Godley v. Open Grounds Farm, Inc. (In re Godley)

505 B.R. 192
CourtUnited States Bankruptcy Court, E.D. North Carolina
DecidedFebruary 5, 2014
DocketCASE NUMBER: 11-03953-8-RDD; ADVERSARY PROCEEDING NUMBER: 12-00263-8-RDD
StatusPublished

This text of 505 B.R. 192 (Godley v. Open Grounds Farm, Inc. (In re Godley)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Godley v. Open Grounds Farm, Inc. (In re Godley), 505 B.R. 192 (N.C. 2014).

Opinion

CHAPTER 12

ORDER DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND GRANTING SUMMARY JUDGMENT FOR DEFENDANT

Randy D. Doub, United States Bankruptcy Judge

Pending before the Court is the Plaintiffs’ Motion for Summary Judgment and the accompanying Memorandum of Law In Support of Plaintiffs’ Motion for Summary Judgment (the “Plaintiffs’ Memo”) filed by Mark A. Godley, Sr., Tiffany L. Godley, and Richard M. Stearns, Trustee (the “Plaintiffs”) on August 28, 2013, the Response and Incorporated Memorandum of Law filed by Open Grounds Farm, Inc. (the “Defendant”) on September 18, 2013, and the Reply In Support of Plaintiffs’ Motion for Summary Judgment filed by the Plaintiffs on September 25, 2013. The Court conducted a hearing on December 12, 2013, in Greenville, North Carolina to consider these matters. At the conclusion of the hearing, the Court took this matter under advisement. On January 14, 2014, the Court entered an Order and Notice pursuant to Federal Rule of Civil Procedure 56(f) giving the parties until February 3, 2014, in which to request a hearing, file affidavits, and supplemental briefs regarding entry of summary judgment in favor of the nonmovant Defendant.

On February 3, 2014, the Defendant filed a Memorandum of Law in Support of Summary Judgment in Favor of Defendant (the “Defendant’s SJ Memo”). The Defendant’s SJ Memo briefly reemphasizes the arguments made in the Defendant’s Response and Incorporated Memorandum of Law. On February 3, 2014, the Plaintiffs filed a Request for Hearing Regarding Summary Judgment and Supplemental Brief (the “Plaintiffs’ Request and Brief’). In addition to requesting a hearing regarding summary judgment in favor of the Defendant, the Plaintiffs’ Request and Brief states that those arguments and authorities contained in the materials previously submitted by the Plaintiffs demonstrate that the Debtors are entitled to summary judgment on the claims set forth against the Defendant in the Complaint. Further, the Plaintiffs’ Request and Brief succinctly reemphasizes arguments made in the Plaintiffs’ Memo.

On February 3, 2014, Richard M. Steams, chapter 12 Trustee, a named Plaintiff, filed the Trustee’s Recommenda[194]*194tion On Plaintiffs’ Motion for Summary Judgment (the “Trustee’s Recommendation”). In the Trustee’s Recommendation, the Trustee states that this case is in a position to be resolved by summary judgment and, even though he is a conduit plaintiff in this case, he recommends that summary judgment in favor of the Plaintiffs be denied. The Trustee sets forth various arguments why 11 U.S.C. § 545 does not provide the authority to avoid transfers for rent on the facts of the case at bar. Moreover, the Trustee argues that the Plaintiffs are not entitled to set aside the unperfected consensual security agreement between the debtors and the Defendant. The Trustee asserts 11 U.S.C. § 544(a)(1) is irrelevant because the transaction was prepetition and the monies were paid long ago and are not recoverable. Such concessions by the chapter 12 Trustee, a named Plaintiff, do irreparable harm to the arguments of the Debtor Plaintiffs. Accordingly, for the reasons set forth herein, a decision by this court is timely and appropriate without further hearing.

JURISDICTION

Subject matter jurisdiction and jurisdiction over the parties exists pursuant to 28 U.S.C. §§ 151, 157, and 1384, and the General Order of Reference of the United States District Court for the Eastern District of North Carolina dated August 3, 1984.

This matter is a core proceeding as set forth in § 157(b)(2) of Title 28 of the United States Code.

STANDARD FOR SUMMARY JUDGMENT

Federal Rule of Civil Procedure 56(c), made applicable in this case through Bankruptcy Rule 7056, states that summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The “plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Id. In making this determination, conflicts are resolved by viewing all facts and all reasonable inferences in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).

According to Federal Rule of Civil Procedure 56(f), “[ajfter giving notice and a reasonable time to respond, the court may: (1) grant summary judgment for a non-movant; (2) grant the motion on grounds not raised by a party; or (3) consider summary judgment on its own after identifying for the parties material facts that may not be genuinely in dispute.” Fed. R.Civ.P. 56(f). If there is no genuine issue of material fact, and the issue to be decided is a matter of law, granting summary judgment for a nonmovant is appropriate after giving the parties notice and a reasonable time to respond. Therefore, a decision by this court is timely.

FACTUAL HISTORY

Mark A. Godley, Sr. and Tiffany L. God-ley (the “Debtors”) filed a voluntary petition for relief under chapter 12 of the United States Bankruptcy Code (the “Code”) on May 23, 2011. The Debtors’ confirmed chapter 12 Plan provides that a portion of Crop Production Services’ secured claim will be paid from proceeds [195]*195from avoidance litigation brought by the Debtors and the chapter 12 Trustee against the Defendant, and that the proceeds beyond the amount of Crop Production Services’ secured claim will be shared by other creditors of the Debtors’ estate. The Plaintiffs filed their Complaint in this action on October 10, 2012, seeking:

(a) to avoid, pursuant to 11 U.S.C. § 545(3), a statutory landlord’s lien for rent arising pursuant to N.C. GemStat. § 42-15 in favor of the Defendant as to Mark A. Godley, Sr.’s (“Godley”) 2010 corn crop grown on the acreage he rented from the Defendant (“2010 Corn”);
(b) to avoid, pursuant to 11 U.S.C.

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Bluebook (online)
505 B.R. 192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/godley-v-open-grounds-farm-inc-in-re-godley-nceb-2014.