Bavely v. Croucher (In re Chambers)
| Decision Date | 03 June 2022 |
| Docket Number | 19-10309,Adv. 20-1009 |
| Parties | In re: TONYA GAIL CHAMBERS Debtor v. BARBARA CROUCHER Defendant E. HANLIN BAVELY, TRUSTEE Plaintiff |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
This opinion is not intended for publication.
This matter is before this Court on the cross-motions for summary judgment filed by Plaintiff-Trustee E. Hanlin Bavely ("Trustee") and Defendant Barbara Croucher ("Ms. Croucher") [Docket Numbers 74 and 76]. This Court also considered the parties' responsive and supportive filings at Docket Numbers 77, 78, 79, 80, 81 and 82.[1]
In October of 2016, more than two years prior to her bankruptcy filing, Debtor Tonya Gail Chamber ("Debtor") transferred her interest in real property to the defendant, Ms. Croucher. After the bankruptcy filing, the Trustee filed an action to avoid the transfer as a fraudulent transfer under the Bankruptcy Code and the Ohio Uniform Fraudulent Transfer Act. The parties filed cross-motions for summary judgment disputing whether the Trustee meets his burden of proving the elements necessary to establish a fraudulent transfer.
Upon review of the evidence presented on summary judgment, this Court concludes that genuine issues of material fact exist regarding whether the Debtor received reasonably equivalent value for the transfer, whether the Debtor was insolvent at or near the time of the transfer, and whether the Debtor intended to incur, believed, or reasonably should have believed that she would incur debts beyond her ability to pay. Accordingly, this Court denies the parties' cross-motions for summary judgment on these issues. However, the undisputed evidence does establish that the Debtor was paying her debts as they became due on or around the time of the 2016 Conveyance. Accordingly, the Trustee has failed to establish a presumption of insolvency under Ohio Rev. Code § 1336.02(A)(2) and Ms. Croucher is granted partial summary judgment on that issue.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a) and 1334, and the standing General Order of Reference in this District. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Both parties consent to this Court entering final orders and judgment in this matter [see Docket Numbers 25 and 26].
On September 1, 2009, the Debtor, Ms. Croucher and Ms. Croucher's son, Gary M. Mitchell, Jr. ("Mr. Mitchell"), recorded a land installment naming them as joint purchasers of real estate with the street address of 1581 Hamilton Richmond Road, Hamilton, Ohio 45013 (the "Property") [Docket Number 74, Ex. 28 (the "Land Installment Contract")]. At the time of entering the Land Installment Contract, Mr. Mitchell and the Debtor were in a marital-like relationship residing together, sharing income and expenses, and raising their daughter [Docket Number 76, Ex. 2, Affidavit of Gary M. Mitchell ("Mitchell Aff."), ¶ 2]. After entering the Land Installment Contract, the Debtor, Mr. Mitchell and their daughter lived in one of the two dwellings on the Property and Ms. Croucher lived in the other [Docket Number 76, Ex. 1, Affidavit of Barbara Croucher ("Croucher Aff."), ¶ 3; Docket Number 74, Ex. 25, Deposition of Debtor Tonya Chambers taken July 12, 2021 ("Debtor Depo."), pp. 145-47].
Per the terms of the Land Installment Contract, the purchase price of the Property was $155,000.00 and the purchasers were to pay $5,000.00 as a down payment and finance the remaining $150,000.00 of the purchase price at a 5.25% interest rate [Docket Number 74, Ex. 28]. To pay the financed portion, the contract required the purchasers to pay $1,495.82 per month beginning on October 1, 2009 with a maturity date of August 31, 2024 [Id.].
While the Debtor and Mr. Mitchell were named as two of the three purchasers in the contract, Ms. Croucher attests that she alone paid the $5,000.00 down payment and made all of the monthly payments due under the Land Installment Contract from September of 2009 until November 14, 2014 [Croucher Aff., ¶¶ 4 and 6]. Around November of 2014, Ms. Croucher attests that she paid the remaining balance owed under the Land Installment Contract, approximately $110,000.00, out of her own funds [Id., ¶ 5]. Ms. Croucher further states that she paid all costs associated with the Property including the taxes, insurance, water bills, security and repairs from her own funds [Id., ¶¶ 7-12]. That Ms. Croucher alone paid the purchase price and the costs associated with the Property is further supported by the statements of Mr. Mitchell [Mitchell Aff., ¶¶ 4-8]. The Debtor disputes these statements and attests that her income was put into a joint account or "pot" that was used to pay for the Property and for expenses related to the Property [Debtor Depo., pp. 114-118, 147-48].
Following the payment of the balance due under the Land Installment Contract, a survivorship deed was signed on November 26, 2014 conveying the Property from the seller named in the Land Installment Contract to the Debtor, Ms. Croucher and Mr. Mitchell jointly and in survivorship [Docket Number 74, Ex. 29].
In 2016, it became clear to Ms. Croucher that the Debtor and Mr. Mitchell would no longer remain in a marital-like relationship and that the Debtor would reside elsewhere [Croucher Aff., ¶ 13]. Ms. Croucher asked the Debtor to transfer her interest in the Property to Ms. Croucher alone [Id.]. On October 11, 2016, the Debtor conveyed her interest in the Property to Ms. Croucher by quit claim deed recorded that same date ("the 2016 Conveyance") [Docket Number 74, Ex. 30]. The papers were signed at a U.S. Bank with Ms. Croucher, Mr. Mitchell, the Debtor, their daughter, and a representative of the bank present [Debtor Depo., pp. 113-14]. Following the 2016 Conveyance, the Debtor continued to live at the Property until February 1, 2017 at which time she moved out and split up with Mr. Mitchell [Debtor Depo., pp. 108-110].
The Debtor did not receive any money from Ms. Croucher in exchange for the conveyance of her one-third interest in the Property [Docket Number 74, Ex. 31, Transcript of § 341 Meeting held February 28, 2019 ("341 Mtg. Tr."), pp. 13-18]. The evidentiary materials presented on summary judgment reveal questions regarding whether or not the Debtor was intimidated by Ms. Croucher and Mr. Mitchell into making the conveyance for no money [Compare 341 Mtg. Tr., pp. 18, 21-22 to Ms. Croucher Aff., ¶ 14; Mr. Mitchell Aff., ¶ 17]. However, Ms. Croucher attests that the Debtor's conveyance was voluntary and, in exchange for the transfer, Ms. Croucher refrained from seeking contribution from the Debtor for all payments made for her benefit under the Land Installment Contract as well as payments towards the Property's taxes and maintenance [Croucher Aff., ¶ 15]. In addition, Ms. Croucher attests that, in exchange for the transfer, she allowed the Debtor to continue to reside on the Property for the period of October 11, 2016 through February 1, 2017 without having to pay rent or utilities [Id., ¶ 16]. The Debtor confirms that she was not asked to pay rent during the period following the conveyance until she left the Property [Debtor Depo., p. 149]. Ms. Croucher calculates that the value of rent for this time period is $1,700 per month totaling $6,800 [Croucher Aff., ¶ 16].
At the time of the 2016 conveyance from the Debtor to Ms. Croucher, the value of the Property was $224,230.00 according to the Butler County Auditor's valuation [Croucher Aff., ¶ 13]. The Property was valued at $251,860.00 by the Butler County Auditor in 2020 [Docket Number 74, Ex. 32].
The Debtor was 49 years old at the time of her July 2021 deposition so was in her early to mid-40's at the time of the 2016 Conveyance [Debtor Depo., p. 15]. She has an 11th grade education and did not have a driver's license until she turned 44 [Id., pp. 16, 39].
While the Debtor was living on the Property in 2016, the Debtor was employed in two jobs [Debtor Depo., p. 48]. The first job was with Mr. Mitchell in his bathtub reglazing and remodeling business, Absolute Magic Remodeling ("Absolute") [Debtor Depo., pp. 43-45]. The Debtor did not receive a formal paycheck from her job at Absolute [Debtor Depo. pp. 44-45, 117, 155]. Instead, all money received from the Absolute remodeling jobs went into a joint account where it was used to pay business and personal expenses [Id.]. Her other position was a part-time job at Bridges Sportwear working five to ten hours a week in 2016 making approximately $12.00 per hour. [Debtor Depo., pp. 46-48]. The Debtor further stated that she received about $700 in social security disability payments for her daughter starting at the time of her daughter's birth [Debtor Depo., p. 159]. However, those payments ended in 2015 when her daughter no longer met the criteria to continue to receive the disability payments [Id.]. This money also went into the same "pot" or joint account during the time it was received [Id., 159-60].
In November of 2016, the Debtor stopped working with Mr. Mitchell at Absolute and in December of 2016 started working at Takumi Stamping making about $13.75 per hour [Id., pp. 41-44]. She worked at Takumi full-time until a work related injury in July of 2020 and is currently on medical leave [Debtor Depo. pp., 41-43].
The Debtor's income, according to her federal...
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