In re Braden, Bankruptcy No. 84-01052-R
| Citation | 69 BR 93 |
| Decision Date | 13 January 1987 |
| Docket Number | Bankruptcy No. 84-01052-R,Adv. No. 85-0634-R. |
| Parties | In re Joseph L. BRADEN, Debtor. Basil T. SIMON, Trustee, Plaintiff, v. Joseph L. BRADEN, and Teachers Insurance and Annuity Association, College Retirement Equities Fund, Defendants. |
| Court | United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — Eastern District of Michigan |
Kenneth Schneider, Detroit, Mich., for plaintiff.
Gerald Rosen, Detroit, Mich., David Goldstein, Ann Arbor, Mich., for defendants.
SUPPLEMENTAL MEMORANDUM OPINION GRANTING THE DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
This adversary proceeding was brought by Basil T. Simon, the Chapter 7 trustee, against Joseph L. Braden, the debtor, the Teachers Insurance and Annuity Association (TIAA), and the College Retirement Equities Fund (CREF). The latter two defendants are holding approximately $133,000 in annuity and retirement plans for the debtor, who is a professor at Eastern Michigan University. Count I of the complaint alleges that this sum is property of the estate, and seeks an order requiring that the defendants turn over this sum to the trustee.
Initially the parties disagree as to whether the debtor's rights under these plans constitute property of the estate under section 541(a)(1). This section provides:
The Court concludes that it is unnecessary to determine whether the debtor's rights under those plans constitute property of the estate under 11 U.S.C. § 541(a)(1), in light of its conclusion that section 541(c)(2) mandates a judgment in favor of the defendant.
11 U.S.C. § 541(c)(2) provides:
A restriction on the transfer of the beneficial interest of a debtor in a trust that is enforceable under applicable non-bankruptcy law is enforceable in a case under this title.
The application of this section raises three issues: (a) whether the debtor's interest is a beneficial interest in a trust; (b) whether there is a restriction on the transfer of that beneficial interest; and (c) whether that restriction is enforceable under non-bankruptcy law.
Initially, there is no dispute here that the debtor's interest is a beneficial interest in a trust. The TIAA Retirement Annuity contract and the CREF Retirement Annuity certificate specifically provide that this beneficial interest is the right to receive these future payments upon the occurrence of certain events, such as termination of employment, death or retirement.
Further, there can be no dispute as to whether there is a restriction on the transfer of that beneficial interest, or as to the extent of that restriction. The affidavit of James Latch of Eastern Michigan University and the plan documents clearly indicate that there is a complete restriction on the transferability of the debtor's beneficial interest in these plans. Simply stated, the debtor has no right to make any kind of assignment or transfer of his future rights in these plans.
Thus, the final issue is whether this restriction is enforceable under applicable non-bankruptcy law. The Court concludes that these restrictions would be completely enforceable under applicable non-bankruptcy law. The trustee has suggested nothing to the Court otherwise and the authority cited by the defendants under "applicable non-bankruptcy law," which pursuant to the plan documents is the law of the State of New York, fully supports their contention that the anti-alienation, garnishment, and assignment provisions are enforceable. Alexandre v. Chase Manhattan Bank, N.A., 403 N.Y.S.2d 21, 61 A.D.2d 537 (1978). Accordingly, the Court holds that the...
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