Plaintiff asserted claims against Debtors under sections 523(a)(2)(A), (a)(2)(B), (a)(4), and (a)(6) related to the dissipation of funds invested by Plaintiff. Debtor-wife sought judgment on the pleadings. With respect to all claims against the wife, the Court found Plaintiff failed to allege facts sufficient to state a claim for relief and instead relied on conclusory statements that did little more than recite the elements of the causes of action. Therefore, the Court entered judgment for Debtor-wife on all claims against Debtor-wife.
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Honorable Barbara Ellis-Monro, Chief Judge
IRS assessed income tax liability on Debtor in excess of $200,000 after certain partnership losses allocated to Debtor were disallowed. The Court determined Debtor had not willfully attempted to evade or defeat the tax, and therefore the tax debt was dischargeable. Although Debtor maintained an affluent lifestyle after the assessment, he made significant payments on the assessment through both voluntary and involuntary transfers and he took no action to remove his assets from the reach of the IRS.
Order granting Motion for Relief from Stay of Moe's Franchisor, LLC. Moe's sought relief from stay because Debtors cannot assume or assign their franchise agreement with Moe's pursuant to 11 U.S.C. § 365(c)(1), which states, "The trustee may not assume or assign any exeuctory contract ... if (1)(A) aplicable law excuses a party, other than the debtor, to such contract or lease from accepting performance from or rendering performance to an entity other than the debtor...; and (B) such party does not consent to such assumption or assignment[.]" A circuit split exists as to whether 11 U.S.C. § 365(c)(1) prohibits a debtor in possession from assuming an executory contract if applicable law would excuse the contract counterparty from accepting performance from someone other than the debtor; however, the 11th Circuit's stance on this issue is determined by In re James Cable Partners, L.P., 27 F.3d 534 (11th Cir. 1994), which states that the restriction of § 365(c)(1) does apply to debtors in possession. Debtors argument that James Cable's application of § 365(c)(1) is dicta is incorrect. Because Debtor could not assume the executory contract, cause existed to grant Moe's relief from the automatic stay.
Deferring ruling on putative landlord's motion to compel rejection or assumption of lease and granting in part landlord's motion for relief from the automatic stay regarding premises used by chapter 11 debtors to operate senior long-term care facilities.
Order denying confirmation of Debtor’s Chapter 13 plan. Debtor’s previous case was dismissed for failure to comply with his own confirmed plan. That plan directed Debtor to auction a “Lake House” to pay judgment creditor Dwayne Richardson’s (“Creditor”) secured claim. In his second case, Debtor filed a plan that proposed to “pay” the secured claim of Creditor by surrendering the Lake House—only one of the properties encumbered by Creditor’s judgment lien. The plan proposed to judicially value the Lake House and pay any deficiency in monthly installments. Debtor repeatedly fell behind on his pre-confirmation plan payments and did not reliably keep Richardson’s collateral insured. Richardson filed several objections noting insurance deficiencies and Debtor’s failure to disclose several pieces of property.
After a trial, the Court denied confirmation on two grounds: First, good faith based in part on Debtor’s failure to maintain insurance (the Lake House was uninsured as of the trial date) and lack of disclosure in the case. Second, the Court held that a plan cannot propose to give an objecting secured creditor only some of his collateral. This result is the same whether the plan couches the treatment as a “partial surrender” or as a “payment.” The surrender provision of Section 1325(a)(5) requires surrender of all property securing the secured creditor’s claim, and the word “payment” as used in the bankruptcy code does not contemplate a transfer of real property to an objecting judgment creditor.
Order overruling Debtor’s objection to claim of Wells Fargo Bank, N.A. Debtor objected to Wells Fargo’s secured proof of claim based on a mortgage loan, asserting that she did not owe it a debt. At the hearing on the objection, Debtor asserted that the endorsements on the note to Wells Fargo were invalid and that the assignment of Debtor’s security deed was by fraudulent “robo-signing.” The Court overruled Debtor’s objection for three reasons. First, because Debtor failed to produce adequate evidence to overcome Wells Fargo’s sworn proof of claim’s prima facie evidence of the validity and amount of its claim. Second, because Debtor entered into a loan modification with Wells Fargo which the court held estopped Debtor from denying that Wells Fargo received an assignment of her mortgage loan. Third, because under Georgia law Debtor lacked standing to challenge the assignment as a nonparty to the assignment agreement.
The Court denied Defendant's Motion for Partial Summary Judgment, finding that the liberal pleading standards of Rule 8, incorporated into the Bankruptcy Code, do not require that the Plaintiff specifically reference the applicable state law. The Court also found that statutes of limitations are procedureal, and the applicable law concerning statute of limitations is that of the forum state, which is in this case Georgia. The Court reserved judgment as to what laws govern the substance of the fraudulent transfer claims, as classification of a fraudulent transfer claim as one resounding in tort or contract may require the Court to examine the facts of the case, and the rules regarding choice-of-law under both are factual inquiries that should not be undertaken until the conclusion of discovery.
The Court sustained the debtor's objection to a creditor's claim as having been filed after the claims bar date and denied the Chapter 13 Trustee's motion to dismiss the case or modify the debtor's confirmed plan to increase the plan payments, finding that the debtor did not have an increase in income.
Honorable Paul W. Bonapfel
In an earlier opinion on the Trustee's motion for partial summary judgment on his objections to a proof of claim, the Court reserved ruling on certain issues to permit the claimant to supplement the record to show a dispute of material fact. Court concludes that the claimant's Supplemental Brief does not establish any such dispute and grants Trustee's motion on those issues.
This Supplemental Memorandum Opinion and Order has not been prepared for publication and is not intended for publication.
Funds distributed under a Chapter 13 plan to the holder of a subordinate security deed, but not claimed, remain property of the creditor. The later conversion of the case to Chapter 7 and "strip-off" of the lien do not affect the rights of the creditor to the unclaimed funds. Debtor's application for disbursement of the funds to her is denied. This Order has not been prepared for publication and is not intended for publication.