In re Walton

158 B.R. 943, 1993 Bankr. LEXIS 1775, 1993 WL 328423
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedJune 2, 1993
DocketBankruptcy No. 92-30440
StatusPublished
Cited by2 cases

This text of 158 B.R. 943 (In re Walton) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Walton, 158 B.R. 943, 1993 Bankr. LEXIS 1775, 1993 WL 328423 (Ohio 1993).

Opinion

OPINION AND ORDER DENYING REQUEST FOR CONTEMPT OF COURT AND ORDERING RECEIVER TO TURNOVER FUNDS TO BANKRUPTCY TRUSTEE

WALTER J. KRASNIEWSKI, Bankruptcy Judge.

This matter is before the Court upon William and Joyce Walton’s (the “Debtors”) pleading “Entry Alternative Recusal re Common Pleas Court Case No. 90-CV-89” filed with this Court on March 16,1993. The Debtors alleged that a number of parties were in contempt of this Court for violation of the automatic stay under 11 U.S.C. § 362. These parties include the Prosecuting Attorney for Wyandot County, a state court appointed receiver, a creditor of the estate and its attorneys, and the trustee in bankruptcy. Upon consideration of the evidence adduced at the hearing, the Court finds that Debtors’ request for a finding of contempt against Charles Bartholomew, William Clark, Ag-Credit, ACA, John Hunter, Jr., Bernard Bauer, and Trustee Malcolm Goodman is not well taken and should be denied.

FACTS

On December 30, 1991, Debtor Joyce Walton filed a voluntary petition under chapter 7 of title 11. Joyce Walton’s husband, Debtor William Walton filed a voluntary petition under chapter 7 of title 11 on February 10, 1992. These cases were consolidated on Debtors’ request on March 13, 1992, and all further entries docketed on Case No. 92-30440.

The Wyandot County Court of Common Pleas had previously set aside certain [945]*945transfers of Debtors’ property as fraudulent under O.R.C. § 1336.04 in Case Number 90-CV-89 (“the State Court Action”). The Wyandot County Court of Common Pleas prohibited Debtors and Wheatley Corporation, a corporation which was determined to be a fraudulent transferee in the State Court Action, from transferring any assets or property until further court order and appointed a receiver to take charge of any proceeds obtained by Wheat-ley. William Clark (“Clark”) was appointed receiver.

This Court granted creditor Ag-Credit, ACA’s (“Ag-Credit”) application for abandonment and an annulment of the automatic stay for certain real property which had been determined to be property of the Debtors in the State Court Action on April 10, 1992. The Court found that the Debtors had no equity in the property. Additionally, this Court dismissed Joyce Walton’s allegations of contempt for violation of the automatic stay against Clark and Ag-Credit. See Opinion and Order Granting Application for Abandonment and Motion for Relief from Stay of Ag-Credit, ACA dated April 10, 1992 (“Abandonment Order”).

On August 6, 1992, this Court issued an opinion denying the Debtors’ demand for protection under the Farm Credit System Act in the real property which had been the subject of the Abandonment Order because the Court lacked jurisdiction over this matter under title 11. See Opinion and Order Denying Debtors’ Demand for Protection Under Farm Credit System Act.

On February 18, 1993, this Court denied Debtors request to void the sale of the land which was the subject of the Abandonment Order because the Debtors did not file an adversary proceeding as required. See■ Order Denying Request for Order to Avoid Sale.

In this proceeding, Debtors allege that certain parties are in contempt of this Court for violation of the automatic stay. The parties include Clark, Ag-Credit, John Hunter, Jr. (“Hunter”) and Bernard Bauer (“Bauer”), attorneys for Ag-Credit, Charles Bartholomew, Prosecuting Attorney for Wyandot County (“Bartholomew”) and Malcolm Goodman, trustee of the Debtors’ bankruptcy estate (“the Trustee”). These parties have allegedly violated the automatic stay provisions of 11 U.S.C. § 362 in regard to property held by Clark including approximately $10,000 in cash which is claimed to be the property of the Wheatley Company, $555 in cash representing the proceeds from the sale of a corn head and $130 in stock dividends made payable to Debtors. Debtors claim that they possess no interest in any of these assets. Debtors do claim an interest in a state tax refund check payable to William Walton for $920 (the “Refund”) which is held by Clark, however, it was not listed as an asset on Debtors’ bankruptcy schedules.

DISCUSSION

Though the subject matter jurisdiction of the bankruptcy courts is broad, this jurisdiction does not extend to property which is not “property of the estate” under 11 U.S.C. § 541. Section 541 of the Bankruptcy Code provides that the bankruptcy estate includes substantially “all legal or equitable interests of the debtor in property as of the commencement of the case”. See 11 U.S.C. § 541. William Walton stated at the evidentiary hearing that the Debtors did not own nor did they have an interest in the $10,000 held by Clark which, according to William Walton, represents property of the Wheatley Company. William Walton stated that the Debtors had no interest in the proceeds from the sale of a corn head held by Clark in the amount of $555. William Walton stated at the hearing that these funds were the property of Steven Walton. Further, William Walton stated that Debtors claim no interest in the stock dividend checks made payable to Debtors totaling $130.

A review of 28 U.S.C. § 157(b) clearly indicates that an action to recover property in which the Debtors have no interest does not represent a core proceeding. Further, under 28 U.S.C. § 157(c)(1), an action to recover property in which the Debtors have no interest does not represent a proceeding which is “otherwise related to” a case un[946]*946der the Bankruptcy Code. See 11 U.S.C. § 157(c)(1). Even under the most expansive reading of “related to” under § 157(c)(1), Debtors’ claim to recover funds in which they have no interest would not “ ‘conceivably have any effect upon the estate being administered in bankruptcy’ ”. Kelly v. Nodine (In re Salem Mortgage Co.), 783 F.2d 626, 634 (6th Cir.1986) (quoting Mazur v. US. Air Duct Corp., 8 B.R. 848, 851 (Bankr.N.D.N.Y.1981)). This Court has no subject matter jurisdiction over funds held by Clark which purportedly represent proceeds from sale of the property of the Wheatley Company and Steven Walton. Additionally, this Court has no subject matter jurisdiction over the stock dividends made payable to William and Joyce Walton in which Debtors claim no interest.

THE REFUND CHECK

This Court finds that Debtors’ motion for contempt against Bartholomew is not well taken. Debtors have alleged that Bartholomew willfully violated the automatic stay by proceeding against the Refund held by Clark. Section 362(h) of the Bankruptcy Code provides damages for willful violations of the automatic stay. See Archer v. Macomb County Bank,

Related

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Bluebook (online)
158 B.R. 943, 1993 Bankr. LEXIS 1775, 1993 WL 328423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-walton-ohnb-1993.