In Re Sweeten

56 B.R. 675, 1986 Bankr. LEXIS 6900
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedJanuary 15, 1986
Docket19-10544
StatusPublished
Cited by7 cases

This text of 56 B.R. 675 (In Re Sweeten) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Sweeten, 56 B.R. 675, 1986 Bankr. LEXIS 6900 (Pa. 1986).

Opinion

OPINION

WILLIAM A. KING, Jr., Bankruptcy Judge.

A debtor’s motion for an award of expenses and attorneys’ fees, pursuant to Fed.R.Civ.P. 37(c), is before the Court. For the reasons stated, we will grant the motion.

On March 16, 1984, Walter Sweeten (“debtor”) filed a petition under Chapter 7 of the Bankruptcy Code (“Code”). 1 On April 4, 1984, the debtor filed a motion to avoid the judicial lien of DeSimone, Inc. (“DeSimone”). On May 7, 1984, DeSimone filed a reply to the motion, denying the allegations as to the fair market value of the debtor’s property and the liens on that property.

*676 On July 5, 1984, the debtor served upon DeSimone a “Request for Admissions”, pursuant to Fed.R.Civ.P. 36(a), requesting DeSimone to admit the truth of the following statements within thirty (30) days:

1. Walter Sweeten, a/k/a Walter Sweeten owns the premises at 3345 N. Lee Street, Philadelphia, PA and at 3415 Kip Street, Philadelphia, PA in fee simple.
2. The fair market value of 3345 N. Lee Street is $3,500.00; the fair market value of 3415 Kip Street is $3,000.00.
3. The premises of 3345 N. Lee Street is security for a mortgage issued by Beneficial Consumer Discount Company, 7206 Frankford Avenue on January 3, 1984 in the amount of $5,000.00.
4. On November 20, 1979, Beneficial Consumer Discount obtained a judgment in mortgage foreclosure in the amount of $6,620.97 against the debtor in the Philadelphia Court of Common Pleas, October Term, 1979, No. 1153.
5. On November 15, 1981 the City of Philadelphia obtained a judgment of $1,280.00 against the debtor in the Philadelphia Court of Common Pleas, December Term, 1981, No. 4679.
6. On August 18, 1983, the United States of America obtained a lien against the debtor at 3415 Kip Street in the amount of $14,056.60.

On July 19, 1984, DeSimone served its reply to - the “Request for Admissions” upon the debtor. The reply stated:

Answers 1 through 6 inclusive. Answering party, DeSimone, Incorporated, through its attorney, Richard L. Gerson, Esquire, avers that, after reasonable investigation, it is without knowledge or information sufficient to form a belief as to the truth of the Request for Admissions, Numbers 1 through 6 inclusive and therefore denies same and demands strict proof thereof at the time of trial.

By letter dated July 27, 1984, debtor’s counsel requested DeSimone to reconsider its general denial of the “Request for Admissions” and to provide notice of any evidence it might have that the requested admissions were not true. By letter dated August 3, 1984, counsel for DeSimone replied that he had no idea of the fair market values of the debtor’s properties, that he did not intend to hire an appraiser to ascertain the values, and that he did not intend to run a judgment search to determine the existing liens on the properties.

On August 14, 1984, a hearing was held on the motion to avoid the lien of DeSi-mone. The debtor testified that he owned the properties in question, that there was a federal tax lien of approximately $14,000.00 encumbering the two (2) properties, that real estate taxes were owed on the properties in the amount of approximately $3,000.00, and that there was a mortgage foreclosure judgment of $6,620.97 on the Lee Street property. He also testified that these encumbrances existed at the time that DeSimone obtained its judgment of $4,678.13 on January 19, 1984.

Counsel for DeSimone did not offer any evidence at the August 14th hearing. The matter was continued to August 23, 1984 to permit the debtor to present testimony from an expert real estate appraiser regarding the fair market value of the two (2) properties.

On August 23, 1984, the day of the scheduled hearing, counsel for DeSimone contacted the debtor’s counsel and informed him that DeSimone was withdrawing its opposition to the debtor’s motion. We entered an Order on the same day granting the motion and avoiding the lien of DeSimone.

On September 12, 1984, the debtor filed the instant motion for payment of expenses and attorneys’ fees pursuant to Fed.R. Civ.P. 37(c).

Rule 37(c), applicable to this matter through Bankruptcy Rules 7037 and 9014, provides:

Expenses on Failure to Admit. If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 36, and if the party requesting the admissions thereafter proves the genuineness of the doc *677 ument or the truth of the matter, he may apply to the court for an order requiring the other party to pay him the reasonable expenses incurred in making that proof, including reasonable attorney’s fees. The court shall make the order unless it finds that (1) the request was held objectionable pursuant to Rule 36(a), or (2) the admission sought was of no substantial importance, or (3) the party failing to admit had reasonable ground to believe that he might prevail on the matter, or (4) there was other good reason for the failure to admit.

The debtor contends that DeSimone was without reasonable ground in believing that it might prevail on the matters which it failed to admit; therefore, the debtor seeks reimbursement from DeSimone for the expenses incurred in proving (and preparing to prove) those matters which DeSimone failed to admit prior to the hearings scheduled for August 14th and August 23rd.

The motion seeks an award of $944.48, which includes: $74.48 in lost wages for the day that the debtor appeared in Court; $70.00 for the real estate appraisal; and $800.00 for eight (8) hours of legal services rendered by debtor’s counsel at $100.00 per hour.

In order to determine whether DeSi-mone’s failure to admit the existence and amounts of the liens in question and the fair market value of the debtor’s properties, was without “reasonable ground”, thereby justifying an award of sanctions to the debtor, we turn to the express language of Fed.R.Civ.P. 36(a), governing Requests for Admission.

Rule 36(a) provides in pertinent part:

A party may serve upon any other party a written request for the admission, for purposes of the pending action only, of the truth of any matters within the scope of Rule 26(b) set forth in the request that relate to statements or opinions of fact or of the application of law to fact, including the genuineness of any documents described in the request ...

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Cite This Page — Counsel Stack

Bluebook (online)
56 B.R. 675, 1986 Bankr. LEXIS 6900, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sweeten-paeb-1986.