Opinions

Effective January 1, 2017, Orders in the United States Bankruptcy Court for the Northern District of Georgia designated by the Court as "opinions" will be transmitted to the Government Publishing Office (GPO) and made available to the public at no cost.  To view these opinions, click HERE to be transferred to GPO site.

Orders designated as Opinions and issued between January 1, 2004 and December 31, 2016 are maintained on this website. Many of these Opinions are not intended for publication and are so designated. Each entry includes the style of the matter, the case number, the date entered on the docket, and a short parenthetical expression of the issue(s) raised. The most recent opinions appear first.

You can narrow your search by judge and/or year below.  You can also use the search feature above to search by name, word, or phrase. The single opinions are in PDF text format and may be searched for word, phrase, or date by using “Control F,” the Windows search function available in any Windows application.

Honorable Wendy L. Hagenau, Chief Judge

Order Denying Motion to Reconsider and Recuse.  Debtor asked the Court to reconsider its order granting relief from the automatic stay and in a separate motion asked that the judge withdraw from hearing the matter.  In the motion to reconsider, the Debtor argued that relief from the automatic stay was improper because the Debtor wanted to contest a judgment entered by the Gwinnett Magistrate Court.  The Court held that, pursuant to the Full Faith and Credit Act and Supreme Court jurisprudence, the bankruptcy court lacks authority to reverse a state court judgment.  Additionally, the Court held that the creditor had a colorable claim to the property in question, justifying stay relief.  In the motion asking for recusal, the Debtor alleged that this Court favored the creditor based on remarks made during the proceedings and asked for the judge to disqualify herself from hearing the matter.  The Court noted that any appeals would be heard by the District Court rather than the bankruptcy court, and ruled that a judge is not recusable for bias when the judge’s opinion is based on matters introduced during the course of proceedings.

Order Denying Motion to Dismiss.  Creditor sought dismissal of Debtor’s bankruptcy case under 11 U.S.C. § 707(b)(2) and (b)(3), and in a separate motion sought dismissal under 11 U.S.C. § 707(a).  The Court ruled that 707(b) was inapplicable because the debts of the Debtor were not primarily consumer debts, the Debtor was a below-median-income debtor, and because the creditor did not have standing to bring a motion under Section 707(b).  The Court also addressed dismissal under 707(a) and, guided by Eleventh Circuit precedent, found that the evidence presented concerning the filing of the Debtor’s bankruptcy case and the Debtor’s income and expenses did not establish cause to dismiss the Debtor’s bankruptcy case under 707(a).

Order Denying Motion for Sanctions.  Creditor sought sanctions against the Debtor’s attorney under Rules 9011(b) and 9011(c).  Although the creditor sought sanctions due to errors in the petition, the Court was primarily concerned with whether the attorney violated Rule 9011 by helping a pro se debtor file a petition.  The evidence presented showed that the attorney helped the Debtor prepare a petition, but did not sign or file the petition.  Additionally, the attorney did not advocate the petition at any time before entering a notice of appearance or receiving a fee.  The Court noted that while assisting pro se Debtors with filing pro se petitions has the potential to mislead the court, the Eleventh Circuit has permitted attorney “ghostwriting” of bankruptcy petitions under certain circumstances.  The Court held that because the evidence showed the attorney simply helped the Debtor by filling in blank spaces on the petition, and did not provide the Debtor with any legal advice, the attorney’s conduct was not sanctionable under Rule 9011.

Honorable W. H. Drake Jr.

The Court denied defendant's motion to have default judgment set aside for insufficient service, finding that a summons that that failed to list the defendant in its caption was sufficient where the defendant had received notice of the suit through other means and waited eight months before filing his motion to set aside.

Denying motion for summary judgment.  Plaintiff had insufficient evidence to support its claim that the debtor/defendant's breach of a noncompetion agreement caused Plaintiff to suffer a willful and malicious injury. 

Honorable James R. Sacca

The Court granted in part and denied in part cross-motions for summary judgment on the Debtor’s objection to the creditor’s claim for $955,880.22. The claim arose out of a default judgment for unjust enrichment from a Tennessee state court against a company for which the Debtor guaranteed the “debts and obligations arising out of contracting activities” as defined by the Tennessee Contractors Licensing Act of 1994, Tenn. Code Ann. § 62-6-101, et seq. The Court concluded that state choice of law rules applied to determine whether the claim was valid under state law since no compelling federal interest existed. It then applied Tennessee’s choice of law rules because filing the claim in the bankruptcy case was functionally an extension of the creditor’s prepetition claim that was pending in a Tennessee state court when the bankruptcy case was filed. The Court found that under Tennessee law the default judgment from a Tennessee state court against the principal company was not binding on the Debtor as a guarantor. Applying Tennessee law, the Court determined that the guaranty was enforceable and the creditor was a third-party beneficiary of the guaranty. However, the Court concluded that the Debtor was not liable for any claims of unjust enrichment against the principal company by way of the guaranty because unjust enrichment is not a contracting activity within the scope of the Tennessee statute. An obligation under the guaranty would only arise if the principal company had an obligation to a creditor arising from the activities performed by that principal company described in Tenn. Code Ann. § 62-6-102(4)(A)(i). Questions of fact still existed with respect to whether the principal company was a contractor engaged in contracting activities as defined by the Tennessee statute, and if so, whether the principal company had any obligation to the creditor arising out of those contracting activities.
INTENDED FOR PUBLICATION

In ruling on cross-motions for summary judgment on a creditor’s motion to disallow the Debtor’s exemption of a profit sharing plan estimated to have assets of about $300,000, the Court concluded that material questions of fact still existed as to whether the plan was qualified under 26 U.S.C. § 401 and denied both motions. The Debtor argued that the plan was not property of the bankruptcy estate pursuant to 11 U.S.C. § 541(c)(2) because it had an enforceable spendthrift provision under O.C.G.A. § 53-12-80(g) and that even if the plan was property of the bankruptcy estate he was entitled to exempt it pursuant to O.C.G.A. § 44-13-100(a)(2.1) and 11 U.S.C. § 522(b)(3)(C). The crux of both issues was whether the plan was a qualified plan under § 401 of the Internal Revenue Code. The creditor argued that the plan was not qualified because: (a) it did not have a required distribution clause, (b) it violated the anti-alienation provision, (c) it violated the exclusive benefit rule, and (d) that various prohibited transactions under 26 U.S.C. § 4975 occurred. The Court concluded the plan did contain the required distribution clause and that material questions of fact existed as to whether the anti-alienation provision and exclusive benefit rule were violated. In addition, the Court rejected the creditor’s argument that one prohibited transaction was sufficient to disqualify a profit sharing plan, but concluded that a profit sharing plan may be disqualified if a multitude of prohibited transactions exist such that the form of the plan is being abused; material questions of fact still existed as to the number of the prohibited transactions that occurred. Furthermore, because neither party presented sufficient evidence that the plan received a “favorable determination” as contemplated by 11 U.S.C. § 522(b)(4)(A), to exempt the plan the Debtor had to demonstrate that it was in substantial compliance with the tax code (or if not the Debtor was not materially responsible for its failure) and that it had not previously received an unfavorable determination by a court or the IRS, pursuant to 11 U.S.C. § 522(b)(4)(B). The creditor maintained the overall burden of proof in objecting to the exemption in accordance with Fed. R. Bankr. P. 4003. Because neither the Debtor nor the creditor met its respective burden to be entitled to judgment as a matter of law on either issue the Court denied both motions. 

Honorable Mary Grace Diehl

Order denying Defendant’s motion for reconsideration. The Court dismissed Defendant’s counterclaims without prejudice for lack of “related to” jurisdiction in accordance with 28 U.S.C. § 1334(b) and remanded the case back to the Magistrate Court of Clayton County, Georgia. In his motion to reconsider, Debtor sought to relitigate issues the Court had already decided, asserting substantially the same arguments as set forth in his previous filings. Absent new findings, changes in law, or clear error of fact or law, the Court found that reconsideration was not warranted.  

Order overruling remaining objections to claims of Petitioning Creditor (lessor). The Court addressed three primary issues. First, Objectors asked the court to avoid certain prepetition payments made by Debtor to Petitioning Creditor and use those avoided payments to partially satisfy Petitioning Creditor’s claim. The Court overruled that objection as a legally unsupported invitation to engage in extenuated analysis and restructuring of prepetition payments. Second, Objectors contended that Petitioning Creditor’s “gap claim” under § 502(f) should be disallowed because the claim overlapped with Petitioning Creditor’s rejection damages claim under § 502(b)(6). The Court overruled that objection, concluding that any perceived overlap with the period addressed in § 502(f) did not serve as a valid basis for reducing or disallowing one of Petitioning Creditor’s claims at the expense of the other. Third, Petitioning Creditor argued Objectors waived the ability to make further legal challenges to Petitioning Creditor’s claims. The Court agreed, concluding that, further legal challenges to Petitioning Creditor’s claims by Objectors have now been waived.

Honorable Barbara Ellis-Monro

Debtor failed to list her involvement with an LLC that was linked to misconduct in an unaffiliated debtor’s bankruptcy case. The Chapter 7 trustee sought to revoke Debtor’s discharge pursuant to 11 U.S.C. § 727(d) as having been incurred by fraud. Debtor served as manager of the LLC and executed multiple documents on behalf of the LLC but had no ownership interest in the LLC and had no independent decision making authority, the Trustee failed to prove that Debtor was required to list the LLC on her SOFA and/or schedules and that her failure to do so was a fraudulent act, and revocation was denied.
NOT INTENDED FOR PUBLICATION

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