Ga. United Credit Union v. Moore (In re Moore)

• Decision Date: 27 August 2020
• Docket Number: Number 20-40309-EJC
• Parties: In re: TRENDA F. MOORE, Debtor. GEORGIA UNITED CREDIT UNION, Movant, v. TRENDA F. MOORE, Respondent.
• Court: U.S. Bankruptcy Court — Southern District of Georgia

In re: TRENDA F. MOORE, Debtor.

GEORGIA UNITED CREDIT UNION, Movant, v. TRENDA F. MOORE, Respondent.

Number 20-40309-EJC

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF GEORGIA SAVANNAH DIVISION

August 27, 2020

Chapter 13

Contested Matter

OPINION ON DEBTOR'S MOTION FOR STAY PENDING APPEAL

Before the Court is the Motion for Stay Pending Appeal(dckt. 66) filed by Trenda F. Moore(the "Debtor") pursuant to Rule 8007 of the Federal Rules of Bankruptcy Procedure(the "Bankruptcy Rules").The Debtor filed a Chapter 13 petition on February 28, 2020.(Dckt. 1).Her plan came on for confirmation hearingon June 4, 2020.Scheduled for hearing that same day were the Amended Motion for Relief from Automatic Stay(the "Motion for Stay Relief") and the Amended Motion for Relief from Co-Debtor Stay(the "Motion for Co-Debtor Stay Relief") filed by Georgia United Credit Union ("GUCU").(Dckt. 25, 26).On July 16, 2020, the Court entered an order denying confirmation and granting both the Motion for Stay Relief and the Motion for Co-Debtor Stay Relief.(Dckt. 51).The Debtor timely filed a Notice of Appeal on July 28, 2020.(Dckt. 54), Then, on August 7, 2020, the Debtor filed the instant Motion for Stay Pending Appeal to prevent foreclosure of certain real property scheduled for September 1, 2020.For the reasons set forth below, the Court will deny the Debtor's motion.

I.Jurisdiction

This Court had subject-matter jurisdiction of the underlying matters of plan confirmation and stay relief pursuant to 28 U.S.C. § 1334(a),28 U.S.C. § 157(a), and the Standing Order of Reference signed by then Chief Judge Anthony A. Alaimo on July 13, 1984.These matters are "core proceedings" within the meaning of 28 U.S.C. § 157(b).The Court has subject-matter jurisdiction of the instant Motion for Stay Pending Appeal pursuant to Bankruptcy Rule 8007.

II.Factual Background

The facts in this case are largely undisputed.On April 5, 2000, the Debtor's mother, Valerie Moore, became the sole owner of 13.25 acres of real propertycommonly known as 440 Mill Creek Church Road, Ellabell, Bryan County, Georgia 31308, pursuant to a Certificate of Order of Year's Support from the estate of James Odell Moore.(Ex. "7").²Five years later, on May 2, 2005, a plat (which indicates "Survey for: Trenda Moore") was filed in the Bryan County records showing a 1.027-acre parcel fronting on Mill Creek Church Road separated from the remainder of the 13.25-acre tract.(Ex. "8").

On July 5, 2005, the Debtor and her mother Valerie obtained a loan from State Employees Credit Union, whose successor by merger is GUCU, in the amount of $25,000.00 secured by the entire 13.25-acre parcel of real property commonly known as 440 Mill Creek Church Road, as evidenced by an Open-End Home Equity Credit Agreement and Truth in Lending Disclosure (ex. "1") and a Revolving Credit Security Deed.(Ex. "2").The security deed was subsequently modified on September 4, 2006, to increase the amount of the loan from $25,000.00 to $50,000.00 and to extend the maturity date from July 5, 2020, to September 4, 2021.(Ex. "3").The security deed was modified a second time on April 16, 2008, to increase the amount of the loan from $50,000.00 to $65,000.00 and to extend the maturity date to April 16, 2023.(Ex. "4").

On February 24, 2010, the Debtor's mother Valerie executed a Deed of Gift transferring to the Debtor the 1.027-acre tract that had been surveyed in March of 2005.(Ex. "5").This 1.027-acre tract subsequently became known as 420 Mill Creek Church Road, Ellabell, Bryan County, Georgia 31308.There is a brick home on the 12.22-acre parcel where the Debtor's mother resided, and the Debtor resides in a mobile home on the 1.027-acre parcel.

Valerie Moore died on April 1, 2019.A petition to probate her last will and testament, executed on September 17, 2002, was filed on August 1, 2019, in the Probate Court of Bryan County.A probate judge admitted the will to probate in an order dated November 12, 2019.(Ex. "6").The will states in pertinent part as follows:

I give, and bequeath all my rights, title, and interest which I have in my residence located at 440 Mill Creek Church Road, Ellabell, Georgia to my children, James J. Moore, Icen L. Moore Sr., Debra M. Simmons, Elijah E. Moore, Bertha F. Davis, Anjeanette Mutcherson, Ella M. Moore, and Trenda F. Scott[the Debtor] equally to share and share alike.Should there be a need to sell my above mentioned residence, then each of the above named children shall have a first option to purchase."

(Ex. "6").No transfer or other disposition of the devised real estate has been made pursuant to this will.After the Debtor's mother passed away in April of 2019,payments to GUCU ceased.³According to its proof of claim, the amount of the pre-petition arrearage was $16,437.84.(Claim No. 9-1, p. 2).

III.Procedural History

On February 28, 2020, on the eve of a scheduled foreclosure by GUCU,⁴ the Debtor filed a Chapter 13 petition.(Dckt. 1).On March 12, 2020, the Debtor filed her Chapter 13 plan.(Dckt. 14).Using the Court's local form plan,⁵ the Debtor proposed a plan of reorganization whereby she will pay to the Chapter 13Trustee the sum of $275.00 per month for a minimum of 36 months.(Dckt. 14, p. 1).From this sum, the Trustee will pay $4,500.00 to the Debtor's attorney and $5,312.00 at an interest rate of 4.25% to Flagship Credit Acceptance in monthly payments of $150.00 for the Debtor's 2012 Toyota Corolla (as well as $55.00 per month in adequate protection payments to this same creditor until the plan is confirmed).(Dckt. 14, p. 2-3).Priority claims, which total $1,613.24 according to the claims register, are to be paid in full.⁶(Dckt. 14, p. 2).General unsecured creditors, whoseclaims total about $3,177.00, are to be paid the total sum of $2,450.00, pro rata, over the life of the plan.(Dckt. 14, p. 2).

As to the Debtor's largest creditor, GUCU, which holds an allowed secured claim of $67,121.27 secured by the entire 13.25-acre tract, the Debtor addresses that creditor in two parts of her plan.First, Paragraph 4(f) provides that "[t]he Debtor(s) move(s) to value the claims partially secured⁷ by collateral pursuant to 11 U.S.C. § 506 and provide payment in satisfaction of those claims[.]"The Debtor values the 1.027-acre tract at $1.00 (one dollar)⁸ in the plan even though she values the same tract in her schedules at $10,700.00.⁹(Dckt. 14, p. 2).

Second, in Paragraph 9 of her plan, the Debtor proposes to surrender to GUCU the 12.22-acre parcel and house at 440 Mill Creek Church Road "in full satisfaction of debt."(Dckt. 14, p. 3).In a nonstandard provision, the Debtor's plan provides that "[a]ny foreclosure notice concerning the real estate at 440 Mill Creek Church [Road], Ellabell, GA must specifically exclude Debtor's property at 420 Mill Creek Church [Road], Ellabell, GA.The 13.25 acres in legal description in security deed includes both properties - only the 12.22 acres at 440 Mill Creek Church [Road] isbeing surrendered."(Dckt. 14, p. 4).In short, the effect of the plan would be to alter substantially the collateral, for which GUCU bargained when it made the initial loan and the successive additional loans, by carving out the 1.027-acre tract, which effectively reduces the road frontage by roughly half.(Ex. "8,""9," & "10").

On March 16, 2020, GUCU filed its Motion for Stay Relief.(Dckt. 17).In its motion, GUCU argued that cause existed to grant relief from the automatic stay of 11 U.S.C. § 362(a) so that GUCU could exercise its state law rights, including nonjudicial foreclosure, with respect to all of its collateral (i.e. the 13.25 acres).On that same date, GUCU also filed its Motion for Co-Debtor Stay Relief.(Dckt. 18).In that motion, GUCU likewise requested relief from the co-debtor stay of 11 U.S.C. § 1301 with respect to all the collateral.The latter motion identified the non-filing co-debtors as "Estate of Valiree [sic] Moore; Debra M. Simmons; Icen Leon Moore, Sr.; Elijah E. Moore; Anjeanette Mutcherson; Ella M. Moore; Jenialician M. Coulter; Latoria D. Davis, Stanley B. Moore; Kenneth T. Moore; [and]Michael T. Moore."(Dckt. 18, p. 2).On March 17, 2020, GUCU filed its Objection to Confirmation arguing that the Debtor's plan was filed in bad faith based on the Debtor's proposal to pay $1.00 for the 1.027-acre parcel, which the Debtor valued at $10,700.00.(Dckt. 19, p. 2).

GUCU filed its proof of claim in the amount of $67,121.27 on May 7, 2020.(ClaimNo. 9).The proof of claim states that the claim is secured by real propertyidentified as "420 & 440 Mill Creek Church Rd., Ellabell, GA 31308."(Claim No. 9, p. 2).On March 24, 2020, GUCU amended its motions for stay relief(dckt. 25, 26) to indicate that the 1.027-acre parcel identified by the Debtor as 420 Mill Creek Church Road "is a portion of the 13.25 acres known as 440 Mill Creek Church Road, Ellabell, Georgia 31308."(Dckt. 25, p. 2).

On June 4, 2020, a telephonic hearing¹⁰ was held on confirmation of the Debtor's plan and on the motions for stay relief filed by GUCU.The parties stipulated to the admissibility of seven exhibits: a loan agreement executed by the Debtor and her late motherValerie Moore on July 5, 2005(ex. "1"); a revolving credit security deed recorded in Bryan County on July 13, 2005(ex. "2"); a modification agreement recorded in Bryan County on September 11, 2006(ex. "3"); a second modification agreement recorded in Bryan County on April 21, 2008(ex. "4"); a deed of gift between the Debtor and Valerie Moore executed on February 24, 2010(ex. "5"); the probate record for the estate of Valerie Moore(ex. "6"); and a certificate of order of year's support between the estate of grantor James Odell Moore and the grantee Valerie Moore.(Ex. "7").¹¹No testimony was taken, nor was any other evidence presented apart from these exhibits.

At the hearing, the Debtor urged an interpretation of §§ 1322(b)(8)and1325(a)(5) by...