Kaufhold v. Cauthen (In Re Cauthen)

152 B.R. 149, 26 Fed. R. Serv. 3d 325, 7 Tex.Bankr.Ct.Rep. 153, 1993 Bankr. LEXIS 1194, 1993 WL 88714
CourtUnited States Bankruptcy Court, S.D. Texas
DecidedMarch 18, 1993
Docket19-30777
StatusPublished
Cited by5 cases

This text of 152 B.R. 149 (Kaufhold v. Cauthen (In Re Cauthen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kaufhold v. Cauthen (In Re Cauthen), 152 B.R. 149, 26 Fed. R. Serv. 3d 325, 7 Tex.Bankr.Ct.Rep. 153, 1993 Bankr. LEXIS 1194, 1993 WL 88714 (Tex. 1993).

Opinion

MEMORANDUM OPINION AND ORDER

KAREN KENNEDY BROWN, Bankruptcy Judge.

Before the Court is an Objection to Discharge, Complaint to Determine Discharge-ability of Debts, Motion to Turn Over Assets of Estate, Motion for Rule 11 Sanctions, Original Complaint, Application for Injunction, and Objection to Dismissal filed by Joseph Kaufhold, Jr., Katherine Open-shaw, and Mary Kaufhold Magee (“plaintiffs”) against Velma and Charles Cauthen (“defendants”). Based on the following findings of fact and conclusions of law, the Court DENIES the debtor's discharge; determines that the amounts incurred by plaintiffs are not dischargeable; and GRANTS an injunction against the defendants as set forth below. This Court has jurisdiction of this proceeding pursuant to 28 U.S.C. §§ 157 and 1334.

I. Background

The heart of this complaint is a dispute over possession to certain real estate (the “property”) and the delays caused by the defendants prior to surrendering possession of the property to the plaintiffs. The plaintiffs and Velma Cauthen at one time were co-owners of a 51 acre tract. The plaintiffs were awarded a judgment of partition of the tract by a state court but the defendants refused to surrender possession of the property, plaintiff’s portion of the tract, until after the filing of this complaint.

The defendants have over the course of several years prevented plaintiffs from obtaining possession of the property. On March 31, 1987, Charles Cauthen filed bankruptcy case no. 87-03052-G3-7 in which he received a discharge on August 17, 1987. On July 16, 1987, Thomas Cau-then, defendant’s brother, filed bankruptcy under case no. 87-06879-H2-7. One asset of Thomas Cauthen’s estate was his interest as heir in the probate estate of Louise Mclver, who apparently had an interest in the property at issue. In that bankruptcy, plaintiff Kaufhold sought to purchase the estate’s interest in the probate estate but was delayed by Charles Cauthen who proposed to pay a greater amount. Cauthen was allowed time to effectuate the purchase but did not do so. On February 25, 1992, Thomas Cauthen’s bankruptcy trustee sold the interest to Kaufhold.

On October 2, 1990, in an attempt to cloud title to the property, Velma Cauthen conveyed minute interests in the subject tract to others. Thereafter, in November, 1990, plaintiffs filed a partition suit against Velma and Charles Cauthen seeking partition of the tract. A state judgment of partition was entered on March 17, 1992, awarding 49.14 acres of the tract to the plaintiffs and 1.99 acres to Velma Cauthen. The state court in this judgment further found that Velma and Charles Cauthen de *152 layed the partition suit and awards costs against them in favor of the plaintiffs in the amount of $233.00, plus postjudgment interest at the rate of 10% per annum.

Thereafter, Velma Cauthen filed bankruptcy case no. 92-44273-G1-7, on May 11, 1992, in an admitted attempt to delay enforcement of the partition judgment. The following month, on June 15, 1992, plaintiffs sought relief from the automatic stay in order to take possession of the property but Velma Cauthen contested the motion, requiring a hearing. However, at the hearing on July 6,1992, she withdrew her opposition and Charles Cauthen announced her intention to dismiss her bankruptcy. The Court recessed the case briefly for the parties to present an agreement. Nevertheless, Velma and Charles Cauthen then left the courthouse. The Cauthens were later notified that a hearing would recommence that afternoon but they again failed to appear. The order lifting the automatic stay was entered on July 13, 1992, but the following week the Cauthens moved for reconsideration of the order. On July 21, 1992, the Court dismissed Velma Cauthen’s bankruptcy.

On July 30,1992, a Brazoria County sheriff’s deputy served the Cauthens with a writ for possession of the property. On that day Charles Cauthen filed the instant bankruptcy case with the admitted purpose of stopping the eviction process. Debtor has never paid his filing fee in this case and the case is therefore subject to dismissal. Similarly, debtor failed to attend his creditor’s meeting which was set for September 2, 1992.

On August 12, 1992, plaintiffs again moved for relief from the automatic stay to obtain possession of the property. On August 17, 1992, Charles Cauthen attempted to obtain a temporary restraining order from this Court against enforcement of the partition judgment. On that date he also sought a writ of mandamus against the judge in the partition suit and sued plaintiffs’ attorneys and the bankruptcy trustee of the Thomas Cauthen bankruptcy in the district court of Harris County, Texas, complaining of ethical violations. This suit was removed to this Court and dismissed on October 6, 1992.

On August 20, 1992, this Court lifted the automatic stay to allow the plaintiffs to proceed with enforcement of the partition judgment. On September 4, 1992, Charles and Velma Cauthen finally surrendered possession of the property.

The Court finds that the instant bankruptcy case and the related pleadings filed therein were filed for the sole purpose of delaying the enforcement of the partition judgment. Each of these actions were meritless attempts by the Cauthens to retain the property, were designed to harass the plaintiffs, and were undertaken without any intention of proceeding further. From the time of the partition judgment debtor has acted with specific intent to injure the plaintiffs and to knowingly and wrongfully deprive them of possession of their property without just cause.

Plaintiffs claim they have incurred numerous forms of damages due to the defendants dilatory tactics in surrendering the property. The Court finds that plaintiffs have incurred $420.00 in surveyor fees incurred in preparation for the hearings on plaintiffs’ motion for relief from stay necessitated by the Cauthens’ bankruptcies. Plaintiffs have incurred $23,240.00 in legal fees plus $2,012.14 in legal expenses in responding to defendants’ filings, including fees for this proceeding. Plaintiffs’ costs awarded in the judgment of partition were incurred because of the Cauthens’ dilatory tactics.

Plaintiffs also seek $637.00 for rent for the time defendants remained on the property after the partition judgment at $125 per month (March 17 to September 4,1992). Plaintiffs seek exemplary damages for violation of Fed.R.Civ.P.Rule 11 plus prejudgment and postjudgment interest and court costs. Plaintiffs further seek an injunction against defendants to prevent further interference with plaintiffs’ possession of the property.

*153 II. Discussion

A. Discharge

Bankruptcy Code section 727 states: (a) The court shall grant the debtor a discharge, unless
(8) the debtor has been granted a discharge under this section, ... in a case commenced within six years before the date of the filing of the petition;

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Bluebook (online)
152 B.R. 149, 26 Fed. R. Serv. 3d 325, 7 Tex.Bankr.Ct.Rep. 153, 1993 Bankr. LEXIS 1194, 1993 WL 88714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kaufhold-v-cauthen-in-re-cauthen-txsb-1993.