United States District Court, D. South Carolina, Columbia Division
OPINION AND ORDER AFFIRMING ORDER OF THE BANKRUPTCY
CAMERON MCGOWAN CURRIE, Senior United States District Judge
matter is before the court on appeal from the Order of the
Bankruptcy Court entered June 6, 2018, denying
Debtor-Appellant Michael Antonio Durant's
(“Durant”) motion to reconsider the Order
Dismissing the Case, entered May 2, 2018. See ECF No. 2-1 at
90-91 (June 6 Order), 72-75 (May 2 Order). For the reasons
below, the Order of the Bankruptcy Court is affirmed.
filed a Voluntary Petition for relief under Chapter 13 of the
Bankruptcy Code in the United States Bankruptcy Court for the
District of South Carolina on January 19, 2018. ECF No. 2-1
at 1, 5-11. Along with this Petition, Durant filed a Chapter
13 Bankruptcy Plan and proposed to make monthly payments of
$280 to Big Rig Lending (“Big Rig”) over 60
months for return of a 2009 International ProStar
Tractor-Truck (“Truck”). Id. at 50-57. Big
Rig filed an objection to Durant's proposed Plan, arguing
the grace period on the Pawn Transaction Contract had
expired, that Big Rig had (after fairly extensive effort)
repossessed the Truck on January 12, 2018, and that Durant
had no ownership or right of redemption in the Truck.
Id. at 59-62. On April 11, 2018, Big Rig filed a
Supplemental Objection to Durant's Plan, arguing the
Truck was no longer property of the estate and requesting the
court deny confirmation of Durant's Chapter 13 Plan.
Id. at 69-70.
addition to the Chapter 13 Petition, Durant filed a Complaint
in an Adversary Proceeding against Big Rig Lending for
turnover of property (“Turnover Action”) on
January 24, 2018. Id. at 2; ECF No. 2-2 at 4-5.
Durant's Complaint in the Turnover Action alleged the
Truck became property of the bankruptcy estate or debtor in
possession upon filing, and Big Rig was “unreasonably
withholding this vehicle” because Durant “filed
his chapter 13 plan which provides payment for full balance
of Defendant's collateral.” Id. at 5.
Durant requested immediate return of the vehicle and
attorney's fees and costs. Id. Big Rig filed an
Answer and Motion for Expedited Hearing. Id. at
7-18. Durant moved for Judgment on the Pleadings, arguing
South Carolina law, not Georgia law, applied to the
proceedings. Id. at 32-36. As South Carolina law
“specifically excludes vehicles as pledged goods,
” Durant claimed it would be a violation of public
policy for the court to accept the Georgia Pawn Transaction
Contract at issue. Id. at 34.
Bankruptcy Court noted the parties had previously advised the
court the matter was ready for trial, and trial was scheduled
for March 9, 2018. Id. at 38. Because the trial was
eight days away, allowing time for briefing would delay the
trial date, and the motion did not meet the requirements of
either Fed.R.Civ.P. 12(c) or 56(c), the motion was denied.
Id. at 39.
trial, the court issued an Order finding Georgia law applied
to the pawn transaction because “the mere fact that
Georgia allows pawning of motor vehicles while South Carolina
law does not is not dispositive that Georgia's law
violates South Carolina public policy.” Id. at
56. However, the court also found Big Rig had not complied
with Georgia law because it dispersed loan proceeds without
first receiving title to the Truck. Thus, the contract did
not apply until January 12, 2018, when Big Rig obtained
possession of the Truck. Id. at 57-58. Because the
grace period began at that time, Durant still possessed the
right to redeem, and that right was the property of the
bankruptcy estate. Id. at 58. The court held Big Rig
was entitled to adequate protection, and that Durant must
maintain insurance on the truck, obtain confirmation of his
Chapter 13 Plan, and make all trustee payments. The court
specifically made Durant's possession of the Truck
conditional on confirmation of Durant's Chapter 13 Plan:
Big Rig could retain possession of the Truck until the Plan
was confirmed, at which time it “must immediately
return the truck to Plaintiff.” Id. at 59.
Durant's request for turnover was “provisionally
granted, ” subject to confirmation of the Chapter 13
Plan. Id. at 60. Big Rig then filed a motion to
alter or amend the Order provisionally granting
Plaintiff's request for turnover, requesting denial of
turnover. Id. at 62. Durant opposed. Id. at
85-86. This matter was considered at the hearing to confirm
the Chapter 13 Plan.
Bankruptcy Court held the confirmation hearing on April 23,
2018, and denied confirmation of the Plan. A written Order
followed, finding the bankruptcy case and Plan were not filed
in good faith, because the petition was filed for the purpose
of recovering the repossessed Truck and the Plan was proposed
almost solely for the purpose of treating the debt owed to
Big Rig. ECF No. 2-1 at 72-75. The court concluded Durant did
not meet his burden to show good faith, and therefore
confirmation of the proposed plan was denied and the case
dismissed. Id. at 75.
Durant filed a motion to alter or amend the Order dismissing
his Chapter 13 Plan, arguing he showed good faith “by
proposing a plan that pays more than the original loan by
nearly $3, 000.00.” Id. at 79. Durant also
argued res judicata applied to the findings made at the
turnover hearing. Id. at 80. Big Rig filed a Return,
requesting the court deny Durant's motion for
reconsideration as its previous order “properly held
that Debtor lacked good faith, ” and res judicata did
not apply. Id. at 82-88. On June 4, 2018, a hearing
was held on this motion and it was denied. An Order followed,
finding res judicata did not apply because the issue of good
faith was not determined at the turnover hearing and findings
at that hearing were conditional upon Durant obtaining
confirmation of a Chapter 13 plan, which he was unable to do.
Id. at 90-91. Therefore, the court held Durant did
not provide grounds for reconsideration, and the motion was
denied. Id. at 91. This appeal followed.
review of a Bankruptcy Court's order, the district court
functions as an appellate court and may affirm, reverse,
modify or remand with instructions for further proceedings.
Fed.R.Bankr.P. 8013. The district court reviews the
Bankruptcy Court's findings of fact for clear error and
its legal conclusions de novo. See In re Merry-Go-Round
Enterprises, Inc., 400 F.3d 219, 244 (4th Cir. 2005).
Findings of fact are clearly erroneous “when, although
there is evidence to support [them], the reviewing court on
the entire evidence is left with the definite and firm
conviction that a mistake has been committed.” In
re Green, 934 F.2d 568, 570 (4th Cir. 1991).
“[W]here there are two permissible views of the
evidence, the factfinder's choice between them cannot be
clearly erroneous.” Anderson v. City of Bessemer
City, 470 U.S. 564, 574 (1985).
normal rules of res judicata and collateral estoppel apply to
the decisions of bankruptcy courts.” Turshen v.
Chapman, 823 F.2d 836, 839 (4th Cir. 1987) (citing
Katchen v. Landy, 382 U.S. 323, 334, 86 S.Ct. 467,
475, 15 L.Ed.2d 391 (1966)). Res judicata bars a subsequent
when three conditions are satisfied: 1) the prior judgment
was final and on the merits, and rendered by a court of
competent jurisdiction in accordance with the requirements of
due process; 2) the parties are identical, or in privity, in
the two actions; and, 3) the claims in the second matter are
based upon the same cause of action involved in the earlier
In re Varat Enterprises, Inc., 81 F.3d 1310, 1315
(4th Cir. 1996) (citing Kenny v. Quigg, 820 F.2d
665, 669 ...