Humphreys v. Watley (In re Watley)

129 B.R. 254, 1991 Bankr. LEXIS 928
CourtUnited States Bankruptcy Court, N.D. Alabama
DecidedMay 29, 1991
DocketBankruptcy No. 89-04414; Adv. No. 90-0863
StatusPublished

This text of 129 B.R. 254 (Humphreys v. Watley (In re Watley)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Humphreys v. Watley (In re Watley), 129 B.R. 254, 1991 Bankr. LEXIS 928 (Ala. 1991).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

L. CHANDLER WATSON, Jr., Bankruptcy Judge.

Introduction:

The above-styled bankruptcy case was commenced by the chapter 13 petition of the defendant and his wife, but was converted by them to a case under chapter 7, title 11, United States Code, and remains pending before this Court as a chapter 7 bankruptcy case. The above-styled adversary proceeding was commenced in the chapter 7 bankruptcy case by the plaintiff and his mother and against the defendant and his wife; however, there has been a voluntary dismissal of the plaintiff’s mother and of the defendant’s wife as parties. The adversary proceeding initially sought to have the Court deny a discharge in bankruptcy, pursuant to 11 U.S.C. § 727(a), or, if a discharge were granted, to have the Court determine that the defendant was indebted to the plaintiff upon a debt arising from the defendant’s alleged conversion of personal property of the plaintiff and not dischargeable as being “for [a] willful and malicious injury ... to the property of another ...,” pursuant to 11 U.S.C. § 523(a)(6). On motion of the defendant, the aspect of the plaintiff’s complaint which objected to the granting of a discharge to the defendant was dismissed.

On March 21, 1991, this adversary proceeding was tried before the Court, without the intervention of a jury and upon the plaintiff’s complaint and the defendant’s denial. The plaintiff appeared by legal counsel. The defendant, although previously represented by legal counsel in this bankruptcy case, has appeared pro se throughout this adversary proceeding. At the conclusion of the trial, efforts to effect a settlement of this dispute were renewed but failed, and this matter was taken under advisement by the bankruptcy judge.

The chronology of the events and the facts upon which this controversy rests are not particularly complicated, but the testimony taken at the trial was marked by considerable confusion. It may be said that the chronology of the events affecting this dispute was established by the random-selection process.

Findings of Fact:

From the court file for this bankruptcy case and this adversary proceeding, of which the bankruptcy judge takes judicial notice, the evidence presented at the trial, and the facts established by implication from the statements of plaintiff’s attorney and the testimony of the parties, the Court [256]*256finds the facts relevant to the issue before the Court to be as follows:

A. Chronology.

1. March 2, 1989, defendant and wife filed chapter 13 petition.

2. June 12, 1989, consent order grants relief from stay (11 U.S.C. § 362) to plaintiff and plaintiff’s mother for them “to enforce their interests in and to their property in the possession of the [defendant],” in the event that the defendant fails to make timely payments of various sums recited in the consent order, which was drafted by plaintiff’s attorney.

3. August 24, 1989, order confirming chapter 13 plan.

4. April 16, 1990, judgment of Circuit Court of Calhoun County, Alabama, for the recovery from the defendant of $31,897.78 and the premises at 914 Noble Street, Anni-ston, Alabama, by plaintiff’s mother, and of the sum of $8,300.00 and of therein-described personal property, “free and clear of any interests defendants might have therein,” by the plaintiff. The judgment listed 220 steel frame chairs, 14 steel frame plush bar stools, 62 (24") round bar tables, 10 (30" X 72") banquet tables, and sundry commercial or business items.

5. May 16, 1990, voluntary conversion by defendant and wife of chapter 13 case to a case under chapter 7, title 11, United States Code.

6. May 26, 1990, clerk’s notice to creditors, informing them of creditors meeting, pursuant to 11 U.S.C. § 341, to be held June 20, 1990.

7. August 16, 1990, complaint filed, commencing this adversary proceeding.

8. November 13, 1990, order of discharge of defendant and wife in chapter 7 bankruptcy case.

9. March 21, 1991, trial of adversary proceeding.

B. Extrajudicial Aspects of Plaintiffs Claim.

1.In November or December of 1984, plaintiff acquired the personal property which he contends was converted by the defendant to the latter’s own use, consisting of 215 metal chairs with padded seats and backs, 7 bar tools, 60 round tables and 8 banquet tables, together with other furniture and equipment — all suitable for use in conducting a bar where people gather for dancing and the consumption of alcoholic beverages.

2. The plaintiff’s mother owned a commercial building in the 900 block of Noble Street, in downtown Anniston, and there, the plaintiff commenced the operation of a bar, utilizing the personal property referred to.

3. In March or April, 1985, the defendant, with persons related to him by blood or marriage, formed a closely-held corporation under the name of Chateau Lounge, Inc., and on behalf of the corporation, the defendant negotiated through the plaintiff for a lease of the commercial building and for the defendant to utilize the personal property in question at that location, for the operation of a bar by the corporation under the name of “Chateau Lounge.”

4. It is unclear from the evidence as to whether the corporation’s arrangement with the plaintiff as to the personal property was merely a lease or whether it was a sale by the plaintiff, but a fair inference from the evidence would be that the transaction involving the personal property was a sale by the plaintiff to the corporation, with the purchase price to be paid in monthly increments.

5. The corporation continued to operate the Chateau Lounge (bar) at that location, under the management of the defendant, until a short time prior to the entry' of the state court judgment against the defendant, on April 16, 1990, after which the corporation vacated the premises.

6. At various times, the Chateau Lounge drew 200 to 400 patrons per night, and the defendant on its behalf purchased additional furniture and equipment for the operation of this bar, including chairs, stools, and tables similar to those obtained from the plaintiff, but none of the chairs, stools, or tables obtained from the plaintiff or otherwise bore any serial number or by [257]*257other means could be identified as being property obtained or not obtained from the plaintiff.

7. During the period of operation of the Chateau Lounge, the building roof leaked and admitted considerable amounts of rainwater which damaged and made unusable a significant amount of the furniture obtained from the plaintiff.

8.

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Cite This Page — Counsel Stack

Bluebook (online)
129 B.R. 254, 1991 Bankr. LEXIS 928, Counsel Stack Legal Research, https://law.counselstack.com/opinion/humphreys-v-watley-in-re-watley-alnb-1991.