Brady v. Welty (In Re Welty)

355 B.R. 177, 2006 Bankr. LEXIS 3192, 2006 WL 3346154
CourtUnited States Bankruptcy Court, N.D. California
DecidedNovember 16, 2006
Docket16-50293
StatusPublished

This text of 355 B.R. 177 (Brady v. Welty (In Re Welty)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brady v. Welty (In Re Welty), 355 B.R. 177, 2006 Bankr. LEXIS 3192, 2006 WL 3346154 (Cal. 2006).

Opinion

MEMORANDUM OF DECISION

LESLIE TCHAIKOVSKY, Bankruptcy Judge.

Lois I. Brady (the “Trustee”), chapter 7 trustee in the above-captioned bankruptcy case, moves for summary judgment in the above-captioned adversary proceeding, objecting to the amended claim filed by defendant Frank A. Welty, III (“Welty”) on May 5, 2006 (the “Amended Claim”). For the reasons stated below, the Trustee’s motion will be granted, and the Amended *179 Claim will be disallowed as a matter of law.

SUMMARY OF FACTS AND PROCEDURAL HISTORY

Johanna A. Welty (the “Debtor”) filed a voluntary petition seeking relief under chapter 7 of the Bankruptcy Code on March 4, 2004. At the time she filed the petition, although her marital relationship with Welty had been dissolved, their property rights had not yet been finally determined. Debtor and Welty were still the co-owners of a home (the “Residence”). The Residence had been ordered to be sold by the family law court, but no sale had yet taken place.

A state court judge pro tern (the “family court judge”) had conducted a trial on various issues in the dissolution proceeding over several days in December 2002. She had issued an order resolving some of these issues which was filed on March 20, 2003 (the “March 20 Order”). Among other things, she granted Welty $156,000 in reimbursement rights from the marital community pursuant to California Family Code § 2640 for his separate property contribution to the Residence. After further hearings, the family law judge issued another order, which was filed on April 16, 2003 (the “April 16 Order”). The April 16 Order established various liens against the Residence, with specified priorities.

On March 1, 2004, Welty recorded an abstract of judgment (the “Abstract”) against the Residence. The Abstract referenced the March 20 Order and asserted the right to a judgment amount of $224,224.18. Three days later, the Debtor filed her chapter 7 bankruptcy petition. On or about July 14, 2004, the Court authorized the sale of the Residence to a third party for $1.4 million.

The Residence was sold, and the first deed of trust, which was held by Green-point Mortgage, was paid from the proceeds. The property taxes encumbering the Residence and the costs of sale were also paid. The remaining proceeds were divided between the Trustee and Welty, the Trustee receiving the Debtor’s share. The Trustee held the Debtor’s share, subject to the remaining liens and other charges against that share, including Welty’s claim of entitlement to additional payment.

On February 10, 2005, this Court held a hearing on an earlier motion for summary judgment filed by the Trustee. Thereafter, the Court issued a memorandum of decision, denying the motion in part but otherwise disposing of most of the issues raised by the complaint. Based on this decision, on June 7, 2005, the Court ordered the Trustee to pay Welty $189,700 out of the estate’s share of the sale proceeds. The Trustee moved for reconsideration, arguing that this amount should be reduced to $156,025. On July 11, 2005, the Court granted the Trustee’s motion for reconsideration, and a check was issued by the Trustee to Welty in this lesser amount.

On May 5, 2006, Welty filed the Amended claim (the “Amended Claim”), asserting the right to receive additional payments from the estate’s share of the sale proceeds based on the March 20 and April 16 Orders. In her current motion for summary judgment, the Trustee objects to the Amended Claim. Welty did not file a substantive objection to the Trustee’s motion. His only response to the motion was a last minute letter request for a continuance of an unspecified length until such time as he could afford to hire an attorney. The Court denied Welty’s request. The motion was presented at a hearing on October 24, 2006 and was taken under submission.

*180 DISCUSSION

A. APPLICABLE LAW

A motion for summary judgment should be granted when the Court determines that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c) (made applicable in bankruptcy proceedings by Fed. R. Bankr.P. 7056); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party must make a prima facie showing that summary judgment is appropriate. Celotex, 477 U.S. at 322, 106 S.Ct. 2548. The party opposing the motion bears the burden of overcoming the prima facie case. Id. at 324, 106 S.Ct. 2548.

If the moving party adequately supports the motion for summary judgment, and the adverse party fails to respond, the Court shall enter summary judgment, if appropriate, against the adverse party. Fed. R.Civ.P. 56(e) (made applicable in bankruptcy proceedings by Fed. R. Bankr.P. 7056). However, the Court may not grant a motion for summary judgment simply because the nonmoving party failed to file an opposition. Henry v. Gill Industries, Inc., 983 F.2d 943, 950 (9th Cir.1993). All doubts concerning the existence of a genuine factual issue must be resolved in favor of the party opposing the motion for summary judgment. British Airways Board v. Boeing Co., 585 F.2d 946, 951 (9th Cir.1978).

If the Court is unable to determine the entire claim by summary judgment, the Court may summarily adjudicate any portion of the claim as to which there is no genuine factual issue. Fed.R.Civ.P. 56(d) (made applicable in bankruptcy proceedings by Fed. R. Bankr.P. 7056).

A properly executed and filed proof of claim constitutes prima facie evidence of the validity and amount of the claim. Fed. R. Bankr.P. 3001(f). The party objecting to the claim must present sufficient evidence to overcome the prima facie evidence. In re Holm, 931 F.2d 620, 623 (9th Cir.1991); In re Consolidated Pioneer Mortgage, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff'd 91 F.3d 151 (9th Cir.1996).

B. DECISION

In the Amended Claim, Welty asserts the right to an unsecured claim against the estate for $328,580 less the $156;025 already paid for a net claim of $172,580.

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355 B.R. 177, 2006 Bankr. LEXIS 3192, 2006 WL 3346154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brady-v-welty-in-re-welty-canb-2006.