Homeland Grp., LLC v. Lawson (In re Credolawson)

• Decision Date: 26 February 2016
• Docket Number: CASE NO. 14–64087–WLH,ADV. PROC. NO. 14–5336
• Citation: 546 B.R. 888
• Parties: In re: Credo Emmanuel Credolawson, a/k/a Emmanuel Lawson, Debtor. Homeland Group, LLC, d/b/a Homeland Group Real Estate Services, a Georgia Limited Liability Company, Plaintiff, v. Credo Emmanuel Lawson, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

546 B.R. 888

In re: Credo Emmanuel Credolawson, a/k/a Emmanuel Lawson, Debtor.

Homeland Group, LLC, d/b/a Homeland Group Real Estate Services, a Georgia Limited Liability Company, Plaintiff,

v.Credo Emmanuel Lawson, Defendant.

CASE NO. 14–64087–WLH

ADV. PROC. NO. 14–5336

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

Signed February 26, 2016

Salu Kunnatha, Atlanta, GA, Amit Patel, Alpharetta, GA, for Plaintiff.

Bret J. Chaness, Rubin Lublin, LLC, Peachtree Corners, GA, for Defendant.

ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT

Wendy L. Hagenau, U.S. Bankruptcy Court Judge

This matter is before the Court on the cross-motions for summary judgment of the parties in this dischargeability action under 11 U.S.C. § 523.The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157and1334 and this matter is a core matter pursuant to 28 U.S.C. § 157(b)(2)(I).

UNDISPUTED FACTS

Each party has submitted a statement of facts which each contends are undisputed.The Defendant has submitted a response to the Plaintiff's Statement of Undisputed Facts, but the Plaintiff has not submitted any response to the Defendant's Statement of Undisputed Facts.Pursuant to BLR 7056–l(a)(2), a respondent to a motion for summary judgment must respond to each separately numbered statement of undisputed facts.The rule provides, "All material facts contained in the moving party's statement that are not specifically controverted in respondent's statement shall be deemed admitted."Since Plaintiff did not respond to Defendant's Statement of Material Facts, the Court will deem them admitted.As a practical matter, there are no factual disputes about the history of the case or the entry of the prior judgment.The only facts in the Defendant's Statement of Material Facts which are not addressed by the Plaintiff in its Statement of Facts are items 17 and 18, which relate to the merits of the action as opposed to the collateral estoppel effect of the prior action.

On August 16, 2007, Defendant Credo Credolawson ("Defendant" or "Credolawson") and Lisa Challenger entered into an exclusive Buyer Brokerage Agreement ("Brokerage Agreement") with Homeland Group LLC("Plaintiff" or "Homeland").The Brokerage Agreement expired by its terms on December 31, 2007 and provided for the payment of a 3% commission on all real property in Georgia which Credolawson purchased or contracted to purchase during the term of the agreement.The Brokerage Agreement also provided that, if Credolawson leased property or entered into a lease/purchase contract during the term of the Brokerage Agreement, Credolawson would pay the broker for the duration of the lease and any renewal or extension thereof a commission of 10% of each rental payment made.Subsequently, on August 22, 2007, Credolawson and Lisa Challenger entered into a lease/purchase agreement for property located at 560 Clearwater Place, Lawrenceville, Georgia.The lease/purchase agreement included an option agreement which provided that Credolawson and Ms. Challenger had until July 31, 2008 to decide whether to proceed with purchasing the property.If the option was not exercised by that date, the tenants would have no obligation to purchase the property.On May 25, 2008, Mr. Credolawson and Lisa Challenger signed an amendment to the lease/purchase agreement which among other things extended the option to purchase from July 31, 2008 to July 31, 2009.By letter dated June 10, 2009, Credolawson informed the seller that he would allow the lease/purchase agreement to expire on July 31, 2009 and would not be exercising his option to purchase the property.However, on August 21, 2009, the same property was purchased by Credolawson and Shantel Credolawson–Darras as joint tenants.Homeland demanded payment of commissions and then filed suit against Credolawson in the State Court of Gwinnett County on January 12, 2012 for breach of contract, fraud and deceit, attorney's fees and punitive damages.

On January 30, 2014, the state court entered a document titled "Final Judgment" granting judgment in favor of Homeland and against Credolawson in the amount of $5,730 as sales commissions, $2,880 as rental commissions, and $3,000 attorney's fees, plus court costs and $10,000 in punitive damages.On February 11, 2014, Credolawson filed a motion in the state court entitled "Motion for Reconsideration" arguing, among other things, that the Brokerage Agreement had expired and that even the 180–day extension of the broker's protection had expired on June 29, 2008, before the property was purchased.The motion also argued that the evidence was insufficient to support any finding of fraud or bad faith.While this motion was pending, Credolawson filed his voluntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code on July 22, 2014.On September 11, 2014, an order denying the motion for reconsideration was entered by the state court, although no party had obtained relief from the automatic stay for the litigation to proceed.

Homeland filed this adversary proceeding on October 22, 2014, alleging that the judgment obtained in the state court litigation against Credolawson was non-dischargeable under 11 U.S.C. § 523(a)(2).The parties' cross-motions for summary judgment followed.

CONCLUSIONS OF LAW

Summary Judgment

Summary judgment is appropriate when "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 a 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);Fed.R.Civ.P. 56(c);Fed. R. Bankr.P. 7056(c)."The substantive law [applicable to the case] will identify which facts are material."Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986).The party moving for summary judgment has the burden of proving there are no disputes as to any material facts.Hairston v. Gainesville Sun Pub. Co.,9 F.3d 913, 918(11th Cir.1993).A factual dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Anderson,477 U.S. at 248, 106 S.Ct. 2505.When reviewing a motion for summary judgment, a court must examine the evidence in the light most favorable to the nonmoving party and all reasonable doubts and inferences should be resolved in favor of the nonmoving party.Hairston,9 F.3d at 918.

Technical Issues Raised by the Defendant

Credolawson argues that Homeland's response to his motion for summary judgment is not timely and should therefore be disregarded.Under BLR 7056–1, Homeland's response to Credolawson's motion for summary judgment should have been filed within 21 days.Instead, the response was filed 30 days after the filing of the motion for summary judgment.Credolawson is correct that the response is untimely and the Court may choose to ignore it.Because Homeland filed its own motion for summary judgment and brief in support thereof which address the same issues as those raised by Credolawson, the Court will consider Homeland's motion for summary judgment and brief as also being a response to Credolawson's motion for summary judgment.The delay in filing is not harmful to either party or to the Court.

Next, Credolawson alleges that Homeland did not cite to any particular evidence in the record in connection with its motion for summary judgment.Again, Credolawson is correct that this was required.However, Fed. R. Bankr.P. 7056(c)(3) allows the Court to consider all materials in the record.All of the relevant documents were submitted by Credolawson in support of his motion for summary judgment and there is certainly no harm in considering those matters in deciding both Homeland's and Credolawson's motions for summary judgment.

Order Demins Motion for Reconsideration Is Void

It is undisputed that the state court's order denying the motion for reconsideration was entered after Credolawson filed his bankruptcy petition.Under 11 U.S.C. § 362, the stay automatically applies to the continuation of any efforts by any party to collect on pre-petition debts or to continue pre-petition litigation, subject to certain exceptions not applicable here."Any orders or judgments entered in violation of [an] automatic stay are void; they are deemed without effect and rendered an absolute nullity."Miller v. Lomax,333 Ga.App. 402, 404, 773 S.E.2d 475(2015)(cites omitted).See alsoMcKeen v. Fed. Deposit Ins. Corp.,274 Ga. 46, 48, 549 S.E.2d 104(2001);Borg – Warner Acceptance Corp. v. Hall,685 F.2d 1306, 1308(11th Cir.1982);Albany Partners, Ltd. v. Westbrook(In re Albany Partners),749 F.2d 670, 675(11th Cir.1984).Based on the foregoing, the order denying Credolawson's motion for reconsideration is void.

Preclusiveness of State Court Judgment

Homeland argues that the judgment from the state court is entitled to collateral estoppel effect.The doctrine of collateral estoppel seeks "to prevent the re-litigation of issues previously contested and determined by a valid and final judgment in another court."Newton v. Lemmons(In re Lemmons),2005 WL 6487216, at *2(Bankr.N.D.Ga.2005).The doctrine of collateral estoppel applies to non-dischargeability proceedings.SeeGrogan v. Garner,498 U.S. 279, 284 n. 11, 111 S.Ct. 654, 112 L.Ed.2d 755(1991).When reviewing a state court judgment under the doctrine of collateral estoppel, "a federal court must accord the judgment the same preclusive effect as it would be given under the law of the state in which the judgment was rendered."Lemmons,2005 WL 6487216, at *2.

This Court must, therefore, turn to Georgia law to determine the preclusive effect of the "Final Judgment" against Credolawson.SeeHebbard v. Camacho(In re Camacho),411 B.R. 496, 501(Bankr.S.D.Ga.2009).Under Georgia law, a party may only assert the doctrine of collateral estoppel when...