Adopting the "functional nexus" test for determining whether an item is a "household good" for the purpose of lien avoidance.
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Judge James D. Walker Jr. (Retired)
Robert F. Hershner, Jr. (Retired)
Debtors sought to discharge state income tax obligations for taxable years ending more than three years prior to the Chapter 7 bankruptcy filing under 11 U.S.C.A. § 523(a)(1)(A). Debtors presented no facts in opposition to the state's motion for summary judgment. The Court held that the three-year priority period was equitably tolled during the debtors' prior Chapter 13 cases under 11 U.S.C.A. § 105(a). The Court held that the debtors' obligations for the tax years in question were nondischargeable.
The Chapter 7 debtor's employer withheld, pursuant to a continuing garnishment, funds from wages that the debtor earned within the ninety-day preference period. The Court held that the debtor could recover the funds and claim the funds as exempt property.
The state court awarded custody of two minor children to the debtor's former husband. The state court ordered the debtor to pay some of the attorney's fees and costs incurred by the former husband. The debtor argues that an award of attorney's fees arising from a post-divorce child custody action was dischargeable. The bankruptcy court disagreed and held that the debtor's obligation was in the nature of support and was nondischargeable in bankruptcy.
Defendant made a loan to Debtor so that Debtor could pay a specific creditor. Debtor understood that loan could only be used to pay that creditor. Debtor sold certain real property and put the proceeds into the same bank account as Defendant's loan. Debtor paid the creditor and repaid the loan to Defendant within the ninety-day preference period. The Court held that the repayment to Defendant was not protected by the earmarking doctrine. The Court held that Debtor held Defendant's loan proceeds in an implied trust and that the trustee could not recover the repayment as a preferential transfer.
Debtor moved to amend her confirmed Chapter 13 plan after confirmation. Confirmed plan treated Respondent's liens as secured claims. Debtor's income decreased, and Debtor wanted to reclassify Respondent's liens as wholly unsecured claims. The Court denied the motion to modify, noting that Debtor's loss of income did not change the nature of Respondent's secured claims as established by the order of confirmation.
In a Complaint to Determine Dischargeability of Debt, Court denied cross-motions for summary judgment filed by Plaintiff and Defendant. The Court held that collateral estoppel did not apply to a state court's default judgment on issue of Defendant's fraud. The Court held that state court's default judgment was entitled to full faith and credit.
Chief Judge John T. Laney, III
Sustaining the Chapter 12 Trustee’s objection to the secured status of a claim, the court held that no valid UCC-1 existed at the time Debtor filed his petition. Therefore, Creditor’s security interest was unperfected. Although Trustee arguably requested the court the determine validity of a lien, which requires an adversary proceeding, the court held that the claim objection process was proper in this case.
The Court looked to Georgia state law on what constitutes a fixture to determine that various pieces of automotive equipment installed in the site of a future car dealership were not fixtures. The sale documents and the behavior of the parties involved in demonstrated an intent to treat the equipment not as fixtures but as personal property, and thus the sale of all the car dealership's "assets," as defined in the sale documents, did not include the sale of the equipment. The Court granted the movant's motion for relief.
In a motion to compel Debtor to surrender leased premises, the court held that although the bankruptcy court has the authority to enter such an order, relief in favor of Movant is not proper in this case. Movant leased operating premises to the equity owner of Debtor who allowed Debtor to use the leased premises. After the lease was deemed rejected under § 365, Movant obtained relief from the automatic stay. However, Debtor remained in possession of the property at the express permission of the equity owner. Therefore, the court held that Debtor’s right to remain in possession was dependent upon the rights of the equity owner, an issue currently pending in state court.