Daniels v. Howe Law Firm, P.C. (In re Daniels), CASE NUMBERS BANKRUPTCY CASE 09-65367-LRC

591 B.R. 814

In the MATTER OF: Gregory DANIELS, Debtor.

Gregory Daniels, Plaintiff,

v.Howe Law Firm, P.C., Defendant.

CASE NUMBERS BANKRUPTCY CASE 09-65367-LRC

ADVERSARY PROCEEDING NO. 15-5296

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

Signed September 28, 2018

Gregory Daniels, pro se.

Jeffrey Roger Nickerson, Howe Law Firm, P.C., Alpharetta, GA, for Defendant.

IN PROCEEDINGS UNDER CHAPTER 7 OF THE BANKRUPTCY CODE

ORDER

Lisa Ritchey Craig, U.S. Bankruptcy Court Judge

Before the Court is the Motion for Partial Summary Judgment (the "Motion") (Doc. No. 69), filed in the above-captioned adversary proceeding by Gregory Daniels ("Plaintiff"). Howe Law Firm, P.C. ("Defendant") opposes the Motion. This matter arises in connection with Plaintiff's suit against Defendant seeking damages for violations of the discharge injunction, violations of the Fair Debt Collection Practices Act (the "FDCPA"), and for negligence.¹

FACTS AND PROCEDURAL HISTORY

On March 2, 2009 (the "Petition Date"), Plaintiff filed a voluntary petition under Chapter 7 of the Bankruptcy Code. See Case Number 09-65367-LRC, Dkt. No. 1. On June 11, 2009, the Chapter 7 trustee assigned to Plaintiff's case filed a report indicating that there was no property available for distribution to creditors, and no claims bar date was ever established. Id. The deadline for filing a complaint objecting to Plaintiff's discharge or for a determination of the dischargeability of a particular debt was June 12, 2009. Id. Dkt. No. 2; Fed. R. Bankr. P. 4004, 4007. The Court entered a discharge order and closed the bankruptcy estate on June 17, 2009 (the "Discharge Order"). Id. Dkt. No. 16, Complaint, Ex. A.

On April 14, 2011, Plaintiff filed an emergency motion for sanctions and violation of the discharge injunction in Plaintiff's bankruptcy case (the "Emergency Sanctions Motion").See Case Number 09-65367-LRC, Dkt. No. 21. In the Emergency Sanctions Motion, Plaintiff asserted that, on June 29, 2010, Kim Anderson ("Anderson") had filed a civil action in the Superior Court of Fulton County ("Superior Court") against Plaintiff, seeking damages related to the prepetition sale of real property. Plaintiff sought a determination from this Court that the debt asserted by Anderson in the state court suit had been discharged. On August 17, 2011, this Court abstained from granting the relief requested in the Emergency Sanctions Motion on the basis that: (1) the Superior Court had concurrent jurisdiction to determine whether the debt at issue was discharged; and (2) a suit was already pending before the Superior Court in which such a determination could be made.

Thereafter, Plaintiff moved the Superior Court to enforce the discharge injunction by finding that the debt was discharged. The Superior Court denied Plaintiff's motion, stating:

[T]o the extent that it can be established that Plaintiff's breach of warranty claim rests upon false pretenses, false representations, or fraud, such a claim would be excepted from discharge. Indeed, at this time, and without addressing the merits of Plaintiff's breach of warranty claim, it appears that the breach of warranty claim is excepted from the discharge. Therefore, the instant motion is DENIED. However, based upon further development of the record, the Court may revisit this issue at a later date.

Complaint Exh. C. Anderson voluntarily dismissed the action without prejudice before the Superior Court could revisit the issue. Complaint, ¶ 16.

In November 2013, Network Commercial Services Incorporated ("Network"), as assignee of Stewart Title Guaranty Company ("Stewart Title"), as subrogee Anderson, filed a complaint against Plaintiff in the State Court of Fulton County (the "Network Action"). Plaintiff's Statement of Undisputed Material Facts² (Dkt. No. 70) ("SUMF") ¶ 1; Defendant's Response to Plaintiff's Statement of Undisputed Material Facts and Statement of Additional Facts (Dkt. No. 72) ("Response to SUMF") ¶ 1. Attorney Richard M. Howe of Howe Law Firm, P.C. signed and filed the complaint in the Network Action. SUMF ¶ 1; Response to SUMF ¶ 1. The Network Action asserted that the debt owed arose from a false swearing and misrepresentations by Plaintiff in his "Sellers Affidavit" and "Warranty Deed" in connection with his sale of real property to Anderson. SUMF ¶ 1; Response to SUMF ¶ 1. Network sought damages of $191,000 plus $102,344.60 in interest and $44,000.01 in attorney's fees. SUMF ¶ 1; Response to SUMF ¶ 1.

In his amended answer, filed on November 27, 2014, Plaintiff moved for dismissal and for summary judgment on the basis of "the existence of the chapter 7 discharge." SUMF ¶ 5; Response to SUMF ¶ 5. Plaintiff also filed a motion to dismiss the Network Action on December 11, 2013, on the basis that Network lacked standing to bring the claims. SUMF ¶ 6; Response to SUMF ¶ 6. In January 2015, the Network Action was dismissed without prejudice for failure to prosecute. SUMF ¶ 8; Response to SUMF ¶ 8.

After the dismissal of the Network Action, Plaintiff filed a complaint against Network and Defendant in the District Court for the Northern District of Georgia (Case No. 15-cv-00827-SCJ) (the "Federal Action"). SUMF, ¶ 9; Response to SUMF, ¶ 9. In the Federal Action, Plaintiff sued Defendant for violations of the FDCPA and alleged the existence of a Chapter 7 bankruptcy discharge. SUMF, ¶ 9; Response to SUMF, ¶ 9.

On April 3, 2015, Defendant refiled in the State Court of Fulton County a complaint against Plaintiff on Network's behalf that was "closely similar" to the complaint previously dismissed for failure to prosecute (the "Second Network Action"). SUMF, ¶ 10; Response to SUMF, ¶ 10. Defendant voluntarily dismissed the Second Network Action in November 2015, prior to a scheduled trial. SUMF, ¶ 11; Response to SUMF, ¶ 11.

In April 2015, Plaintiff filed a motion to reopen his bankruptcy case for the purpose of filing suit against Network. See Case Number 09-65367-LRC, Dkt. No. 32. Plaintiff initiated this adversary proceeding on July 23, 2015, by filing a complaint against Network, to which Defendant was later added by amendment.³ Id ., Dkt. Nos. 1, 16. Plaintiff dismissed voluntarily his claims against Network on December 16, 2015. Id ., Dkt. No. 20.

The Court takes judicial notice of the fact that Plaintiff's Schedule F did not list a debt owed to Anderson, Stewart Title, or Network and that Plaintiff's attached creditors' list did not include the names and addresses of Anderson, Stewart Title, Network, or HLF. See Case Number 09-65367-LRC, Dkt. No. 1. The Court takes further judicial notice of the fact that the Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines mailed to scheduled creditors in Plaintiff's bankruptcy case was not mailed to Anderson, Stewart Title, Network, or HLF. See id. , Dkt. No. 7.

While Defendant does not dispute the facts above, Defendant's Response to Plaintiff's Statement of Undisputed Facts in Support of Plaintiff's Motion for Partial Summary Judgment and Statement of Additional Facts ("Defendant's SUMF") includes additional facts, which Defendant asserts are "material to the Court's consideration" of the Motion. Defendant's SUMF, ¶ II. Plaintiff objects to the Court's consideration of these additional facts as being supported only by "inadmissible hearsay."

The Court finds the following additional facts to be relevant to this matter and that Defendant has properly relied upon the affidavits of Kim Anderson and Felicia E. Saintil-Deltis for the purpose of demonstrating the existence of a genuine issue of material fact in defense of the Motion.⁴

Plaintiff applied for and obtained a HELOC from Washington Mutual, which was secured by the Property. Affidavit of Felicia E. Saintil-Deltis, ¶ 2. The security deed for the HELOC was never cancelled or marked paid in the land records of Cobb County, Georgia. Id. ¶ 9. After August 30, 2005, Plaintiff continued to borrow on the HELOC and ultimately defaulted under the terms of the HELCO and failed to make payments, leaving, as of March 16, 2010, an unpaid principal balance of $296,226.37. Id. ¶¶ 10, 13. Prior to June 2010, Anderson had no notice of knowledge of Plaintiff's bankruptcy filing. Affidavit of Kim Anderson, ¶ 2.

CONCLUSIONS OF LAW

Plaintiff seeks partial summary judgment as to Defendant's liability for violations of the discharge injunction, violations of the FDCPA, and negligence.⁵ Having reviewed the Motion, the Court concludes that material facts remain in dispute as to whether the debt at issue was discharged and, therefore, the Court cannot conclude that Defendant's filing of the Second Network Action violated the discharge injunction.

A. Summary Judgment Standard

In accordance with Federal Rule of Civil Procedure 56 (applicable to bankruptcy proceedings under Rule 7056 of the Federal Rules of Bankruptcy Procedure ), the Court will grant summary judgment only if "there is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c) ; see also Hairston v. Gainesville Sun Publ'shg Co. , 9 F.3d 913, 918-19 (11th Cir. 1993). A fact is material if it might affect the outcome of a proceeding under the governing substantive law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute of fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. The moving party has the burden of establishing the right of summary judgment. Clark v. Coats & Clark, Inc. , 929 F.2d 604, 608 (11th Cir. 1991) ; Clark v. Union Mut. Life Ins. Co. , 692 F.2d 1370, 1372 (11th Cir. 1982).

To determine whether a genuine issue of material fact exists, the Court must view the evidence in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co. , 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ; Rosen v. Biscayne Yacht & Country Club, Inc. , 766 F.2d 482, 484 (11th...