In Re Cheely

280 B.R. 763, 48 Collier Bankr. Cas. 2d 887, 2002 Bankr. LEXIS 753, 39 Bankr. Ct. Dec. (CRR) 233, 2002 WL 1627263
United States Bankruptcy Court, M.D. Georgia·Decided June 26, 2002·No. 16-30743·Published·Cited by 3 cases

Opinion

MEMORANDUM OPINION

JAMES D. WALKER, JR., Bankruptcy Judge.

This matter comes before the Court on Debtor’s Motion to Reopen Chapter 7 Case to File an Amendment to Schedule F. This is a core matter within the meaning of 28 U.S.C. § 157(b)(2)(0). After considering the pleadings, the evidence, and the applicable authorities, the Court enters the following findings of fact and conclusions of law in conformance with Federal Rule of Bankruptcy Procedure 7052.

Findings of Fact

Debtor, Rickey J. Cheely, owned Cheely Lawn Care, which was having financial trouble when Tom and Myra Leigh Mitchell d/b/a Grassmasters offered to buy him out. During negotiations, Grassmasters paid Debtor a salary, paid debts of Cheely Lawn Care, and collected Cheely Lawn Care’s accounts receivables. Debtor told the Mitchells that if the deal fell through, he would have to file for bankruptcy. He also told them that if he did file, he would not list them as creditors.

The joining of the two businesses was supposed to be completed by the end of 2000. With the takeover still pending in March 2001, and with creditors threatening to repossess his personal property, Debtor canceled the deal and filed a no-asset Chapter 7 petition on March 9, 2001. His petition did not list the Mitchells or Grassmasters as creditors. 1 ■ Debtor testified that he did not list them because he did not believe he owed them any money. Debtor took time off work to file the petition and informed the Mitchells that he had done so. Leigh Mitchell testified that Debtor had told the Mitchells he had filed bankruptcy. On April 2, 2001, Debtor and Tom Mitchell signed a document drafted by Leigh Mitchell that was headed “Rickey Cheely’s Debt to Grassmasters.” The document listed several debts incurred by Debtor and paid by Grassmasters in addition to work done by Grassmasters for which it had not been paid.

The Court granted Debtor a discharge on June 22, 2001, and closed his case on September 7, 2001. On November 9, 2001, the Mitchells filed suit against Debtor in the Baldwin County Superior Court to collect payments made to creditors on Debt- or’s behalf and to collect advances made to Debtor. Debtor’s counsel filed a motion for a stay due to bankruptcy in the state court case. Nevertheless, the state court entered judgment for the Mitchells. It is unclear whether Debtor’s motion preceded the judgment, although the Mitchells’ counsel stated that no stay was in effect at the time judgment was entered.

Debtor seeks to reopen the case to add the Mitchells as creditors so that the discharge injunction may be enforced in the *765 civil suit filed by the Mitchells against Debtor. The Mitchells object to reopening the case, claiming Debtor intentionally omitted them from his schedules.

Conclusions of Law

Section 350(b) of the Bankruptcy Code authorizes the Court to reopen a bankruptcy case “to administer assets, to accord relief to the debtor, or for other cause.” 11 U.S.C.A. § 350(b) (West 1993). The decision of whether or not to reopen the case is solely within the discretion of the bankruptcy court. In the Matter of Shondel, 950 F.2d 1301, 1304 (7th Cir.1991); Critical Care Support Servs., Inc. v. United States (In re Critical Care Support Servs.), 236 B.R. 137, 140 (E.D.N.Y.1999).

The actual controversy between the parties appears to be whether or not the discharge injunction 2 applies to any debt that may be owed to the Mitchells. 3 However “reopening a case simply to amend schedules does nothing to affect the discharge of a debt.” Keenom v. All Amer. Mktg. (In re Keenom), 231 B.R. 116, 119 (Bankr.M.D.Ga.1999) (Walker, J.). Section 727(b) provides for the discharge of all debts other than those excepted from discharge by Section 523. 4 Id. at 120 (quoting Judd v. Wolfe, 78 F.3d 110, 113—14 (3d Cir.1996)). The issue of whether an omitted debt was discharged in Chapter 7 may be litigated in one of three ways:

“First, if a creditor pursues a lawsuit on the claim, the debtor can assert the bankruptcy discharge as an affirmative defense and the court with jurisdiction over that lawsuit can decide whether the debt falls within any of the exceptions to discharge. Second, under Bankruptcy Rule 4007(b) either the [d]ebtor or the creditor can move to reopen th[e] case for the purpose of filing a complaint to determine dischargeability. Third, the [d]ebtor can bring action in this Court to enforce the discharge injunction.... ”

Id. at 125 (quoting In re Mendiola, 99 B.R. 864, 870 (Bankr.N.D.Ill.1989)). The parties have not pursued any of these options, and the question of dischargeability is not answered by Debtor merely adding the omitted creditor to his schedules.

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In Re Cheely, 280 B.R. 763, 48 Collier Bankr. Cas. 2d 887, 2002 Bankr. LEXIS 753, 39 Bankr. Ct. Dec. (CRR) 233, 2002 WL 1627263 (Ga. 2002).

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