Order denying the Motion Confirming the Automatic Stay Is Not in Effect as to Pending State Court Litigation. The Debtor filed a petition under Chapter 7. Following the filing of Chapter 7 case, the Creditor sought discovery from non-debtors in a state court action that involved the Debtor as a co-defendant. The discovery requests related to the Debtor’s conduct. The Debtor filed an Emergency Motion for Protective Order and to Enforce the Automatic Stay. The State Court granted the Debtor’s Motion, and barred the Creditor from seeking further discovery related to the Debtor. The Creditor initiated a contested matter to request a “comfort order” from the Bankruptcy Court to persuade the State Court that the automatic stay does not affect the Creditor’s discovery efforts . The Bankruptcy Court concluded that even though the Rooker¬-Feldman Doctrine did not preclude it from addressing the State Court’s ruling, res judicata did.
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Order granting Creditor’s Motion for Relief from the Automatic Stay and Order of Rejection of Non-Residential Real Property Lease. The Landlord filed a motion seeking Relief from the Automatic Stay to pursue state law remedies on property leased to the Debtor. The case started as a Chapter 11 case. The Debtor failed to assume a nonresidential lease within 120 days of filing for the case. The lease was rejected as a matter of law pursuant to § 365(d)(4). Subsequently, the case was converted from a Chapter 11 case to a Chapter 7 case. The Chapter 7 Trustee attempted to assume the lease in the Chapter 7 case, citing the post-dating provision of § 348(c). The leasehold mortgage creditor supported the Trustee’s efforts, and argued that it had rights to assume the lease pursuant to an agreement with the Landlord.
The Court held a lessor is entitled to immediate surrender of the property on rejection under § 365(d)(4) of the Bankruptcy Code. Once the lease is deemed rejected pursuant to the statute, conversion of the case and post-dating of the order for relief pursuant to § 348(c) of the Bankruptcy Code do not cause that lease to “revive” and the Trustee cannot assume the lease. Concerning the leashold mortgage creditor, the Court concluded that any rights the creditor held under its agreement were not terminated by the rejection of the lease, but they did not preclude granting relief from the stay. The Court granted relief from the Automatic Stay because the lease was not assumed or rejected within 120 days.
Order concerning the Debtor’s Notice of Pending Settlement. In a Chapter 7 case, the Plaintiff filed a complaint alleging “violations” of § 727 and § 523 of the Bankruptcy Code. The parties submitted a proposed consent order that required the debtor to pay $3,000 of a $3,871.44 debt that as a nondischargeable debt pursuant to 523(a)(2) in exchange for the Plaintiff’s dismissal of the suit, including the § 727 claims. Pursuant to Rule 7041, a 727 claim cannot be dismissed without notice to the Trustee. The Court held that public policy demands that the Plaintiff must dismiss her claims pursuant to § 727 before the parties may settle the § 523 claims.
Order granting in part and denying in part the Plaintiff’s Motion for Default Judgement. The Plaintiff initiated an adversary proceeding asking the Court to declare that a debt owed by the Debtor was nondischargeable as a domestic support obligation pursuant to 523(a)(5) of the Bankruptcy Code. The Plaintiff also sought costs, damages, and attorney’s fees. The Court held the domestic support obligations were nondischargeable under 523(a)(5) of the Bankruptcy Code. However, the Court denied costs, damages, and attorney’s fees because the Debtor failed to comply with Rule 54 and lacked any citation to authority.
Honorable James R. Sacca
Order denying motion to amend complaint. Court held that the proposed amendment to the complaint would be futile because plaintiff failed to plead with specific damages as required in an action for slander of title pursuant to OCGA 51-9-11, and that the trustee's bill of sale refers only to the sale of the debtor's interest in the real property and not plainiff's inerest in the property.
"NOT INTENDED FOR PUBLICATION"
Order denying defendant's motion to disqualify plaintiff's counsel. Court held that the Georgia Rules of Professional Conduct do not prohibit counsel's representation of plaintiff in this adversary proceeding. Counsel's representation of former client did not create a conflict of interest because counsel's former client and plaintiff do not have conflicting interests in this adversary proceeding. Moreover plaintiff is not an officer or director breaching a fiduciary duty to the former client or other members of counsel's former client. The Court also held that defendant's purchase of an economic interest only in counsel's former client did not create an attorney-client relationship between counsel and defendant.
Honorable Wendy L. Hagenau
Order on Defendant’s Motion for Summary Judgment. Defendant sought summary judgment on Plaintiffs’ claims for non-dischargeability under 11 U.S.C. §§ 523(a)(2) and (a)(4) as well as on certain of Defendant’s affirmative defenses. The Court held that the alleged constructive partnership that existed between one of the Plaintiffs and the Defendant was insufficient for a finding of fiduciary capacity under section 523(a)(4), and that summary judgment was therefore appropriate for any claims requiring a fiduciary capacity under section 523(a)(4). The Court also held that Defendant’s affirmative defense of res judicata does not apply to bar a plaintiff who received a judgment on a contract from arguing the judgment is non-dischargable due to fraud.
Honorable Paul W. Bonapfel
Summary judgment entered in favor of Chapter 7 Debtor on claims of Plaintiffs (1) for determination that Debtor’s interest in property is not property of the estate; (2) for denial of discharge; and (3) for determination that debts are excepted from discharge under § 523(a)(4). Final Judgment to be entered for Debtor on claims in complaint; court retains jurisdiction to conduct evidentiary hearing on Debtor’s requests for attorney’s fees and on motions for sanctions and responses filed by the parties.
Order denying plaintiff's motion for summary judgment. State court default judgment not entitled to preclusive effect in dischargeability proceeding because court cannot conclude that elements of securities fraud claim were necessary to the judgment and the basis for the award of punitive damages was too vague and ambiguous.
Chapter 13 Trustee objected to confirmation on ground that Debtor’s plan did not provide for payment of all projected disposable income because the Debtor was not entitled under the “means test” rules of § 707(b)(2)(A)(i)(I) to the Ownership Costs allowance under the IRS Transportation Standards for his car that was encumbered by a title-pawn obligation. Held: Objection overruled and plan confirmed. The Ownership Costs allowance is applicable regardless of whether the encumbrance on a car of the debtor is a purchase-money debt or lease. INTENDED FOR PUBLICATION