The debtor objected to the claim of creditor SN Servicing Corporation, the current mortgage holder on the debtor's residence, claiming the mortgage was made current in the co-signor's earlier bankruptcy case and claiming that all subsequent payments were made on time. The creditor argued that the mortgage at issue was a simple interest mortgage, a mortgage in which interest accrues daily and failure to pay on time results in an increase in interest rather than late charges. Thus, the co-signor's cure did not reinstate the original amortization schedule because the late payments leading up to that prior bankruptcy resulted in a higher principle. The Court agreed with the creditor and overruled the debtor's objection.
Opinions
The Middle District of Georgia offers opinions in PDF format, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.
Please note: These opinions are not a complete inventory of all judges' decisions and are not documents of record. Official court records are available at the clerk's office.
Judge John T. Laney, III
In an adversary proceeding seeking to determine nondischargeability of a debt, the Court granted in part and denied in part the wife-defendant's motion to dismiss complaint and granted the plaintiffs' motion to amend complaint. The Court granted the motion to dismiss the fraud allegation because the allegation did not meet the particularity requirement of Federal Rule of Civil Procedure 9 (made applicable to adversary proceedings through Bankruptcy Rule 7009); the Court denied the motion to dismiss the embezzlement, larceny, and willful and malicious injury allegations because taking the allegations at face value and construing all reasonable inferences in favor of the plaintiffs, the complaint properly alleged all three. The Court granted the plaintiffs' motion to amend because the plaintiffs had not done anything justifying denial, and refusing to grant leave to amend without reason is an abuse of discretion.
In a lengthy opinion, the Court examined law of propely filed proofs of claim after several debtors objected to the claims filed by eCAST Settlement Corporation in each case. The Court limited the reach of its prior opinion, In re Stephens, 443 B.R. 225 (Bankr. M.D. Ga. 2010). The Court discussed compliance with Bankrupty Rule 3001 and Official Form 10 (on how a creditor can achieve prima facie validity for its proof of claim), the effects of noncompliance with Bankruptcy Rule 3001, and the proper procedures and allocation of burdens in deciding objections to claim. The Court ultimately sustained all three objections to claim.
A postpetition fire destroyed the debtors' house, resulting in insurance proceeds totaling $107,000.00, which the creditor bank held. The debtors filed a motion to use this cash collateral. Both parties agreed that the creditor bank was entitled to keep an amount equaling the payoff of the house note, but the parties did not agree on how the house note's dragnet clause (and subsequent credit transactions between the parties) affected the reach of the lien to further proceeds. The Court granted the debtors motion in part and denied it in part, allowing the debtors to keep the amount over the balance of the house plus the amount owed on a vehicle in which the creditor held a security interest. The car debt was treated in a confirmed Chapter 13 plan, and the creditor was bound by the terms of that plan.
A Chapter 7 Debtor had a 1/5 interest in a vested remainder in real estate, and the Trustee moved the Court to close the case while still retaining jurisdiction over the remainder interest so that the Trustee could administer the asset when the interest became a fee simple. Assuming without deciding that the Court indeed has the power to close a case and retain jurisdiction over a remainder interest, the Court held that the Trustee did not meet its burden in showing that the benefits in retaining jurisdiction over this particular asset overcame the burdens.
The Court granted the Debtor's three objections to discharge against the same creditor when the creditor could not establish a chain of assignment for its claims. The Court discussed the basic federal rule that in bankruptcy, state law governs the substance of claims; the Court also examined Georgia state law cases illustrating the proper way to assign a claim.
The Court granted the Debtors' motion to voluntarily dismiss their Chapter 7 case after the Court determined the Debtors had not satisfied a two-pronged test: (1) Whether the Debtor can show cause to dismiss and (2) If the Debtor does show cause, whether the dismissal would prejudice creditors. The second prong was examined under a factors test.
Receiver filed for bankruptcy for five business under state receivership. Question as to whether filing was in bad faith when Superior Court entered order nunc pro tunc after the filing. Held that nunc pro tunc order is void, and that bankruptcy estate retains exclusive jurisdiction. Also, debtors' principals were not in position to act as fiduciaries due to the fact that they were indicted and currently under trial for various Georgia criminal charges.
The court held that a creditor can seek relief from the discharge injunction to pursue a judgment of liability against the debtor for the sake of recovering against the debtor.s insurer. The court also relied upon 11 U.S.C. §524(e) for the proposition that a creditor may seek relief from the permanent injunction in order to establish liability of the debtor to recover from a third party.
Plaintiff filed complaint against Defendant in Superior Court alleging breaches of fiduciary duty under Georgia Partnership law. Defendant removed to bankruptcy court. Trustee intervened in Superior Court and filed answer and counterclaim. Trustee issued a bill of sale to the Defendant transferring any interest in business partnership to Defendant. Defendant erroneously believed this to automatically substituted him for the Trustee. Defendant failed to file an answer or other response within 10 days; thus, Defendant was in default. The "good cause" standard of Fed. R. Civ. P. 55(c) governs whether a clerk.s entry of default should be set aside. The four factor test is (1) whether the defaulting party took prompt action to vacate the default; (2) whether the defaulting party provides a plausible excuse for the default; (3) whether the defaulting party presents a meritorious defense; and (4) whether the party not in default will be prejudiced if the default is set aside. Turner Broadcasting Systems, Inc. v. Sanyo Electric, Inc., 33 B.R. 996, 1001 (N.D. Ga. 1983), aff.d, 742 F.2d 1465 (11th Cir. 1984). In this case, Defendant failed to satisfy the 2nd, 3rd, and 4th factors. Therefore, the motion to reconsider order striking Defendant.s untimely answer was denied.