In re Mead, Bankruptcy No. 05-13930.

• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida
• Citation: 374 B.R. 296
• Docket Number: Adversary No. 06-14.,Bankruptcy No. 05-13930.
• Parties: In re Kenneth H. MEAD, Debtor. Kenneth H. Mead, Plaintiff, v. United States of America, et al., Defendant.
• Decision Date: 28 March 2007

374 B.R. 296 In re Kenneth H. MEAD, Debtor.
Kenneth H. Mead, Plaintiff,
v.
United States of America, et al., Defendant. Bankruptcy No. 05-13930. Adversary No. 06-14. United States Bankruptcy Court, M.D. Florida, Jacksonville Division. March 28, 2007.

Page 297

COPYRIGHT MATERIAL OMITTED

Page 298

COPYRIGHT MATERIAL OMITTED

Page 299

Ronald Bergwerk, Jacksonville, FL, for Plaintiff.

Bruce T. Russell, U.S. Department of Justice, Washington, DC, Bonnie Riggi, NYS Department of Law, Albany, NY, Joseph A. Tringali, Assist. Atty General, West Palm Beach, FL, Jacob A. Brown, R. Raye Curry, Akerman Senterfitt, Edward H. Merrigan, Jacksonville, FL, Kevin M. Newman, Menter Rudin & Trivelpiece PC, Syracuse, NY, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

JERRY A. FUNK, Bankruptcy Judge.

This proceeding came before the upon Plaintiffs Motion for Summary Judgment (the "Motion"). Partners Trust Bank, Financial Federal Credit, Inc., the New York State Department of Taxation and Finance, and the New York Environmental Protection and Spill Compensation Fund (the "New York Oil Spill Fund") filed responses in opposition to the Motion. Upon the pleadings and the arguments of the parties, the Court finds it appropriate to grant in part and deny in part Plaintiffs Motion for Summary Judgment.

Background

Florida Properties

Plaintiff owns four condominiums in Marion County Florida (the "Florida Properties"). Various creditors have obtained judgments against Plaintiff. The following documents have been recorded with the Clerk of Court in Marion County, Florida by the following parties on the following dates.

Date Description
                January 11, 2001 AmSouth Bank Judgment
                July 20, 2001 BSB Bank & Trust Company
                 Judgment 11
                

Page 300

August 13, 2001 BSB Bank & Trust Company
                 Judgment2
                January 16, 2002 Florida DOR Warrant
                July 30, 2002 Truserve Judgment
                November 20, 2002 Notice of Federal Tax Lien
                January 3, 2003 Transcript of Judgment-State
                 of New York
                May 5, 2004 Financial Fed. Credit Judgment3
                July 29, 2004 First American Title Judgment
                

Virginia Property

Plaintiff owns an improved commercial lot in Virginia Beach, Virginia. The following documents have been recorded with the Commonwealth of Virginia.

Date Description
                July 9, 2001 the BSB Judgments
                November 26, 2001 AmSouth Judgment
                April 29, 2002 American Express Judgment
                December 5, 2003 Warrant — State of New York4
                January 9, 2003 Transcript of Judgment — State
                 of New Yorks5
                February 11, 2003 Notice of Federal Tax Lien
                July 29, 2004 Financial Fed. Credit Judgment
                

On October 14, 2005 Plaintiff filed a voluntary petition under Chapter 11 in this Court. Plaintiff filed a complaint on January 11, 2006 seeking to determine the validity, priority or extent of a lien.

Standard for Summary Judgment

Summary judgment under Rule 56 is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (2006)(incorporated by Fed. R. Bankr.P. 7056). A moving party bears the initial burden of showing a court that there are no genuine issues of material fact that should be decided at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); accord Clark v. Coats & Clark, Inc., 929 F.2d 604, 607 (11 th Cir.1991). A moving party discharges its burden on a motion for summary judgment by "`showing' — that is, pointing out ... that there is an absence of evidence to support the nonmoving party's case." Celotex Corp., 477 U.S. at 325, 106 S.Ct. 2548. In determining whether the movant has met this initial burden, "the court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the nonmoving party." Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997)(citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) and Fitzpatrick v. City of Atlanta, 2

Page 301

F.3d 1112, 1115 (11th Cir.1993)). In other words, the court must decide "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If a moving party satisfies this burden, then a nonmoving party must come forward with specific facts showing that there is a genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A nonmoving party must do more than simply show that there is some metaphysical doubt as to the material facts. See id. "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Id.

Discussion

Plaintiff seeks to have the Court determine the validity and priority of liens filed by the various parties as to the Florida Properties and the Virginia Property. To the extent that the filings operate as liens, the priorities are in order of the date and time of recordation. The Court will separately address the Florida Properties and the Virginia Property.

Florida Properties

AmSouth Bank did not file an answer to the Complaint. Plaintiff obtained a default against AmSouth Bank. Additionally, Plaintiff's affidavit attests that no debt is owed to AmSouth Bank. Am South did not file a response to the Motion for Summary Judgment. Because it is undisputed that no debt is owed to AmSouth Bank, AmSouth Bank does not have a lien against the Florida Properties.

Next in time is BSB. BSB attempted to domesticate the BSB Judgments pursuant to § 55.505, Florida's version of the Uniform Enforcement of Foreign Judgment Act (the "Florida UEFJA") which provides:

55.505. Notice of recording; prerequisite to enforcement

(1) At the time of the recording of a foreign judgment, the judgment creditor shall make and record with the clerk of the circuit court an affidavit setting forth the name, social security number, if known, and last known post office address of the judgment debtor and of the judgment creditor.

(2) Promptly upon the recording of the foreign judgment and the affidavit, the clerk shall mail notice of the recording of the foreign judgment, by registered mail with return receipt requested, to the judgment debtor at the address given in the affidavit and shall make a note of the mailing in the docket. The notice shall include the name and post office address of the judgment creditor and of the judgment creditor's attorney, if arty, in this state. In addition, the judgment creditor may mail a notice of the recording of the judgment to the judgment debtor and may record proof of mailing with the clerk. The failure of the clerk to mail notice of recording will not affect the enforcement proceedings if proof of mailing by the judgment creditor has been recorded.

(3) No execution or other process for enforcement of a foreign judgment recorded hereunder shall issue until 30 days after the mailing of notice by the clerk and payment of a service charge of up to $37.50 to the clerk. When an action authorized in s. 55.509(1) is filed, it acts as an automatic stay of the effect of this section.

The following undisputed facts are set forth in Plaintiff's Motion for Summary Judgment and Partner Trust Bank's Objection

Page 302

to Plaintiff's Motion for Summary Judgment. The affidavits accompanying the BSB Judgments included three addresses for Plaintiff. The Clerk of Marion County sent notice of the BSB Judgments to those three addresses. BSB also mailed the notice to those three addresses. The first address used by BSB is that of a rental house Plaintiff owned but did not reside at. The second address was a former business address of an affiliated company, which closed in 1999. The third address was a former residence from which Plaintiff moved permanently in 1998. Plaintiff did not receive any notices of recording of the BSB Judgments.

After the filing of the BSB Judgments, Plaintiff disposed of several other properties in Marion County, Florida. BSB's counsel worked with Plaintiff and AmSouth Bank in connection with the sales and received payments on behalf of BSB from the sales. In connection with these transactions, Plaintiff was aware of the BSB Judgments against the properties which he sold and acknowledged the same by allowing payments at closings to be made to BSB in exchange for partial releases of the BSB Judgments.

Debtor argues that because of ineffective mailing, the liens that would have otherwise been created by the recordation of the BSB Judgments had not become final by the petition date and are therefore inferior to the trustee's strong arm powers.⁶ BSB argues that neither actual delivery nor utilization of residential addresses is required by the statute. BSB argues that by having worked with BSB and causing BSB to receive payments from the disposition of his other Florida properties, Plaintiff had actual notice of the domestication of the BSB Judgments and should be estopped from challenging their validity.

Ordinarily, a judgment debtor must receive notice by mail of the recording of a foreign judgment. See Cruz v. Desert Palace, Inc., 770 So.2d 306, 308 (Fla.3d Dist.Ct.App.2000) (holding that process for enforcement of a judgment creditor's foreign judgment could not be commenced where judgment debtor did not receive the prescribed notice of the recording of the judgment from either the clerk of court or from the judgment creditor); Pan Am World Services, Inc. v. Abdell, 522 So.2d 1177, 1179 (La. 4th Ct.App. 1988) (noting the insufficiency of "mere mailing to a supposed address" and stating that "notification by mail is sufficient but only where it is shown that...