In re Harris, Bankruptcy No. 79-01362-BKC-TCB
| Decision Date | 18 July 1983 |
| Docket Number | Adv. No. 83-0503-BKC-TCB-A.,Bankruptcy No. 79-01362-BKC-TCB |
| Citation | 32 BR 125 |
| Parties | In re Lester J. & Carol J. HARRIS, Debtors. Jeanette TAVORMINA, Trustee, Plaintiff, v. Lester J. & Carol J. HARRIS, Defendants. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
Arthur S. Weitzner, Miami, Fla., for plaintiff/trustee.
Joseph A. Moretz, Miami, Fla., for defendants.
The trustee seeks recovery of money paid to the debtor/husband after bankruptcy in satisfaction of two mortgages in which he held a partial interest at the time of bankruptcy. The trustee also seeks establishment of her right to receive the debtor's share of another mortgage which will be satisfied in five months. Without objection, the complaint was amended at trial. The debtors have answered. The matter was tried on July 14.
The facts are not in dispute. The debtors filed for bankruptcy on November 14, 1979. The debtor/husband with six other general partners were then joint mortgagees on three mortgages involving three separate properties in Dade County. There is no reference to the debtor/husband's interest in these mortgages or in the partnership set forth in Schedule B (Statement of all property of debtor) of the schedule of assets and liabilities filed by the debtors in this case nor in the debtors' statement of financial affairs. The statement of financial affairs makes the following reference to the partnership, Apartments Ltd. In response to the question:
No further disclosure or reference was made to these property interests during the administration of this case before it was closed on September 24, 1981.
At the time the bankruptcy schedules were prepared and filed and, indeed, until some time after the case was closed, the debtors quite plausibly believed that the mortgages had been executed in favor of the partnership rather than the individual partners and that neither the partnership interest nor the mortgages had any more than a nominal value. The partnership had no other assets and each of these mortgages was in default and had been the subject of unsuccessful efforts to enforce payment. There is no evidence here, therefore, of any deliberate effort to defraud creditors, nor has that been alleged. However, the question of the debtors' good faith is not relevant to this action.
In 1982, two of the mortgages were assumed and discharged by a third party and the debtor/husband was paid $69,022, his distributive share of the partnership assets, which is 20.85%. The foregoing proceeds were deposited in a joint checking account held by the two debtors. It is presently anticipated that the remaining mortgage will be satisfied in early December and that the debtor/husband's distributive share will be approximately $10,425.
It is undisputed that the partnership interest and the interest in the mortgages constituted property of this estate and that the proceeds of those interests, whenever received, also are property of the estate. § 541(a)(1) and (6).
The trustee reopened this case in September, after learning of this unadministered asset and this action ensued.
The debtors' only serious position is that these property interests were abandoned by the trustee when the case was closed in 1981 under § 554(c), which provides:
"Unless the court orders otherwise, any property that is scheduled under section 521(1) of this title and that is not administered before a case is...
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