Walker v. Lee (In re Rounds)

229 B.R. 758, 1999 Bankr. LEXIS 359
CourtUnited States Bankruptcy Court, W.D. Arkansas
DecidedJanuary 15, 1999
DocketBankruptcy No. 96-80361
StatusPublished
Cited by4 cases

This text of 229 B.R. 758 (Walker v. Lee (In re Rounds)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walker v. Lee (In re Rounds), 229 B.R. 758, 1999 Bankr. LEXIS 359 (Ark. 1999).

Opinion

MEMORANDUM OPINION

ROBERT F. FUSSELL, Bankruptcy Judge.

I. INTRODUCTION

Pending before the Court is Creditor-Petitioner Calvin Walker, Jr.’s (“Walker”) April 28,1998 Petition to set aside the Respondent Trustee’s (“Trustee”) sale to the Respondent Loftins (“Loftins”) of 3.61 acres of land in Carroll County, Arkansas. For the reasons stated below, Walker’s Petition is GRANTED. The sale, which this Court approved on December 22, 1997 and confirmed on January 22,1998, is hereby SET ASIDE.

II. JURISDICTION

This Court has jurisdiction over the pending matter pursuant to 28 U.S.C. § 1334. Further, the above is a core proceeding with[760]*760in 28 U.S.C. § 157(b)(2)(N) (orders approving sale of property).1

The following Memorandum Opinion constitutes findings of fact and conclusions of law in accordance with Bankruptcy Rule 7052.

III. BACKGROUND FACTS

The debtor in the bankruptcy underlying this dispute is Gary Edward Rounds (“Rounds”), who once owned around 109 acres of land in Carroll County. Rounds testified2 thát he and the “creditor” at issue in this case, Calvin Walker, Jr., had been friends since the two were around thirteen years old. Since that time, the men saw each other regularly. Additionally, Mr. Walker allegedly helped Mr. Rounds, over the course of some years, on Mr. Rounds’s farm and in his sanitation business.

This controversy is rooted in Mr. Rounds’s purported oral conveyance, in 1991, of a 3.61-acre portion of the 109-acre tract to Mr. Walker (“Walker land”),3 allegedly in return for Mr. Walker’s labor. Mr. Rounds estimated that he owed Mr. Walker, for the work Walker had performed for him in the past, somewhere between $ 10,000.00 - 12,000.00. Mr. Walker testified that he considered that the land would constitute payment in full for this debt. Walker further testified that immediately after he and Rounds came to this oral understanding, Walker commenced clearing the 3.61 acres and cutting a road onto the property.

Gary Rounds first filed in Chapter 13 bankruptcy on March 25, 1994.4 At that time, he did not list Mr. Walker as a creditor.5

Later that year, sometime in December 1994, both Walker and Rounds testified that Rounds approached Walker to reduce to writing their 1991 oral agreement concerning the Walker land.6 Mr. Walker asserted that both he and Mr. Rounds together prepared what they styled as a “Temporary Ownership Deed” (“Deed”). Mr. Walker drew up the map contained in the “Deed”; Mrs. Jamie Walker (Mr. Walker’s wife)7 typed the text accompanying it; and the document was duly [761]*761witnessed, notarized, and dated December 14,1994.

The text of the “Deed” is as follows:

TEMPORARY OWNERSHIP DEED
Be it known that Calvin Walker, Jr. has worked for me on my farm between Berry-ville and Huntsville on Highways 412 and 21 and helped me on occasion in my sanitation business. I give him the fenced-in acreage as shown by the strip map below as pay [sic] for the described work. Until my farm is paid off, this temporary ownership deed will be his promissory note showing this acreage on Highways 412 and 21 in the Northeast corner of the 80 acres of my farm adjoining the Christmas Tree Farm is paid in full. When my farm is paid off, I will issue him a proper deed— paid in full. Fenced-in area on map is acreage. Fence not fully complete as of this date, but will be. — Fenced-in area is 435 ft. on North side; 455 ft. on East side; 375 ft. on South side; and 420 ft. on West side.
M
Gary E. Rounds

The parties did not record their “Deed.”8 Nevertheless, after signing it, Mr. Walker testified that he obtained a survey, for which Gary Rounds paid, and Walker completed the fence referred to in the “Deed.”

From the time of the 1991 oral agreement until March 1998, when Walker testified that he first learned of the subsequent sale of the same Walker land to the Respondent Loftins, Mr. Walker and his wife testified that Walker built a stone entry, leading from the road he had cut onto the property, and installed a metal gate in it emblazoned with a “W”; put in a pond, flower beds, and an outhouse; and very nearly completed construction of a substantial cabin.

As noted, in December of 1995, Rounds’s first Chapter 13 case was dismissed for nonpayment. He refiled, again in Chapter 13, in April of 1996. In June of that year, his case was converted to a Chapter 7 and John Terry Lee, one of the respondents in the instant matter, was appointed Chapter 7 Trustee.

Just over a week after the Chapter 7 conversion, Mr. Rounds filed an amendment to schedules on which Calvin Walker, Jr.’s name and address appear in the bankruptcy record for the first time. That document is styled as “Second Amendment to Petition, Schedules and Statement of Financial Affairs,” filed with this Court on June 25,1996. Included in the first item in that document is debtor’s amendment to Schedule G, “to add the following executory contracts.” Listed in that grouping is the Rounds-Walker agreement concerning the Walker land now at issue. The amending document characterizes Mr. Walker’s interest as lodged in the “Temporary Ownership Deed,” a copy of which was appended and incorporated by reference. The certificate of service, accompanying the amending document and dated the same day, includes both the Trustee, John T. Lee, and his attorney Jill Jacoway.9

Mr. Lee’s administration of the estate proceeded. On August 13, 1996, he applied for approval of the sale of forty acres of land (“Loftin land”) adjacent to the contested 3.61 Walker acres, for a purchase price of $ 30,-000.00, to the Respondents Loftins.

At one time, the Loftins, Rounds, and Walker appear to have been each others’ friends. Walker and Rounds both so testified. Rounds testified that he also owed Mr. Loftin money. Thus, Mr. Rounds testified, to satisfy that debt, Rounds permitted the Loftins to run cattle on the forty acres neighboring the contested Walker tract. Both Jim and Anna Loftin testified at the September 7th hearing that they had spoken to Calvin Walker, on the land, numerous times. The Loftins, thus, appear to have been closely familiar with the land at issue and they also knew of Mr. Walker’s presence on it.10

[762]*762The Trustee’s application of sale regarding the Loftin land represented that he had provided notice of the sale to all creditors and parties in interest, by first-class mail.11 The certificate of service in the Court file further specifies that Trustee Lee mailed this notice to the creditors listed on the mailing matrix. However, since Calvin Walker, Jr.’s name and address did not appear on this matrix,12 needless to say, he did not receive this notice or any of the other like ones.

Trustee Lee has conceded in a brief that Mr.

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229 B.R. 758, 1999 Bankr. LEXIS 359, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walker-v-lee-in-re-rounds-arwb-1999.