Case 3:23-ap-00088-BAJ Doc 1 Filed 10/06/23 Page 1 of 6

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION

In Re: CASE NO.: 3:23-bk-01443-BAJ

Chapter 13
GAIL F. DANIELS,

Debtor.
_______________________________/

SHAMROCK-SHAMROCK, INC,

Plaintiff,

v.

GAIL DANIELS

Defendants.

________________________________/

ADVERSARY COMPLAINT TO DETERMINE DISCHARGEABILITY

Creditor, SHAMROCK-SHAMROCK, INC. (“Shamrock”), brings this Adversary

Complaint against GAIL DANIELS (“Debtor”), pursuant to Section 727 of Title 11 of the United

States Code (“Bankruptcy Code”), Rules 4007(e) and 7001(6) of the Federal Rules of Bankruptcy

Procedure, and allege as follows:

1. This Adversary Complaint seeks to determine the dischargeability of the Proof of

Claim #11 of Creditor Shamrock pursuant to Section 727(4), and Section 727(5) of the Bankruptcy

Code.

PARTIES, JURISDICTION AND VENUE

2. Shamrock is an unsecured creditor of Debtor, pursuant to a personal guaranty she

provided in conjunction with a mortgage loan transaction.

Page 1 of 6
 Case 3:23-ap-00088-BAJ Doc 1 Filed 10/06/23 Page 2 of 6

3. Debtor is an individual residing in Flagler County.

4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S. C.

Section 1334(b). This Court has statutory authority to hear and determine this case under 28 U.S.C.

Sections 157(b)(2)(H), (J) and (K).

5. This is a core proceeding pursuant to 28 U.S.C. section 157.

6. Venue is proper in the Court pursuant to 28 U.S. C. Sections 1408 and 1409.

FACTS COMMON TO ALL COUNTS

7. Debtor commenced this proceeding on June 21, 2023 to stop a foreclosure lawsuit

filed by Creditor Shamrock against certain property located in Flagler County (“Property”).

Debtor also sought mortgage modification mediation for the Property, which she claimed on

Schedule A to be owned by her and on Schedule C to be her homestead. On Schedule D, Debtor

also claimed that Creditor Shamrock-Shamrock, Inc., is her secured creditor.

8. The Property, which Debtor lists in her petition as her residence, is owned not by

Debtor, but by Farbarback LJ, LLC, a Wyoming limited liability company (“Owner”). Debtor

identified the Owner as being 100% owned by her.

9. Creditor Shamrock conveyed the Property to the Owner on June 28, 2022, taking

back a note and mortgage from the Owner, and a personal guarantee from Debtor.

10. Beginning January 1, 2023, the Owner stopped making payments under the

mortgage note and on March 1, 2023, Creditor filed a foreclosure complaint against the Owner

and the Debtor in the Circuit Court in and for Flagler County, Case Number: 2023-CA-00096

(“Foreclosure Action”), due to the default under the terms of the Note and Mortgage securing

Creditor’s interest in the Property.

11. Debtor was named as a defendant in the Foreclosure Action solely because she had

Page 2 of 6
 Case 3:23-ap-00088-BAJ Doc 1 Filed 10/06/23 Page 3 of 6

executed a personal guarantee of the Note. The debtor has no legal or beneficial interest in the

Property, and Debtor’s bankruptcy estate has no interest in the Property.

12. Owner failed to pay the 2022 Property taxes. Creditor advanced and paid

$7,618.40 for the 2022 taxes on March 13, 2023.

13. Owner failed to pay insurance. Creditor advanced and paid $ 1,273.33 for

insurance.

14. As disclosed on Debtor’s Statement of Financial Affairs, approximately thirteen

months before commencing this action, Debtor transferred Twenty Thousand Dollars ($20,000) to

the First Baptist Church of Belleview as a charitable contribution.

15. Debtor’s gross income was reported by her to be $22,000.00 for the year 2022.

16. Section 727(a)(5) states:

(a) The court shall grant the debtor a discharge, unless—

(5) the debtor has failed to explain satisfactorily, before determination of denial of

discharge under this paragraph, any loss of assets or deficiency of assets to meet the

debtor’s liabilities.

COUNT I – DENIAL OF DISCHARGE UNDER SECTION 727(a)(4)

17. Debtor realleges paragraphs 1 through 19 as if fully set forth herein.

18. Section 727(a)(4) states:

(a) The court shall grant the debtor a discharge, unless—

(4) The debtor knowingly and fraudulently in or in connection with the case-

(A) made a false oath or account;

(B) presented or used a false claim.

19. In this proceeding, Debtor falsely stated and claimed that she was the owner of the

Page 3 of 6
 Case 3:23-ap-00088-BAJ Doc 1 Filed 10/06/23 Page 4 of 6

Property and that Creditor Shamrock was her secured creditor. Debtor sought mortgage

modification for a property that was not owned by her.

20. Debtor knowingly made these false statements for the purpose of unfairly and

unlawfully thwarting Creditor’s right to foreclosure on the Property.

21. Creditor has been materially prejudiced by this fraudulent misrepresentation.

Creditor has had to pursue relief before this Court to continue its foreclosure action against the

Property, thereby incurring attorneys fees and delay in its foreclosure.

22. In addition to the fraudulent statements above, Creditor also would show this court

that Debtor receives monthly income that has not been reported on Schedule I of her petition,

thereby depriving Creditor of lawful payment on its unsecured claim for guarantee of the mortgage

note.

WHEREFORE, Creditor respectfully requests this Court to enter an order denying the

Debtor’s discharge for Creditor’s claim, and to order such additional relief as this Court deems

just and equitable.

COUNT II – DENIAL OF DISCHARGE UNDER SECTION 717(d)(5)

23. Debtor realleges paragraphs 1 through 19 as if fully set forth herein.

24. Section 727(a)(5) states:

(b) The court shall grant the debtor a discharge, unless—

(5) the debtor has failed to explain satisfactorily, before determination of denial

of discharge under this paragraph, any loss of assets or deficiency of assets to meet

the debtor’s liabilities.

25. Thirteen months before the commencement of her Chapter 7 proceeding, Debtor

Page 4 of 6
 Case 3:23-ap-00088-BAJ Doc 1 Filed 10/06/23 Page 5 of 6

gave away almost the entire amount of her reported annual income to a Church that she no longer

attends.

26. Although barely avoiding grounds for discharge under Section 727(a)(2), this large

transfer of money certainly raises questions about the source of funds, the Debtor’s ability to make

such a payment and the Debtor’s intentions in avoiding her obligations to Creditor.

27. Debtor made this alleged charitable contribution in the same month as she signed

the personal guarantee for the mortgage loan, knowing that she would have an obligation to make

the payments if the Owner, which was solely under her ownership and control, defaulted on the

mortgage loan payments.

28. As a result of the loss of this cash asset, the mortgage payments on Creditor’s

mortgage loan stopped approximately six (6) months after this transfer was made. These mortgage

payments were an obligation of Debtor pursuant to her written personal guarantee of the mortgage

loan.

29. There is no satisfactory or reasonable explanation for such a significant transfer of

money at a time so close to the commencement of this action.

WHEREFORE, Creditor respectfully requests this Court to enter an order denying the

Debtor’s discharge for Creditor’s claim, and to order such additional relief as this Court deems

just and equitable.

Respectfully submitted,
BADGLEY LAW GROUP

/s/. Jeffrey S. Badgley

JEFFREY S. BADGLEY
Florida Bar No.: 0599417
Badgley Law Group
801 N. Magnolia Ave., Suite 107
Orlando, FL 32803
Tel: (407) 781-0420

Page 5 of 6
 Case 3:23-ap-00088-BAJ Doc 1 Filed 10/06/23 Page 6 of 6

Fax: (407) 781-0706

Attorney for Creditor
jbadgley@Badgleylawgroup.com

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on October 6, 2023, I electronically filed the foregoing with the
Clerk of Court by using the CM/ECF System, and a true and correct copy of this motion has been
provided either by CM/ECF or by U.S.P.S. First Class Mail postage pre-paid to the following
interested parties:

Scott W. Spradley, Law Offices of Scott W. Spradley, P.A., PO Box 1, 301 South Central Avenue,
Flagler Beach, FL 32136;
Debtor, Gail F. Daniels, 90 W. Waterside Parkway, Palm Coast, FL 32137;
Co-Debtor, Farbarback LJ, LLC, Attn: Officer, Manager or General Agent, 90 W. Waterside
Parkway, Palm Coast, FL 32137;
Co-Debtor, Farbarback LJ, LLC, Attn: Registered Agent, 30 N Gould Street, Suite R, Sheridan,
WY 82801;
Douglas W. Neway, Chapter 13 Trustee, PO Box 4308, Jacksonville, FL 32201;
Office of the United States Trustee, 400 West Washington Street, Suite 1100, Orlando, FL 32801.

/s/Jeffrey S. Badgley
JEFFREY S. BADGLEY
Florida Bar No.: 0599417

Page 6 of 6