Milton Tyrone Bush and Malissia Katernia Bush

CourtUnited States Bankruptcy Court, N.D. Alabama
DecidedFebruary 14, 2024
Docket22-40068
StatusUnknown

This text of Milton Tyrone Bush and Malissia Katernia Bush (Milton Tyrone Bush and Malissia Katernia Bush) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milton Tyrone Bush and Malissia Katernia Bush, (Ala. 2024).

Opinion

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ALABAMA EASTERN DIVISION

In re: } Milton Tyrone Bush and } Malissia Katernia Bush, } Case No. 22-40068-JJR13 } Debtors. } _______________________________

MEMORANDUM OPINION AND ORDER

This chapter 13 case has been pending for over two years, and is paying all claims, including unsecured claims, in full. Two related creditors moved the court to lift the automatic stay to allow them to pursue various claims against the Debtors in a state court lawsuit. For the reasons that follow, the court declines to do so. Background The Debtors filed for bankruptcy relief under chapter 13 of the U. S. Bankruptcy Code1 on January 26, 2022. The Debtors’ petition listed their residence as 102 Kennedy Street, Pell City, Alabama (the “Property”). Schedule A/B stated they, along with others, owned an interest in a single-family home located on the Property, and described their interest as “heir property.” Billy Ray Bush and Joanna Bush Britt (the “Movants”), were not scheduled as creditors and were not on the original mailing matrix filed by the Debtors with their petition. Thus, the Movants were likely not aware of the Debtors’ pending bankruptcy case when, on February 15, 2022, they filed a lawsuit (the “Lawsuit”) against the Debtors and other defendants in state circuit

1 11 U.S.C. § 101, et seq. (the “Code”). The Debtors, Movants, and Trustee stipulated to most of the facts recited herein (Doc. 83) and most, if not all, are also reflected in the various pleadings and documents on the court’s docket. court (the “State Court”) asserting claims for fraud, trespass, ejectment, and conversion, and seeking a declaration that the Debtors did not have any interest in the Property. Alternatively, the Movants asked for a sale of the Property and a division of the proceeds among the Property’s owners according to their interest therein. Additionally, the complaint claimed damages for personal injuries suffered by Billy Ray Bush, one of the Movants, when he was allegedly assaulted

by Debtor Milton Bush. After the State Court was made aware of the Debtors’ bankruptcy, it stayed the Lawsuit. In late March 2022, the Movants filed their proof of claim in the Debtors’ bankruptcy case for $30,600 and the court added the Movants to the mailing matrix to receive notices. (Claim 14 filed March 31, 2022.) As discussed below, the Movants seek stay relief to “liquidate” their claims in State Court, and in the brief supporting their position, they described their claim as one for “unpaid rent” and assert that payment on their claim under the Debtors’ plan is tantamount to an admission that the Movants are in fact the owners of the Property and the Debtors are merely occupants. (Doc. 85, p. 3.) The court does not agree that the claim, on its face, indicates it is a

claim for unpaid rent. To the contrary, the Movants stated in part 8 of their proof of claim that the basis for their claim was damages for “Trespass Conversion, Fraud of Real Estate, Possession of Heir Property, [and] Assault of Billy Ray Bush.” The Debtors’ amended chapter 13 plan (Doc. 28 filed March 23, 2022) proposed to pay 100% of allowed claims and was confirmed without objection on April 8, 2022. (conf. order Doc. 36.) The confirmation order has long been final and unappealable. In the months following confirmation, the Movants received $7,029.392 from periodic disbursements made by the Trustee

2 In her brief opposing the Movants’ motion for stay relief, the Trustee stated she is holding an additional $2,894.40 that is due to be disbursed to the Movants. (Doc. 84, p. 2.) from the biweekly payments by the Debtors under their plan, and disbursements should continue assuming additional plan payments are made as proposed.3 Although the Movants filed their proof of claim before confirmation, the Debtors objected to that claim over a year later, on July 21, 2023, seeking to disallow the claim entirely; however, as mentioned below, the objection was withdrawn. The Pleadings

On October 30, 2023, the Movants filed a motion (the “Motion” Doc. 64) requesting that the automatic stay of Code § 362(a) be terminated to allow them to pursue and liquidate their claims in the State Court Lawsuit.4 The Debtors (Doc. 77) and Trustee (at the hearing) opposed the Motion. The Debtors stated at the hearing on this matter and in their brief (Doc. 87, p. 5) that they will be unable to maintain their chapter 13 plan payments if required to retain and pay counsel to defend the Lawsuit in State Court.5 Importantly, after the hearing on the claim objection and

3 It’s worth noting that the Movants were added to the matrix to receive notices when they filed their proof of claim on March 31, 2022, which was after the amended plan was filed on March 23, 2022, but before the confirmation order was entered on April 8, 2022. Inasmuch as these documents were filed within a few days of each other, a credible argument could have been made supporting a motion to reconsider the order confirming the plan, but the credibility of that position was lost after the lapse of over a year and the Movants’ acquiescence and acceptance of plan payment during that timeframe.

4 It is significant that the Lawsuit was commenced after the Debtors filed their bankruptcy petition. The State Court Lawsuit was and remains a nullity as to the Debtors. “Actions taken in violation of the automatic stay are void and without effect.” Borg-Warner Acceptance Corp. v. Hall, 685 F.2d 1306, 1308 (11th Cir. 1982). The Movants acknowledged in their brief filed in support of their Motion that the Lawsuit was “void and without effect” because it was filed in violation of the automatic stay. (Doc. 85, ⁋ 14.) Nonetheless, the Movants offer that if their Motion is granted and they were to prevail in the Lawsuit (presumably by this court modifying the stay retroactively and thereby reinstating the otherwise void Lawsuit), they would not seek to collect or enforce any State Court judgment or order but would return to this bankruptcy court for their claim to administered in the Debtors’ chapter 13 case.

5 The Debtors’ budget shown in Schedules I and J confirm that they do not have the wherewithal to pay an attorney to defend the Lawsuit and continue to pay their chapter 13 plan payments. If payments are not paid, the case will be dismissed and the Debtors’ creditors, including the Movants, will receive no further payments in the case. Motion, the Debtors withdrew their objection to the claim, leaving only the Motion and the Debtors’ and the Trustee’s objections thereto (Doc. 77) for resolution. Jurisdiction and Authority to Enter Final Orders The Motion itself is a core proceeding under 28 U.S.C. § 157(b)(2)(G): “Core proceedings include . . . (G) motions to terminate . . . the automatic stay . . . .” Movants take issue, however,

with this court’s authority to rule on the personal injury aspect of their claim. In making certain exclusions to core jurisdiction, § 157(b)(2)(B) and (b)(2)(O) further provide: “Core proceedings include . . . (B) allowance or disallowance of claims against the estate . . . but not the liquidation or estimation of contingent or unliquidated personal injury tort or wrongful death claims against the estate for purposes of distribution in a case . . . .. . . [and] (O) other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor . . . . relationship except personal injury tort or wrongful death claims.” (emphasis added).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
Milton Tyrone Bush and Malissia Katernia Bush, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milton-tyrone-bush-and-malissia-katernia-bush-alnb-2024.