In re Martinez

595 B.R. 912
CourtUnited States Bankruptcy Court, S.D. Florida.
DecidedJanuary 7, 2019
DocketCase No.: 18-10307-BKC-MAM
StatusPublished
Cited by2 cases

This text of 595 B.R. 912 (In re Martinez) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Florida. primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Martinez, 595 B.R. 912 (Fla. 2019).

Opinion

Mindy A. Mora, Judge

THIS MATTER came before the court upon Trustee's Objection to Claimed Homestead Exemption (ECF No. 117) (the "Objection") and the memorandum of law (ECF No. 143) (the "Memorandum") in support thereof filed by the chapter 7 trustee ("Trustee"). On September 5, 2018, the court conducted an evidentiary hearing (the "Evidentiary Hearing") on the Objection and took the matter under advisement. The primary issue in dispute is whether the above-captioned debtor ("Debtor") should receive the benefit of the homestead exemption provided by Article X, § 4(a)(1) of the Florida Constitution (as made applicable in this bankruptcy case by 11 U.S.C. § 522(b) and Florida Statutes §§ 222.01 and 222.02 ), despite having rented the subject property to a tenant for approximately two-and-a-half years prior to the petition date in this bankruptcy case.

PROCEDURAL HISTORY

Prepetition, Debtor owned a single-family residential property located at 1111 SW 18th Street, Boca Raton, Florida (the "Property"). See ECF Nos. 31 and 35. Debtor filed for chapter 7 relief on January 9, 2018 (the "Petition Date") but failed to timely file his schedules and statements of financial affairs. In response, Trustee filed a motion to compel Debtor to file all required documents and sought to prevent automatic dismissal of the case. See ECF No. 11 (the "Motion to Avoid Dismissal"). The court granted the Motion to Avoid Dismissal, and also granted Trustee's request to compel Debtor to file schedules of assets and liabilities and a statement of financial affairs, as well as to appear at a § 341 meeting of creditors. See ECF No. 27.

On February 21, 2018, Debtor finally filed his initial Schedules of Assets and Liabilities and Statement of Financial Affairs (ECF No. 31), and later amended his initial filing on March 1, 2018 (ECF No. 35) (collectively, the "Schedules and Statements").

Consistent with his prior uncooperative stance regarding disclosure, Debtor's Schedules and Statements provided incomplete and often contradictory information. In Schedule A/B, Part 1, Debtor listed the Property which is a single-family home, and valued the Property at $ 550,000. In Schedule C, Debtor claimed $ 480,000 of *915the value of the Property as exempt under Fla. Const. Article X, § 4 (a)(1) and Fla. Stat. Ann. §§ 222.01 and 222.02. In Schedule D, Debtor listed Caliber Home Loans ("Caliber") as a secured creditor holding an undisputed lien against the Property in the amount of $ 606,814.25. In his Statement of Intention, however, Debtor failed to list any secured creditor or mortgage debt, and thereby failed to confirm to the court, Trustee, and creditors of his intention as of the Petition Date.1

Debtor also checked "no" to the questions contained in Schedule A/B at Item No. 30 ("Other amounts someone owes you"), Item No.33 ("Claims against third parties, whether or not you have filed a lawsuit or made a demand for payment"), Item No. 34 ("Other contingent and unliquidated claims of every nature, including counterclaims of the debtor and rights to set off claims"), Item No. 35 ("Any financial assets you did not already list"), and Item No. 53 ("Do you have other property of any kind you did not already list?"). None of these responses adequately addresses the situation leading to the Evidentiary Hearing, i.e. Debtor's long-term lease of the Property to an unrelated tenant in exchange for a substantial cash payment.

In Schedule G, Debtor listed one residential lease with Overlook Point for property located at 4611 N. Federal Highway, Deerfield Beach, Florida 33441 (the "Overlook Point Lease"). Debtor failed to disclose any other executory contract or unexpired lease on Schedule G, including any unexpired lease of the Property. In both his initial Schedule I (ECF No. 31) and his amended Schedule I (ECF No. 157, stricken at ECF No. 175), Debtor stated that he receives no income from rental property. Moreover, Debtor indicated that he has no income at all to report. Again, Debtor's disclosure was both misleading and inaccurate.2

In his initial Schedule J (ECF No. 31), Debtor listed monthly rental or home ownership expenses of $ 1,700, which Debtor testified at a Rule 2004 examination is the rental amount he remits to Overlook Point. See ECF No. 194 at 107. Debtor also indicated in Schedule J that he does not pay any real estate tax debt or home maintenance, repair, and upkeep expenses, nor does he remit any monthly mortgage payments.3

Question 2 of Debtor's Statement of Financial Affairs required Debtor to provide prior addresses for the three years preceding the Petition Date. He provided the following addresses and occupancy dates:

5840 46th Manor, Pompano Beach, Fl 33076 from December 2016 - June 2017
2160 SE 4th Court, Deerfield Beach Fl 33441 from June 2017 - December 20184 *916550 River Oak Lane, Deerfield Beach, Fl 33441 from January 2016 - December 2016
1111 SW 18th Street Boca Raton Fl 33486 from 2000 - December 2015.

Questions 4 and 5 of the Statement of Financial Affairs required Debtor to disclose any income from operating a business or from other sources within the current year or the two calendar years preceding the Petition Date. In his responses, Debtor represented that he had no such income.5

Question 23 of the Statement of Financial Affairs required Debtor to answer the question: "Do you hold or control any property that someone else owns? Include any property you borrowed from, are storing for, or hold in trust for someone." Debtor checked the box to indicate his answer was "No".

After Debtor failed to appear at a properly-noticed Rule 2004 examination (the "2004 Examination"), upon further motion of Trustee, the court granted Trustee's request to compel Debtor to appear at a rescheduled 2004 Examination and provide further documentation regarding various disputed assets. See ECF Nos. 47, 70, 72, and 74. Nonetheless, in a pattern that has repeated itself throughout this bankruptcy case (the "Bankruptcy Case"), Debtor ignored the court's order by failing to timely cooperate with Trustee's request to provide documentation and by failing to appear at the scheduled 2004 Examination. These failures resulted in Trustee filing a motion to compel Debtor to appear at the 2004 Examination and for sanctions against Debtor, which the court granted. See ECF Nos. 77 and 111.

Approximately one month later, Debtor, who had by then retained new counsel, filed a motion to dismiss the Bankruptcy Case or, in the alternative, to convert the Bankruptcy Case to a case under chapter 13 of the Bankruptcy Code. See ECF No. 104 (the "Motion to Convert").

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Bluebook (online)
595 B.R. 912, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-martinez-flsb-2019.