The Chapter 13 debtor contended that his obligation to buy a replacement home for his former spouse was a dischargeable property division rather than a nondischargeable domestic support obligation. The court disagreed and held that the debtor's obligation to buy a replacement home was a nondischargeable support obligation.
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Chief Judge James P. Smith
The court denied the creditor's motion for summary judgment contending that a certain obligation was nondischargeable under 11 U.S.C. § 523(a)(2)(B). Although the debtor had listed on his financial statement certain real property that he did not own, the debtor, in his affidavit, testified that he had told the creditor's loan officer that he did not own it, but included the property on his financial statement in compliance with the loan officer's instruction. The court held that there were material facts in dispute regarding the creditor's reliance, its reasonable reliance and the debtor's intent to deceive concerning the debtor's financial statement.
The state court had held the debtor and his corporation in contempt of court for failing to produce certain maintenance records on a jet aircraft that was owned by the creditor, and certain personal property in which the creditor held a security interest. The creditor argued that the contempt order was entitled to collateral estoppel effect in its objection to discharge and dischargeability actions against the debtor. The bankruptcy court held that although the contempt order was a final order and that the debtor was bound by the order, that the contempt order had not resolved the same or similar issues presented in the creditor’s objection to discharge under 11 U.S.C. § 727(a). The bankruptcy court, however, held that the contempt order had established that the debtor had willfully and maliciously injured property and collateral of the creditor and that the creditor’s claims for those injuries were nondischargeable under 11 U.S.C. § 523(a)(6).
The debtor pledged his truck to a pawnbroker. The debtor did not cure his default within the applicable time, and the truck was automatically forfeited to the pawnbroker. The debtor filed a Chapter 13 case and proposed to pay the pawnbroker as a secured claim. The pawnbroker filed a proof of claim and received preconfirmation adequate protection payments. When the debtor defaulted on his plan payments, his case was dismissed and the pawnbroker repossessed the truck. The debtor filed a second Chapter 13 case and contented that the pawnbroker had waived its ownership of the truck by filing a proof of claim in the first case and accepting adequate protection payments. The court held that under 11 USC § 349, dismissal of the first case returned the parties to the positions as they existed at the time of the filing and that the pawnbroker was the owner of the truck. The court denied the debtor's motion for turnover of the truck.
Judge James D. Walker Jr. (Retired)
A creditor who filed three proofs of claim for a single judgment debt was entitled to only vote on the Debtor’s Chapter 11 plan. The Court found that the three proofs of claim represented a single debt capable of a single satisfaction and, therefore, must be treated as one claim for voting purposes.
The Court declined to impose sanctions for behavior by the debtor’s personal injury attorney that amounted to professional discourtesy but did not violate any court orders or rules and did not evidence an attempt to abuse the judicial system.
Court denied Plaintiff’s motion for summary judgment in a § 523(a)(4) action for defalcation by a fiduciary when the Plaintiff failed to show that a trust relationship arose prior to its debt.
After the debtor's discharge was revoked, the Court declined to retain jurisdiction over a sec. 523(a) nondischargeability proceeding for the purpose of reducing the creditor's state law claims to judgment. In reaching its decision to dismiss the adversary, the Court considered judicial economy, fairness to the parties, and difficulty of the legal issues.
When an undersecured creditor holds a security interest in real property and in post-petition rents generated from that property, each interest is entitled to separate adequate protection. Thus, the debtor must provide adequate protection to use post-petition rents that constitute cash collateral. However, no adequate protection is necessary to the extent the rents are used to protect the underlying real property or to otherwise benefit the creditor's interest in the property.
Judge John T. Laney, III
The Chapter 7 trustee moved to reopen a closed case to administer settlement proceeds as property of the estate. The settlement was on account of a injury caused by prepetition by prescription medication, but the debtor did not know the cause of the injury until after the bankruptcy case was closed. Georgia's discovery rule states that a cause of action does not accrue until a plaintiff knows what caused the injury. Inconsistent Eleventh Circuit authority put the Court in a difficult position, but the Court denied the trustee's Motion to Reopen. The debtor's product liability lawsuit did not accrue under Georgia law until he knew the cause of his injury. Because the lawsuit did not accrue prepetition, the settlement proceeds were not property of the estate.