In re Jimerson, CASE NUMBER: 16–60838–PMB

• Citation: 564 B.R. 430
• Decision Date: 26 January 2017
• Docket Number: CASE NUMBER: 16–60838–PMB
• Parties: IN RE: Clarence JIMERSON, Debtor.
• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia

564 B.R. 430

IN RE: Clarence JIMERSON, Debtor.

CASE NUMBER: 16–60838–PMB

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

Signed January 26, 2017
Entered January 27, 2017

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Schuyler Elliott, Schuyler Elliott & Associates, Inc., Norcross, GA, for Debtor.

MEMORANDUM OPINION AND ORDER CONFIRMING PLAN¹

Paul Baisier, U.S. Bankruptcy Court Judge

The above-captioned case came before the Court on November 10, 2016 (the "Hearing") for confirmation of a Chapter

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13 plan of reorganization (Docket No. 46) (the "Plan") proposed by the Debtor.² At the Hearing, counsel for the Debtor appeared in support of confirmation of the Plan and counsel for Deed Co LLC ("Deed Co") appeared in opposition. Counsel for the Chapter 13 Trustee (the "Trustee") also appeared at the Hearing and did not oppose confirmation. The Debtor was also present at the Hearing.

Deed Co purchased real property located at 1256 Joseph E. Boone Boulevard, NW, Atlanta, Georgia 30314 (the "Property")³ at a tax sale in 2015, and asserts that it is the owner of the Property. Through his Plan, the Debtor seeks, among other things, to redeem the Property. Deed Co filed an Objection to Confirmation and Motion to Dismiss (Docket No. 13) on September 8, 2016 (the "Objection"), asserting that the Debtor cannot redeem property sold at a tax sale through a Chapter 13 plan.⁴ This Court holds that the Debtor can redeem the Property through the Plan, and will confirm the Plan for the reasons outlined below.

FACTS ⁵

The Debtor purchased the Property on March 27, 1995.⁶ Around the same time, for reasons unrelated to the payment of real property taxes, the Debtor conveyed the Property via quitclaim deed to his sister, Annie M. Jimerson. That deed was recorded on April 17, 1995. The Debtor maintained de facto control over the Property after the conveyance. During the time that Annie Jimerson held legal title to the Property, ad valorum taxes on the Property were not paid.⁷ Because ad valorum property taxes were not paid on the Property, the Fulton County Tax Commissioner levied and sold the Property at a tax sale conducted by the Sheriff of Fulton County on February 3, 2015 (the "Tax Sale"). Deed Co purchased the Property at the Tax Sale for $16,958.27.⁸ On May 22, 2016, Deed Co served notice (the "Barment Notice") on Annie Jimerson and the other

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parties required to receive that notice by O.C.G.A. § 48–4–45. The Barment Notice stated that the recipients had until June 27, 2016 (the "Redemption Deadline") to redeem the Property pursuant to O.C.G.A. § 48–4–40. For the purposes of confirmation, there is no dispute that the Tax Sale was proper or that the Barment Notice was properly provided.⁹

On June 20, 2016, Annie Jimerson conveyed the Property back to the Debtor via quitclaim deed. That deed was recorded on June 21, 2016. The Debtor filed this case on June 22, 2016 (the "Petition Date") under Chapter 13 of Title 11 of the United States Code (the "Bankruptcy Code"). On the same day, the Debtor filed the first version of the Plan, invoking the right to redeem the Property and proposing to pay all of his debts (including the redemption amount) in full. With the statutory interest added since the time of the Tax Sale, the redemption amount as of the Petition Date was $22,045.75 (the "Redemption Amount").¹⁰

DISCUSSION ¹¹

The two (2) issues before the Court regarding the confirmation of the Plan both relate to the right of redemption that the Debtor seeks to exercise in his Plan. They are (1) whether the Debtor, having been transferred an interest in the Property after the tax sale and after the delivery of the Barment Notice, has a right of redemption under Georgia law and, if so, (2) whether the Debtor can pay the Redemption Amount over the term of his Plan.¹² These issues are addressed below in turn.

DOES THE DEBTOR HAVE A RIGHT OF REDEMPTION

Under Georgia law, taxes are assessed against real property as of January

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1 of each year, and the taxpayer holding the property as of January 1 is responsible for "returning" it. O.C.G.A. § 48–5–10. "Liens for all taxes due the state or any county or municipality in the state shall arise as of the time the taxes become due and unpaid and all tax liens shall cover all property in which the taxpayer has any interest from the date the lien arises until such taxes are paid." O.C.G.A. § 48–2–56(a).

If taxes are not timely paid, the tax commissioner may, after notice to the property owner, issue executions to the sheriff to levy upon the property of the taxpayer. O.C.G.A. § 48–1–3 et. seq. After property is sold at a tax sale, O.C.G.A. § 48–4–40 provides

Whenever any real property is sold under or by virtue of an execution [fi fa ] issued for the collection of state, county, municipal, or school taxes or for special assessments, the defendant in fi. fa. or any person having any right, title, or interest in, or lien upon such property may redeem the property from the sale by the payment of the amount required for redemption, as fixed and provided in Code Section 48–4–42 :

(1) at any time within 12 months from the date of the sale; and

(2) At any time after the sale until the right to redeem is foreclosed by the giving of the notice provided for in Code Section 48–4–45.

O.C.G.A. § 48–4–40 (the right to redeem under this section, the "Right of Redemption"). There is no dispute that the Tax Sale was properly conducted, that the Barment Notice was properly sent, or that the deadline to redeem based on the Barment Notice was June 27, 2016. Without deciding whether the Right of Redemption is transferable, at a minimum, the Debtor obtained an interest in the Property when Annie Jimerson re-conveyed the Property to him on June 20, 2016, prior to the Redemption Deadline. O.C.G.A. § 48–4–40 provides that any party with an interest in the property may redeem the property at any time until the Redemption Deadline. It does not distinguish between a person acquiring that interest before or after the tax sale or either of the two (2) deadlines contained in that section. A plain reading of that section would be that anyone with an interest at any point within the time frame allowed by the statute possesses and may exercise a Right of Redemption. Therefore, the Debtor possessed a Right of Redemption on the Petition Date, and the Court must address the second question—whether the Debtor can exercise the Right of Redemption by paying the Redemption Amount under his Plan.

CAN THE REDEMPTION AMOUNT BE PAID OVER THE TERM OF A PLAN

Courts in this District are split as to whether a debtor who files a Chapter 13 bankruptcy case between the delivery of a barment notice under by O.C.G.A. § 48–4–45 and the deadline for redemption arising from that barment notice can pay the redemption amount over time pursuant to a Chapter 13 plan, or whether instead the debtor must pay the redemption amount in full by a date that is no later than sixty (60) days¹³ after the filing date of the bankruptcy case.¹⁴ The first case in this

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District to answer that question, Francis v. Scorpion Group, LLC (In re Francis), 489 B.R. 262 (Bankr. N.D. Ga. 2013) (Hagenau, J.)("Scorpion"), held, on facts very similar to this case, that the debtor can pay the redemption amount over the term of a Chapter 13 plan. More recently, Chief Judge Mullins decided two (2) such cases and held in each case that a debtor cannot pay the redemption amount over the term of a plan. Callaway v. Harvest Assets, LLC (In re Callaway), Bankr. Case No. 14–64446–CRM, Docket No. 36 (Bankr. N.D. Ga. February 6, 2015), aff'd Case No. 1:15–cv–00570–ODE (N.D.Ga. Oct. 30, 2015) ("Callaway");¹⁵ and In re Edwards, Bankr. Case No. 14–51366–CRM, Docket No. 35 (Bankr. N.D. Ga. Nov. 13, 2014)("Edwards").

This Court agrees with the analysis set forth in Scorpion. As set forth below, the Property is property of the estate; Deed Co holds a claim in this case secured by the Property; and that secured claim can be modified pursuant to 11 U.S.C. § 1322(b).

PROPERTY OF THE ESTATE

Property of the estate is defined in the Bankruptcy Code as "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a). In this case, Deed Co. holds legal title to the Property. Bare legal title, however, is not the only factor to consider in determining what constitutes property of the estate. Scorpion, 489 B.R. at 266. For example, under a deed to secure debt in Georgia, the borrower does not hold legal title to the property, but nonetheless that property is unquestionably property of the borrower's bankruptcy estate because the borrower possesses the rest of the "bundle of rights" that constitute ownership. Id.(citing Citizens' & S. Bank v. Realty Sav. & Trust Co., 167 Ga. 170, 144 S.E. 893 (1928) ). The same is true of a tax deed holder prior to the expiration of the Right of Redemption. Although the lender's rights are bargained for, and the tax deed holder's rights are created by...