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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

The Court considered a motion to remand and for abstention of a post-petition declaratory judgment action filed in the state court concerning certain rights to mine rock that had been transferred pre-petition from debtor to an entity created by debtor’s managing member. The Court determined that it had subject matter jurisdiction over this matter because the complaint merely re-characterized a fraudulent transfer dispute resolved through an order denying the appointment of a chapter 11 trustee as a contract dispute and because resolving the dispute over rights to mine rock required construing and potentially enforcing this Court’s order denying the motion for appointment of a trustee. Abstention was not required because the proceeding involved core proceedings (i.e., fraudulent transfer litigation and interpretation of the Court’s own order). As to removal directly to bankruptcy court, the Court agreed with the majority rule that removal under 28 U.S.C. § 1452 can be made directly to the bankruptcy court.  As to venue, 28 U.S.C. § 1409(e) was inapplicable, and even if it did apply, venue in the Northern District of Georgia was proper. Finally, the right to a jury trial over certain claims does not require that the entire proceeding be remanded because such claims can be tried in district court.

Trustee objected to Debtor’s claimed exemption in real property that Debtor quitclaimed to his former spouse pre-petition as part of a Settlement Agreement executed one day prior to the spouse’s filing a Divorce Proceeding. The deed was recorded three days later. During the pendency of the Divorce Proceeding the Debtor filed for bankruptcy and a Final Judgment of Divorce was entered thereafter. The Court determined that the Property was not property of the bankruptcy estate and Debtor had no interest to exempt because it was transferred pre-petition when the Debtor executed the Deed contemporaneously with the Settlement Agreement. The transfer was not an equitable division of property which arose after the divorce proceeding was filed. Further, the exception contained within O.C.G.A. § 19-5-7 did not apply to the transfer. Consequently, Debtor had no interest in the Property on the Petition Date.  In addition the transfer of the Property was a voluntary transfer for purposes of § 522(g)(1)(A). And, to the extent the Trustee recovers the Property, Debtor would not be entitled to claim an exemption in the Property.

Order Denying Defendant’s Motion to Dismiss and Granting Judgment for Plaintiff.  The parties disputed whether a security deed contained the requisite signatures and formalities to comply with Georgia law.  The Court ruled that the placement of the notary public’s signature within a certificate of acknowledgment indicated that his signature was an acknowledgment rather than an attestation.  Further, the Court ruled that the notary public’s failure to record the date on which the notarial act of acknowledgment took place rendered the acknowledgment invalid, making the deed patently defective under Georgia law and therefore avoidable pursuant to 11 U.S.C. § 544.

Order denying Defendant’s motion to dismiss, denying motion of the Nonparties to quash subpoena, granting Plaintiff’s motion to compel, and setting a status conference. Plaintiff initiated an adversary proceeding objecting to discharge. This order resolved three primary issues:
First, Defendant, who is also the Debtor in the lead bankruptcy case, moved to dismiss the adversary proceeding for Plaintiff’s failure to properly effect service on Defendant’s attorney. It was undisputed that Plaintiff failed to properly effect service on Defendant’s attorney. However, the Court found that Plaintiff properly served Defendant, and that Defendant’s attorney waived insufficient service by, among other things, failing to timely raise his defense. Therefore, the Court denied Defendant’s motion to dismiss.
Second, the Nonparties moved to quash a subpoena issued by Plaintiff’s counsel for the purpose of deposing the Nonparties. Plaintiff had previously deposed the Nonparties in Defendant’s lead bankruptcy case. The Nonparties asserted that FRCP 30(a)(2)(A)(ii) required Plaintiff to obtain leave of court to depose Nonparties in the adversary proceeding because the “deponent had already been deposed in the case.” The Court disagreed, concluding that “case,” in the context of FRCP 30(a)(2)(A)(ii), refers to the adversary proceeding, not the title 11 umbrella as a whole. Therefore, because the Nonparties had not already been deposed in the case, the Court concluded that Plaintiff could depose Nonparties without leave of court.
Third, Plaintiff filed two motions to compel, which were deemed unopposed because no response to either motion was filed.

Order sustaining Trustee’s objection to Claimant’s claim. Trustee objected to Claimant’s claim for lack of documentation. Claimant alleged that is entitled to a constructive trust on funds allegedly misappropriated by Debtor’s former owner. Claimant failed to trace the allegedly misappropriated funds to Debtor and, as such, failed to provide support for applying a constructive trust to such funds. The Court sustained Trustee’s objection to Claimant’s claim and ordered the claim disallowed in its entirety.

Order Denying Motion for Partial Summary Judgment.  The Court ruled disputed issues of fact remained with respect to sections 523(a)(2)(A) and (a)(6).  The Court also held that the Plaintiff’s attempt to use collateral estoppel failed because the Plaintiff failed to establish that there was an identity of issues between the state court judgment and the dischargeability action. 

The Court entered default judgment against the defendant, a petition preparer, in an adversary proceeding brought by the U.S. Trustee.  The Court had previously entered an order requiring the defendant to disgorge the fee she had charged the debtor and to pay a $500 fine.  The defendant failed to do either.  As a result, the Court enjoined the debtor from acting as a bankruptcy petition preparer pursuant to section 110(j)(2)(B).

The Court entered default judgment against the defendant, a petition preparer, in an adversary proceeding brought by the U.S. Trustee.  The Court had previously entered an order requiring the defendant to reduce her fee to $25 and remit the remaining $125 to the debtor.  The defendant failed to remit the $125.  As a result, the Court enjoined the debtor from acting as a bankruptcy petition preparer pursuant to section 110(j)(2)(B).

The debtor brought this suit against the Chapter 7 trustee and the trustee's bondholder in the name of the United States pursuant to Bankruptcy Rule 2010(b).  The debtor alleged that the trustee had negligently carried out his duties in regard to the sale of a 1974 Corvette in which the debtor had claimed an exemption.
On debtor's motion for judgment on the pleadings, the Court held: (1) the fact that a debtor has claimed an exemption does not automatically entitle the debtor to receive that amount; and (2) a trustee cannot be held liable for conducting a 363 sale in conformity with a court order approving that sale.
The Court ultimately concluded that the debtor could not make out any case against the trustee based on his allegations and dismissed the complaint.  Because the action against the bondholder was derivative of the action against the trustee, the Court dismissed the debtor's motion for default judgment against the bondholder and denied the bondholder's motion to set aside default as moot.

Honorable Paul M. Baisier

Order granting in part and holding in abeyance in part motion of Plaintiff for summary judgment, and denying in part and holding in abeyance in part motion of Defendant-Debtor for summary judgment, regarding Plaintiff’s complaint objecting to the dischargeability of certain obligations of Debtor former spouse, awarded in state court marital dissolution litigation, as domestic support obligations under 11 U.S.C. § 523(a)(5) & (a)(15) and § 1328(a)(2).  Obligations at issue consisted of the following: (1) payments under Divorce Decree; (2) award of attorney’s fees in Contempt Order; and, (3) award of attorney’s fees “on account” in Modification Order pending anticipated jury trial regarding same.  First, Debtor argued that part of subject obligation set forth in Divorce Decree constituted dischargeable property settlement.  After concluding Section 523(a)(15) did not apply in Chapter 13 case, Court determined that obligation at issue constituted domestic support obligation excepted from discharge under Section 523(a)(5).  Applying longstanding factors used prior to 2005 amendments to Bankruptcy Code to discern nature of an obligation (i.e. property settlement or support), Court concluded that order for Debtor to pay Plaintiff for her share of business interest acquired during marriage was in the nature of support given its function in view of the totality of circumstances presented. Therefore, arrearage could not be discharged.  Despite label of obligation in Divorce Decree, payments appeared designed to balance parties’ disparate levels of income and the obligation was enforceable by contempt.  Court next concluded that attorney’s fee award in Contempt Order, awarded as expense of litigation to enforce child support obligation, also constituted nondischargeable support.  Finally, Court held in abeyance ruling on award of attorney’s fees “on account” in Modification Order under O.C.G.A. § 19-9-3(g) to allow further argument on issue of status of this award based on state court litigation and possible jury trial.