(State law: Attempted wrongful foreclosure);
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(Court denied creditor's Motion in Limine to Exclude Evidence, concluding that, where a creditor forecloses on property and subsequently purchases the property at the foreclosure sale without confirming the sales price with the superior court of the respective county, in accordance with O.C.G.A. § 44-14-161, or seeking any form of judicial approval from the bankruptcy court that such a price approximated the fair market value of the property, a debtor, unrelated to the aforementioned foreclosure, shall have an opportunity to contest that price and any resulting deficiency before the creditor shall be allowed relief from the automatic stay to foreclose on additional collateral held by the debtor).
(Court denied creditor’s Motion for Relief from Stay finding that the creditor was adequately protected and while the property lacked equity, the property was necessary for an effective reorganization in accordance with section 362(d).)
Order on Cross Motions for Summary Judgment. After relief from stay, Defendant credit bid statutory attorney’s fees under O.C.G.A. § 13-1-11. Trustee seeks to recover the amount by which statutory attorney’s fees exceeds actual reasonable attorney’s fees under Section 506(b). On cross motions for summary judgment, the Court held (i) it has jurisdiction to construe its Order Modifying the Automatic Stay and to adjudicate the amount, if any, of excess proceeds due the Trustee following the foreclosure sale; (ii) the matter is a core proceeding; (iii) the Order Modifying the Automatic Stay was broad enough to permit the Defendant to send the attorney’s fees notice under O.C.G.A. § 13-1-11; (iv) under the terms of the relief from stay order, the Eleventh Circuit’s decision in In re Welzel continues to apply to determine if there are any excess proceeds due to the Trustee after foreclosure sale, particularly since the Order Modifying the Automatic Stay specifically retained the right of the Trustee to receive the excess proceeds; and (v) the foreclosure bid was a credit bid and does not necessarily reflect the extent to which the creditor recovered fees in excess of those allowable under Section 506(b). Consequently, the Court will hold an evidentiary hearing to determine the value of the property, and the amount of allowable fees under 11 U.S.C. § 506(b) in order to ascertain if the Defendant received more than its secured claim under Section 506(b).
Honorable Mary Grace Diehl (Recall)
The Court granted Defendants’ motion to dismiss Plaintiff’s complaint. Plaintiff alleged, among other things, Defendants did not rightfully own the debt on his home mortgage and Defendants breached the duty of good faith and fair dealing. The Court ruled Plaintiff’s service was untimely under FRBP 7004(e) because service was not made within fourteen days after the issuance of the summons. The Court additionally ruled Plaintiff’s service on Defendant bank was insufficient under FRBP 7004(h). The Court noted its ruling did not prevent Plaintiff from pursuing his claims in another forum.
The Chapter 7 Trustee was awarded partial summary judgment on counts that related to determining the Debtor’s interest in a dissolved limited partnership under Georgia law. The undisputed facts showed that under Georgia limited partnership law, Georgia’s Revised Limited Partnership Act, and the Will of Debtor’s deceased husband and general partner in the limited partnership, the limited partnership was dissolved and that Debtor held 70% of the partnership interest at the time of the petition. The death of an individual, general partner is an event of withdrawal, resulting in dissolution. O.C.G.A. §§ 14-9-801(3), 14-9-602(6)(A), 14-9-203 & 14-9-206(c). Debtor inherited the deceased’s interest in the limited partnership, and Debtor’s total interest was property of the estate.
The Chapter 7 Trustee’s claims for partition and turnover were denied based on the estate only holding an interest in the dissolved - but not wound up - limited partnership, and not the partnership property itself. The Chapter 7 Trustee, however, did hold the Debtor’s right for distribution, termination, cancellation, and liquidation of the partnership.
The Court denied Defendants’ motion to reset hearing and motion to vacate default judgment. Defendants failed to attend a hearing on Trustee’s previous motion and the Court entered default judgment against Defendants. The Court found Defendants offered no law in support of their motion and that it would harm the bankruptcy estate by unnecessarily adding to Trustee’s time and expenses.
The Court denied Debtor’s motion to stay all proceedings to sell estate assets in a chapter 7 case. Debtor claimed he needed time to pursue claims against third parties and that favorable judgments on these claims would augment the estate. Debtor offered no legal authority to justify granting the stay, however. The Trustee had full authority under § 704 to administer assets of the bankruptcy estate.
Honorable Paul W. Bonapfel
Automatic stay of 11 USC s 362(a) applies to garnishment action in its entirety, including any independent claim of the garnishing creditor against the garnishee based on the garnishee's failure to comply with garnishment summons, unless unmodifiable judgment against garnishee has been entered prior to filing of the case. Because the case was filed before the time for the fiilng of the answer to the garnishment summons, the garnishee is not in default. Because it is now undisputed that the garnishee employee failed to withhold prepetition wages from the debtor-employee, the stay is properly modified to permit creditor to pursue employer for failure to withhold wages because the claim does not involve the debtor, the debtor's property, or property of the estate. The debtor has no property interest that he can exempt and therefore cannot avoid the garnishment lien under 11 USC s 522(f) to the extent that the creditor seeks to enforce its claim against the employer.