Yoppolo v. Lindecamp (In re Fox)

277 B.R. 740
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedMarch 22, 2002
DocketNo. 00-3264
StatusPublished
Cited by4 cases

This text of 277 B.R. 740 (Yoppolo v. Lindecamp (In re Fox)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yoppolo v. Lindecamp (In re Fox), 277 B.R. 740 (Ohio 2002).

Opinion

MEMORANDUM OPINION AND DECISION

RICHARD L. SPEER, Bankruptcy Judge.

This cause comes before the Court upon the DefendantyDebtor’s Motion for Summary Judgment, Memorandum in Support, and Reply; and the Plaintiff/Trustee’s Cross Motion for Summary Judgment, Memorandum in Support, and Memorandum in Opposition to the Defendant’s Motion for Summary Judgment. This Court has now had the opportunity to review the arguments of Counsel, the exhibits, as well as the entire record of the case. Based upon that review, and for the following reasons, the Court finds that the Plaintiffs Motion for Summary Judgment should be Denied, and that the Defendant’s Motion for Summary Judgment should be Granted.

FACTS

The uncontested facts of this case show that the Defendant, Charles Lindecamp, and the Debtor, John Fox (hereinafter referred to respectively as the “Defendant” and the “Debtor”), have been very good friends since they were quite young. As a part of this friendship, both the Defendant and the Debtor share a common interest together; namely, the recreational activity of hunting and shooting. In order to further pursue these interests, both the Defendant and the Debtor began, in the late 1960’s, to practice shooting on property owned by the Debtor’s parents; to wit: 5 /£ acres of property located on Seminary Road in Milan, Ohio. This endeavor eventually led to the formation of a shooting club at the Seminary Road property in which an admission fee would be charged.

In addition to the shooting club, the Debtor also started his own retail gun business which he named “Firearms Unlimited.” Although the exact figures were not presented to the Court, it is apparent that this business took in considerably more money than the shooting range. In fact, at its height, the facts of this case [742]*742show that the Debtor’s gun business took in over a million dollars in annual revenue. The Debtor also stated that although the revenue generated from his retail gun business was commingled with those proceeds received from the shooting range, the two businesses were run completely separately from each other. In this respect, it is clear that, except as an occasional customer, the Defendant was in no way involved in the Debtor’s retail gun business.

In the years following the formation of the shooting club, which was eventually named the “Fox Rifle and Pistol Club,” the Defendant became very involved in the club’s development. In this regard, the evidence presented in this case clearly shows that the Defendant built most of the infrastructures (i.e., benches, a shelter and targets) at the shooting club. In addition, the Defendant handled most of the general labor activities at the shooting range. Although it appears that the Defendant put in a considerable amount of time at the shooting club, the Defendant consistently stated that he never expected to receive any compensation for his efforts. Instead, the Defendant explained that his work at the shooting club — which spanned approximately 30 years- — was done “of his own initiative” and “because he liked it.” (Deposition of Defendant at pgs. 37, 39).

Notwithstanding the alleged volunteer nature of the Defendant’s work at the shooting range, the Defendant was initially paid, at least in part, for his work at the range. Such payments, however, ceased in 1986 when the Debtor, instead of actually paying the Defendant for his work, simply kept track of the number of hours that the Defendant spent working at the shooting range. Based upon this practice, the Debtor subsequently agreed to sign three promissory notes in favor of the Defendant: a note for Forty-nine Thousand dollars ($49,000.00) on June 1, 1990; a note for Seventeen Thousand Five Hundred dollars ($17,500.00) on January 1, 1996; and a note for Thirty-one Thousand Five Hundred dollars ($31,500.00) on January 1, 1999. These amounts, according to the Debtor, were figured based upon an hourly salary of Six dollars ($6.00) per hour. Also, during this same time frame, discussions between the Debtor and the Defendant took place regarding the exact nature of the Defendant’s relationship with the shooting range business. This relationship, according to the Debtor, would involve the Defendant becoming a “partner” in the shooting range business. In addition, both the Defendant and the Debtor apparently agreed that the Defendant would receive an interest in the shooting range business, if not immediately, then out of the proceeds of the sale of the property if the property was ever sold. These agreements, however, were never formalized or otherwise placed in writing.

In 1998, individuals with property in the vicinity of the shooting range commenced a suit against the Debtor who, in 1992, had become the sole owner of the Seminary Road property. The basis for the lawsuit was that the operation of the shooting range constituted a nuisance. In direct response to the suit, the Defendant fully cooperated with the Debtor in the Debtor’s efforts to win the lawsuit; for example, the Defendant, although not actually called, was to be a witness in the pending litigation. In addition, the Defendant sought to ameliorate any problems with the shooting range by making certain modifications to the Debtor’s property such as fencing in the range and heightening a wall to increase the safety of the range. These efforts, however, eventually proved to be unsuccessful, when on January 11, 2000, an injunction was entered by the Common Pleas Court of Erie County, Ohio which effectively shut down the shooting range.

[743]*743In addition to the above lawsuit, the Defendant, on December 9, 1999, also commenced a lawsuit against the Debtor in order to recover on those promissory notes written by the Debtor in the Defendant’s favor. The Debtor, although somewhat surprised by the lawsuit, did not in any way defend in the action. In bringing the suit, the Defendant explained that he was unhappy with the way in which the Debtor was handling the state court nuisance suit. As a consequence, the Defendant related that the objective of his lawsuit was to secure his interest in the Seminary Road property, and thus recoup something for the years of work he had done at the property. At this particular juncture, it is clear that the Defendant was aware of the Debtor’s deteriorating financial situation. Furthermore, the Defendant stated that by the Spring of 2000, he knew that the Debtor was contemplating filing for bankruptcy relief. In this respect, it was pointed out to the Court that the Debtor had first seen an attorney regarding bankruptcy in the fall of 1999.

On March 13, 2000, the Defendant, after having first obtained a judgment against the Debtor by default, secured a judgment lien on the Seminary Road property owned by the Debtor. Exactly 115 days later, the Debtor filed a petition in this Court for relief under Chapter 7 of the United States Bankruptcy Code. The PlaintifftTrustee, who is the duly appointed trustee of the Debtor’s bankruptcy estate, then filed the instant Complaint to avoid the Defendant’s judgment lien on the basis that its transfer to the Defendant constituted a preference within the meaning of § 547 of the Bankruptcy Code. With regards to the Trustee’s cause of action under this Code section, the Parties’ respective motions for summary judgment presented one issue for this Court to decide: Whether, at the time the Defendant obtained his judgment hen, the Defendant was an “insider” as that term is defined in § 101(31) of the Bankruptcy Code.

LAW

§ 547. Preferences

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Cite This Page — Counsel Stack

Bluebook (online)
277 B.R. 740, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yoppolo-v-lindecamp-in-re-fox-ohnb-2002.