Kennedy v. Najarian Capital, LLC (In re Kennedy)
| Decision Date | 17 November 2022 |
| Docket Number | 19-64620-WLH,Adversary Proceeding 20-6167-WLH |
| Parties | IN RE: WESLEY KENNEDY, JR., Debtor, v. NAJARIAN CAPITAL, LLC ASPEN, LLC, ANCHOR ASSETS XIV, LLC, Defendants. WESLEY KENNEDY, JR., Plaintiff, |
| Court | U.S. Bankruptcy Court — Northern District of Georgia |
Wendy L. Hagenau U.S. Bankruptcy Court Judge THIS MATTER is before the Court on motions for summary judgment filed by all three Defendants.
Plaintiff Wesley Kennedy, Jr. ("Debtor") filed this adversary proceeding seeking damages and a preliminary injunction related to a foreclosure of real property which allegedly violated the stay. Najarian Capital LLC ("Najarian"), Anchor Assets XIV, LLC ("Anchor"), and Aspen LLC ("Aspen") filed Motions for Summary Judgment (Docs. Nos. 65 & 66) (the "Motions"). They contend the automatic stay was not violated because Debtor was not the record title holder of the property at issue at the time of the foreclosure and the foreclosure sale did not affect property of the bankruptcy estate. Debtor responded in opposition to both Motions (Docs Nos. 70 & 71), contending he had valid title to the Property because a quitclaim deed purporting to transfer the Property was a forgery and a corrective quitclaim deed purporting to transfer the Property was procured by fraud. Najarian, Anchor, and Aspen filed replies in support of their motions (Docs. Nos. 78 & 79). The Court has jurisdiction of this matter pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157, and this is a core proceeding pursuant to 28 U.S.C. §157(A), (G), and (O).
Debtor was an iron worker in New York. In 2015, he received a $3.6 million settlement relating to a personal injury claim. At some point in 2015, Debtor met Brenda Ragland ("Ragland"). On July 6, 2015, Debtor signed a power of attorney authorizing Ragland to buy the property at 4563 Carissa Court, Ellenwood, Georgia (the "Property") on his behalf. On July 7, 2015, a warranty deed was executed for the purchase of the Property showing Debtor and Ragland as the purchasers and holding title as joint tenants with right of survivorship. The warranty deed was recorded in DeKalb County on July 14, 2015. The power of attorney did not authorize Ragland to take title to the Property in her name, and Debtor contends he did not authorize Ragland to put her name on the deed.
On July 24, 2015, a quitclaim deed purportedly transferring the Property from Debtor and Ragland as grantors to Sugarmama Breakfast 2GoGoGo, LLC ("Sugarmama") as grantee was executed for $1.00 in consideration (the "Quitclaim Deed"). Debtor contends he did not sign the document and his signature was forged on the Quitclaim Deed. The Quitclaim Deed was recorded in DeKalb County on September 11, 2015.
Sugarmama then purported to transfer the Property to Ragland's daughter (Quashaunda Kitchens ("Kitchens")) by a quitclaim deed recorded on August 29, 2016 in DeKalb County. The deed was signed by Elaine Chavo, the name which Ragland was allegedly using at the time.
On November 2, 2016, a "Corrective Quitclaim Deed" was signed by Debtor and Ragland, "N/K/A Elaine Chavo", as grantors and Sugarmama as grantee (the "Corrective Quitclaim Deed"). Debtor contends he was fraudulently induced into signing the Corrective Quitclaim Deed, but he does not dispute that he signed the document. The Corrective Quitclaim Deed states the grantors "remise, convey, and forever quitclaim unto the said Grantee" the Property. The Corrective Quitclaim Deed states further its purpose is to "correct the lot number in the legal description" which was "inadvertently shown as Lot 121 on past conveyances." The "past conveyances" were not identified. The Corrective Quitclaim Deed was recorded in DeKalb County on November 8, 2016.
In the meantime, Kitchens purported to transfer the Property to Consumer-Oriented Planning Services, Inc. ("COPS") by quitclaim deed dated November 2, 2016, which was recorded in DeKalb County on November 8, 2016. On November 4, 2016, COPS signed a deed to secure debt to Aspen to secure a loan for $170,000, which was recorded in DeKalb County on November 8, 2016.
At all times during these transfers, Debtor lived in the Property. He contends he was unaware of the transfers at the time they were made, but at some later point he learned about them. On January 31, 2018, Debtor filed a complaint against Chavo, Sugarmama, Kitchens, COPS, and Aspen in DeKalb County, Case Number 18-cv-1767 (the "First Complaint"). On February 8, 2018, a lis pendens was filed in DeKalb County regarding the complaint and identifying the Property. Debtor dismissed the First Complaint on February 2, 2019.
On March 29, 2019, Debtor filed a second complaint in DeKalb County against the same defendants, Case Number 19-CV-3864 (the "Second Complaint"). Aspen filed a motion to dismiss the Second Complaint. The motion was unopposed and the case was dismissed on August 19, 2019. The dismissal order stated that all claims against Aspen were dismissed with prejudice and that Aspen holds a first-priority security deed, and it canceled any Notice of Lis Pendens.
Aspen prepared to foreclose on the Property, and sent Debtor a notice of foreclosure sale scheduled for October 1, 2019. On September 13, 2019, Debtor filed a petition for Chapter 13 bankruptcy relief, Case Number 19-64620 ("First Bankruptcy Case"). He listed Aspen on the creditor matrix. Notice of the Debtor's bankruptcy was sent to Aspen (Doc. No. 6, entered on September 18, 2019). On September 30, 2019, Debtor's counsel, Mr. Holiday, faxed notice of the bankruptcy filing to Weisman PC, the law firm that represented Aspen in the litigation relating to the First Complaint and Second Complaint.
On October 1, 2019, Aspen foreclosed on the Property. The deed under power to Aspen was recorded and reflects a purchase price of $188,250. On November 6, 2019, Aspen sold the Property to Najarian. Najarian thereafter signed a deed to secure debt to Anchor. Najarian sent notice to Debtor on November 8, 2019 stating it intended to take the Property and change the locks.
On December 19, 2019, Debtor's First Bankruptcy Case was dismissed. On December 23, 2019, Najarian initiated dispossessory proceedings against Debtor in state court. Debtor's First Bankruptcy Case was reinstated on December 30, 2019, and the dispossessory proceedings were placed on hold. The First Bankruptcy Case was subsequently dismissed on April 16, 2020.
On May 4, 2020, Debtor filed a second Chapter 13 bankruptcy case, Case Number 20-66088 ("Second Bankruptcy Case"). The Second Bankruptcy Case was dismissed on August 12, 2020.
This Complaint was filed on February 9, 2021 in Debtor's First Bankruptcy Case. The Court previously entered an order on April 13, 2021 denying Najarian's Motion to Dismiss or Abstain. After discovery, the Motions were filed.
Motions for summary judgment are governed by Federal Rule of Civil Procedure 56, made applicable in adversary proceedings by Federal Rule of Bankruptcy Procedure 7056. 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 (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 (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. 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. Id.
11 U.S.C. § 362(a). The language in Section 362 is very broad and is in the disjunctive, meaning that any of the provisions may apply to a particular act by a creditor or a third party. In the Eleventh Circuit, transactions in violation of the automatic stay are void. See Borg-Warner Acceptance Corp. v. Hall, 685 F.2d 1306, 1308 (11th Cir. 1982).
The weight of authority holds that "a mere possessory interest in real property, without any accompanying legal interest, is sufficient to trigger the protection of the automatic stay." In re 48th St. Steakhouse Inc., 835 F.2d 427, 430 (2d Cir. 1987); see also In re Convenient Food Mart No. 144, Inc., 968 F.2d 592, 594 (6th Cir. 1992); In re Atl. Bus. & Cmty. Corp., 901 F.2d 325, 328 (3d ...
To continue reading
Request your trial