The Debtor’s former spouse and a guardian ad litem for their child sought determinations of the dischargeability of debts under §§ 523(a)(5), (a)(15), and (a)(6), stemming from Debtor’s frivolous custody battle in state court. Debts owed for attorneys fees in the litigation were not in the nature of support and thus not excepted by 523(a)(5), but were nonetheless nondischargeable under 523(a)(15). The Court held that a guardian ad litem appointed in child custody case was a “legal guardian” under 101(14A), rendering fees awarded by the state court to the guardian ad litem nondischargeable under 523(a)(5).
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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.
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Judge James E. Massey (Retired)
The Debtor in this Chapter 7 case sought to hold the Defendant in civil contempt for alleged violations of the discharge injunction under section 524. The Debtor repeatedly told the Defendant she wanted to continue to make payments and remain in her home. Defendant’s actions in calling the Debtor to remind her missed payments, sending letters to the Debtor reminding her of missed payments, and inspecting the property for occupancy when the payments were in arrears of 31 days or more were not attempts to collect debt from the Debtor as her personal liability. The lender’s intent was to encourage the Debtor to catch up the missed payments and thereby avoid foreclosure, which was consistent with the Debtor’s goal to keep her home. The Court held there is no private right of action under section 524(a)(2).
Honorable Barbara Ellis-Monro, Chief Judge
"Order finding that Defendant's interest in Plaintiff-Debtor's property resulted from an express easement, limited in duration by the use of Debtor's property, and did not result from a purported easement by necessity, prescription, or creation of interest via a draft of homeowners' declarations. Debtor is bound by the express easement, as it had inquiry notice of such claim of right, regardless of the lack of formal recordation."
NOT INTENDED FOR PUBLICATION
Debt to plaintiff based on a loan to new venture owned by Debtor was dischargeable because Plaintiff did not establish that Debtor intended to deceive Plaintiff as required to establish a claim under 11 U.S.C. § 523(a)(2)(A). In addition, Debtor’s business plan was not a “statement respecting debtor’s or an insider’s financial condition” under 11 U.S.C. § 523(a)(2)(B).
NOT INTENDED FOR PUBLICATION
Honorable Mary Grace Diehl (Recall)
The Court denied Defendant’s motion for reconsideration as untimely under Local Rule 9023-1. Defendant’s argument of the applicability of Rule 9006(f) to Rule 9023 was unsuccessful. Additionally, Defendant’s arguments for leniency as a pro se party failed. The Court also denied Defendant’s motion under Rule 9024, which does not apply the 14-day requirement. Defendant’s arguments were seen as re-litigation of the Trustee’s section 363(h) claim. The Court was and remained satisfied that a sale of the Property subject to Defendant’s half-interest has a benefit to the estate that outweighs the detriment to Defendant. Therefore, Defendant’s motion was denied.
Chapter 11 Debtor filed a multi-count complaint against Defendant, who moved for summary judgment and asserted both collateral estoppel and Debtor’s failure to make out the following claims as a matter of law: equitable subordination, equitable disallowance, breach of contract, unjust enrichment, equitable return of post-petition payments, and an objection to proof of claim. Defendant was not entitled to preclude litigation of the claims in this action because the state court order on which it relied did not constitute a final judgment for purposes of collateral estoppel. Debtor also created a factual record that demonstrated factual disputes with regard to its claims. The Court could not weigh the credibility of evidence to determine whether there was sufficient inequitable conduct to prevent the Debtor from establishing its equitable claims. Likewise, there were factual disputes regarding interpretation of the lease that made summary judgment inappropriate. Finally, a determination as to which party would prevail in an action enforcing or construing the lease was a prerequisite to triggering the lease’s attorney’s fees provision, thus making any determination regarding Defendant’s proof of claim premature.
NOT INTENDED FOR PUBLICATION
Order granting Defendant’s motion to dismiss. Rosetta Stone filed an adversary proceeding seeking a determination that campaign funds held by the Chapter 7 Trustee could only be distributed to campaign creditors. The trustee filed a motion to dismiss, contending that the campaign funds became property of the estate and, absent a security interest in property of the estate, he was required to distribute estate assets pursuant to the priority order established in section 726 of the Bankruptcy Code. Rosetta Stone argued that by virtue of Georgia campaign finance laws, the campaign funds held by the trustee, while property of the estate, were subject to a constructive trust in favor of campaign creditors. The Court concluded that the subject funds were property of the estate and the trustee was required to distribute assets pursuant to section 726. The Bankruptcy Code promotes equality of distribution and the Court cannot prefer one creditor over another unless specifically directed to do so. The Court found nothing in the Bankruptcy Code or Georgia law to warrant treating Plaintiff’s claim differently than other similarly situated creditors. Accordingly, the Court granted the trustee’s motion to dismiss.
NOT INTENDED FOR PUBLICATION
(Court denied Plaintiff's Motion for Summary Judgment, finding that the Plaintiff failed to establish as a matter of law that the Chapter 13 Debtor's mortgage obligation under a "Contract of Settlement" and incorporated into the parties' divorce decree was in the nature of "alimony, maintenance, or support so that she was entitled to judgment pursuant to Section 523(a)(5); and finding that the Plaintiff failed to establish as a matter of law that the Chapter 13 Debtor's mortgage obligation was nondischargeable under Section 523(a)(15).)
Judge Robert E. Brizendine (Retired)
In Chapter 13 case, Court determined whether certain obligations set forth in divorce decree constituted non-dischargeable award of alimony or dischargeable division of property under 11 U.S.C. Section 1328(a)(2), which makes reference to 11 U.S.C. Section 523(a)(5), which in turn refers to domestic support obligations as defined in 11 U.S.C. Section 101(14A). Court made inquiry into evidence of state court's intent regarding nature of each debt at issue by examining overall structure of award and other factors because 11 U.S.C. Section 1328(a)(2) does not incorporate 11 U.S.C. Section 523(a)(15) and its inclusion of property settlement obligations arising in marital dissolution proceedings as coming within an exception to discharge.
Honorable Paul W. Bonapfel
In an indenture trust agreement, the Chapter 11 debtor "pledged and assigned" its real estate to the creditor. The debtor did not execute a deed to secure debt, and the creditor did not record the indenture trust agreement in the county real estate records. The debtor asserted that the creditor did not have a lien on the property and that any lien it did have was avoidable under the strong-arm provisions of section 544(a)(3) because the lack of recordation made it unenforceable against a bona fide purchaser. The Court ruled that the language of the trust agreement created a mortgage lien under Georgia law and that references in a lease and UCC fixture filing, both recorded in the county's real estate records, would put a purchaser on "inquiry notice" and lead to discovery of the mortgage lien. Hence, the mortgage lien was not avoidable under section 544(a)(3).
NOT INTENDED FOR PUBLICATION