Chesley v. Hammons (In re Chesley)

551 B.R. 663, 26 Fla. L. Weekly Fed. B 171, 2016 Bankr. LEXIS 1923
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedMay 4, 2016
DocketCase No. 8:11-bk-13785-KRM; Adv. No. 8:15-ap-00474-KRM
StatusPublished
Cited by1 cases

This text of 551 B.R. 663 (Chesley v. Hammons (In re Chesley)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chesley v. Hammons (In re Chesley), 551 B.R. 663, 26 Fla. L. Weekly Fed. B 171, 2016 Bankr. LEXIS 1923 (Fla. 2016).

Opinion

MEMORANDUM OPINION REGARDING PROPERTY OF THE BANKRUPTCY ESTATE (WARLOCK RACING BOAT)

K. Rodney May, United States Bankruptcy Judge

In 2000, Mr. Chesley (“Debtor”) purchased a world class 29’ Warlock open sea racing boat, serial # UTCWC706G001 (the “Warlock”), with a tow trailer, engine and related accessories. The Warlock is a specialized vessel,’ which Debtor has used for more than a decade to compete in open sea races. No certificate of title was ever issued for the Warlock. Within months before the bankruptcy filing, Debtor paid $3,500 to acquire another tow trailer, and $9,999 for an outboard motor. In this bankruptcy case, Debtor never disclosed his possession of the Warlock or his purchase of the Warlock-related assets on the eve of bankruptcy.1

Debtor does not dispute his purchase, use and possession of the Warlock. Instead, he claims that it cannot be property of the bankruptcy estate because no certificate of title was issued to him. Debtor argues, inconsistently, that his father, who does not hold such registered title either, is the real owner of the Warlock, according to their mutual understanding. Debtor argues that the Warlock, tow trailer and outboard motor in his possession are beyond the reach of this Court’s jurisdiction.2

The Chapter 7 trustee, Susan K. Woodard (the “Trustee”), filed this adversary proceeding against Debtor and his father, Harry Hammons (“Hammons”), and against others who may claim an interest in these assets: Bullfrog Performance Speed Shop, Inc. (“Bullfrog”); Timothy R. Nobles, Tim Nobles Trailer Sales and Rentals, Inc., Tim Nobles Trailers Inc., and Tim Nobles Trailer and Repair LLC [666]*666(collectively, the “Nobles Defendants”).3 The Trustee seeks a declaratory judgment that the Warlock, a 29-31’ Tow Master Boat ■ Trailer, serial # 5AZBB3034YF007215, outboard .motor, and related equipment (including propellers and electronics) are property of Debtor’s bankruptcy estate, pursuant to Bankruptcy Code § 541.4 She also seeks judgment that no defendant, other than Debtor, has any interest in these assets and, upon such determinations, the assets must be turned over to the Trustee, pursuant to § 542.5

Debtor and the Trustee have filed cross motions for summary judgment.6 Judgments have been' entered previously against all defendants except Debtor.7 The only question remaining is whether Debtor had an equitable interest in the Warlock, outboard motor, tow trailer and the related assets on the petition date and the date the original case was converted to Chapter 7.8

After reviewing the record,9 the Court rejects Debtor’s principal contention that he is not the “legal” owner of the Warlock. [667]*667The statute he relies on, Fla. Stat. § 319.22(1), applies only to the title registration of motor vehicles and mobile homes. Therefore, Debtor’s motion for summary judgment will be denied. The undisputed and admitted facts demonstrate that Debtor, and no one else, is the beneficial owner of the Warlock. The Court rejects Debtor’s claim that the tow trailer under the Warlock is not the same one Debtor purchased pre-petition; but, for pleading deficiencies, complete relief as to ownership of the trailer cannot be granted to the Trustee. The Trustee’s motion for summary judgment will be granted in full, however, as to the Warlock, the propeller and electronics, and the outboard motor. Partial summary judgment will be entered as to the tow trailer now with the Warlock.

BACKGROUND FACTS

Debtor is a world class open sea boat racer. He competes in races sanctioned by Super Boat International.10 In 2004, he won the World Championship.11 He competed in the World Championship in 2012.12

The Trustee has alleged, and Debtor does not dispute, that Debtor purchased the Warlock in July 2000, with a loan from First Union National Bank in the amount of $80,310 (the “Warlock Loan”).13 The collateral for the Warlock Loan was stated in the promissory note to be:

“00 Warlock 29 World Class Race Boat SER # UTCWC706G001 and 29-81 Tow Master Boat Trailer Serial # 5AZBB3031ÍYF007215 and any attachments hereto and in the future added to the boat.”14

Debtor made loan payments of about $900 per month for seven years.15 But, he ceased doing so after he was severely injured in a 2005 automobile accident.16 First Union’s successor brought suit, but declined to seek replevin of the Warlock and other assets, apparently because its liens were not perfected.17 The bank obtained a judgment of about $70,722 against Debtor and his former wife on January 19, 2007.18

Debtor filed his Chapter 13 petition on July 21, 2011 (the “Petition Date”). Just two months before filing, Debtor received $336,644 from settling his personal injury claim arising from the 2005 accident.19 He used a portion of these funds to buy assets related to his racing activities: on June 2, 2011, Debtor paid $3,500 to “Tim Nobles Trailers” to acquire a tow traile’r;20 on or about July 5, 2011, Debtor purchased an [668]*668outboard motor for $9,999.21 Debtor admits that he raced the Warlock in Sarasota on July 3, 2011, less than three weeks before the petition date.22

The Warlock and outboard motor were not disclosed in any of the schedules filed in Debtor’s bankruptcy case.23 In his several responses to Item 26 of Schedule B, which asks for disclosure of “boats, motors and accessories,” Debtor disclosed either “mise, parts” or nothing at all.24 In the two Statements of Financial Affairs filed in 2011, Debtor disclosed only that he was holding in his possession an asset described as “father’s boat.”25 It was not until January 9, 2013, that Debtor listed in Schedule B, Item 28, a “TNT trailer” located at his house.26 But, in the subsequent amendment of Schedule B, filed on April 14, 2014, that disclosure was deleted.27

With such little to go on, the Trustee described these assets in her Complaint as they were described in the 2000 Warlock Loan note. The Trustee alleges that she learned, at a hearing on May 14, 2015, of Debtor’s claims that the Warlock is owned by Hammons, the outboard motor is owned by Bullfrog, and the tow trailer is owned by Tim Nobles, either individually or through one of his businesses.28 The Trustee also alleges that at the hearing on May 14, 2015, Debtor disclosed that a certificate of title had never been issued for the Warlock and that Debtor believes he does not possess the Manufacturer’s Statement of Origin (“MSO”) for it; according to Debtor, Hammons may have the MSO.29

The MSO for the Warlock has not been proffered in this proceeding, by Debtor or Hammons, in support of Hammons’ claim of ownership.

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Cite This Page — Counsel Stack

Bluebook (online)
551 B.R. 663, 26 Fla. L. Weekly Fed. B 171, 2016 Bankr. LEXIS 1923, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chesley-v-hammons-in-re-chesley-flmb-2016.