In re Cecconi
| Decision Date | 17 April 2007 |
| Docket Number | Bankruptcy No. 02-50653-ASW.,Adversary No. 03-5024. |
| Citation | 366 B.R. 83 |
| Parties | In re Guiseppe Enzo CECCONI, Debtor. Sarah Cecconi, Plaintiff, v. Guiseppe Enzo Cecconi, A.C. Spicer, Trustee in Bankruptcy (under U.K. insolvency laws), Defendants. A.C. Spicer, Trustee in Bankruptcy (under U.K. insolvency laws), Counter-Claimant, v. Sarah Cecconi, Counter-Defendant. A.C. Spicer, Trustee in Bankruptcy (under U.K. insolvency laws), Cross-Complainant, v. Guiseppe Enzo Cecconi, Cross-Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of California |
Patric J. Kelly, Adleson, Hess and Kelly, Campbell, CA, for Giuseppe Enzo Cecconi.
Elaine M. Seid, McPharlin, Sprinkles & Thomas, San Jose, CA, for Sarah Cecconi.
Amy L. Hespenheide, Shartsis, Friese & Ginsburg, San Francisco, CA, for A.C. Spicer.
Before the Court is Plaintiff Sarah Cecconi's ("Sarah")1 complaint against Guiseppe Enzo Cecconi ("Enzo") and A.C. Spicer, Trustee in Bankruptcy (under U.K. Insolvency Laws) ("Trustee") and Trustee's related counterclaim and cross-claim. Sarah seeks a determination that the house and property located at 3190 Del Ciervo Drive, Pebble Beach, California (the "Property") are her sole and separate property. Trustee seeks a determination that Enzo holds a community property interest in the Property.
The matter has been tried and submitted for decision. Sarah is represented by Paul S. Avila, Esq. and Elaine M. Seid, Esq. of McPharlin, Sprinkles & Thomas LLP. Enzo is represented by Patric J. Kelly, Esq. of Adleson, Hess & Kelly. Trustee is represented by Mary Jo Shartsis, Esq. and Amy L. Hespenheide, Esq. of Shartsis, Friese & Ginsburg LLP. At trial Sarah called Enzo, Carla Korb, Gary Vandeweghe, Elizabeth Montagu, Jane Watson Steel, Elaine Seid and herself as witnesses. Trustee called Enzo and himself as witnesses.
This Memorandum Decision constitutes the Court's findings of fact and conclusions of law, pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.
This case involves an unusual couple with an unusual lifestyle. Sarah and Enzo are both in their 70s and have been married for over 30 years. In the early years of their marriage, the Cecconis acted as many married couples do — i.e., they lived together. At that point they lived in Venice, Italy at or near the Hotel Cipriani ("Cipriani") where Enzo worked as a general manager. The couple lived on Enzo's income. For the next twenty-two years, however, Enzo and Sarah maintained a strong marriage while pursuing very separate and independent lifestyles. Their separate finances were a key aspect of their relationship. About the same time Enzo decided to leave Venice and open up a restaurant in London, Sarah inherited a large portfolio of stock and oil royalties from her grandmother. Sarah did not want to live in London full-time and the couple started to live separate lives. Enzo primarily ran a restaurant in London and Sarah spent her time traveling with her mother, summering in Venice, Italy and wintering in Pebble Beach, California. Enzo and Sarah spent time with each other during the spring and fall, and saw each other on occasion during the summer and winter months.
The couple had a mutual, clear and strong understanding that Enzo's property from his business ventures were his and Sarah's inheritance was hers. Enzo and Sarah maintained separate finances and each provided for their own living expenses. The couple clearly understood and agreed that Enzo had his property in Europe and Sarah had her property in the United States, and they acted separately with regard to that property — Enzo ran his restaurants and renovated property in London without input from Sarah. Sarah purchased a townhouse in Pebble Beach and purchased and constructed the Property without input from Enzo. It is due in large part to the unusual nature of their relationship that Sarah is able to support her position so convincingly as the plaintiff in this lawsuit.
Enzo ran into financial difficulties in the 1990s. Insolvency proceedings were ordered against him in the United Kingdom on January 8, 2001. Trustee filed an ancillary proceeding under 11 U.S.C. § 304 in this Court on January 7, 2002. On January 15, 2003, Sarah filed a Complaint to Establish Purchase Money Resulting Trust against Enzo and Trustee. On February 21, 2003, Trustee filed his answer, counterclaim and cross-claim. Trustee amended his counterclaim and cross-claim on March 27, 2003, and June 18, 2003. Trial commenced on this matter on March 21, 2005 and continued on March 22, 23, 24, 28, 29, 30, and 31, 2005; April 1, 8, 12, 13, 25, and 26, 2005; and May 31, 2005. Post-trial briefing ended on November 22, 2006.
i.) Enzo Cecconi — Enzo is a citizen and resident of Italy and a debtor in insolvency proceedings in the United Kingdom.
ii.) Sarah Cecconi — Sarah is the wife of Enzo.
iii.) Carla Korb — Ms. Korb was the business and social secretary to Sarah's father, George Coleman, from August 1976 to February 1998.
iv.) Gary Vandeweghe — Mr. Vandeweghe is an attorney and a friend of both of Sarah's parents. Mr. Vandeweghe also represented Sarah in relation to litigation over the Property filed by the Royal Bank of Scotland.
v.) Elizabeth Montagu — Mrs. Montagu is Sarah's mother and the Dowager Duchess of Manchester ("Duchess").
vi.) Jane Watson Steel — Ms. Steel is Sarah's friend.
vii.) Elaine Seid — Ms. Seid is an attorney and represents Sarah in this litigation.
viii.) Trustee A.C. Spicer — Trustee is a chartered accountant and the trustee in Enzo's insolvency proceedings in the United Kingdom.
Enzo was born and raised in Venice, Italy where he attended private school and gymnasium. Enzo wanted to work in the hotel and restaurant business since childhood, and started in that industry in 1956 when he was 20 years old. Enzo joined the Bauer Hotel, a deluxe hotel in Venice, in 1957. In order to improve himself, Enzo worked at the Bauer during the summer, then, during the winter months, he traveled to Germany, France, and London, among other places, to work and study seeking to develop his language skills so he could write a proper letter in English, French or German. Enzo speaks Italian, English, French, German and Spanish. In 1964, Enzo joined the Cipriani in Venice as an assistant manager and worked his way up to general manager of the hotel sometime prior to 1973. The Cipriani is a high-end hotel and caters to well-to-do guests. It is currently one of the top ten hotels in the world.
Sarah was born in Miami, Oklahoma to George and Elizabeth Coleman. Sarah comes from a very wealthy family — her father was on the board of directors for Pennzoil — and she has lived an unusual life. During Sarah's childhood, she spent the summers in Pebble Beach, California and the winters in Florida. Sarah started attending boarding school in Wellesley, Massachusetts around eleven years of age and spent the first three years of high school in Middleburg, Virginia. During these years, Sarah spent the summers in Pebble Beach. Sarah spent her senior year of high school in Pebble Beach and graduated from a private high school in Monterey. Sarah developed an affinity for Pebble Beach during her childhood.
Sarah's parents divorced in 1957 or 1958 and, after that time, Sarah's mother, the Duchess, resided in Pebble Beach and Mr. Coleman resided in Palm Beach, Florida. Around this time, Sarah moved to Los Angeles and worked at two different jobs for a total of approximately one year — her only employment in her life. Mr. Coleman paid the rent on Sarah's apartments in Los Angeles.
After the Duchess divorced Mr. Coleman, the Duchess married William Crocker and, after Mr. Crocker died, the Duchess married the Duke of Manchester. During most of the 1960s, and until Sarah married Enzo, Sarah traveled with the Duchess and lived in several places during the year. Sarah spent approximately four months a year in Pebble Beach, two or three months in New York City, three months in London, and some time in Kenya where the Duke of Manchester had property.
At this point in her life, Sarah did not have much income and received only a small monthly allowance. Sarah did own a townhouse in Sun Valley, Idaho ("Sun Valley Property") for approximately five years in the late 1960s and early 1970s. When Sarah owned the Sun Valley Property, she spent approximately five months a year in Sun Valley. To purchase the Sun Valley Property, Sarah borrowed $60,000 from a trust set up by Mr. Coleman's mother and father ("Trust"). The Trust was comprised of a wealthy stock portfolio and oil royalties. Mr. Coleman was trustee for and managed the Trust for his mother. The funds Sarah borrowed were repaid to the Trust when the Sun Valley Property was sold.
Enzo first met Sarah at the Cipriani in 1973 when Sarah stayed at the hotel with the Duke and Duchess of Manchester. Enzo and Sarah married in May 1974. At the time he married, Enzo owned a car, was the general manager of the Cipriani, and had a small house in the country for his parents. When Sarah married Enzo, Mr. Coleman cut off Sarah's monthly allowance. The Cecconis lived at the Cipriani during their first year of marriage since part of Enzo's salary included an apartment inside the hotel. For the next three years, the Cecconis leased the apartment next door to the hotel, with the Cipriani paying the rent and all expenses of that apartment.
For most of the time Enzo was employed at the Cipriani, the Guinness family owned the hotel. At some point, the Cipriani was sold by the Guinness family and the new owner asked Enzo to remain as a director of the new company. But Enzo was ready to...
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