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In re PAUL S. HUDSON, Chapter 7, Debtor.

ORDER

ROBERT LITTLEFIELD, Bankruptcy Judge

Upon the notice of motion and motion, dated February 10, 2005, filed by Paul S. Hudson, Esq. (the "Debtor") pursuant to Federal Rule of Bankruptcy Procedure 9024 and Federal Rule of Civil Procedure 60(b) for an order seeking relief, correction, or clarification of an order and decision of this court dated February 12, 2004, and upon the affidavit of Paul S. Hudson, sworn to on the 10th day of February, 2005, filed in support of the motion, and upon the supplementary affirmation of Paul S. Hudson, sworn to on March 17, 2005, filed in further support of the motion, and upon the affidavit of Kenneth S. Varley, Esq., sworn to on March, 2005, filed on behalf of Richard T. Corvetti in opposition to the motion, and a hearing having been held on March 31, 2005, and the Debtor having appeared pro se, and Richard T. Corvetti having appeared by and through his attorneys, Donohue, Sabo, Varley Huttner, LLP (Kenneth G. Varley, Esq.), and the Chapter 7 Trustee, Gregory Harris, Esq., having appeared, and the court having heard oral argument, the court makes the following findings of fact pursuant to Federal Rule of Civil Procedure 7052:

1. Richard T. Corvetti filed a motion pro se, dated December 17, 2003, for an order granting relief form the automatic stay pursuant to 11 U.S.C. § 362 to permit him to attempt to satisfy post-petition interest accruing on a pre-petition claim resulting from a state court judgment against the Debtor (the "Judgment") from the Debtor's post-petition assets, more specifically, the Debtor's inheritance from his wife, Eleanor Hudson (the "§ 362 Motion").

2. In support of the § 362 Motion, Mr. Corvetti relied on paragraph 9(d)(viii) of a certain settlement agreement between Mr. Corvetti and the Debtor, dated March 7, 2002 (the "Settlement Agreement"), which provided:

It is therefore the agreement of the parties that Corvetti shall be entitled to receive all of Hudson's interest in all such lawsuits against Libya up [to] the amount of $385,501.24, with interest of 9% accruing as of November 12, 1999, and that Hudson will take all necessary steps to permit Corvetti to collect and receive such amounts and shall take no action whatsoever to interfere with Corvetti's rights to collect and receive such amounts.

3. In opposition to the § 362 Motion, the Debtor argued Mr. Corvetti settled his state court claim against the Debtor, and the only interest Mr. Corvetti retained in the state court action was his right to receive the first $380,760.21 of the Debtor's individual distribution from the Hudson v. Libya case. In addition, the Debtor asserted Mr. Corvetti executed a general release in favor of the Eleanor Hudson in 2002.

4. Based upon the language contained in paragraph 9(d)(viii) of the Settlement Agreement, Mr. Corvetti argued the Debtor reaffirmed the Judgment amount with interest accruing as of November 12, 1999, the original filing date of the Debtor's bankruptcy petition.

5. The court rendered an oral decision in connection with the § 362 Motion on February 5, 2004, finding that the Settlement Agreement did not constitute a valid reaffirmation agreement pursuant to 11 U.S.C. § 524, and because the Debtor may eventually receive a discharge, either from this court or via an appeal, the interest Mr. Corvetti sought to recover may ultimately be covered by a discharge. Based upon the foregoing, the court concluded Mr. Corvetti failed to establish "cause" pursuant to 11 U.S.C. § 362(d)(1) and denied the motion, without prejudice to renewal, should the parties seek to comply with the provisions of 11 U.S.C. § 524(c) and (d) and obtain the required approval of the court. An order in conformance with the court's oral decision was entered on February 12, 2004.

6. The court's decision of February 5, 2004 was limited to the issue of whether the automatic stay of 11 U.S.C. § 362 should be lifted to permit Mr. Corvetti to collect post-petition interest on a pre-petition claim against the Debtor's post-petition assets.

7. With the current motion, the Debtor argues he should not be required to amend paragraph 9 of the Settlement Agreement to conform with 11 U.S.C. § 524 and seek the court's approval thereunder as the Settlement Agreement is exempt from the requirements of 11 U.S.C. § 524 because (1) the interest sought by Mr. Corvetti has been paid, (2) the Settlement Agreement involved a discharge proceeding, post petition consideration, and a pre-petition security interest, and (3) Mr. Corvetti's relief under the Settlement Agreement is limited to in rem relief.

8. Mr. Corvetti filed an amended complaint in Richard T. Corvetti v. Paul Hudson (Adv. Pro. No. 04-90005) seeking as a second cause of action a declaration as to the enforceability of the Settlement Agreement. A trial in connection with the second cause of action is scheduled for September 7, 2005 — September 9, 2005 at 9:00 a.m.

NOW, after due deliberation, and over the opposition of Richard T. Corvetti, the court clarifies its decision of February 5, 2004 and order of February 12, 2004, and it is hereby

ORDERED, as it appears that questions of fact exist as to whether the provisions of 11 U.S.C. § 524 are applicable to the Settlement Agreement, the court makes no specific ruling as to whether paragraph 9 of the Settlement Agreement or the Settlement Agreement itself is enforceable; and it is further

ORDERED, that absent a determination from a court of competent jurisdiction, the enforceability of the Settlement Agreement will be addressed at the trial to be held in connection with Adversary Proceeding No. 04-90005 on September 7 — September 9, 2005 at 9:00 a.m.

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IN RE HUDSON
(May 4, 2005)