Cox v. Andrews (In re Andrews)
| Decision Date | 20 December 2011 |
| Docket Number | Nos. 4:09–bk–11116 E,4:10–ap–01092.,s. 4:09–bk–11116 E |
| Citation | 467 B.R. 173 |
| Parties | In re Gregory Roger ANDREWS and Ronda Michelle Andrews, Debtors.Richard L. Cox, Trustee, Plaintiff v. Gregory Roger Andrews, Ronda Michelle Andrews, Brian Keith Andrews, Jeff Andrews, Harland Melton, and Jake Alred, Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of Arkansas |
OPINION TEXT STARTS HERE
Jeremy Bueker, Stuttgart, AR, for the Debtors.
Thomas Streetman, Crossett, AR, for the Chapter 7 Trustee.
Thomas Fowler, for Defendants Brian and Jeff Andrews.Jimmy Eaton, North Little Rock, AR, for Defendant Harland Melton.Richard Cox, Chapter 7 Trustee.
On September 27, 2011, the Court held a trial on the Amended Complaint filed by the Chapter 7 Trustee, Richard Cox (the “Trustee”), against the Debtors, Greg and Ronda Andrews, two brothers of Debtor Greg Andrews, Brian and Jeff Andrews, and other defendants. The Trustee originally sought avoidance of the transfer of the drag racing car called the “Big Nasty” (the “Race Car”) and turnover of the Race Car if it was in the same condition as when it was transferred. Since it has been established that the Race Car was taken apart, painted and transferred, the Trustee now seeks a joint and several judgment against Defendants Greg and Brian Andrews in the amount of $30,000 together with an award for the Trustee's attorneys fees and costs, and damages for willful violation of the automatic stay.
At the September 27, 2011 Trial, Thomas Streetman appeared on behalf of the Trustee; Jeremy Bueker appeared on behalf of the Debtors; Thomas E. Fowler, Jr., appeared on behalf of Brian Andrews and Jeff Andrews; and Jimmy D. Eaton appeared on behalf of Harland Melton. Defendant Jake Alred is in default and made no appearance. At the close of trial, the parties elected to file closing briefs in lieu of closing arguments. At that time, the Court granted a pending Motion for Judgment on Partial Findings (referred to in Court as a “directed verdict”) 1 in favor of Defendant Harland Melton. The Court still has under advisement similar motions with respect to Jeff and Brian Andrews. The parties filed their respective briefs on October 27, 2011, with the Trustee filing a very short reply brief on October 28, 2011. The September 27, 2011 Trial is hereinafter referred to as the “2011 Trial” to distinguish it from the October 27, 2009 trial (“2009 Trial”) held in a related matter concerning the same Race Car.
This matter is a core proceeding, as defined by 28 U.S.C. § 157(b)(2), over which this Court has jurisdiction pursuant to 28 U.S.C. § 1334(b).
The Debtors filed their voluntary bankruptcy petition (the “Petition”) on February 19, 2009. On May 15, 2009, Debtors amended the Petition (the “First Amended Petition”) to disclose a tax refund, for which they claimed an exemption. On June 19, 2009, Randy and Renee Watson (the “Creditors”) filed a complaint (4:09–ap–1150) objecting to the Debtors' discharge in which they alleged that the Debtors knowingly and fraudulently made false oaths in filing the Petition, and that they transferred and concealed their property within one year of the Petition. The Debtors' Answer denied every material allegation in the Complaint. The Debtors filed another amended petition on October 23, 2009 (the “Second Amended Petition”), in which they disclosed information about transfers and property as alleged in the Complaint. The Court held the 2009 Trial on October 27, 2009. On February 2, 2010, the Court held a telephonic hearing, delivering a lengthy oral opinion (the “Oral Opinion”) denying the Debtors' discharge, in part, because the Debtors failed to disclose Greg's interest in the Race Car. In the Oral Opinion, the Court made a number of factual findings that were the basis of the ruling. In response to the Defendants' Motion to Amend Judgment or For a New Trial (the “Motion to Amend”) in which the Debtors asserted that the Court made several findings of fact in its Oral Opinion that were not supported by the evidence at the 2009 Trial, the Court thoroughly reviewed the testimony and other evidence in the case again, and concluded that it was necessary to correct or amend some of the factual findings made in the Oral Opinion and entered an order correcting those facts on May 6, 2010 (docket # 25, 4:09–ap–1150). The same day, the Court entered a Memorandum Opinion Denying Debtors' Discharge (the “Memorandum Opinion”) (docket # 26, 4:09–ap–1150) and an Amended Final Judgment (docket # 27, 4:09–ap–1150). In the Memorandum Opinion, the Court made amended and corrected factual findings. Those that relate to the Race Car and this proceeding are restated below: 2
1. The Debtors have been married [since 1996]. Greg Andrews has raced cars since before that time. Drag racing has long been Greg's great passion in life.
2. Some time in the early 1990s, Greg and his brother, Brian Andrews, built a drag racing car, called the “Big Nasty” (the “Race Car”), from a chassis.
3. Greg is undisputedly the driver of the Race Car. He has raced it at public events, appeared in television interviews with it, represented it belonged to him, worked on it, maintained it, named it, stored it, painted extensive detailed designs on it, and held himself out as its owner to both the Creditors and the general public.3
4. At races, Greg sold T-shirts. One of these T-shirts was introduced into evidence as Plaintiffs' Exhibit # 8. The words “Greg Andrews” appear on the T-shirt, above the picture of the Race Car. Underneath the picture, the T-shirt reads “Outlaw Door Slammer.” Testimony indicated Greg is a member of a drag-racing club called the “Dixie Door Slammers.” The T-shirt makes no reference to any other person or business. The back of the T-shirt reads:
Greg Andrews
Big Nasty
First in the Fours
5. Photographs of the Race Car were introduced into evidence. Defendants' Exhibit # 2 and Plaintiffs' Exhibit # 9 are both photographs of the Race Car that show the passenger side window. In these photographs, it is apparent that the Race Car has the words “Greg Andrews” on the passenger side window. Defendants' Exhibit # 1 is an older photograph of the Race Car, taken before it was detailed and painted yellow; it shows the driver side window. At that unknown prior date, the Race Car had the words “Andrews Brothers” in the driver side window. There is no evidence before the Court as to whether the driver side window still has those words.
6. The uncontroverted testimony was that the Race Car cannot be legally driven on public roads, and therefore, no title to it exists. Additionally, the evidence was that the Race Car was never listed on any personal property assessment.
7. Greg worked at the Andrews Auto Body (the “Body Shop”), located in Wynne, Arkansas, and owned by Greg's brother, Brian Andrews, for many years before leaving in 2007. Steve Wallin, whom the Court found to be particularly credible, testified that Greg left the Body Shop as a result of a falling out with Brian. Tony Sides corroborated Mr. Wallin's testimony about the falling out and stated that the disagreement resulted in a physical altercation between the two brothers.4 Mr. Wallin further testified that after the falling out, Greg took possession of the Race Car and it was Mr. Wallin's impression that the Race Car belonged to Greg after that. The other witnesses' testimony did not contradict Mr. Wallin's testimony, except as to the ownership of the Race Car following the Andrews brothers' falling out. While the other witnesses generally corroborated Mr. Wallin's testimony regarding possession of the Race Car after the falling out, they contradicted his testimony regarding ownership of the Race Car.
8. After leaving the Body Shop at some unknown date in 2007, Greg and Randy Watson formed A & W Extreme Painting, LLC (the “LLC”).
9. Mr. Watson testified that Greg said he owned the Race Car.
10. Greg and Mr. Watson both testified that Greg received money from Mr. Watson and that the money was used, as intended by both, for various expenses related to the Race Car. There was contradictory testimony as to whether Mr. Watson transferred the money to Greg as a gift or a loan.
11. Mr. Watson had a bus that was painted to match the Race Car. (Defendants' Exhibit # 3.)
12. Both Greg and Mr. Watson testified that the LLC was dissolved in 2008 after Greg and Mr. Watson had financial disagreements.
...
15. Ronda, Brian, and Greg testified that Brian had been the exclusive owner of the Race Car until recently, when another Andrews brother, Jeff, also acquired an interest in it. Brian further testified that Jeff acquired a 25% interest in the Race Car.
16. The Debtors lived in Wynne until around the time they filed the Petition. While the precise location of each Debtor's residence in early 2009 is unclear, Ronda testified that on February 12, 2009, Greg lived with Jeff in Searcy, Arkansas, and she lived with her mother. She also testified that on February 19, 2009, both Debtors resided at a rented house in Searcy, Arkansas. This house appears in photographs submitted into evidence as Plaintiffs' Exhibits # 6 & # 7. Debtors still resided at this address on the date of the [2009] Trial.
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22. The Race Car was listed for sale shortly before [the 2009] Trial. Tony Sides testified that Jeff instructed him to list the Race Car for sale. The list price was $33,000. The Debtors did not seek permission from the Court to sell the Race Car. Prior to the [2009] Trial, the Debtors did not disclose the Race Car's existence.
23. On the day of the [2009] Trial, the Race Car and a trailer alleged to be owned by Brian Andrews were both stored at the Debtors' home in Searcy. Plaintiffs' Exhibit # 7 is a photograph, taken on an unknown date, showing the utility trailer stored in the Debtors' attached garage. Neither the Race Car nor the trailer was listed on Debtors' schedules and...
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