In re O'Neill, Bankruptcy No. 83-0674-8P7
| Decision Date | 08 December 1988 |
| Docket Number | Adv. No. 87-222.,Bankruptcy No. 83-0674-8P7 |
| Parties | In re Michael Shane O'NEILL, Debtor. George HADLEY, Plaintiff, v. Michael Shane O'NEILL, Helen DeFrance and Shannon Schriedel, Defendants. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
David Steen, Tampa, Fla., for plaintiff.
J. Patrick McElroy, Clearwater, Fla., for defendants.
Allan C. Watkins, Tampa, Fla., for creditor, David Ebert.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND MEMORANDUM OPINION
THIS IS a Chapter 7 liquidation case and the matter under consideration is a Complaint filed by George Hadley (Trustee), against Michael Shane O'Neill (Debtor), Helen DeFrance, the Debtor's grandmother and Shannon Schriedel, the Debtor's sister. Through his Complaint, the Trustee seeks a determination in Count I that transfers of certain real property to the Debtor's grandmother and sister and the Debtor's execution of a mortgage in favor of the Debtor's grandmother constitute fraudulent conveyances pursuant to § 726.01 of the Florida Statutes, and thus may be avoided by the Trustee pursuant to § 544(b) of the Bankruptcy Code. Count II of the Complaint has been dismissed with prejudice by a previous order of the Court. In Count III of the Complaint, the Trustee seeks a determination that in the event this Court determines the mortgage in favor of the Debtor's grandmother to be valid, the lien on the property secured by the mortgage should be transferred to the estate pursuant to § 510(c)(2) of the Bankruptcy Code. In opposition, the Defendants categorically deny the Trustee's allegations that the transfers were fraudulent and raise the affirmative defenses of estoppel, laches, and waiver.
The Court has considered the evidence presented at the final evidentiary hearing and finds the facts relevant to a resolution of this matter to be as follows:
On March 31, 1983, the Debtor filed his voluntary Chapter 7 Petition. On March 31, 1983, George Hadley was appointed as Interim Trustee and on June 8, 1983, he subsequently succeeded himself as permanent Trustee. On August 28, 1986, the Debtor's case was closed. On October 2, 1986, Keith Ebert, a creditor, filed a Motion to Reopen the case. On October 10, 1986, the Trustee likewise filed a similar Motion. On December 29, 1986, this Court entered an Order Reopening the case, and on June 18, 1987, the Trustee filed the Complaint under consideration.
As noted, in his Complaint, the Trustee seeks to set aside the following transfers by the Debtor. The first of these occurred on May 7, 1981, when the Debtor executed a "mortgage note" in favor of his grandmother, Helen DeFrance, in the amount of $28,000 plus interest at 10% per annum. The note states that all principal and accrued interest would be due and payable in 30 years or upon the sale of property located at 514 Keystone Avenue, Clearwater, Florida. (Trustee's Exh. No. 1) It further appears that the Debtor orally agreed to make monthly payments on the note in the amount of $245 (Trustee's Exh. No. 2). Simultaneously, the Debtor executed a third mortgage in favor of his grandmother, Helen DeFrance, on the property owned by him at 514 Keystone Avenue. It appears that the mortgage note and mortgage were executed in conjunction with a loan made by the grandmother to the Debtor for the purchase of a truck. The mortgage and note were recorded in the public records of Pinellas County, Florida on December 21, 1981.
The record further reveals that subsequently, on March 22, 1983, the Debtor executed and recorded a quitclaim deed in favor of his grandmother and thereby conveyed his entire interest in the real property at 514 Keystone Avenue to his grandmother. (Trustee's Exh. No. 4) It should be noted that the deed provided in part that the "deed is given in consideration of satisfaction in full of that certain mortgage and Mortgage Note . . ." discussed previously. On March 31, 1983, the Debtor filed his Chapter 7 Voluntary Petition. It is conceded by the Debtor that the quitclaim deed was executed and the property was transferred to his grandmother to prevent the Trustee from liquidating the Debtor's interest in the property.
On November 24, 1983, even though the property was now owned by the Debtor's grandmother, the Debtor as lessor executed an agreement with Dan and Terry Carrico (Mr. and Mrs. Carrico) for the lease of the property located at 514 Keystone Avenue. Rent payments were made directly to the Debtor. (Trustee's Exh. No. 9) On August 6, 1984, the Debtor filed a Statement of Claim in the Pinellas County Court, Small Claims Division against Mr. and Mrs. Carrico to recover for losses incurred by the Debtor due to damage done by the Carricos to the property. (Trustee's Exh. No. 8) On December 21, 1984, the Small Claims Division of the Pinellas County Court entered and recorded a final judgment in favor of the Debtor and against the Carricos in the total amount of $535. (Trustee's Exh. 10) It is without dispute that the Debtor received the monies collected from the Carrico's in satisfaction of the judgment.
On February 18, 1985, the Debtor's grandmother executed a quitclaim deed conveying her interest in the same real...
To continue reading
Request your trial