Limor v. Daniel (In re Gee)

166 B.R. 314, 1993 Bankr. LEXIS 2142
CourtUnited States Bankruptcy Court, M.D. Tennessee
DecidedDecember 7, 1993
DocketBankruptcy No. 389-07491; Adv. No. 392-0178A
StatusPublished
Cited by4 cases

This text of 166 B.R. 314 (Limor v. Daniel (In re Gee)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Limor v. Daniel (In re Gee), 166 B.R. 314, 1993 Bankr. LEXIS 2142 (Tenn. 1993).

Opinion

MEMORANDUM GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGEMENT

GEORGE C. PAINE, II, Chief Judge.

I. INTRODUCTION

The Chapter 7 trustee, as plaintiff, has initiated this adversary proceeding to retain all of the net proceeds from the sale of the debtor’s property located at 5154 Murfrees-boro Road. Before the court is the trustee’s motion for summary judgement seeking an order granting a judgement in her favor as a matter of law. For the reasons stated in this memorandum, the court finds that the trustee’s motion should be granted.

II. FINDINGS OF FACT

The following relevant facts are not in dispute. On February 1, 1987, H. Truman Gee (the debtor), Elizabeth P. Gee (the debt- or’s wife), and Wise Moving Company, Inc. (the debtor’s business) entered into a Sales Agreement with Phillip E. Daniel (the defendant) and Daniel Moving & Storage, Inc. (Daniel’s business). Under the agreement, the debtor and his wife agreed to transfer to Daniel a one-half interest in certain real property at 5154 Murfreesboro Road, being the location of Wise Moving Company. In exchange, Daniel agreed to make a cash payment of $22,300 and assume certain liabilities of Wise Moving Company.

The debtor did not execute or deliver a deed of conveyance granting Daniel the one-half interest in the property. Further, no instrument evidencing such conveyance was recorded in the Register’s Office for Rutherford County, Tennessee, where the property was located. Nevertheless, subsequent to the agreement, Daniel took exclusive control over the property and paid the liabilities of Wise Moving Company assumed under the agreement.

On October 19,1987, the debtor sued Daniel in Rutherford County Chancery Court to compel Daniel to consent to the sale of the property to a prospective buyer, Donelson [316]*316Associates. On November 12, Daniel removed the case to federal district court. On December 21, Daniel filed a counter complaint seeking to require the debtor and his wife to deliver a deed to the one-half interest in the property as agreed to in the Sales Agreement.

On May 9, 1989, the debtor and his wife divorced. On September 11, 1989, the debt- or’s wife quitclaimed her entire interest in the subject property to the debtor pursuant to their divorce decree.

On September 22, 1989, Daniel filed an Abstract of Counter Complaint with the Register of Deeds of Rutherford County. On October 2, Daniel also locally filed a Notice of Lien Lis Pendens. Through these filing, Daniel attempted to give notice of the relief he sought in the federal court counter complaint described above. On October 4, the debtor filed Chapter 11 bankruptcy.

The debtor initiated a complaint against Daniel on August 6, 1990 to obtain approval from the court to sell the property and distribute the proceeds. On October 15, 1990, the property was sold pursuant to an agreed order between the debtor and Daniel. The sale generated net proceeds of $138,221.11, which were placed in escrow. The final issue for resolution of this complaint was to determine how the sale proceeds should be distributed. On December 19, the court rendered a telephonic decision construing the Sales Agreement and ordering that its terms be enforced. As such, the court ordered that Daniel be paid $94,042.04 and the debtor the remaining $44,179.07.

On January 3, 1991, the case was converted to a Chapter 7, and J. Michael Combs was appointed trustee. On January 25, the debt- or filed a motion to alter or amend the court’s December 19th judgement. In an agreed order on March 8, the trustee and Daniel agreed that $87,000 would be released out of escrow to Daniel. The remainder of funds in escrow were to be paid over to the trustee. However, on March 21, the court ordered that all sale proceeds held in escrow be paid to the trustee until the claims of the trustee to these proceeds was resolved.

On May 13, 1992, the trustee filed a complaint against Daniel claiming that the trustee was entitled to retain all of the net sale proceeds. In April of 1993, Susan R. Limor was appointed trustee upon Combs’ withdrawal. On August 23, 1993, Limor, as trustee, moved for summary judgment on all issues raised in the May 13 complaint.

III. CONCLUSIONS OF LAW

A, Summary Judgement Standard

Bankruptcy Rule 7056 states that Federal Rule of Civil Procedure 56, governing summary judgments, applies in adversary proceedings. Rule 56 provides:

The [summary] judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Fed.R.Civ.P. 56(c) (West 1993).

Rule 56(c) sets forth a two-pronged test. The first question is whether there is a genuine dispute regarding a fact that is material to the case. The second question is, if there is no factual dispute, whether the moving party is entitled to a judgment under the law.

The court finds no dispute regarding the material facts of this case as set forth above. Further, the court finds that the trustee is entitled to a judgement as a matter of law regarding the issues raised in the trustee’s complaint.

B. Arguments

The trustee, as plaintiff, contends that pri- or to filing bankruptcy, the debtor never conveyed a one-half interest in the 5154 Mur-freesboro Road property as he agreed to do in the Sales Agreement. Consequently, the debtor retained full ownership of the property at the time of his bankruptcy filing. The property thus became property of the bankruptcy estate upon the debtor’s filing. Alternatively, the trustee argues that, if a conveyance did occur, the trustee has rights superi- or to those of Daniel pursuant to the avoidance powers of 11 U.S.C. § 544. The trust[317]*317ee, therefore, is entitled to retain all of the net sale proceeds generated from the sale of the property.

Daniel, as defendant, contends that the debtor transferred a one-half interest in the property to him prior to the debtor’s bankruptcy filing. Daniel argues that the Sales Agreement, the local filing of the Abstract of Counter Complaint and'the Notice of Lien Lis Pendens, and his possession of the property effectively transferred this interest to him. Since this transfer took place pre-petition, Daniel’s one-half interest did not become property of the bankruptcy estate. As such, Daniel claims that he should be paid the sale proceeds payable to him pursuant to this court’s December 19, 1990 judgement and the March 8, 1991 agreed order.

C. Discussion

The first issue entitled to summary judgment is whether the execution of the Sales Agreement, the local filing of the Abstract of Counter Complaint and the Notice of Lien Lis Pendens, and Daniel’s possession of the property constituted a conveyance under Tennessee law. The court finds that a conveyance under Tennessee law did not occur between the parties.

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Cite This Page — Counsel Stack

Bluebook (online)
166 B.R. 314, 1993 Bankr. LEXIS 2142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/limor-v-daniel-in-re-gee-tnmb-1993.