Church Joint Venture, L.P. v. Blasingame (In re Blasingame)
| Decision Date | 03 May 2018 |
| Docket Number | No. 17-8009,No. 17-8011,17-8009,17-8011 |
| Parties | IN RE: EARL BENARD BLASINGAME; MARGARET GOOCH BLASINGAME, Debtors. CHURCH JOINT VENTURE, L.P., Plaintiff-Appellant/Cross-Appellee, v. EARL BENARD BLASINGAME; MARGARET GOOCH BLASINGAME; THE BLASINGAME FAMILY RESIDENCE GENERATION SKIPPING TRUST, Defendants-Appellees/Cross-Appellants. |
| Court | U.S. Bankruptcy Appellate Panel, Sixth Circuit |
By order of the Bankruptcy Appellate Panel, the precedential effectof this decision is limited to the case and parties pursuant to 6th Cir. BAP LBR 8024-1(b). See also 6th Cir. BAP LBR 8014-1(c).
File Name: 18b0002n.06
On Appeal from the United States Bankruptcy Court for the Western District of Tennessee at Memphis.
No. 08-28289—Jennie D. Latta, Judge.
Before: HUMPHREY, OPPERMAN, and WISE, Bankruptcy Appellate Panel Judges.
ARGUED: Bruce W. Akerly, MALONE AKERLY MARTIN, PLLC, Dallas, Texas, for Appellant/Cross-Appellee. Michael P. Coury, GLANKLER BROWN, PLLC, Memphis, Tennessee, for Appellees/Cross-Appellants. ON BRIEF: Bruce W. Akerly, MALONE AKERLY MARTIN, PLLC, Dallas, Texas, for Appellant/Cross-Appellee. Michael P. Coury, GLANKLER BROWN, PLLC, Memphis, Tennessee, for Appellees/Cross-Appellants.
DANIEL S. OPPERMAN, Chief Bankruptcy Appellate Panel Judge. Church Joint Venture ("CJV") filed a complaint against E. Benard Blasingame, Margaret Gooch Blasingame (together the "Debtors"), and the Blasingame Family Residence Generation Skipping Trust (the "BRT")1 seeking turnover of a property interest relating to the real property at which the Debtors reside. The Debtors assert that their interest in the property is an equitable right to reside in the property for their life that is neither property of the bankruptcy estate nor subject to turnover. CJV asserts that the Debtors' interest is a transferrable legal life estate subject to turnover to the bankruptcy estate. The bankruptcy court held that the Debtors' interest was an equitable life estate and granted summary judgment to the Debtors. For the reasons that follow, the Panel AFFIRMS.
This opinion addresses two consolidated appeals. CJV's appeal lists the issue as whether the bankruptcy court erred in finding and concluding that the life estate grant in the trust instrument was an equitable life estate rather than a legal life estate. In the cross-appeal, the Debtors and the BRT raise two issues: (1) whether the bankruptcy court erred in failing to find that a warranty deed from the Debtors to the BRT transferred the property to the BRT; and (2) whether the bankruptcy court's failure to find that the warranty deed effectively transferred the property from the Debtors to the BRT resulted in the bankruptcy court giving an advisory opinion and acting without jurisdiction.2
The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Western District of Tennessee has authorized appeals to the Panel, and neither party has timely elected to have this appeal heard by the district court. 28 U.S.C. § 158(b)(6) and (c)(1). A final order of the bankruptcy court may be appealed as of right pursuant to 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1494, 1497 (1989) (citations omitted). An order granting summary judgment is a final order. U.S. Bank Nat'l Assoc. v. Barbee (In re Barbee), 461 B.R. 711, 712-13 (B.A.P. 6th Cir. 2011); Drown v. Nat'l City Bank (In re Ingersoll), 420 B.R. 414, 414-15 (B.A.P. 6th Cir. 2009).
A bankruptcy court's final order granting a motion for summary judgment is reviewed de novo. See Int'l Dairy Foods Ass'n v. Boggs, 622 F.3d 628, 635 (6th Cir. 2010). Likewise, the determination whether property is part of the bankruptcy estate is a question of law reviewed de novo. Spradlin v. Khouri (In re Bruner), 561 B.R. 397, 400 (B.A.P. 6th Cir. 2017) (citing Kitchen v. Boyd (In re Newpower), 233 F.3d 922, 927 (6th Cir. 2000)). "'Under a de novo standard of review, the reviewing court decides an issue independently of, and without deference to, the trial court's determination.'" Ingersoll, 420 B.R. at 415 (quoting Buckeye Check Cashing, Inc. v. Meadows (In re Meadows), 396 B.R. 485 (B.A.P. 6th Cir. 2008)). "'Summary judgment is proper if the evidence, taken in the light most favorable to the nonmoving party, shows that there are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law.'" Rogan v. Vanderbilt Mortg. & Fin., Inc. (In re Dorsey), No 13-8036, 2014 WL 888917 (B.A.P. 6th Cir. March 7, 2014) (quoting Menninger v. Accredited Home Lenders (In re Morgeson), 371 B.R. 798, 800 (B.A.P. 6th Cir. 2007)).
Importantly, under their counsel's signatures, the parties filed a Joint Pretrial Statement setting forth certain agreed facts. (Joint Pretrial Statement, Adv. No. 15-00339 ECF No. 11, February 12, 2016). CJV acknowledged certain stipulations at oral argument.3 The stipulations relevant to this appeal are:
(Joint Pretrial Statement at 8-9).
Some additional background information is useful in understanding this appeal. Prior to December 30, 1993, the Debtors owned 337 South Maple, Adamsville, Tennessee (the "Residence"). As of late 1993, the Debtors were indebted to a variety of lenders including Third National Bank of Nashville ("TNB"). The debt to TNB exceeded $4,000,000, and was secured by the Residence among other assets. TNB intended to foreclose on the Residence. On December 29, 1993, TNB indicated that it would release its lien on the Residence for a payment of $490,000.
On December 30, 1993, Mavoureen Blasingame ("Mavoureen"), Earl's mother, wired $490,000 to TNB, which acknowledged receipt on December 31, 1993. On December 30, 1993, Mavoureen also formed "The Blasingame Family Residence Generation Skipping Trust." Mavoureen is listed as the Grantor of the BRT on the trust document. The Debtors signed the document as co-trustees. The BRT's beneficiaries include the Debtors and their children Katherine G. Blasingame and E. Benard Blasingame, Jr. Contingent beneficiaries include Mavoureen Blasingame, Evelyn H. Gooch, Grace G. Henley, Will Henley, Rebecca Henley, Sarah Henley, Robert B. Gooch III, Laurie P. Gooch, Jennifer Gooch, Brian Gooch and Elizabeth Gooch, as well as several charitable organizations.
The record reflects a contract dated December 31, 1993 between the Debtors, as individuals, and the Debtors as co-trustees of the BRT for the sale of the Residence from the Debtors to the BRT. On December 31, 1993, the Debtors executed a warranty deed transferring the Residence to "The Blasingame Family Residence Trust."4 The warranty deed was recorded in McNairy County, Tennessee that day. The record also contains a promissory note dated December 31, 1993 listing the BRT as the maker and Mavoureen as payee in the principal amount of $460,000. Mavoureen forgave the debt between herself and the BRT over time. The Debtors lived at the Residence at all times since December 31, 1993.
On October 7, 2014, creditor CJV, acting derivatively on behalf of the Chapter 7 trustee, Edward L. Montedonico, commenced an adversary proceeding against the Debtors and the BRT (the "Life Estate Action"). In the Life Estate Action, CJV sought a declaratory judgment that the BRT granted a legal life estate to the Debtors, and that the legal life estate was property of the Debtors' bankruptcy estate, and thus also sought turnover of the legal life estate. The Debtors asserted that they only had an equitable right to reside in the property granted through the BRT. The parties filed cross-motions for summary judgment.
On January 10, 2017, the bankruptcy court entered its Order on Cross-Motions for Partial Summary Judgment (Adv. No. 15-00339 ECF No. 63). On February 21, 2017, the bankruptcycourt issued its Final Order Granting Defendants' Motion for Cross-Motion for Summary Judgment (Adv. No. 15-00339 ECF No. 68). CJV appealed and the Debtors filed a cross-appeal from these orders.
Section 541 of the Bankruptcy Code defines property of the bankruptcy estate as follows:
11 U.S.C. § 541(a)(1). Booth v. Vaughan (In re Booth), 260 B.R. 281, 285 (B.A.P. 6th Cir. 2001) (citing Butner v. United States, 440 U.S. 48, 55, 99 S. Ct. 914, 918 (1979)).
The bankruptcy court determined that "[t]he limited question before the court is whether or not the Debtors hold a life estate in their Residence." (Order on Cross Motions for Partial Summary Judgment at 8, Adv. No. 15-00339...
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