King Louie Mining, LLC v. Comu (In re Comu)

542 B.R. 371
CourtUnited States Bankruptcy Court, N.D. Texas
DecidedDecember 8, 2015
DocketCase No. 09-38820-sgj-7; Adversary No. 10-03269-sgj
StatusPublished
Cited by4 cases

This text of 542 B.R. 371 (King Louie Mining, LLC v. Comu (In re Comu)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
King Louie Mining, LLC v. Comu (In re Comu), 542 B.R. 371 (Tex. 2015).

Opinion

MEMORANDUM OPINION AND ORDER DETERMINING THAT PROPERTY AT 5301 PALADIUM DRIVE, DALLAS, TEXAS HAS BEEN ABANDONED AS DEBTOR’S AND NON-DEBTOR SPOUSE’S HOMESTEAD AND GRANTING REQUEST OF CHAPTER 7 TRUSTEE AND CERTAIN JUDGMENT CREDITORS FOR TURNOVER OF SUCH PROPERTY, IN AID OF COLLECTION OF MONEY JUDGMENT

STACEY G. JERNIGAN, United States Bankruptcy Judge

NOW BEFORE THIS COURT is a request for relief that has been jointly sought by the Chapter 7 Trustee and certain judgment creditors in a post-judgment context in the above-referenced adversary proceeding (the “Adversary Proceeding”). The request pertains to an allegedly abandoned Texas homestead.

Specifically, as explained more fully below, both the Chapter 7 Trustee and the aforementioned judgment creditors have earlier (on July 8, 2014) obtained a postpe-tition money judgment against Cengiz J. Cornu, a/k/a CJ Cornu (the “Debtor” or “Mr. Cornu”) and related entities in this Adversary Proceeding after a five-day bench trial [DE ## 147 & 148] (hereinafter, the “Adversary Judgment”).1 The Adversary Judgment was subsequently affirmed by the District Court on July 24, 2015, and is now on appeal before the Fifth Circuit Court of Appeals, although unstayed. The Chapter 7 Trustee and judgment creditors have recently become embroiled in efforts to collect upon their Adversary Judgment. There is scarcely any ambiguity as to what can and cannot be pursued, at this point, as far as collection efforts — since the Debtor’s discharge was revoked as part of the Adversary Judgment (as further explained below). To that end, the Chapter 7 Trustee and judgment creditors have jointly filed an application for turnover relief and various injunctive relief [DE # 236] pursuant to Fed. R. Civ. Pro. 69, as'incorporated into adversary proceedings pursuant to Fed. R. Bankr.Pro. 7069, seeking aid from this court in the collection of their Adversary Judgment (hereinafter, the “Post-Judgment Turnover Application”).

Just one isolated portion of the multifarious relief sought in the Post-Judgment Turnover Application is now before the court: a request that the court determine that certain unencumbered property [374]*374owned by the Debtor at 5301 Paladium Drive, Dallas, Texas (the “Paladium Property”), that the Debtor has previously exempted as a Texas homestead in his bankruptcy case, has been abandoned as a homestead and, thus, is subject to turnover in aid of collection of the Adversary Judyment. The facts, distilled to their essence, are: (a) the Debtor and his non-debtor spouse resided at the unencumbered Paladium Property for several years before and on the bankruptcy petition date (the petition date was December 31, 2009) and claimed it as their homestead; (b) no one objected during the bankruptcy case to the homestead exemption asserted on the Paladium Property; (c) the Debtor and his spouse discontinued using the Paladium Property as a residence during the bankruptcy case — in fact, soon after the Chapter 7 Trustee’s and judgment creditors’ Adversary Proceeding was filed (in the fall of 2010) — and began renting it for income, directing the rental payments to be made to an entity that this court has earlier determined to be the alter ego of the Debtor; (d) the Debtor and his non-debtor spouse have continuously, for the past five years, while renting the Paladium Property, resided in another nearby.Dallas home (“Home # 2”), that was purchased in the fall of 2010 for cash by a newly created foreign company that is allegedly owned and controlled by the Debtor’s brother, a resident of the country of Turkey (although the Debtor appears to have created and at all times directed the actions of such foreign entity, and the Debtor and his spouse have paid no rent for use of Home # 2 since 2011). To be clear, the issue before this court does not involve section 522 of the Bankruptcy Code and whether the Debtor claimed a valid homestead exemption on the Paladium Property at the outset of his bankruptcy case. The Chapter 7 Trustee and judgment creditors are not attempting to revisit that issue or make an argument similar to what was raised in the cases of In re D’Avila, 498 B.R. 150, 153 (Bankr.W.D.Tex.2013) (J. Davis), Cage v. Smith (In re Smith), 514 B.R. 838, 850 (Bankr.S.D.Tex.2014) (J. Bohm), and Lowe v. DeBerry (In re DeBerry), Adv. No. 15-05054, 2015 WL 6528024, at *1 (Bank.W.D.Tex. Oct. 28, 2015) (J. Gargotta), which addressed whether postpetition events in a Chapter 7 case, before closure of the case, can impact a debtor’s previously claimed homestead exemption under section 522 of the Bankruptcy Code.2 Rather, the Chapter 7 Trustee and judgment creditors are now in the posture of trying to collect upon a postpetition judgment issued by this court, in a context in which the Debtor has no discharge; they are simply seeking to reach any available nonexempt assets to collect upon their judgment. In this endeavor, they discovered circumstances that they believe demonstrate that the Debtor and his nondebtor spouse have abandoned what once was their homestead. If so, they seek a turnover of the property, pursuant to this court’s authority under Fed. R. Bankr .Pro. 7069.

For the reasons set forth below, the court determines that the Debtor and non-debtor spouse have, indeed, abandoned the Paladium Property as a homestead, and the Chapter 7 Trustee and judgment creditors are entitled to and will be awarded turnover relief as to such property, as requested, in aid of collection on their Adversary Judgment. The court sets forth below its findings of fact and conclusions of law in support of this order.

[375]*375I. JURISDICTION

Bankruptcy subject matter jurisdiction exists in this matter, pursuant to 28 U.S.C. § 1384(b). This bankruptcy court has authority to exercise bankruptcy subject matter jurisdiction pursuant to 28 U.S.C. § 157(a) & (c) and the Standing Order of Reference of Bankruptcy Cases and Proceedings (Misc. Rule No. 33), for the Northern District of Texas, dated August 3,1984. This is a core proceeding in which this court has statutory authority to issue final orders, pursuant to at least 28 U.S.C. § 157(b)(2)(A), (E), and (0).

II. FINDINGS OF FACT

A. The State Court Judgment and Commencement of Mr. Cornu’s Bankruptcy Case

1. On April 30, 2009, in a case styled Humitech Int’l Group, Inc., et al. v. Comu, et al, Index No. 06-602567 (New York 2009) (the “State Court Action”), three parties known as King Louie Mining, LLC, King Louie Enterprises, LLC and Ronald Katz (the “Katz Parties”) recovered a pre-petition judgment against Mr. Comu in the following amounts: $2,003,945.84 to King Louie Mining, LLC; $199,811.10 to King Louie Enterprises, LLC; and $75,508.22 to Ronald Katz; for a total amount of $2,279,265.16, plus post-judgment interest, until paid (the “State Court Judgment”).

2. Soon thereafter, on December 31, 2009, Mr. Comu filed the above-referenced chapter 7 bankruptcy case (the “Bankruptcy Case”). His wife, Phyllis Comu (“Mrs. Comu”), did not file for bankruptcy relief. Diane Reed was appointed as the chapter 7 trustee (the “Chapter 7 Trustee” or the “Trustee”).

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Cite This Page — Counsel Stack

Bluebook (online)
542 B.R. 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/king-louie-mining-llc-v-comu-in-re-comu-txnb-2015.