct. Dec. 211; 2017 WL 745596


Prior History:  [**1] Appeal from the United States District Court for the District of Colorado. (D.C. No. 1:14-CV-02408-REB).

Cowen v. WD Equip., LLC (In re Cowen), 549 B.R. 774, 2015 U.S. Dist. LEXIS 132875 (D. Colo., 2015)


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Bankruptcy Law, Procedural Matters, Judicial Review, Bankruptcy Appeals Procedures, Standards of Review, Clear Error Review, De Novo Standard of Review, Jurisdiction, Core Proceedings, Automatic Stay, Violations of Stay, Damages, Bankruptcy, Conversion & Dismissal, Effects of Dismissal, Noncore Proceedings, Scope of Stay, Claims Against Estate Property, Governments, Legislation, Interpretation, Case Administration, Bankruptcy Court Powers, Estate Property, Noncustodial Turnovers