GEIBank Industrial Bank v. Martin (In Re Martin)

97 B.R. 1013, 1989 Bankr. LEXIS 387, 1989 WL 26198
CourtUnited States Bankruptcy Court, N.D. Georgia
DecidedMarch 9, 1989
Docket19-51511
StatusPublished
Cited by16 cases

This text of 97 B.R. 1013 (GEIBank Industrial Bank v. Martin (In Re Martin)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GEIBank Industrial Bank v. Martin (In Re Martin), 97 B.R. 1013, 1989 Bankr. LEXIS 387, 1989 WL 26198 (Ga. 1989).

Opinion

*1015 CONTESTED MATTER

STACEY W. COTTON, Bankruptcy Judge.

ORDER

Before the court is GEIBank Industrial Bank’s (“movant”) amended motion for relief from stay and for imposition of sanctions pursuant to Bankruptcy Rule 9011 against debtor and her attorney. This matter is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2)(G). After consideration of the record, the testimony and other evidence presented, and the arguments of counsel, the court’s findings and conclusions are as follows:

On February 2,1988, debtor filed a Chapter 13 petition in Case No. 88-00883. On May 23, 1988, movant filed a motion for relief from stay with regard to the property located at 1876 Hazelwood Drive, Marietta, Georgia (“the property”). This court, by order entered August 3, 1988, granted relief by modifying the stay to permit mov-ant to exercise its rights under the deed to secure debt and to pursue its state law remedies. (See also “Consent Order Modifying Stay”, entered June 29, 1988).

Movant subsequently commenced a foreclosure proceeding with a .scheduled auction date of September 6, 1988. On September 6, 1988 at 8:19 A.M., debtor filed a Chapter 7 petition in Case No. 88-07667. At the time of such filing, this debtor’s Chapter 13 Case No. 88-00883 was open and active with a confirmed plan. Debtor filed a skeletal petition praying for relief under Chapter 7. Debtor’s signature and the signature of her attorney, Thomas L. Bingley, appear on the skeletal petition. 1

At the time of the filing of a petition in this court, the debtor’s attorney, or the debtor, if pro se, is required to complete and file a disclosure form listing all prior cases filed by the debtor within the last two years and all related cases in which the debtor is the spouse, partner, or is affiliated with a corporation. Bankruptcy Local Rule 740, N.D.Ga. The signature of attorney Thomas L. Bingley appears on said form which states that the debtor has no such prior or related cases.

On September 16, 1988, debtor filed her schedules and statement of financial affairs. Paragraph eight of the statement of financial affairs contained the following question:

Prior bankruptcy. What cases under the Bankruptcy Act or title 11, United States Code have previously been brought by or against you? (State the location of the bankruptcy court, the nature and number of each case, the date when it was filed, and whether a discharge was granted or denied, the case was dismissed, or a composition, arrangement or plan was confirmed.)

Debtor made the following reply to this question: “Chapter 13 Case #A88-00883SWC Northern Dist. of Ga-Dismissal questioned.”

At approximately 9:50 A.M. on September 6, 1988, the date of the Chapter 7 filing, Marvin J. Zagoria, a paralegal for movant’s counsel, Steven E. Zagoria, received a telephone call from a woman who identified herself as attorney Thomas Bing-ley’s secretary. Said secretary advised Marvin J. Zagoria that Mr. Bingley had filed a Chapter 7 petition on debtor’s behalf. The secretary was advised by the paralegal Zagoria that the movant would request an emergency hearing before Judge Cotton to seek relief from the stay. The paralegal, Marvin J. Zagoria, requested that Mr. Bingley contact attorney Steven E. Zagoria as soon as possible. The secretary then advised the paralegal Zago-ria that Mr. Bingley was in court and she was uncertain whether she would be able to contact him. (See Affidavit of Marvin J. Zagoria, sworn to and subscribed before a notary public on September 13, 1988 and attached to movant’s September 19, 1988 amended motion for relief from stay and for sanctions as Exhibit C).

In response to the Chapter 7 filing, mov-ant filed an emergency motion for relief from stay on September 6, 1988. An in-ehambers hearing was set for 1:30 P.M. *1016 that same day. Marvin J. Zagoria then made several attempts to contact Mr. Bing-ley to advise him of the hearing. At approximately 12:30 P.M., Marvin J. Zagoria received a call from one Ted Smith, who identified himself as Mr. Bingley’s paralegal, and who advised that Mr. Bingley was out of town and could not attend the emergency hearing. (See Affidavit of Marvin J. Zagoria).

After hearing the argument of movant’s counsel at the emergency hearing, the court, by order entered September 13,1988, modified the stay and allowed movant to foreclose on its secured interest, provided, however, that movant could not record its deed under power of sale until a full hearing upon notice could be held.

Movant subsequently filed an amended motion for relief from stay which sought leave to record its deed under power of sale and also included a request for the imposition of sanctions against debtor and her attorney under Bankruptcy Rule 9011. 2 Said motion came on for hearing upon notice on October 25, 1988. Steven E. Zago-ria, movant’s attorney, and Thomas L. Bingley, debtor’s attorney, were present at the hearing. Debtor did not appear.

This case presents a classic example of the continuing abuse of creditors and the bankruptcy system by debtors and their attorneys. It is this type of conduct which the bankruptcy courts, the district courts and the appellate court of this circuit have sought to curtail. See Phoenix Piccadilly, Ltd. v. Life Insurance Co. of Virginia (In re Phoenix Piccadilly, Ltd.), 849 F.2d 1393 (11th Cir.1988) (Chapter 11 case dismissed as a bad faith filing); Natural Land Corp. v. Baker Farms, Inc. (In re Natural Land Corp.), 825 F.2d 296 (11th Cir.1987) (Chapter 11 case dismissed as a bad faith filing); Shell Oil Co. v. Waldron (In re Waldron), 785 F.2d 936 (11th Cir.), cert. dismissed, 478 U.S. 1028, 106 S.Ct. 3343, 92 L.Ed.2d 763 (1986) (Chapter 13 case dismissed as a bad faith filing).

Based on the record in these Chapter 7 and 13 cases and the September 6 and October 25, 1988 hearings, the court concludes that debtor’s Chapter 7 case was not filed in good faith. This new filing evidences an intent by debtor to circumvent this court’s August 3,1988 order lifting the automatic stay in the pending Chapter 13 case and to hinder and delay movant’s efforts to exercise its rights with regard to the property. Counsel even admitted at the October 25 hearing that debtor sought more time and urged the court to deny the creditor’s motion and give the debtor additional time. (Transcript of the October 25, 1988 hearing on movant’s amended motion for relief from stay and for imposition of sanctions, pages 11, 17-18, hereinafter, “Transcript, p. #”). Had debtor been sincerely seeking Chapter 7 relief, the pending Chapter 13 case could have legitimately been converted to Chapter 7.

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Cite This Page — Counsel Stack

Bluebook (online)
97 B.R. 1013, 1989 Bankr. LEXIS 387, 1989 WL 26198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/geibank-industrial-bank-v-martin-in-re-martin-ganb-1989.