Dennen v. Dennen (In re Dennen)

539 B.R. 182, 74 Collier Bankr. Cas. 2d 717, 2015 Bankr. LEXIS 3324, 2015 WL 5735207
CourtUnited States Bankruptcy Court, D. Colorado
DecidedSeptember 29, 2015
DocketCase No. 15-18255 HRT
StatusPublished
Cited by5 cases

This text of 539 B.R. 182 (Dennen v. Dennen (In re Dennen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dennen v. Dennen (In re Dennen), 539 B.R. 182, 74 Collier Bankr. Cas. 2d 717, 2015 Bankr. LEXIS 3324, 2015 WL 5735207 (Colo. 2015).

Opinion

ORDER ANNULLING THE AUTOMATIC STAY

Howard R. Tallman, Judge, United States Bankruptcy Court

This case comes before the Court on Movant’s Motion for Order Confirming [184]*184Absence of the Automatic Stay (docket # 15) (the “Declaratory Motion”) and Mov-ant’s Motion for Annulment of the Automatic Stay Pursuant to 11 U.S.C. § 862(d) (docket # 18) (the “Annulment Motion”).

Movant, the Robert and Joan Dennen Trust Dated October 11, 2007, (the “Trust”), seeks either an order declaring that the automatic stay never came into effect with respect to the Trust upon the filing of the Debtor’s bankruptcy or, in the alternative, an order annulling the stay under 11 U.S.C. § 362(d).

I.FACTUAL BACKGROUND

The relevant facts are as follows:

1. The Trust is a living trust established by the Debtor’s parents who are currently living. The Trust is the owner of residential real property located at 2501 S. Victor Street, # A, Aurora, Colorado (the “Property”), in which the Debtor resides.
2. The Trust elected to terminate the Debtor’s tenancy at will in the summer of 2014, and a Notice to Quit was served upon the Debtor.
3. The Notice to Quit informed the Debtor that the tenancy at will was terminated as of August 12, 2014, at 11:59 p.m. The Debtor failed to surrender possession of the Property to the Trust and the Trust proceeded to file an unlawful detainer action against the Debtor on August 13, 2014, in Arapahoe County Court (Case No.2014C44553) (the “FED Action”).
4. The Arapahoe County Court granted the relief. sought by the Trust and entered a judgment against the Debtor and in favor of the Trust, ordering that possession of the Property be surrendered.
5. The Arapahoe County Court issued a Writ of Restitution dated September 4, 2014, and a second Writ dated September 11, 2014, ordering the Sheriff to remove the Debtor from the Property.
6. The Debtor filed a Notice of Appeal of the judgment for possession.
7. The Arapahoe County District Court (the “District Court”) entered an Order Denying Appellant’s Motions and Dismissing the Appeal on August 10, 2015. The Order was entered 18 days after the Debtor’s Voluntary Petition was filed on July 23, 2015.
8. Debtor filed a Notice of Bankruptcy Case Filing with the Clerk of the Arapahoe County Court on August 10, 2015, but the Debtor did not provide notice to Trust.
9. The Debtor made no entry at the bottom of page 2 of his Voluntary Petition in the section entitled Certification by a Debtor Who Resides as a Tenant of Residential Property and made no attempt to comply with 11 U.S.C. § 362(1) at the time he filed his Voluntary Petition.

II. DISCUSSION

A. Applicability of 11 U.S.C. § 362(b)(22)

The Declaratory Motion is based upon application of § 362(b)(22). Under that subsection, the automatic stay does not apply and never comes into existence, except as provided in § 362(1), with respect to

the continuation of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential property in which the debtor resides as a tenant under a lease or rental agreement and with respect to which the lessor has obtained before the date of the filing of the bankruptcy petition, a [185]*185judgment for possession of such property against the debtor.

11 U.S.C. § 362(b)(22).

The Trust did obtain a judgment for possession of the Property prior to the Debtor’s commencement of this bankruptcy case. However, the language of § 362(b)(22) contemplates a more formal landlord-tenant relationship. It speaks in terms of the rights of a lessor with respect to a debtor who is a tenant under a lease or rental agreement. The instant dispute presents no such commercial relationship. Instead, the Debtor has been living in a property owned by his parents through a living trust. He has done so for some years without any written agreement and without paying rent.

Because the language used in § 362(b)(22) is specific to the type of landlord-tenant relationship that is formed under a “lease or rental agreement,” the Court finds that it is not applicable to the current dispute and will deny the Declaratory Motion.

B. Annulment of the Automatic Stay Under 11 U.S.C. § 362(d)

In his statements to the Court, the Debtor made vague claims of an ownership interest in the Property and of his “sweat equity.” On his Schedule A, the Debtor describes his interest in the property as “future and contingent equitable rights as heir.” At hearing, the Debtor made no offer of proof with respect to documentation that would substantiate an ownership interest. Consistent with the Debtor’s failure to offer any evidence of an ownership interest to this Court, the transcript of the Arapahoe County Court judge’s ruling in the FED action contains the following:

The Court finds, upon all of the evidence here, that there is actually no factual evidence of sweat equity in the property on behalf of the Defendant. There’s been really no evidence other than just a claim. There, the Defendant does not have any current legal right of ownership to the property. Any future right of inheritance does not encumber the Plaintiffs right to their own property. The Plaintiffs are not dead, they could sell their property tomorrow if they felt like it, and they’re not obligated to keep the property or to make it available to the Defendant. Inheritance is something that occurs after the death of the parent, and that is not the case. Because there is no agreement, no contract, no lease, no sweat equity, and the Defendant’s total financial dependence on the Plaintiffs, the Court finds he is a tenant at will.

Movant’s Exhibit C, p.154.

The Colorado statute of frauds requires any interest in real property, except for a lease for a term not exceeding one year, to be in writing. Colo. Rev. Stat. § 38-10-106. Because the Debtor offered to produce no such writing to demonstrate his claimed ownership, the Court finds that the record supports no such claim of ownership by the Debtor. Indeed, the evidence offered by the Trust persuades the Court that Debtor’s “interest” is nothing more substantial than naked possession coupled with an expectation of an inheritance.

1. 11 U.S.C. § 362(d)(1)

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Cite This Page — Counsel Stack

Bluebook (online)
539 B.R. 182, 74 Collier Bankr. Cas. 2d 717, 2015 Bankr. LEXIS 3324, 2015 WL 5735207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dennen-v-dennen-in-re-dennen-cob-2015.