The matter came before the Court on Motions for Summary Judgment (the “Motion”) filed by defendants McCalla Raymer, LLC (“McCalla”), SunTrust Bank and SunTrust Mortgage, Inc. (collectively “SunTrust”). The Complaint sought recovery for damages stemming from a botched 2010 foreclosure sale. After hearing oral argument on the motions the Court decided to grant the Defendants’ Motions as to: Count 3 – Judicial Estoppel; Count 4 – Equitable Subordination; Count 6 – Violation of Automatic Stay; Count 7(A)(3) – Fraud; Count 7(B) – Violation of Fair Debt Collections Practices Act; and Count 8 – Conversion. The Court denied Defendants’ Motions as to: Count 7(A)(1) – Wrongful foreclosure; Count 7(A)(2) – Tortious interference with property rights; and Count 9 – State law attorney fees under O.C.G.A. § 13-6-11.
Opinions
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Judge John T. Laney, III
This matter came before the Court on Debtor, FMB Bancshares, Inc.’s, Motion to Dismiss the Involuntary Chapter 7 Petition filed by Trapeza CDO XII, LTD. FMB sought to have the Involuntary Petition dismissed pursuant to 11 U.S.C. § 303 and 11 U.S.C. § 305. FMB argued that Tapeza was not a proper creditor under § 303 because FMB’s liability to Trapeza was “contingent,” and that Trapeza did not have standing under the contractual documents to file an involuntary bankruptcy petition. Additionally, FMB argued that the court should exercise discretionary abstention pursuant to § 305 because bankruptcy was not in the best interest of the debtor and creditors. The Court did not agree. The Court held that: (1) Trapeza had standing under the contractual documents to file the involuntary petition; (2) Trapeza was a proper creditor under § 303 because it is the holder of a claim that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount; and (3) Abstention under § 305 was not proper. Accordingly, the Court denied the Motion to Dismiss.
The Court granted the Trustee’s Motion for Summary Judgment to set aside certain fraudulent transfers under O.C.G.A. § 18-2-70, et seq., as made applicable to bankruptcy cases pursuant to 11 U.S.C. § 544. The Court held that the doctrine of judicial estoppel barred the Debtor and the Defendant from claiming the transfers were merely returning the property to the Defendant, and that the Defendant had always been the rightful owner of the property. The Court also found that the Trustee established all the elements of a fraudulent transfer by showing that the Debtor did not receive a reasonably equivalent value in exchange for the transfers and the Debtor was insolvent or became insolvent as a result of the transfers.
On Summary Judgement the Court was asked to decide a narrow issue regarding federal tax liens. Specifically, the issue before the Court was whether accounts receivable acquired by the debtor more than 45 days after the filing of a notice of tax lien on the debtor's property may be considered proceeds of contract rights acquired by the debtor prior to the expiration of that 45 day period, so as to give the security interest of a commercial creditor in the receivables priority over the tax lien. The Court held that payments received by the Debtor under its contract after the filing of the tax liens were identifiable proceeds of contract rights, rather than accounts receivable. Therefore, pursuant to 26 U.S.C. §§ 6323(a) and (c) the Bank's prior perfected security interest in the contract payments is senior to the IRS's tax lien.
The matter came before the Court on debtor’s Motion for Contempt against the Internal Revenue Service. The debtor argued that because the IRS’s proof of claim classified her year 2002 tax debts as general unsecured and because the discharge order discharged all general unsecured debt, that the Chapter 13 discharge order encompassed the 2002 tax debt. Accordingly, the debtor’s motion sought to hold the IRS in contempt for violation of the discharge injunction based on the IRS’s attempt to collect the 2002 tax debt. The Court held that the tax debt was non-dischargeable, and therefore the IRS did not violate the discharge injunction by attempting to collect the 2002 tax debt.
The creditor who financed the debtor's vehicle purchase was named as a lienholder on the vehicle title certificate, despite the debtor not having signed a security agreement. The debtor moved the Court to order the creditor to remove its name from the title. Under Florida law, which applied to this case, notation on a title certificate does not in itself grant a security interest--the security interest must be in a separate, written document. The Court held that the creditor was unsecured and granted the debtor's motion.
The Chapter 7 trustee moved for summary judgment in an adversary proceeding seeking to avoid the debtor's allegedly fraudulent transfers to the debtor's son. In a lengthy opinion, the Court held that the record contained many disputed issues of material fact arising from the defendant's argument that the debtor was merely returning property belonging to the debtor. The Court also examined the impact of the 2010 amendments to the Federal Rule of Civil Procedure 56.
In response to two pro se adversary complaints, the debtor moved to dismiss for failure to state a claim, for a more particular statement, and to strike allegations. The Court addressed, at length, each of the debtor's objections to the complaints. The Court granted in part and denied in part the debtor's motions, and the Court gave the plaintiffs an opportunity to amend their complaints.
In response to two pro se adversary complaints, the debtor moved to dismiss for failure to state a claim, for a more particular statement, and to strike allegations. The Court addressed, at length, each of the debtor's objections to the complaints. The Court granted in part and denied in part the debtor's motions, and the Court gave the plaintiffs an opportunity to amend their complaints.
The Court granted the Chapter 7 trustee's motion to reconsider an order denying the trustee's motion to reopen. The Court reexamined Johnson v. Alvarez (In re Alvarez), 224 F.3d 1273 (11th Cir. 2000), and concluded it mandated the result that Georgia's discovery rule does not apply when determining whether a cause of action is property of the estate.