Underwood v. Selent (In re Underwood)

568 B.R. 785
CourtDistrict Court, E.D. Michigan
DecidedMarch 13, 2017
DocketCivil Case No. 15-12563; Bankr. Case No. 06-55754; Adv. Pro. No. 14-4966
StatusPublished
Cited by1 cases

This text of 568 B.R. 785 (Underwood v. Selent (In re Underwood)) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Underwood v. Selent (In re Underwood), 568 B.R. 785 (E.D. Mich. 2017).

Opinion

OPINION AND ORDER

LINDA V. PARKER, U.S. DISTRICT JUDGE

This matter is before the Court as an appeal from the United States Bankruptcy Court for the Eastern District of Michigan, the Honorable Thomas J. Tucker presiding. Debtor and Appellant Glenn Richard Underwood (“Underwood”) appeals two decisions entered by Judge Tucker in an adversary proceeding Underwood filed against several of his creditors in his Chapter 11 bankruptcy case and the bankruptcy liquidating trustee, Gene R, Kohut (“Liquidating Trustee”). Specifically, Underwood challenges Judge Tucker’s December 10, 2014 order granting a motion to dismiss filed by Patricia Selent and Lynda Carto and dismissing the first three counts of Underwood’s adversary complaint. Underwood also challenges Judge Tucker’s July 9, 2015 order adjudicating the fourth count of Underwood’s complaint, requiring certain property re-deeded to the Liquidating Trustee, and allowing the Liquidating Trustee to sell any of the properties as permitted by' the confirmed plan in Underwood’s Chapter 11 case, as modified by an October 14, 2008 order. For the reasons that follow, this Court affirms Judge Tucker’s decisions.

[789]*789I. Standard of Review

The bankruptcy court’s findings of faet are reviewed under the clearly erroneous standard. Fed. R. Bankr. P. 8013. “A finding of fact is clearly erroneous Vhen although there is evidence to support it, the reviewing court, on the entire evidence, is left with the definite and firm conviction that a mistake has been committed.’” United States v. Mathews (In re Matthews), 209 B.R. 218, 219 (6th Cir. BAP 1997) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)). The bankruptcy court’s conclusions of law are reviewed de novo. Nuvell Credit Corp. v. Westfall (In re Westfall), 599 F.3d 498, 501 (6th Cir. 2010). This means the Court reviews the law independently and gives no deference to the conclusions of the bankruptcy court. Myers v. IRS (In re Meyers), 216 B.R. 402, 403 (6th Cir. BAP 1998). “[I]f a question is a mixed question of law and fact, then [the reviewing court] must break it down into its constituent parts and apply the appropriate standard of review for each part.” Investors Credit Corp. v. Batie (In re Batie), 995 F.2d 85, 88 (6th Cir. 1993).

II. Factual and Procedural Background

This bankruptcy matter arises from an Oakland County Circuit Court case that Selent, Carto, and other family members of Underwood (i.e., the defendants in the bankruptcy adversary case, but for the Liquidating Trustee) filed in 2004 against Underwood and Underwood Property Management Company, a sibling partnership that owned and managed numerous real estate properties. See Underwood v. Carto, No. 315949, 2014 WL 4263229, at *1 (Mich. Ct. App, Aug. 28, 2014). The 2004 lawsuit resulted in a judgment of $392,752, plus interest, against Underwood and in favor of the plaintiffs (hereafter “Judgment Creditors”). (Id.) To protect himself from the judgment while he pursued his state court appellate remedies, Underwood filed a Chapter 11 bankruptcy petition .on October 30, 2006.

On July 24, 2007, the bankruptcy court entered an order confirming Underwood’s bankruptcy plan. Order, In re Underwood, No. 06-55754 (Bankr. E.D. Mich. July 24, 2007), ECF No. 114. The bankruptcy plan provides that the Judgment Creditors possess allowed claims against Underwood “only to the extent that the Judgment Creditors ... are deemed to have [■] claim[s] against [Underwood] after all appellate rights are exhausted by [Underwood] and the claims by the Judgment Creditors ... .against [Underwood] are both final and non-appealable under the laws of the State of Michigan.” Id. at 2-3. The amount of the claims, the plan states, is in the amount determined by the Michigan courts.1 Id. at 4. The bankruptcy plan requires Underwood to escrow and maintain a balance of no less than $450,000 with Bank of America by May 31, 2008, for payment of the Judgment Creditors’ allowed unsecured claims.2 Id. at 3. The plan further requires Underwood to make “[p]ayment to the Judgment Creditors ... by the later of: (1) May 31, 2008; or (2) ten (10) days after all appellate rights are exhausted by [Underwood] and the claims by the Judgment Creditors .... against [Underwood] are both final and non-ap-pealable under the laws of the State of Michigan (‘Disbursement Date’).” Id.

[790]*790Pursuant to a stipulation between Underwood and the Judgment Creditors, the bankruptcy plan was modified on October 13, 2008. Stip. & Order, id., ECF No. 169. The modified plan inter alia reduces the amount of the escrow balance and requires Underwood to execute quit claim deeds to the Liquidating Trustee with respect to the following properties: (a) 6085 and 6185 White Lake Road, White Lake, MI; (b) 9230 Dixie Hwy. (with four lots), Clark-ston, MI; (c) 9237 Hillcrest, Clarkston, MI; 11875 Milford, Holly, MI; and (d) 137 Hudson and 158 Summit (4 units), Pontiac, MI. Id. at 2-3. The modified plan orders the Liquidating Trustee to “hold the quit claim deeds in escrow and not record the same until twenty (20) days after all appellate rights are exhausted by [Underwood] and the claims by the Judgment Creditors ... against [Underwood] are both final and non-appealable under the laws of the State of Michigan.” Id. at 3. The modified bankruptcy plan provides that, after such time, the Liquidating Trustee may record the deeds and “to the extent reasonably necessary ... effectuate the sale of such real property in order to satisfy any outstanding obligation to the Judgment Creditors on Appeal or the Liquidating [Trustee].” Id.

In June 2008, the Michigan Court of Appeals ruled on Underwood’s appeal of the Oakland County Circuit Court judgment. Carto v. Underwood Prop. Mgmt. Co., No. 272747, 2008 WL 2389493 (Mich. Ct. App. June 12, 2008). The court of appeals affirmed the trial court’s grant of summary disposition in favor of the Judgment Creditors and against Underwood, but vacated the trial court’s damages award. Id. The court remanded the matter to the trial court for a recalculation of damages. Id.

On remand, the trial court appointed a certified public accountant (“CPA”) as an expert to assist it in properly calculating the damages. Underwood, 2014 WL 4263229, at *1. Based on the CPA’s calculations, the trial court issued a revised judgment of $200,823 against Underwood on November 15, 2010, Id. Underwood filed three unsuccessful motions for the trial court to reconsider its revised judgment and one unsuccessful motion for relief from judgment. Id, Underwood appealed the trial court’s decisions to the Michigan Court of Appeals, without success as well. Id. and n.3.

Underwood filed additional lawsuits in the Michigan courts seeking to overturn the Oakland County Circuit Court’s judgment. Id.

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Bluebook (online)
568 B.R. 785, Counsel Stack Legal Research, https://law.counselstack.com/opinion/underwood-v-selent-in-re-underwood-mied-2017.