In Re: J. Bradford Jones
| Decision Date | 15 March 2011 |
| Docket Number | Case No. 09-18024-FJB |
| Parties | In re: J. BRADFORD JONES, Debtor |
| Court | U.S. Bankruptcy Court — District of Massachusetts |
In the matter before the court, the chapter 13 debtor, J. Bradford Jones (the "Debtor"), objects under 11 U.S.C. § 502(b)(1) to the amount of the $35,219.44 secured claim asserted in this case by the Board of Trustees of 1105 Massachusetts Avenue Condominium Trust (the "Trust"). The claim is based in part on a state court judgment for common area fees; the remainder consists of related postjudgment assessments. The Debtor maintains that he is at most obligated for two months' common area charges totaling approximately $500. For the reasons set forth below, the court will allow the claim in the amount requested.
The Debtor filed a petition for relief under Chapter 13 of the Bankruptcy Code on August 23, 2009, thereby commencing this bankruptcy case. The Trust filed a proof of claim in the case on September 9, 2009, asserting a secured claim in the amount of $35,260.94, secured by a lien on the Debtor's unit. The proof of claim indicates that the claim is for unpaid condominium common area fees. As an attachment to the proof of claim, the Trust also filed an accounting of the Debtor's obligation to the Trust, including all transactions from 1991 to September 2009 in monthly increments; the starting balance in 1991 is an unexplained "balance forward" from the previous year. The spreadsheet itemizes the balance owed in terms of condo fees, late fees, and other charges, and it further details credits for payments received from the Debtor. Also attached to the proof of claim are (i) detailed invoices from the Law Offices ofGoodman & Shapiro, LLC for legal fees incurred by the Trust in enforcing its charges against the Debtor and (ii) further itemized invoices from Paul E. Saperstein Company ("the Auctioneer"), an auctioneer, to Goodman & Shapiro, LLC, for services rendered in conjunction with two planned foreclosures by the Trust of its lien on the Debtor's unit.1
On October 5, 2009, the Debtor filed an objection to the proof of claim (the "Objection"), challenging the validity of numerous fees, charges, and assessments and asking this court to determine the proper amount of the claim. In his objection, the Debtor explains that the Trust had obtained a judgment for much of the amount being sought in its proof of claim, 2 but that the Debtor, having been unable to pay the contested amount, had been barred by state law from actually litigating the validity of the charges he contested and therefore had suffered this judgment to enter against him without a fair opportunity to actually litigate the charges. He argues that he should therefore be permitted in this proceeding to challenge the charges on which the judgment is based.
In a response to the Objection, the Trust argues that the Debtor should not now be permitted to relitigate the state court action and that the judgment is binding on him for purposes of the present claim. The Trust also defends charges that have been assessed since entry of the judgment, including significant attorney's fees and auctioneer's fees and expenses that the Trust incurred in attempting to foreclose its statutory lien on the Debtor's unit.
After a preliminary hearing on the Objection, the Court scheduled an evidentiary hearing. In the scheduling order, the Court stated that, to establish that portion of its claim that is based on amounts awarded through a state court final judgment, the Trust could simply present evidence of that judgment, in which event the hearing would then focus on those portions of the claims that are not attributable to that judgment.
At the outset of the evidentiary hearing, held on March 16, 2010, the Trust moved to amend its proof of claim by appending to it an attested-to copy of the state court judgment, which the Trust adduced at the evidentiary hearing, and the Court allowed this motion without objection from the Debtor. Accordingly, on March 18, 2010, the Trust filed an amended proof of claim in the amount of $35,219.44 (approximately $41 less than the amount claimed in the original proof of claim; the Trust has offered no explanation for the discrepancy), supplemented this time by a copy of the judgment on which the claim is partially based.3 Of its total claim of $35,219.44, $19,320.94 is attributable to the judgment. The Trust contends that the balance of $15,898.50 is the sum of the monthly common area fees, late charges, and attorney's and auctioneer's fees and expenses that accrued after August 2008 and before the Debtor's bankruptcy filing on August 23, 2009, less the one payment that the Debtor made during that period.
At the evidentiary hearing, the Trust presented three witnesses: Myra Miller, the manager of and long-time bookkeeper for the 1105 Massachusetts Avenue Condominium, to testify to the validity of the Trust's records; Attorney Ellen Shapiro, of the Law Offices of Goodman & Shapiro, LLC, counsel to the Trust, to testify regarding the Trust's attorney's fees; and Jeffrey Mann, Senior Vice President of the Auctioneer, Paul Saperstein Company, to testify regarding the Auctioneer's charges the Trust incurred. Attorney Shapiro's direct testimony was submitted by affidavit, which affidavit the Court received into evidence; she was cross-examined at the hearing. The Debtor presented only the testimony of the Debtor himself. After the conclusion of the hearing, the parties submitted briefs in lieu of closing arguments, and court then took the matter under advisement.
The Debtor purchased unit 4G of the 1105 Massachusetts Avenue Condominium, in Cambridge, Massachusetts, in 1978 and has owned the unit since that time. In 2007, the Trust brought suit against him in Cambridge District Court for unpaid common area charges and to establish its right to collect those fees by foreclosing on its statutory lien on the unit. The Debtor had the assistance of counsel in the matter for at least a portion of the action. He did actually litigate some issues, at least in conjunction with a motion for summary judgment, but the precise progress of the litigation is not otherwise in evidence. On November 4, 2008, the District Court entered judgment for the Trust and against the Debtor in the total amount of $19,320.94, consisting of common expenses through August 2008 of $15,569.92 and attorney's fees and court costs for the prosecution of that action in the further amount of $3,751.00. The judgment further declared that this sum constituted a lien on Unit 4G having priority over all other liens on the unit other than liens recorded before the condominium's Master Deed and liens for real estate taxes and other municipal charges against the unit. The judgment further permitted the Trust to sell Unit 4G in an attempt to satisfy the judgment debt, and it specified that the Trust would be entitled to all costs incurred in proceeding with the sale, such as advertising costs, attorney's fees, and auctioneer's fees related thereto, which fees and costs would be considered part of the priority lien. The judgment also orders the Debtor to pay to the Trust all common expenses lawfully assessed against him and all late charges and attorney's fees and costs unpaid by him after August 2008. The Debtor filed a notice of appeal from this judgment but did not prosecute the appeal, and, on motion of the Trust, it was dismissed for nonprosecution. The judgment is valid and subsisting, and the Debtor does not contend otherwise.
After entry of judgment, the Debtor made only one payment to the Trust, a payment of $260 in September 2008. The Trust incurred further attorney's fees in conjunction with Debtor's appeal of the judgment. Eventually, the Trust commenced proceedings to foreclose its lien andto that end, through counsel, employed Paul E. Saperstein Co. as auctioneer. The Trust scheduled the foreclosure sale for June 30, 2009. The Trust advertised the sale, in part through its counsel, who placed legal notices in the Cambridge Chronicle, and in part through the Auctioneer, who further advertised the sale in appropriate newspapers; and for these ads the Trust, through its attorney and auctioneer, incurred advertising expenses. On June 28, 2009, two days before this sale was to occur, the Debtor filed his first bankruptcy petition (not the one that commenced this case). This filing required that the foreclosure sale be cancelled or continued. The Auctioneer appeared at the property on the date and time appointed for the sale and adjourned the sale to August 27, 2010. For its services in conjunction with the June 30 sale and its adjournment, the Auctioneer charged the Trust $750, its standard fee. This charge, Jeffrey Mann explained, consisted of two parts: $450 for the work involved in initially planning and scheduling the auction sale scheduled for June 30, 2009, and $300 for its services in conjunction with the continuance of the scheduled auction. Both amounts are standard charges of the Auctioneer. The cancelation fee in particular is a usual and ordinary fee of the Auctioneer, made necessary by the fact that so many of the sales for which it prepares are averted by last-minute bankruptcy filings. Even when the sale does not go forward, the auctioneer incurs expenses.4
The Debtor's first bankruptcy case was dismissed on July 31, 2009 for the Debtor's failure to comply with an order of the Court requiring him to file proof of insurance. The Trust then recommenced its plans to conduct an auction sale of the property, now rescheduled to August 27, 2009. To that end, the auctioneer placed additional advertisements in local newspapers and, in doing so, incurred further advertising expenses of $830. On August 23, 2009, the Debtor filed his second bankruptcy petition, which commenced the...
To continue reading
Request your trial