Agin v. Resendes (In re Borba)
| Decision Date | 07 April 2016 |
| Docket Number | Adv. P. No. 14–1132,Case No. 14–11614–JNF |
| Citation | 549 B.R. 428 |
| Parties | In re Lucy Borba, a/k/a Lucy F. Resendes, Debtor Warren Agin, Chapter 7 Trustee, Plaintiff, v. Sende Resendes, Defendant |
| Court | U.S. Bankruptcy Court — District of Massachusetts |
Warren E. Agin, Swiggart & Agin, LLC, Boston, MA, pro se.
Daniel Kostrzewa, Swiggart & Agin LLC, Boston, MA, for Plaintiff.
Gary W. Cruickshank, Law Office of Gary W. Cruickshank, Boston, MA, for Defendant.
The matter before the Court is the seven-count Complaint filed by the Chapter 7 Trustee of the estate of Lucy Borba (the "Debtor") against the Defendant, Sende Resendes (the "Defendant" or "Resendes"), who is the Debtor's older sister.1 The Defendant answered the Complaint, the parties filed a Joint Pretrial Memorandum, and the Court conducted a trial on February 9, 2016.
At the trial, three witnesses testified and 29 exhibits were accepted into evidence. The issue presented is whether the Trustee sustained his burden of proving that the Debtor's transfer of a one-half interest in property located at 630 Cohannet Street, Taunton, Massachusetts (the "Property") was voidable as either a constructively or intentionally fraudulent transfer under federal or state law. See 11 U.S.C. §§ 544, 548(a)(1)(A), (B), and Mass. Gen. Laws ch. 109A, §§ 5(a)(2), 6(a)and 5(a)(1).
In their Joint Pretrial Memorandum, the parties set forth numerous agreed facts which this Court has supplemented based upon the evidence adduced at trial. On April 10, 2014, the Debtor filed a Chapter 7 bankruptcy petition, although she testified that she contemplated filing a bankruptcy petition at the beginning of the year. The U.S. trustee appointed Warren E. Agin the interim Chapter 7 Trustee on April 11, 2014.
On May 19, 2014, less than six weeks after the Debtor filed her bankruptcy petition, Green Tree Servicing LLC filed a Motion for Relief from the Automatic Stay with respect to the Debtor's property located at 107 Tremont Street, Taunton, Massachusetts. It alleged that a note and mortgage it held had been in default since March 1, 2012. Neither the Debtor nor the Chapter 7 Trustee opposed the Motion, and, accordingly, this Court, on June 3, 2014, entered an order granting Green Tree Servicing LLC relief from the automatic stay. The Trustee subsequently filed a Notice of Abandonment with respect to the Tremont Street property on September 24, 2015.
On July 8, 2014, the Chapter 7 Trustee filed a request for a bar date for filing proofs of claim. The Court granted the request and established October 7, 2014 as the deadline for filing proofs of claim. Six creditors filed proofs of claim totaling $28,452.61. Neither Green Tree Servicing LLC nor the holder of a junior lien on the Debtor's Tremont Street property filed a proof of claim.
With respect to the merits of the Trustee's Complaint, Maria L. Gomes is the mother of the Debtor and her sister, the Defendant. Luis A. Gomes is the deceased stepfather of the Defendant and the Debtor. Manuel dosSantos conveyed the Property to Luis A. Gomes and Maria L. Gomes as tenants by the entirety and to the Defendant, Sendes [sic] D. Resendes, as joint tenants by deed, dated December 23, 1994, for a stated consideration of $119,900. The Defendant was a senior in high school at the time the deed was executed. She continues to reside in the Property; the Debtor resided in the Property until 2004.
Less than six months after the Defendant, her mother and step-father acquired the Property from Manuel dosSantos, the Defendant conveyed her interest in the Property to Luis A. Gomes and Maria L. Gomes as tenants by the entirety for a stated consideration of $1.00.3 On April 7, 1999, Luis A. Gomes and Maria L. Gomes conveyed the Property by Quitclaim Deed to themselves as Trustees of The Luis A. Gomes and Maria L. Gomes Family Trust for a stated consideration of $1.00. Luis A. Gomes died sometime in early 2003.
On July, 7 2003, Maria L. Gomes, as Trustee of The Luis A. Gomes and Maria L. Gomes Family Trust, transferred the Property to herself, the Defendant, and the Debtor as joint tenants with the right of survivorship. Less than two years later, on May 25, 2005, Maria L. Gomes, the Defendant and the Debtor transferred the Property by Quitclaim deed to the Defendant. On that same date, the Defendant refinanced the Property, executing a mortgage in favor of Mortgage Electronic Registration Systems, Inc. ("MERS") to secure a note in the sum of $95,000 in favor of American Mortgage Network, Inc.
In addition, on May 25, 2005, the date on which the Defendant became the sole owner of the Property, Elidio Camara conveyed property located at 107 Tremont Street, Taunton, Massachusetts to the Debtor for a stated consideration of $241,000. The Debtor and Matthew J. Borba executed a mortgage in favor of MERS to secure a note, executed only by the Debtor, to Homecomings Financial, LLC in the sum of $272,000 on the same day. On December 22, 2006, they executed an Open End Mortgage to MERS to secure a note to Homecomings Financial, LLC in the sum of $25,000.
The Defendant testified that her mother wished to be removed from the deed to the Property "to get healthcare." She also testified that the Debtor wished to be removed from the deed because "I believe her home time [sic]—first-time home buyer or something, I believe."
The Defendant, who resides in the Property with her mother, her husband, and the couple's two children, has made all the regular monthly mortgage payments since May 25, 2005. Indeed, the Defendant and her spouse, Ricardo Pereira, in addition to caring for Maria Gomes, who is 65 years old, does not speak English, and uses a cane, have paid all real estate taxes, made all insurance payments, and taken care of all repairs and expenses associated with the Property. The Property is assessed at $192,400 by the City of Taunton, although the Defendant testified that if she were to sell the Property she probably would ask no more than $180,000 for it. The Debtor has never contributed any money toward mortgage payments, real estate taxes, homeowner's insurance or upkeep for the Property.
On or about January 26, 2006, after the Defendant executed the mortgage to MERS with regard to the Property, but before she married Ricardo Pereira, she transferred the Property to herself and the Debtor as joint tenants by Quitclaim Deed for consideration of less than $1.00. The deed was not dated but it was recorded on January 26, 2006. The Defendant explained that her mother wanted her daughters to share ownership of the Property. The Defendant testified as follows:
The Debtor testified that she could not recall the reason for the January 2006 transfer.
Title remained in the names of the Defendant and the Debtor as joint tenants until August 15, 2012 when the Defendant and the Debtor transferred the Property to the Defendant by Quitclaim Deed for a stated consideration of $1.00. Both the Defendant and her husband, Ricardo Pereira, testified that the Debtor approached the Defendant about the transfer and did not provide them with any reasons for her decision. According to them, the Debtor did not discuss either her mortgages on the property located at 107 Tremont Street, Taunton, Massachusetts or any outstanding credit card debt.
As noted above, the Debtor filed a Chapter 7 petition on April 10, 2014. On Schedule A–Real Property, the Debtor disclosed that she has an interest in real estate located at 107 Tremont Street, Taunton, Massachusetts with a market value of $148,694.00, subject to liens securing debt of $300,497.89. In 2012, the City of Taunton Assessor's office valued the property located at 107 Tremont Street at $151,500.00. The Debtor recognized that she was "underwater" on her mortgages and had stopped making mortgage payments sometime in 2013, although in its Motion for Relief from the Automatic Stay Green Tree Servicing LLC set forth an earlier date of March 1, 2012.
The Debtor listed personal property with a value of $72,419.01 on Schedule B–Personal Property, approximately half of which she claimed exempt on Schedule C–Property Claimed as Exempt. The Debtor disclosed that her 401k retirement plan, to which she ascribed a value of $65,626.40, served as security for loans totaling $32,522.24. On Schedule F–Creditors Holding Unsecured Nonpriority Claims, the Debtor listed general unsecured claims in the amount of $45,650.69. On Schedules I and J–Current Income and Expenses of Individual Debtor(s), the Debtor disclosed that she was employed by "Roche Bros. Sudbury Farms" as a grocery clerk and had been so employed for twenty years. She also disclosed that her expenses exceeded her income by $733.21.
On her Statement of Financial Affairs, the Debtor did not list any transfers of property within the two years preceding the commencement of her Chapter 7 case. She, however, did list two collection actions by Discover Bank and Cache, LLC in her Statement of Financial Affairs that resulted in judgments in 2013. Aside from the transfer of her interest in the Property, the Debtor did not sell any assets between August 15, 2012 and April 4, 2014, or transfer any assets in excess of $1,000.00 in value.
The Debtor now lives in Norton, Massachusetts. She testified that she did not make payments toward the mortgage or expenses associated with the Property because she did not live there.
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