The Court recommended that the District Court dismiss Defendants’ counterclaims for conversion, breach of contract, and fraud because (1) conversion claim could not lie where Defendants did not allege sufficient facts indicating that Defendants had title or right of possession to funds escrowed with Plaintiff and Plaintiff did not have any independent, non-contractual duty to release the funds; (2) breach of contract claim was not viable because although the parties’ loan agreement provided that Plaintiff would disburse funds within seven days, Plaintiff’s delayed payment was not a material breach, and the loan agreement precluded Defendants from recovering monetary damages for unreasonable delay and limited their remedies to specific performance, injunctive relieve, and/or declaratory judgment; and (3) fraud claim was unsustainable because Defendants did not allege any specific misrepresentations other than vague allegations that Plaintiff misrepresented its intent to perform under the loan agreement after that contract had already been formed.
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Honorable James R. Sacca
The Court found following trial that Debtor did not receive any value in exchange for a transfer of $472,806 to the Defendant that occurred less than two years before its petition date, that these funds were the Debtor's property and not the Defendant's (as he testified at trial), and that the Debtor was insolvent at the time of the transfer. The Court concluded that the trustee was entitled to avoid this transfer pursuant to 11 U.S.C. Section 548(a)(1)(B) and recover it pursuant to 11 U.S.C. Section 550.
The Court found following trial that Debtor did not receive any value in exchange for a transfer of Persian rugs to its principal that occurred less than two years before its petition date, that this property belonged to the Debtor, and that the Debtor was insolvent either before or immediately following this transfer. The Court concluded that the trustee was entitled to avoid this transfer pursuant to either 11 U.S.C. Section 544(b) or 548(a) and recover it pursuant to 11 U.S.C. Section 550.
The Court held that (1) service to individual defendant at post office box was insufficient, (2) the Court still had constitutional authority to enter a final order in this fraudulent transfer proceeding following the Supreme Court's decision in Stern v. Marshall, (3) Chapter 13 Debtor had standing to bring fraudulent transfer action under Section 548, and (4) Debtor's motion for summary judgment must be denied because questions of fact remained regarding whether Defendants complied with Georgia law when completing foreclosure sale and regarding whether foreclosure sale of Debtor's home was a transfer for less than reasonably equivalent value.
The Court denied motion to dismiss for lack of subject matter jurisdiction filed by Debtor and related entities in adversary proceeding, in which bank had filed complaint seeking declaratory judgments relating to title on real property owned by Debtor at the time it filed for Chapter 11 protection. The Court held that it had subject matter jurisdiction over this adversary proceeding because the bank's claims were related to the underlying bankruptcy case (because those claims could have conceivably affected property of the estate) at the time the complaint was filed, notwithstanding the fact that the underlying bankruptcy case was later dismissed. The Court also explained why exercising its discretion to retain jurisdiction over this adversary proceeding after dismissing the underlying bankruptcy case was proper.
Court denied Debtor's objection to claim transfer because only the purported transferor of a claim has standing to object to the transfer under rule 3001(e)(2).
Court granted Fannie Mae's motion for relief from automatic stay so it could proceed with state court dispossessory proceedings because Fannie Mae showed cause for relief pursuant to Code Section 362(d) by virtue of the fact that it had obtained a writ of possession in state court; the Court also held that Fannie Mae had standing to seek relief from the stay because its writ of possession indicated that it was a party in interest with a colorable claim to the subject property.
Debtor's motion for examination of creditor under Rule 2004 was granted in part and limited to the purpose of determining the extent to which Debtor's personal property contained in bed and breakfast facility may or may not have been foreclosed on.
Court granted Debtor's motion for exemption from credit counseling because exigent circumstances--primarily that an interruption in internet service (among other factors) prevented her from completing her credit counseling prior to her petition being filed--merited a waiver under Code Section 109(h)(3)(A) of the requirement to obtain credit counseling before filing her petition required by 109(h)(1).
Court denied Plaintiff's motion for default judgment seeking a judgment of nondischargeability under Code Section 523(a)(2)(A) because Plaintiff wholly relied on the presumption of fraudulent intent under 523(a)(2)(C) but did not allege sufficient facts--specifically, that the debt was a consumer cash advance under an open end credit plan--to invoke that presumption, and Plaintiff did not allege any other facts to satisfy the elements of fraud.