Opinions

Order after trial on the dischargeability of debt from default judgment under 11 U.S.C. §§ 523(a)(4) and (a)(6). Irreconcilable testimony regarding missing firearms prevented the Plaintiff from carrying his burden of proof as to the dischargeability of the judgment debt except as to one weapon—a Singer M1911 45-caliber pistol. The Court found that § 523(a)(4) was satisfied with respect to the Singer because the Plaintiff demonstrated by a preponderance of the evidence that (1) the Debtor obtained the Singer rightfully, (2) the Debtor appropriated the Singer for his personal use, and (3) the appropriation occurred with fraudulent intent. The Court also found that the Plaintiff carried his burden as to § 523(a)(6), finding that the sale of the Singer and subsequent injury to the Plaintiff was intentional, malicious, and wrongful, as the Debtor had no basis upon which to dispose of the Singer.

Order denying Debtor’s motion to determine secured status of Secured Creditor’s lien and strip such lien effective on discharge. Debtor asserted that Secured Creditor’s lien should be reclassified as unsecured because a loan modification was not properly attested or acknowledged. However, the Court concluded that, on the facts before the Court, the loan modification was enforceable and did not affect the validity or priority of the Secured Creditor’s lien.

Chapter 11 debtor’s confirmed plan provided to pay debts arising under a divorce decree to his ex-wife in a reduced amount in full satisfaction of the claim. The ex-wife agreed to the treatment. When debtor defaulted under the plan, his ex-wife sought to recover the debt in full in state court. The debtor then cured the default under the plan and filed a complaint to enjoin his ex-wife from seeking recovery of her debt in excess of the amount provided for in the plan. The Court held that the ex-wife was bound by the terms of the plan and could not pursue her debt outside the plan during the pendency of the plan. The Court further held that confirmation of the plan did not, by itself, affect the amount of the debtor’s liability under the divorce decree. Upon completion of the plan, the ex-wife could pursue any unpaid non-dischargeable debt in state court, where the debtor was free to raise defenses including settlement and satisfaction of the debt.

Order denying Petitioning Creditor’s request for additional attorney’s fees. Following a series of orders resolving various objections to Petitioning Creditor’s claims, a single issue remained: whether Petitioning Creditor was entitled to additional attorney’s fees under an earlier consent judgment. The Court, applying applicable North Carolina state law, concluded that Petitioning Creditor was not entitled to attorney’s fees because the earlier consent judgment lacked an express provision requiring payment of costs of post-judgment enforcement.

Order dismissing adversary complaint with prejudice for Plaintiff’s failure to state a claim. Plaintiff initiated an adversary proceeding seeking injunctive relief and a remedy for alleged breach of contract. Plaintiff alleged Secured Creditor had no standing to initiate foreclosure proceedings and that Secured Creditor’s failure to respond to a letter constituted a violation of the FDCPA and TILA. Secured Creditor filed a motion to dismiss for failure to state a claim. The Court concluded that Plaintiff’s complaint contained only conclusory allegations and that Plaintiff failed to allege any facts that would allow the Court to conclude he was entitled to relief.

Order dismissing adversary complaint with prejudice for Plaintiff’s failure to state a claim. Plaintiff initiated an adversary proceeding seeking injunctive relief and a remedy for alleged breach of contract. Plaintiff alleged Secured Creditor had no standing to initiate foreclosure proceedings and that Secured Creditor’s failure to respond to a letter constituted a violation of the FDCPA and TILA. Secured Creditor filed a motion to dismiss for failure to state a claim. The Court concluded that Plaintiff’s complaint contained only conclusory allegations and that Plaintiff failed to allege any facts that would allow the Court to conclude he was entitled to relief.

The plaintiffs' son had died as a result of a four-wheeler (ATV) accident involving the debtor's son. The Superior Court of Troup County, Georgia, concluded that the debtor had been negligent in failing to supervise her son's operation of the ATV and granted the plaintiffs a judgment for $1,010,127.12. After the debtor filed her bankruptcy case, the plaintiffs brought an adversary proceeding seeking to except their judgment from discharge pursuant to section 523(a)(6). The plaintiffs claimed that the death of their son was a willful and malicious injury. On the debtor's motion for summary judgment, the Court concluded that the judgment debt was not one for willful and malicious injury. The Court concluded that even if the debtor had received warnings about the danger of allowing a child to operate the ATV and knew that other children were riding the ATV, that did not make her substantially certain that the injury to the plaintiffs' son would occur if she allowed her son to operate the ATV. Consequently, the debt owed to the plaintiffs did not fall within the narrow exception to discharge allowed under section 523(a)(6).

Denying Debtor's motion to dismiss Chapter 7 Trustee's complaint to avoid and recover a fraudulent transfer allegedly made by the Debtor to his father, the Defendant. The Trustee's complaint stated a claim. Further, the fact that no proofs of claim had been filed in the case did not provide a basis for dismissing the complaint and closing the bankruptcy case.

Order dismissing adversary complaint with prejudice for Plaintiff’s failure to state a claim. Plaintiff sought punitive damages, attorneys’ fees, and other expenses for an alleged violation of the automatic stay by Secured Creditor. The Court concluded that Plaintiff failed to state a claim upon which relief could be granted because the property in question was not property of the estate at the time the alleged violation occurred and because Plaintiff failed to allege that Secured Creditor had knowledge of the bankruptcy as the time the alleged violation occurred.

Order overruling the case trustee’s objection to exemption of IRA. Trustee objected to Debtor’s exemption of an IRA. Trustee argued that the United States Supreme Court’s decision in Clark v. Rameker, 134 S. Ct. 2242 (2014), controlled this case because Debtor’s IRA included inherited funds from her late spouse’s IRA. The Court overruled Trustee’s objection because Debtor’s IRA was not an “inherited IRA.” Rather, Debtor held the exempted IRA in her own name. The Court saw nothing in Clark or the Bankruptcy Code that would prevent Debtor from exempting the full amount of her IRA, including the funds rolled over into Debtor’s IRA from her late spouse’s IRA.

The Court granted the trustee’s objection to confirmation and held that the chapter 13 debtors were ineligible to be chapter 13 debtors in a joint case because their aggregate unsecured debts exceeded the limit set forth in § 109(e). Although each debtor’s separate unsecured debts did not exceed the debt limit and each debtor was individually eligible to be a chapter 13 debtor because their aggregate unsecured debts exceeded the limit they were ineligible to be joint debtors. Relying on the plain meaning of the statute, and particularly the placing of the word “aggregate” in connection with the unsecured debt limit, the Court concluded that in chapter 13 cases a debtor who files an individual case and debtors who file a joint case are subject to the same unsecured debt limits under § 109(e). INTENDED FOR PUBLICATION "

The Court granted default judgment to Department of Human Services (DHS), finding that DHS's allegation that the debtor had lied on her application for food-stamp benefits constituted a false representation within the meaning oif section 523(a)(2)(A).

The Court granted the debtor's motion to dismiss adversary proceeding as the plaintiff's complaint to determine dischargeability was time barred pursuant to section 523(c) and Federal Rule of Bankruptcy Procedure 4007(c).

The Court granted the secured creditor's motion for adequate protection. The creditor held a pre-petition blanket lien on all of the debtor's property, and claimed all of the debtor-restaurant's revenue as cash collateral. The Court held that because a restaurant is service based, a portion of its revenue is received in return for the services provided, a portion of the revenue is received as payment for the food itself (the inventory), and it is only that portion received in exchange for the inventory that constitutes proceeds of that inventory (and thus cash collateral). Consequently, the Court granted the creditor adequate protection in the form of a replacement lien only on the debtor's post-petition inventory.

Order denying Plaintiff’s motion for entry of default judgment. Because Plaintiff failed to file a proper certificate of service, the Court was unable to determine whether Debtor was properly served. Additionally, the Court observed that the Clerk had not entered default and that without proof of service of the summons and complaint, the Clerk could not enter default.

The Court denied creditor's motion for default judgment for failure to plead sufficient facts. The plaintiff-creditor had filed a complaint objecting to the debtors' discharge pursuant to section 727, and sought a determination that the debt owed to her was exempt from discharge pursuant to either section 523(a)(6) or (a)(2). The creditor was the debtors' former landlord, who had obtained a judgment against the debtors for damage done to the rental property. Because the creditor had not plead sufficient facts to support a claim under any of those three causes of action, the Court denied the motion for default judgment.

Finding that the Chatper 7 Trustee's objection to the Debtor's exemption of an inherited pension plan was moot because the Debtor's interest in the pension plan was excluded from property of the bankruptcy estate by section 541(c)(2). The Debtor's interest in the pension plan constituted a beneficial interest in a trust that contained transfer restrictions enforceable under applicable nonbankruptcy law.

Movants filed a motion to extend the time to file a complaint objecting to discharge under § 727 and to determine dischargeability of a debt under § 523. The motion was filed on the day the deadline expired. The Court denied the motion because Movants lacked diligence in investigating their potential claims despite having possession of relevant documents for more than two months and having ample opportunity to seek additional information from the debtor. NOT INTENDED FOR PUBLICATION

NOT INTENDED FOR PUBLICATION. Order denying motion for disqualification pursuant to 28 USC 455(a)"

The Court granted the Trustee's motion for sanctions against the defendants due to the defendants' violation of the Court's discovery order. Hoping to enter a sanction that would both punish the defendants and deter others from doing the same, while still allowing the case to move forward, the Court identified certain facts as established pursuant to Federal Rule of Civil Procedure 37(b)(2)(A)(i), and proscribed the defendants from introducing evidence as to other facts pursuant to Rule 37(b)(2)(A)(ii).