Creditor who acquired, by assignment from an affiliate, a real estate mortgage executed by the debtor alleged that the debtor had committed fraud in connection with the mortgage and sought determination that its deficiency claim was excepted from discharge. Default judgment is denied because a fraud claim cannot be assigned and no fraud was committed against creditor.
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Honorable Paul W. Bonapfel
Trustee objected to reasonableness of attorney’s fees of $4,200 in chapter 13 case. Based on modification of fee agreement to provide that the flat fee encompassed substantially all legal services that the debtor would likely require during the life of the case, the Court allowed the fee.
At trial, court determined that the debt of the debtor to the plaintiff for insurance fraud was nondischargeable and determined the amount of the debtor’s liability. The plaintiff is also entitled to attorney’s fees as an element of damages under O.C.G.A. § 13-6-11, punitive damages under O.C.G.A. 51-12.5.1, and prejudgment interest at seven percent under O.C.G.A. § 7-4-2. Bankruptcy court has jurisdiction under 28 U.S.C. § 157(c)(2), with consent of the parties, to enter money judgment on the nondischargeable claim.
Although it may be appropriate to object to a claim that includes unmatured interest, it is not appropriate to seek its complete disallowance on that ground; the proper remedy is allowance of the claim in the proper amount. Further, it is not appropriate to disallow a claim, without a hearing, if a response to an objection has been filed, even if the claimant fails to appear at the hearing. If the debtor has an actual objection to a claim on the merits, the court will, of course, hear it. But the court will not disallow a claim, in whole or in part, in the absence of a showing that the debtor has a valid objection that requires its disallowance under 11 U.S.C. §§ 502(b). In re Shank, 315 B.R. 799 (Bankr. N.D. Ga. 2004). Moreover, if the claim is secured by collateral that the debtor desires to retain, disallowance of the claim other than because it is not owed would not seem to affect the holder’s lien. Thus, the lien might survive the bankruptcy case under Universal American Mortgage Co. v. Bateman (In re Bateman), 331 F.3d 821 (11th Cir. 2004). If the Debtor’s objective is to retain collateral, disallowance of the claims for a procedural defect would not appear to be in the Debtor’s interest.
(Order denying Defendant’s motion to dismiss for failure to state a claim. Whether the plaintiffs were independent contractors or employees under Fair Labor Standards Act and, thus, whether they were creditors for purposes of bringing a 523 or 727 action, was a fact-intensive determination inappropriate for a Rule 12(b)(6) motion. The court declined to treat the Rule 12(b)(6) motion as a motion for summary judgment since the parties had engaged in no discovery in this proceeding and where discovery had not been completed in the district court case which was pending at the time of the bankruptcy filing.)
(Order granting Defendant’s motion to dismiss for failure to state a claim for relief under 523(a)(2)(A). The Plaintiff’s oral statement regarding the unencumbered value of real property was a statement regarding his financial condition and, thus, was not actionable under 523(a)(2)(A) under either the broad interpretation or narrow interpretation of “statement respecting the debtor’s or an insider’s financial condition.”).
In earlier order in this preference action brought by the chapter 7 trustee, the court concluded that the security deeds held by a purchase money lender on the Debtor’s property were perfected within the meaning of § 547(e)(1)(A) at the time they were executed and delivered because, under Georgia law, a bona fide purchaser would have had inquiry notice of them at all times prior to their recordation based on the Debtor’s absence of record title and the existence of a cancelled security deed on the property in favor of another lender. On reconsideration, the court ruled that, when established by reference to a bona fide purchaser standard, the rights of a bankruptcy trustee are determined on a hypothetical basis and without regard to what an actual purchaser actually did or did not know about the facts as they actually existed. A bankruptcy trustee’s rights based on a hypothetical bona fide purchaser’s rights are neither diminished nor augmented by attributing actual knowledge or its absence to the trustee In other words, the facts cannot be changed, and the bankruptcy trustee’s rights, i.e., the legal consequences of those facts, are determined on the basis of those actual facts.
(Debtor’s complaint to determine that unsecured debt owed to ex-spouse arising from divorce decree is dischargeable fails to state a claim for relief. While the Debtor’s debt to the ex-spouse may not be a domestic support obligation as contemplated by § 523(a)(5), it is nevertheless a debt to a former spouse incurred by the Debtor in connection with the divorce decree and, therefore, falls within the category of debts described in § 523(a)(15) which are now excepted from discharge based upon changes made to § 523(a)(15) under BAPCPA).
Guardian ad litem fees awarded in custody dispute excepted from discharge pursuant to 11 U.S.C. § 523(a)(5).
Defendant’s motion to dismiss fraudulent transfer claims denied because actual fraud claims stated with sufficient particularity for purposes of Rule 9(b). Motion for more definite statement of constructive fraudulent transfer claims denied as claims are not “vague or ambiguous.” Motion to strike immaterial matters denied because defendant has not shown that the allegations at issue have no bearing on the litigation or will cause it prejudice. 548(a)(1)(A) and (B); O.C.G.A. §§ 18-2-74, 18-2-75; FED. R. CIV. P. 8, 9, 12(e), 12(f).