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.
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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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Honorable James R. Sacca
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 Plaintiff's Motion for Summary Judgment , which sought denial of discharge pursuant to Sections 523(a)(2)(B), 523(a)(2)(A), and denial of discharge under Section 727(a)(4), determining that questions of fact remained as to all claims and therefore the Plaintiff did not satisfy its burden under the summary judgment standard.)
Opinion after trial on complaint seeking judgment for return of a security deposit and nondischargeability of that judgment as incurred through fraud and conversion, pursuant to 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6). Debtor, as owner and operator of lessor, represented to potential lessee that lessee’s $50,000 security deposit would be held in escrow. In fact, the security deposit was deposited into lessor’s operating account, and Debtor used the funds or transferred the funds to related companies and to himself. Court could finally adjudicate both the dischargeability and the amount of the judgment; Stern v. Marshall, 131 S.Ct. 2594 (2011) is inapplicable because determining the amount of the claim is intertwined with the dischargeability determination and by filing the bankruptcy case Debtor consented to adjudication of matters related to dischargeability. Lessee could assert fraud, despite lease which directly contradicted the misrepresentations and which contained merger clause, because lease was rescinded prior to lessee’s discovery of the misrepresentations. Debtor was personally liable for the fraud as arising from his own conduct, in the amount of $50,000 plus interest. Alternatively, Debtor was guilty of conversion in the amount of $48,762.47, the amount that was transferred to Debtor or his family or was used in transactions that were not adequately explained. No punitive damages or attorneys’ fees awarded, but the debt was nondischargeable.
Honorable Paul W. Bonapfel
The Plan Trustee sought to recover, as fraudulent transfers under Georgia law, "fictitious profits" Defendants received on their investments in a Ponzi scheme. Defendants asserted that Louisiana law applied and that the applicable limitations period barred the action. The Court concluded that the choice of law rules of the forum state apply and that Georgia law governed the issues under Georgia's choice of law rules.
The pro se Creditor contended that, in a pre-petition garnishment action, the garnishment court ordered disbursement of garnished funds to the Debtor unless the Creditor objected. The Creditor further claimed that, upon filing the objection, the garnishment court directed the Creditor to seek relief from the bankruptcy court. The Creditor then filed, in the bankruptcy court, an objection to disbursement of the funds. The Creditor did not seek relief from the automatic stay. The Debtor had not disclosed the garnishment action, did not schedule the garnished funds as an asset, and had not moved to avoid the lien under § 522(f).
The Court declined to direct disbursement of the funds in the garnishment court because it is not appropriate for a bankruptcy court to tell another court what to do. The Court ruled that the funds should be deemed to be scheduled so that:(1) they will be abandoned under § 554(c) if the Trustee does not administer them; and (2) the automatic stay will therefore terminate upon closing of the case.
Judge Robert E. Brizendine (Retired)
In Chapter 7 case, Court held that Debtors could void wholly unsecured second priority lien on rental property not used as Debtors' residence under 11 U.S.C. Section 506(d) and the authority of McNeal v. GMAC Mortgage LLC (In re McNeal), 477 Fed.Appx. 562 (11th Cir. 2012)
Honorable Mary Grace Diehl (Recall)
Plaintiff was the Chapter 7 Trustee, who had filed a Motion that the Attorney-Client Privilege had been waived as to certain documents and information. This opinion addressed one of the Defendants’, Richard W. Wolfe and SAS-Moran Lake Holding Company, LLC (“the Wolfe parties”), responses. In their response, the Wolfe parties purported to have the ability to intervene in the underlying discovery dispute. The Court held that such an intervention would be inappropriate because it violated the Federal Rule of Bankruptcy Procedure 7024(c) and it was not ripe for review. The proposed intervention simply did not comport with the procedural rule, and because such an intervention was wholly contingent on an event which had not yet occurred, it was not ripe. The Court ordered that the Wolfe parties may not intervene in the pending discovery dispute between the Chapter 7 Trustee and one of the other Defendants, Roswell Holdings, LLC.
Defendant filed Motion to Dismiss based on pro se Debtor’s failure to comply with the Court’s procedural orders concerning time limitations for service on Defendant. Debtor took actions to remedy the failure but only after the motion had been filed. Although no extension had been sought, the Court, considering Rule 4(m) of the Federal Rules of Civil Procedure, found that no extension of time was warranted. Based on the two-step inquiry to assess a request for an extension of time, the Court found that Debtor had provided no justification to support such an action. Furthermore, dismissal of the case was appropriate because Debtor’s complaint failed to state a claim for which relief could be granted. Dismissal was thus appropriate under the facts.
Honorable Barbara Ellis-Monro, Chief Judge
"Order Denying Defendant's Motion to Remand. Removed action would not be remanded to state court, as Chapter 11 debtor's main asset was an airport with a disputed permanent easement, which would affect the value and the outcome of a pending 11 U.S.C. section 363 motion, which would necessarily come before the Court."