Opinion
Case No. 08-11724PM.
November 4, 2008
MEMORANDUM OF DECISION
This case is before the court on the Motion for Relief from Stay filed by United Rental Properties ("United"). Specifically, United seeks relief from the automatic stay to allow it to seek judgment against the Debtor and her spouse, Prasad M. Nataraj, in state court so as to enable United to levy on property owned by them as entireties property that could not be reached in this bankruptcy proceeding. This effort has long been sanctioned by the Fourth Circuit ( Phillips v. Krakower, 46 F.2d 764, 765-766 (CA4 1931); Chippenham Hosp. v. Bondurant, 716 F.2d 1057, 1059 (CA4 1983)) so as to avoid what the court has viewed tantamount to legal fraud as to a creditor holding a claim against both partners. Sumy v. Schlossherg, 777 F.2d 921, 931 n. 24 (CA4 1985).
The Debtor opposes the Motion for various reasons including the fact that the Internal Revenue Service has a priority claim that would be ahead of the Movant's claim. In any event, should another creditor be successful in its adversary proceeding seeking denial of Debtor's discharge, Gonchigar v. Nataraj, Adv. Proc. No. 08-0430, this dispute would he moot.
The court will grant the Motion insofar as it will allow United to proceed with the civil action filed in the Circuit Court for Montgomery County, Maryland, against the Natarajs to judgment, as well as to any appeals therefrom, but without the right to pursue collection of any such judgment. This is because United should not be allowed to be placed in a position superior to creditors holding allowed claims as to the Debtor and her spouse.
An appropriate order will be entered.
Notice Recipients
Recipients of Notice of Electronic Filing: Recipients submitted to the BNC (Bankruptcy Noticing Center):
District/Off: 0416-0 User: laspivey Date Created: 11/5/2008 Case: 08-11724 Form ID: pdfall Total: 5 tr Cheryl E. Rose trusteerose@aol.com aty Merrill Cohen merrillc@cohenbaldinger.com aty William David Day day@gillandsippel.com TOTAL: 3 db Radhika Nataraj 10000 Ormond Road Potomac, MD 20854 Prasad Nataraj 10000 Ormond Road Potomac, MD 20854 TOTAL: 2