Dwain W. Tate - Adversary Proceeding

United States Bankruptcy Court, District of Columbia·Decided October 16, 2020·No. 19-10009·Unknown

Opinion

The document below is hereby signed. gente, Signed: October 16, 2020 ye” MM alll ey Crag oo

tttha □□ BY ae S. Martin Teel, Jr. United States Bankruptcy Judge UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLUMBIA

In re ) ) DWAIN W. TATE, ) Case No. 19-00237 ) Debtor. ) (Chapter 13) a) ) DWAIN W. TATE, ) ) Plaintiff, ) ) Vv. ) Adversary Proceeding No. ) 19-10009 FATRFAX VILLAGE I ) CONDOMINIUM, et. al., ) Not for publication in ) West’s Bankruptcy Reporter. Defendants. ) MEMORANDUM DECISION AND ORDER DECIDING REMAINING ISSUES ON UNDISPUTED FACTS The second amended complaint filed by the plaintiff in this adversary proceeding, Dwain W. Tate (“Tate”), the debtor in the main bankruptcy case, includes a Count II seeking damages pursuant to 11 U.S.C. § 362(k) (1) for the defendants’ having willfully violated the automatic stay (“Count II”). I previously granted Tate partial summary judgment decreeing that, within the meaning of 11 U.S.C. § 362(k) (1), the defendants “willfully”

violated the automatic stay. The facts are not in dispute, and the parties agreed at the pretrial conference of May 6, 2020, that I could decide the claim based on the papers already filed in lieu of proceeding to a trial. I FACTUAL BACKGROUND Tate is the son of Annetta M. Tate (“Ms. Tate”), who owned a condominium unit (“the Property”) until her death. After his mother passed away intestate, Tate, the heir to the Property, continued to make the monthly payments on the mortgage and condominium fees, but Ms. Tate remained the “named owner” according to the deed on file with the Recorder of Deeds and the Office of Tax and Revenue tax records. Tate eventually fell delinquent on the payment of the condominium fees owed the condominium association, Fairfax Village Condominium I (“Fairfax Village”), a defendant herein. Fairfax Village set a foreclosure sale for sometime in early 2017, and on January 17, 2017, Tate e- mailed Fairfax Village’s attorney, Brian Fellner (who has acted as Fairfax Village’s attorney herein and also as its trustee to

pursue foreclosure for Fairfax Village’s claim for condominium fees), telling him “I received a Notice of Foreclosure letter, addressed to my mom Annetta Tate, who is deceased. And I was hoping we could work something out, other than auction and or sale of the condo. In which I am still paying for.” The 2 foreclosure sale was called off in exchange for Tate making a $6,000.00 payment. However, in 2019, Fairfax Village, through Fellner, set a second foreclosure sale for April 11, 2019, at 10:34 a.m. On March 12, 2019, Tate e-mailed Fellner, stating “I received a Notice of Foreclosure letter, addressed to my mother Annetta Tate who is deceased. And I was hoping we could work something out, such as a down payment and or payment plan. Rather than auctioning and or sale of the condo. In which I am still paying for.” No arrangement was worked out. On April 10, 2019, Tate’s attorney, Harris Ammerman, e-mailed Fellner at 3:45 p.m. advising: “I represent Mr. Tate who will be filing a ch 13 bankruptcy which will stay the foreclosure pending on behalf of Fairfax Village Condo I; please provide me with any documents that have been prepared to initiate the foreclosure sale process. I will provide you with a bankruptcy case number as soon as the case is filed.” Fellner e-mailed Ammerman back asking “You represent Annetta Tate?” and at 3:52 p.m. Ammerman responded “Her surviving son has an inchoate interest in the property and by law

he is entitled to obtain ch 13 bankruptcy relief and payoff all outstanding financial obligations.” At 3:58 p.m., Ammerman e- mailed Fellner the Letters of Administration issued by the Superior Court of the District of Columbia on May 25, 2007, naming Tate the personal representative of the estate of Ms. 3 Tate, deceased. At 4:10 p.m., Fellner e-mailed Ammerman, stating: “The property remains in her name 12 years later. There is no transfer or perfection of title. Your client has a potential interest in the property, but from my reading, his bankruptcy does not stay my client’s foreclosure against the unit.” By a 4:53 p.m. e-mail, Ammerman responded: “I disagree and if the property is sold at auction and you have notice of the bankruptcy filing, I will ask the court to rule on a willful violation of the automatic stay and seek damages see 11 USC 362(a}(3); I will email you with the bky case number.” Tate filed his bankruptcy petition on April 10, 2019, at 6:57 p.m. At 7:07 p.m., Ammerman e-mailed Fellner attaching a copy of the bankruptcy case docket, and asking Fellner to advise of his intentions regarding the sale. At 8:27 p.m., Fellner responded by stating that “Per my earlier comments, it is our position that your client has no interest in this property. You have provided no citation otherwise,” quoting a North Carolina decision that a personal representative could not sue as to real property because “realty vested in an heir with title relating back to the date of

death.” Fellner’s e-mail then concluded: Based upon that language, my client intends to proceed to sale. It seems quite clear that the stay does not apply to property not owned by your client. Bankruptcy courts use state law to determine ownership of property. Here, though your client may have opened an estate for the deceased, he neither made the subject property a part of the estate, nor did he transfer the property into his own name in the ensuing twelve years (presumably to avoid 4 paying the transfer taxes and whatnot, though the reason is immaterial). State law says he is not the owner. Additionally, if he truly meant to go through the Chapter 13 process, and not simply use the stay as a weapon to avoid collections efforts, he would likely have filed and contacted my office before today. I am sure you will capably represent your client and his interests. But my intention based upon the case law reviewed is to proceed with a validly noticed sale. The foreclosure sale proceeded on April 11, 2019. On April 14, 2019, Tate commenced this adversary proceeding, and on April 19, 2019, Tate filed an amended complaint (Dkt. No. 7) seeking declaratory relief voiding the foreclosure sale and damages for violation of the automatic stay. The amended complaint alleged that Tate had an equitable interest in the Property but failed to allege that Tate was his mother’s heir. Accordingly, upon consideration of the defendants’ Motion to Dismiss (Dkt. No. 19) regarding Tate’s amended complaint, the court issued its Memorandum Decision and Order re Motion to Dismiss and Directing Plaintiff to Provide a More Definite Statement (Dkt. No. 28) directing Tate to provide a more definite statement of the basis for his claimed equitable interest, but ruling that if Tate had a prepetition equitable interest in the Property as his mother’s heir, then such an interest would be a valid basis for the relief sought in the amended complaint. Thereafter, Tate filed a second amended complaint (Dkt. No. 32) providing the requested detail by alleging the he is his mother’s heir. In response, the 5 defendants filed an answer (Dkt. No. 34) to the second amended complaint in which they conceded that the debtor had an equitable interest in the Property and agreed to unwind the foreclosure sale. On August 6, 2019, the defendants filed a Motion for Summary Judgment, and on August 13, 2019, Tate filed his opposition which included a motion that summary judgment be entered in his favor as to the issue of whether there was a willful violation of the automatic stay (Dkt. No. 37). In its Memorandum Decision and Order re Motions for Summary Judgment (Dkt. No.

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