In re Bohac
| Decision Date | 25 May 1990 |
| Docket Number | Bankruptcy No. 90-10152FM. |
| Citation | 117 BR 256 |
| Parties | In re Rudy J. BOHAC, Debtor. |
| Court | U.S. Bankruptcy Court — Western District of Texas |
Michael Deitch, Deitch, Egan, Greenblum & Hamilton, P.C., Austin, Tex., for debtor.
John M. Scanlan, Scanlan & Buckle, Austin, Tex., for creditors.
A contested hearing was held on April 24, 1990, pursuant to Objections to Exemptions filed by Don Higginbotham, Successor Administrator of the Estate of Olga C. Bohac, Deceased, and by creditors Dorothy Bohac, Ann Bohac Moriarty, Myra Bohac Valenta, Mark Bohac, Jay Bohac, Lois Bohac and Joseph Bohac (the "Bohac Creditors") wherein the objectors dispute the Debtor's right to claim certain rural real property as his homestead. The Court, having considered the Objection, the Response of the Debtor thereto, the briefs of parties, the arguments of counsel, and its own independent legal research, makes the following Findings of Fact and Conclusions of Law pursuant to Bankruptcy Rules 9014 and 7052 and based thereon denies the claimed exemption.
This exemption litigation is not to be viewed in isolation. It is simply the latest chapter in a rather long book about the inter-familial warfare that has apparently been going on between the Debtor on the one hand and the Bohac Creditors on the other hand since before the death of the matriarch Olga C. Bohac. Some years before her death in 1985, there was a split of the family with she and the Debtor on one side and the Bohac Creditors on the other. The split was such that communication between the sides did not exist at all. The Debtor, upon the death of Olga C. Bohac, was named Independent Executor of her Estate. Unlike 99% of the decedent's estates that are independently administered in the State of Texas, this one was neither simple nor independent of court supervision as the parties chose that arena as a battlefield where they could publicly express their mutual dislike, distrust, and contempt in such a manner as to bring disgrace to the entire family.
One apparently appropriate result of this absurd warfare was the removal of the Debtor as the Independent Executor of the Estate of Olga C. Bohac and the appointment of Don Higginbotham as Successor Administrator. Another result was the granting of a judgment in favor of the Bohac Creditors against the Debtor in the amount of $178,843.00, which judgment was entered to reimburse the Bohac Creditors for attorney's fees which they had incurred in the probate matter in protecting their legal rights and interests with regard to certain activities of the Debtor while he was serving as Independent Administrator of the Estate of Olga C. Bohac, which the state court jury and the probate court found to be unjustified and actionable. Third, Higginbotham has filed a claim in this case on behalf of the estate for $155,000.00 alleging misappropriation, fraud, defalcation and embezzlement of and by the Debtor while in a fiduciary capacity.
The jury verdict in favor of the Bohac Creditors was handed down on July 14, 1989. Final judgment was signed by the probate court on October 4, 1989. An amended abstract of judgment was filed of record in Williamson County, Texas on October 12, 1989.
Bloodied but not beaten, the Debtor retaliated. Between the date of the rendering of the jury verdict and the entry of the final judgment, the Debtor engaged in aggressive pre-bankruptcy planning. First, he hired his present counsel on or about August 1, 1989. Second, on August 15, 1989, he executed a $50,000.00 promissory note in favor of his probate counsel secured with a pledge of certain farming equipment and trucks. He then signed a $25,000.00 note to other probate counsel secured by livestock and other property. Third, on September 22, 1989, the Debtor filed a formal "Declaration of Intended Homestead" (emphasis added) in which he claimed the Homeplace, the 47.7 acres surrounding the Homeplace, and 150.3 acres of the Bartlett Farm (total acreage of Bartlett Farm is 187.98) as his "intended" homestead. The Homeplace is approximately 25 miles from the Debtor's residence at 14 Country Drive, Round Rock, Texas, and the Bartlett Farm is approximately 4½ miles further from the Homeplace. Finally, on October 2, 1989, he signed a $75,000.00 note in favor of Cattleman's Bank and secured it with 82.5 acres of other non-exempt farmland which was otherwise unencumbered and a $30,000.00 Certificate of Deposit. The purpose of this loan was to borrow enough money to fix up the "Homeplace" as it had become uninhabitable. Today it is still uninhabitable. The Homeplace is the house and approximately two acres that Olga C. Bohac had inhabited during her lifetime. The effect of this last transaction would have been to convert $75,000.00 in non-exempt property to property claimed as exempt in addition to the intended homestead property itself.
Unfortunately for the Debtor, a substantial portion of his pre-bankruptcy planning went awry. First, his probate counsel allowed certain deadlines to pass which has made the potential for effective appeal of the $178,834.00 judgment virtually impossible. Upon learning this, this Court entered its Order of April 24, 1990 which requires the Debtor to take action to cancel the $50,000.00 note and the pledge of collateral to secure the same as well as investigating potential causes of action against such counsel by reason of such mistake. Included would be the potential for a return of $59,888.27 previously paid such counsel. The Debtor must advise the Court by June 5, 1990, of his intentions in this regard.
Next, when the Debtor obtained the commitment of Cattlemen's Bank to loan $75,000.00 for improvement of the Homeplace, he neglected to tell them about the $178,000.00 jury verdict. Not surprisingly, they are no longer interested in loaning him any money. This Court, by Order dated April 24, 1990, has effectively cancelled the pledge of collateral for the $75,000.00 note and that note is of no further force nor effect. Accordingly, the 82.5 acres and the $30,000.00 Certificate of Deposit are now effectively unencumbered.
The pre-bankruptcy planning still remaining intact is the "intended" homestead designation to which the Bohac Creditors have objected.
Rudy Bohac is a chemist for the Austin Police Department. He is the director of the forensic lab at the Austin Police Department. Since July 1987, he, together with his wife and 10-year old son, have lived at 14 Country Drive, Round Rock, Texas. The property is part of Wildwood Country Subdivision, which consists of 22 lots each approximately one acre in size. The subdivision is fully developed with only three or four vacant lots. The property is located just outside the eastern city limits of Round Rock, Texas. The Debtor's son attends school in the Round Rock Independent School District. The Homeplace and other rural property claimed as exempt by the Debtor is in the Granger Independent School District.
The Debtor has routinely farmed the Bartlett property as well as the 48 acres surrounding the 2-acre Homeplace. He bought the Bartlett property on December 10, 1979, five days after having received the 48 acres surrounding the 2-acre Homeplace as a gift from his mother, Olga C. Bohac. Apparently, it was around this time that the family feud surfaced. The Debtor has also rented the acreage, and/or portions thereof, from time to time to other individuals on a share cropping basis. No farming or ranching operations at all take place at 14 Country Drive.
It is undisputed that the Debtor presently makes his residence at 14 Country Drive. He has so scheduled it. The Debtor's testimony is that he presently lives at 14 Country Drive and did so on the date of the filing of this case, such being the operative date as of which the Debtor's entitlement to exemptions must be determined. He spends at least five nights a week at 14 Country Drive and his wife spends every night there. He stays at the Homeplace some Friday and Saturday nights due to his farming activities. He has listed 14 Country Drive as his home address on his Internal Revenue Service Forms 1040 for the years 1987 and 1988. It is also undisputed that the Debtor filed an Application for Residential Homestead on January 28, 1988 for 14 Country Drive.
The Homeplace was left to the Debtor by his mother in her will. As early as October 5, 1988, and as late as February 10, 1989, the Debtor publicly avowed that he had given the 2-acre Homeplace to his son, Rudy J. Bohac II. It is important to note that the avowal on February 10, 1989, was made under oath in the lawsuit that resulted in the $178,834.00 judgment. The Debtor's testimony at that deposition was that he had signed a deed conveying the Homeplace to his son but had never recorded it because he was holding it for his son in his desk drawer. The Debtor now claims that he has destroyed that deed. This would have had to have happened sometime subsequent to his sworn testimony on the February 10, 1989 deposition but prior to the filing of his "intended" homestead declaration on September 29, 1989. The Debtor's recollection of exactly when this happened is conveniently hazy. It is also not credible.
The Debtor claims to have abandoned his homestead at 14 Country Drive in Round Rock. Clearly, he did not claim it as exempt upon his schedules; and until midway through the trial of this matter, the admissions of the Debtor and his counsel throughout these proceedings were consistent and vehement to the effect that 14 Country Drive, Round Rock, Texas, was not the Debtor's homestead upon the filing of this case, that the Debtor had, and has, no intention of claiming it as his homestead, and that the Debtor has abandoned it.
Then something strange happened. In the face of his prior consistent attestations and protestations to the contrary, the Debtor...
To continue reading
Request your trial