In re Griffin
| Decision Date | 08 February 1991 |
| Docket Number | Adv. No.: 90-0556-BKC-SMW-A.,Bankruptcy No.: 87-01663-BKC-SMW |
| Citation | 123 BR 933 |
| Parties | In re Wunita L. GRIFFIN, Debtor. Daniel L. BAKST, Trustee, Plaintiff, v. Mary GRIFFIN, Defendant. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
Ronald Lewis, West Palm Beach, Fla., for plaintiff.
Reggie David Sanger, Fort Lauderdale, Fla., for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
THIS CAUSE having come before the Court upon the complaint of Daniel L. Bakst (the "trustee") against Mary Griffin (the "co-owner") for determination, partition, and sale of the respective interests of Wunita L. Griffin (the "debtor") and the co-owner in real property pursuant to 11 U.S.C. § 363(h) and the Court having heard the testimony, examined the evidence presented, observed the candor and demeanor of the witnesses, considered the arguments of counsel, and being otherwise fully advised in the premises does hereby make the following Findings of Fact and Conclusions of Law:
Jurisdiction is vested in this Court pursuant to 28 U.S.C. § 1334(b), 28 U.S.C. § 157(a, b) and the district court's general order of reference. This is a core proceeding in which the Court is authorized to hear and determine all matters relating to this case in accordance with 28 U.S.C. § 157(b)(2)(N).
On December 9, 1977, a residence located at 1808 Lauderdale Manor Drive, Fort Lauderdale, Florida was purchased in the name of Mary Geneva Griffin and Wunita L. Griffin as joint tenants with rights of survivorship. The debtor signed the mortgage as an accommodation to the co-owner so that she could qualify for the purchase money mortgage. All mortgage payments and improvements to the property have been made by the co-owner. The debtor has not resided in the property and did not claim the property as her exempt homestead under Florida law. The property was not listed on the debtor's bankruptcy schedules. The co-owner currently lives in the property along with her twenty year old daughter. The current fair market value of the property as testified by the co-owner is approximately $25,000.00 subject to an outstanding secured indebtedness on the property of approximately $20,000.00. The trustee, as successor in interest to the property of the debtor by operation of 11 U.S.C. § 541, brought this action seeking to sell the property pursuant to 11 U.S.C. § 363(h) in order for the estate to realize the proceeds of its one-half interest in the property.
The co-owner argues that since she has paid all the consideration for the property, any interest of the estate in the property is subject to a resulting trust and that it should be determined that the co-owner is the sole owner of her residence. A resulting trust arises automatically out of a set of circumstances to accomplish the presumed intent of the parties. In re Hampton, 43 B.R. 633 (Bankr.M.D.Fla. 1984). For example, where the purchase price of property is provided by one person but title is taken in the name of another, the title holder is presumed to hold the same in trust for the other. In re Hampton, 43 B.R. at 633; Socarras v. Yaque, 452 So.2d 992 (Fla. 3d DCA 1984). A resulting trust must arise, if at all, at the instant legal title vests and the alleged beneficiary must have paid the purchase price or bound himself by an absolute obligation to pay it. Socarras v. Yaque, 452 So.2d at 994; Harnish v. Peele, 386 So.2d 8 (Fla. 5th DCA 1980).
In the case at hand, it was the debtor, not the co-owner, who supplied a vast majority of the consideration at the time legal title vested in the debtor and co-owner. The majority of the consideration for the purchase of the property was the $23,500.00 mortgage which the debtor was required to sign in order for the co-owner to obtain financing for the purchase of the property. Other than the closing costs, the co-owner only expended money on the property after legal title vested, and these expenditures were concurrent and incident to the co-owner's habitation and enjoyment of the property. Therefore, the Court finds that the co-owner is not entitled to the imposition of a resulting trust and that the estate does have a joint one-half ownership interest in the property.
Pursuant to 11 U.S.C. § 363(h), a trustee may sell both the estates' interest and the interest of any co-owner in property in which the debtor had, immediately before the commencement of the case, an undivided interest as a tenant in common, joint tenant, or tenant by the entirety, only if the following conditions are met:
The statute also gives the non-debtor certain protections. The co-owner has the right to purchase the property at the trustee's proposed sale price. 11 U.S.C. § 363(i). The co-owner is entitled to a percentage of the proceeds of sale according to his interest. 11 U.S.C. § 363(j).
The first condition that must be satisfied before the Court will permit a sale of the jointly owned property pursuant to § 363(h) is that partition of the property between the co-owners is impracticable. Where property is a single family residence, there is no practicable manner of partition other than a sale and division of the proceeds. In re Ivey, 10 B.R. 230 (Bankr.N.D.Ga.1981). In light of the fact that the subject property is a small residential home, the Court finds that partition of the property is impracticable.
The second condition of § 363(h) is that sale of the estate's interest would realize significantly less for the estate than a sale free from the interest of co-owners. Although no evidence was introduced as to the trustee's efforts to sell the estate's interest in the subject property to the co-owner or to any other parties, the trustee relies on In re Vassilowitch, 72 B.R. 803 (Bankr.D.Mass.1987), to invite the Court to take judicial notice that a sale of the estate's undivided interest in the property would realize significantly less for the estate than a sale of such property free of the interest of the co-owner. In Vassilowitch, the court took judicial notice that the sale of the estate's interest in such property would realize less than the...
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