Order Denying Defendants’ Motion to Dismiss. Plaintiff commenced an adversary proceeding seeking to have a debt arising out of a confession of judgment adjudicated a nondischargeable willful and malicious injury under § 523(a)(6). Prior to the entry of the confession of judgment, Defendants purchased a home from Plaintiff.  Unhappy with their home, among other things, Defendants allegedly began a campaign to disrupt Plaintiff’s business.  Plaintiff filed a suit against Defendants in state court and Defendants filed a suit against Plaintiff in federal court. The parties entered into a settlement agreement intended to resolve both lawsuits. Under the terms of that agreement, Defendants executed a confession of judgment to remain confidential and in the care of Plaintiff in the absence of a default by Defendants under the settlement agreement. Defendants defaulted under the settlement agreement and Plaintiff filed the confession of judgment. In the adversary proceeding, Plaintiff alleged that Defendants initiated a malicious and unlawful smear campaign to damage Plaintiff’s business and reputation and therefore the debt represented by the confession of judgment is nondischargeable under § 523(a)(6). Defendants argued that the adversary proceeding should be dismissed because: (1) the general release clause in the settlement agreement prohibited the adversary proceeding; (2) the settlement agreement’s no admission of liability clause demonstrated the intent to fully resolve the dispute and prohibited the adversary proceeding; (3) res judicata, collateral estoppel, and judicial estoppel prevent the dischargeability claim from being relitigated by this Court because the settlement agreement was ruled enforceable by the state court; (4) the confession of judgement underlying Plaintiff’s debt is a nullity because certain property which was allegedly not sold on account of Defendants’ interference, later was sold and therefore Plaintiff’s damages were fully mitigated; and (5) the complaint failed to state a claim upon which relief can be granted. The Court first found that the general release and no admission of liability clauses did not limit the Court’s ability to determine if the underlying debt was dischargeable. Second, the Court found that Plaintiff’s action was not barred by res judicata, collateral estoppel, or judicial estoppel because the dischargeability claim is a federal cause of action arising out of Defendant’s bankruptcy and therefore could not have been litigated in the state court. Fourth, the Court found that it was precluded under the doctrine of res judicata from relitigating the amount of the confession of judgment. Finally, the Court found that under Rule 12(b)(6), Plaintiff had sufficiently alleged that its injury was willful, and that Defendants acted with malice. Therefore, Plaintiff stated a plausible claim for nondischageability of the debt under § 523(a)(6). 
 
 

Order Denying Debtor’s Motion to Enforce Automatic Stay, to Declare Post-Petition Sale Void, and for Sanctions Under 11 U.S.C. § 362(k). The Court denied pro se Debtor’s motion to enforce the automatic stay, void a post-petition foreclosure sale, expunge state-court filings, and impose sanctions. Debtor filed chapter 7 approximately 95 minutes before a scheduled foreclosure sale and emailed notice to prior counsel, who forwarded it to current counsel only four minutes before the sale. Because the sale occurred post-petition but before expiration of North Carolina’s ten-day upset-bid period, it was automatically of no effect under state law and the Court did not need to enter an order declaring the sale void. Although the sale may have violated the stay, the Court found no willful violation because Creditor lacked timely notice and promptly took necessary steps to remedy any violation the next day. Even if Creditor had willfully violated the stay, Debtor presented no evidence of attorney’s fees or other damages.

     Order Denying Motion to Set Aside Entry of Default and Default Judgment. After the Defendant failed to respond to the complaint or summons in an adversary proceeding pursuing avoidance actions under 11 U.S.C. §548, the Court entered a default judgment. The Plaintiff-Trustee then executed on the judgment, withdrawing $82,261.37 from the Defendant’s bank account in April 2025. The Defendant later filed a motion to set aside the default judgment on July 10, 2025, claiming excusable neglect due to email communication issues with its attorney.
     When seeking “relief from a judgment under Rule 60(b), a moving party must first show (1) that the motion is timely, (2) that he has a meritorious claim or defense, and (3) that the opposing party will not suffer unfair prejudice if the judgment is set aside." United States v. Welsh, 879 F.3d 530, 533 (4th Cir. 2018); see also Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987). After meeting each of the three required threshold conditions, the movant "must then satisfy one or more of the six grounds for relief set forth in Rule 60(b)." Park, 812 F.2d at 896.
     The Court denied the motion, first finding the Defendant failed to meet a threshold requirement for setting aside the default judgment—timeliness. See Welsh, 879 F.3d at 533; Fed. R. Civ. P. 60(c). The Defendant filed the motion more than five months after the default judgment and over two-and-a-half months after the Defendant’s bank account was garnished, with no compelling explanation for the delay.
     The Court further determined that the Defendant did not demonstrate excusable neglect under Rule 60(b)(1). The Fourth Circuit has “established two analytical approaches under Rule 60(b) in cases of default: (1) those that involve a blameless party and a blameworthy attorney, and (2) those that involve a blameworthy party.” Heyman v. M.L. Marketing Co., 116 F.3d 91, 94 (4th Cir. 1997). As that court noted, “when dismissal is caused by the negligence of a party, vacatur is not granted as freely.” Id. (citing Augusta Fiberglass Coatings, Inc., v. Fodor Contracting Corp., 843 F.2d 808, 811 (4th Cir. 1988)). In this case, the Court was unable to find excusable neglect as the purported lapse in communication stemmed from the Defendant’s failure to inform its attorney that its email address was no longer active, which was firmly in the Defendant’s control. The Court also rejected the alternative argument under Rule 60(b)(6), finding the Defendant made no mention of the extraordinary circumstances that would justify relief under that provision. See Justus v. Clarke, 78 F.4th 97, 110 (4th Cir. 2023).
Because the Defendant did not satisfy the necessary conditions to set aside the default judgment, the Court denied the motion, leaving the judgment in effect.
 

Opinion and Order Valuing Secured Claim of Marine Federal Credit Union. Debtor purchased and refinanced property in Purlear, NC to operate cabins and build “glamping” pods for short-term rentals, but stopped making loan payments in 2023 and filed for bankruptcy in September 2023. Creditor filed a claim of approximately $4.9 million, while Debtor’s plan proposed valuing the secured portion at $2 million. Both parties submitted expert appraisals, with Creditor’s valuation at $4.36 million and Debtor’s at $2.46 million. After an evidentiary hearing, the Court held that Debtor bore the burden of proof and that the appropriate standard was fair market value based on the income approach, assuming completion of rental units. Finding flaws in both appraisals, the Court relied on Debtor’s own projected operating income and a 9% capitalization rate, ultimately valuing the secured claim at $3,794,314.89 and deeming the remainder unsecured.