McCauley v. Powell

CourtUnited States Bankruptcy Court, N.D. Georgia
DecidedSeptember 5, 2025
Docket22-05166
StatusUnknown

This text of McCauley v. Powell (McCauley v. Powell) 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
McCauley v. Powell, (Ga. 2025).

Opinion

RUPI ep Cc: OR a Oe sy me □

2 of : a aa fae ty _ = IT IS ORDERED as set forth below: bisreics (\

Date: September 4, 2025 VU . 2

Sage M. Sigler U.S. Bankruptcy Court Judge

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION In Re: CASE NUMBER: PAMELA SHARAIL POWELL, 22-57011-SMS Debtor. CHAPTER 7 MICHELE MCCAULEY, ADVERSARY PROCEEDING NUMBER: Plaintiff, 22-05166-SMS v. PAMELA SHARAIL POWELL, Defendant. ORDER DENYING PLAINTIFF’S MOTION TO AMEND COMPLAINT The purpose of a bankruptcy discharge is to provide a fresh start to honest but unfortunate debtors. Some debts, such as student loans, certain taxes, or domestic support obligations, are generally excepted from discharge. For other debts, such as a debt resulting from fraud or intentional injury, nondischargeability requires a determination by a court of competent jurisdiction. The Bankruptcy Code allows creditors 60 days after the initial meeting of creditors to file

a complaint against the debtor asserting that the bankruptcy court should find a debt nondischargeable. Once that 60-day window closes (along with any extensions granted by the bankruptcy court), a creditor can neither initiate a nondischargeability proceeding nor add additional nondischargeability claims to an already-filed complaint against the debtor. But under

certain circumstances, a nondischargeability complaint amended after the deadline may relate back to the original date of filing. The original complaint in this proceeding pursued a nondischargeability determination on an unliquidated defamation claim. Once the Court determined that the underlying defamation claim was no longer viable, the plaintiff sought leave to amend her complaint to assert a racketeering claim as the underlying basis for nondischargeability. For the reasons set forth below, the Court denies the plaintiff’s request to amend. I. JURISDICTION AND VENUE The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(I) as a determination of the

dischargeability of a debt. II. BACKGROUND a. Prebankruptcy Litigation Michele McCauley (“McCauley”) formerly owned a burger restaurant franchise that employed Pamela Sharail Powell (“Powell”) in downtown Atlanta. After the employment relationship ended, Powell filed suit against the franchise,1 alleging that her employment was terminated in retaliation for supporting the sexual harassment claims of another employee against

1 Pamela Powell v. Burger Docs Atlanta, Inc., United States District Court for the Northern District of Georgia, Case No. 1:19-cv-03808-MLB (the “Retaliation Suit”). the franchise’s general manager.2 During the Retaliation Suit, the declaration of Jawanna Edwards (the “Declaration”), which contained allegedly defamatory statements about McCauley, was affixed to Powell’s response in opposition to McCauley’s motion for summary judgment filed on March 18, 2021. For their parts in filing the Declaration, McCauley sought sanctions under Fed.

R. Civ. P. (“Rule”) 11 against Powell and her counsel, but the district court refused to award them (Retaliation Suit, Doc. 103). After a jury trial, judgment was entered in favor of McCauley’s franchise and against Powell. During the Retaliation Suit, McCauley filed a lawsuit in the Superior Court of DeKalb County (civil action file no. 21CV10225, the “DeKalb Suit”) against declarant Jawanna Edwards, Powell, and Powell’s Retaliation Suit counsel. In the DeKalb Suit complaint, McCauley asserted a single count of libel against all defendants for filing the Declaration. While the DeKalb Suit was pending, Powell initiated a bankruptcy case and notified McCauley of the filing. b. The Bankruptcy Case Powell filed her voluntary petition initiating the above-styled bankruptcy case under

chapter 7 on September 3, 2022 (the “Bankruptcy Case”). Notice was sent to all disclosed creditors that Powell’s meeting of creditors would be held telephonically on October 12, 2022, and that the deadline to file a complaint to except a debt from discharge under Fed. R. Bankr. P. (“Bankruptcy Rule”) 4007(c) was December 12, 2022 (the “4007(c) Deadline,” Bankruptcy Case, Doc. 5). The chapter 7 trustee held and concluded the meeting of creditors as scheduled and reported on the Court’s docket that there was no property available for distribution from the estate over and above that exempted by law on October 18, 2022. On January 10, 2023, the Court entered an order discharging Powell and closing the Bankruptcy Case (Bankruptcy Case, Doc. 15). Prior to the

2 McCauley was not the restaurant’s general manager. 4007(c) Deadline, on December 6, 2022, McCauley filed a complaint to determine the dischargeability of her defamation claim pending in the DeKalb Suit (the “Complaint,” Doc. 1), initiating this adversary proceeding. c. This Adversary Proceeding

In the original Complaint, McCauley accused Powell, through her counsel in the Retaliation Suit, of filing the allegedly defamatory Declaration. McCauley asserted that by allowing her counsel to file the Declaration, which was the sworn testimony of a third party, Powell intentionally, willfully, and maliciously injured McCauley, and any recovery against Powell on that claim is nondischargeable under § 523(a)(6). On December 19, 2022, Powell filed her Answer to Complaint (Doc. 6) and Motion to Dismiss and for Abstention (the “Motion to Dismiss,” Doc. 7). McCauley filed her response to the Motion to Dismiss on December 29, 2022 (Doc. 9). The Court held a hearing on the Motion to Dismiss on March 21, 2023, and entered an order the same day denying dismissal of the Complaint, abstaining from determining the amount of McCauley’s defamation claim given the pendency of

the DeKalb Suit, modifying the automatic stay to allow the DeKalb Suit to proceed to liquidate McCauley’s claim, and staying this proceeding (Doc. 20). Other than a status conference held on May 22, 2024, this proceeding was dormant until Powell filed a Motion for Summary Judgment (the “MSJ,” Doc. 24) on November 6, 2024. In the MSJ, Powell argued that McCauley could not maintain this proceeding because the defamation claim—the sole claim asserted as the basis for McCauley’s debt in the original Complaint—had been dismissed in the DeKalb Suit.3 McCauley filed a response on November 22, 2024 (Doc. 25),

3 The Georgia Court of Appeals affirmed the dismissal of the defamation claim after McCauley appealed. See McCauley v. Powell, 373 Ga. App. 169, 908 S.E.2d 27 (2024). asserting that she still had a claim pending against Powell because she amended her complaint in the DeKalb Suit to include a count for racketeering. The Court held a hearing on the MSJ on February 25, 2025, and granted it on the basis that the only claim underlying the nondischargeability Complaint had been dismissed in the DeKalb Suit (Doc. 32). At the MSJ

hearing, McCauley’s counsel requested that her client be granted leave to amend the Complaint to add the racketeering claim, and Powell’s counsel asserted her opposition to such leave. The Court reserved its ruling on whether to grant leave to amend the Complaint and allowed McCauley 10 days to file a motion to amend the Complaint. Id. On March 7, 2025, McCauley filed a Motion for Leave to Amend Complaint with an associated brief (the “Motion to Amend,” Doc. 34), which is presently before the Court, and filed a proposed amended complaint (the “Proposed Amended Complaint” or “PAC”) as an attachment to the Motion to Amend.

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