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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 Barbara Ellis-Monro, Chief Judge

Defendants  (the Chapter 7 Trustee, the Gwinnett County Department of Water Resources, Gwinnett County, several Gwinnett County employees and members of the Board of Commissioners) filed Motions to Dismiss in an action brought under § 362(k) and for the chapter 7 Trustee’s alleged failure to fully investigate Debtor’s asserted claims. As to the Non-Trustee Defendants, the Court found that because this was Plaintiff’s second case pending within one year, the automatic stay in the current case expired 30 days after the petition date pursuant to 11 U.S.C. § 362(c)(3). Therefore, any action taken after that time could not violate the automatic stay. Plaintiff’s conversion of the case from chapter 13 to chapter 7 did not revive or extend the stay. In addition, because Plaintiff did not provide adequate assurance, the water department could terminate debtor’s service 20 days after the petition date pursuant to § 366(a) without violating § 362(a). Plaintiff’s claim that a mailing sent to him violated the automatic stay was factually sufficient and the complaint was not a shotgun pleading. Therefore the Motion to Dismiss was granted in part and denied in part regarding the mailing of an invoice while the automatic stay was in place. Further, claims against individual defendants were dismissed because no facts were alleged that would show individual involvement in any of the actions alleged.
With respect to the chapter 7 Trustee’s Motion to Dismiss, Plaintiff failed to state a claim against the Trustee for failure to fully discharge his duties because the Court previously determined that Trustee’s abandonment of all claims was appropriate. Finally, based upon the information disclosed by Debtor in his schedules funds used to make a payment were not property of the estate and could not be recovered.

Chapter 13 case and plan were not filed in good faith where (1) Debtor wife sold real property in Florida and received proceeds in excess of $64,000, (2) Debtor husband induced a judgment creditor to release a lien on their residence in Georgia, (3) Debtors sold their Georgia residence in a short sale without informing the mortgage holders that they had cash on hand from the Florida sale, and (4) Debtor husband used the Florida sale proceeds to purchase a new Georgia residence in his name alone free of liens. It appears Debtors actions were calculated to provide themselves with a residence free of debt without fully satisfying the judgment creditor and mortgage creditors.

Plaintiff filed an Amended Emergency Motion For Injunctive Relief, Motion For Contempt, Motion For Violation Of Automatic Stay, Motion For Creditors Misconduct. Plaintiff alleged that certain claims arose when the Water Department terminated his access to municipal water and mailed Debtor a letter regarding his account post-petition. The Court held that claims for violation of the stay are matters that can only arise in bankruptcy and such claims are within the Court’s core jurisdiction. 11 U.S.C. § 362(a); 28 U.S.C. 157(b)(2). Likewise, to the extent Plaintiff was asserting claims against the chapter 7 trustee, these claims arise under the Bankruptcy Code and are within the Court’s core jurisdiction. In contrast, Plaintiff’s claims seeking injunctive relief in the form of an order directing that the Water Department restore water service, seeking to hold Defendants in contempt, and alleging creditor misconduct are not matters that could only arise in bankruptcy and therefore are not within the Court’s core jurisdiction. Moreover, the Court did not have “related to” jurisdiction over these claims because any award of damages would solely benefit Plaintiff and not the bankruptcy estate.  The Court also denied Plaintiff’s request for injunctive relief on an expedited basis because Plaintiff failed to demonstrate an ability to satisfy any of the elements necessary for injunctive relief.

Honorable Paul M. Baisier

Order granting motion of United States Trustee to dismiss Chapter 7 case pursuant to 11 U.S.C. § 707(b)(3).  U.S. Trustee argued that totality of circumstances demonstrated abuse because evidence shows Debtors could make substantial payments to creditors either in a case under Chapter 11 or 13, or outside of bankruptcy.  In analyzing issue, Court determined that Section 707(b)(3) requires more than a finding of ability to pay.  Relevant factors include: whether case filing caused by unforeseen event; eligibility of debtor for repayment-based relief; out-of-court remedies and negotiations; reliable income; potential for meaningful distribution to creditors under Chapter 13; and, reasonableness of debtor’s budget.  Upon evaluation of foregoing factors in connection with financial condition of Debtors, Court concluded filing of petition under Chapter 7 was an abuse of Section 707(b)(3).

Order granting summary judgment in favor of Plaintiff and against Defendant-Debtor on issue held in abeyance in prior ruling with regard to nondischargeability of award of attorney’s fees on account under O.C.G.A. § 19-9-3(g) in state court litigation related to dissolution of parties’ marriage.  State superior court entered award based on Debtor’s stated intention to seek a jury trial on issue of modification of child support and custody, and court’s assessment of Plaintiff’s ability to retain counsel and offer a defense.  Plaintiff contended award is fully enforceable and excepted from discharge since it functions as support under 11 U.S.C. § 523(a)(5).  Debtor countered that because award is contingent in nature and no jury trial was ever sought, it is not a legally enforceable obligation.  Court determined that even though award is contingent in nature and unfixed in amount, Plaintiff established existence of enforceable obligation.  Further, Plaintiff established that same was in the nature of support intended to benefit former spouse in pending litigation, and so was excepted from discharge.

Order Granting in Part and Denying In Part the Plaintiffs' Motion to (1) Strike Affirmative Defenses, or Alternatively, Require More Definite Statement, (2) Dismiss Counterclaims or, alternatively, Require More Definite Statement, and (3) Dismiss Objections to Claim in case involving an objection to discharge.

Motion to Strike Affirmative Defenses
The Defendant had plead 37 affirmative defenses in his answer.  The Plainitffs requested that most of them be stricken pursuant to Rule 12(f).  The Court declined to apply the heightened pleading standard outlined by the Supreme Court in Twombly and Iqbal to affirmative defenses, instead relying on the plain meaning of Rule 8(c)'s requirement that a defendant must merely "state" the affirmative defenses he has.  Nevertheless, the Court struck two of the defenses as completely inapplicable to the proceeding.  The Court also declined to order the Defendant to provide a more definite statement of his defenses, as there is the Court had not ordered the Plaintiff to respond to the Defendant's answer.
Dismiss Counterclaims
The Defendant had plead counterclaims for violation of the automatic stay, injunctive relief, slander, intentional infliction of emotional distress, breach of contract, punitive damages, and attorney's fees. Before the Court could address this aspect of the Plaintiffs' motion, the party's entered a consent order withdrawing the motion as to five of the Defendant's counterclaims (violation of the automatic stay, injunctive relief, slander, intentional infliction of emotional distress, and punitive damages).  Consequently, the Court only addressed the breach of contract and attorney's fees claims.
On the breach of contract, the Defendant alleged that one of the Plaintiffs had been slandering the Defendant to business associates and his bank.  The Defendant alleged that this activity breached a non-disparagement clause in a separation agreement entered into by the Defendant and the Plaintiff when they had ceased their prior business relationship.  The Court concluded that because the claim was based on a pre-petition contract, the claim belonged to the estate.  As the claim belonged to the estate, the Chapter 7 Trustee, rather than the Defendant, was the real party in interest within the meaning of Rule 17.  Therefore, the claim was dismissed.
Concerning attorney's fees, the Court concluded that the Defendant could proceed with its claim for attorney's fees against one of the Plainitffs, but not the other, as he had alleged no underlying claim that could support attorney's fees against the other.
Objection to Claims
The Defendant had also listed as "counterclaims" objections to the claims of the two Plaintiffs.  However, as neither Plaintiff had filed a proof of claim, and objections to claim are to be filed in the main bankruptcy case, not the adversary proceeding, the Court dismissed these counts.

Order granting in part and denying in part the motion to dismiss of Debtor and Joint Debtor (“Defendants”). Plaintiff initiated an adversary proceeding seeking a finding of Debtor’s personal liability directly or under an alter ego theory, a finding of nondischargeability under § 727(a)(2)(A) and § 727(a)(4)(A) of the Bankruptcy Code, and a denial of Defendants’ discharges under § 523(a)(2)(A) and § 523(a)(6) of the Bankruptcy Code. In response, Defendants filed a motion to dismiss for failure to state a claim. First, the Court granted Defendants’ motion in part, concluding that Plaintiff failed to allege facts in the complaint sufficient for relief under § 727(a)(2)(A) as to Debtor and for any relief as to Joint Debtor. Second, the Court denied Debtors’ motion in part, concluding that, on the remaining counts against Debtor, Plaintiff alleged facts sufficient to state a claim upon which relief could be granted and facts sufficient to show Debtor’s personal liability. Finally, the Court granted Plaintiff leave to amend the complaint under Federal Rule of Civil Procedure 15(c)(1)(B).

Honorable Wendy L. Hagenau

Order on Parties’ Cross-Motions for Summary Judgment.  The parties disputed the preclusive effect of a state court judgment for rental commissions, attorney’s fees, costs, and punitive damages entered in favor of the Plaintiff.  As a preliminary matter, the Court ruled that the state court’s denial of the Defendant’s motion for reconsideration of the state court judgment while Defendant’s bankruptcy case was pending was void as a violation of the automatic stay.  On the issue of preclusion, the Court found that Georgia law provides that a judgment is not final as long as there is a right to appellate review.  The Court further ruled that the state court judgment was not preclusive because the Defendant’s motion for reconsideration challenged the factual findings of the state court, making it a motion for new trial, which tolled the time to appeal.

Honorable Paul W. Bonapfel

Order denying Defendant's motion to dismiss for failure to state a claim. Complaint states facts that satisfy pleading requirements for claims under Sections 523(a)(2)(B), 727(a)(2)(A), and 727(a)(3). NOT INTENDED FOR PUBLICATION.

Order granting in part and denying in part Trustee’s motion for summary judgment on actual and constructive fraudulent transfer actions under 548(a)(1) and Georgia law. The court concluded that the defendant did not rebut the "Ponzi scheme presumption" with respect to the transfer it received, but that factual disputes regarding value and good faith precluded entry of summary judgment in favor of the trustee.
Not intended for publication.