In re Rabzak, Bankruptcy No. 82-04003 T.
| Decision Date | 03 November 1987 |
| Docket Number | Bankruptcy No. 82-04003 T. |
| Citation | 79 BR 960 |
| Parties | In re Stanley RABZAK, Debtor. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Frederick L. Reigle, Reading, Pa., trustee.
Eugene Orlando, Herman, Orlando & Rearden, Reading, Pa., for trustee.
Alan M. Seltzer, Ryan, Russell & McConaghy, Reading, Pa., for Berks Indus. Warehousing, Inc.
Richard L. Orwig, Reading, Pa., for Joan Masler.
John Grenko, Reading, Pa., for John Grenko.
David G. Campbell, Reading, Pa., for Bank of Pennsylvania.
We now render decision on the following matters in the case of Stanley A. Rabzak ("debtor"), a pro se chapter 7 debtor: (1) debtor's objection to the trustee's April 14, 1987 report of consummated sale; (2) debtor's motion for a more specific bill of particulars;1 (3) debtor's objection to the proofs of claim filed by Bank of Pennsylvania, Berks Industrial Warehousing, Inc. (the moving company hired by the trustee to remove debtor's possessions from the property), Fidelity Bank, Hamilton Bank, and Joan Masler (debtor's ex-wife), and (4) trustee's objection to debtor's proof of claim. We also order the submission of additional information to allow review of debtor's objection to the proof of claim of John Grenko, Esq.
Our evaluation of these matters starts with the tortuous procedural and appellate history of this case, brief excerpts of which we describe below. On February 11, 1987, after a hearing in which debtor was allowed to present his objections, we entered an order allowing the trustee to sell debtor's interest2 in certain real estate ("the property"). As a result of debtor's actions, we ordered on January 30, 1987 that the trustee and his agent be permitted access to the real estate to conduct necessary radon, water and septic testing. Debtor's refusal to cooperate led us to sign an order for possession on February 12, 1987. The debtor requested a stay pending appeal, which we denied. He then appealed the January 30th and February 12th orders. No appeals are now pending.3
The objections and motions listed above were heard on July 1, 1987. On September 16, 1987, debtor filed an "Emergency Motion to Admit Evidence in Conjunction with Debtor's Objection to Trustee's Claim" ("Emergency Motion"). Since the trustee did not personally file any claim, we have reviewed the content of the Emergency Motion. Debtor alleged that the trustee and his agents ". . . performed their duties in an improper, unworkmanlike quality." Thus, the Emergency Motion is really an additional objection to (1) the Berks Industrial Warehousing ("BIW") proof of claim, and (2) the debtor's objections to the trustee's report of sale. Accordingly, we will treat the Emergency Motion as supplemental arguments to both of these matters.
The Emergency Motion was heard on October 13, 1987, at which time the debtor presented the testimony of a friend who allegedly witnessed the BIW employees as they moved debtor's possessions from the property in March of 1987. Berks requested that we hear the testimony of their witness on this subject, and we scheduled the matter for hearing on October 28, 1987. Prior to that time, debtor filed a request for a continuance, which we denied by order dated October 26, 1987.
On April 13, 1987, the trustee filed a report of consummated sale, and the debtor filed an objection4 to the report ("Objection to Report"). Debtor also filed a "Motion for More Specific Bill of Particulars," requesting a public accounting of the trustee's expenses. Since the bankruptcy code and rules identify no such pleading, and in light of debtor's pro se status, we will deem this a request for hearing on (1) the trustee's report of consummated sale, and (2) the debtor's objection to the claim of BIW. We also consider a document captioned "Objection to Claim," filed by the debtor on May 5, 1987 and docketed to adversary no. 86-1440.5 This document requests that the debtor's ex-spouse not be given any proceeds from the sale of the property because (1) the trustee failed to consider adversary 86-1440; (2) no party responded6 to debtor's motion to get his ex-spouse to appear for an examination. Whatever this document may be, it is not, as debtor captions it, an objection to a Proof of Claim. We will read it as a broad objection to the trustee's report of sale.
We deny debtor's objections to the report and request for a bill of particulars for the following reasons. The trustee has fully reported his sale related expenditures and receipts, and provided a copy of the settlement sheet. He has also certified that the sale and distributions were made in accordance with the notice of sale. Further, at the July 1, 1987 hearing, the trustee called as a witness the attorney who prepared the settlement sheet and attachments. That witness fully explained all notations and calculations under questioning from both the trustee's counsel and debtor. Debtor's objection focuses on the "adjustments" category of the settlement sheet. Debtor fully questioned the witness who testified that these were certain sale expenses with which debtor's non-debtor, ex-wife was not properly chargeable.7 We agree with the trustee. 11 U.S.C. §§ 363(h), (f).
During the July 1, 1987 hearing, the debtor also objected that the property was not sold to the first party making an acceptable offer. We specifically deny this objection. The sale has been fully consummated and all appeals decided. Further, the trustee took acceptable steps when the first purchasers were unable to meet their mortgage contingency; he secured purchasers willing to pay the same price under virtually identical terms, Notes of Testimony, July 1, 1987 ("N.T."), and proceeded to send out an amended notice of sale. Despite his protestations, debtor presented no evidence that the price received by trustee was not the fair market value of the real estate. He objects that we did not authorize this sale, but neither the Code nor the (local or national) Rules in effect at the time this sale was consummated require that the Judge approve such a sale in the absence of objections. Rules 6004(a), (d), 2002(a)(2), (c)(1) (). Finally, although debtor claims to have had an agreement of sale with another party, the July 1, 1987 testimony suggests that no such agreement existed because debtor's ex-spouse, a co-owner of the property, did not sign the agreement.
We turn to the proofs of claim to which debtor objects. Properly filed proofs of claim are prima facie evidence of the validity and amount of the claim, absent any objection by a party in interest. 11 U.S.C. § 502(a) and Rule 3001(f). The burden of going forward is then on the objector, In re Vic Snyder, Inc., 50 B.R. 631, 633 (E.D.Pa.1985), who must present evidence sufficient to rebut the prima facie case. In re Harmon, 72 B.R. 458, 461 (Bankr.E.D.Pa.1987); In re Baker, 49 B.R. 240 (E.D.Pa.1985). The objector must present ". . . evidence tending to defeat . . ." the proof of claim, but the ". . . ultimate burden of persuasion . . ." remains on the creditor filing the proof. In re Joseph D. Stinger, No. 87-01332F, slip op. at 2 (E.D.Pa. July 22, 1987).
Linking many of these proofs of claim are debtor's objections to the timeliness of their filing. A few explanatory words clarify this issue. This case was filed as a chapter 13 on August 25, 1982. On October 14, 1986, we signed an order converting the case to chapter 7. The initial date set for the chapter 13 creditors' (11 U.S.C. § 341) meeting was January 30, 1983. Pursuant to former Bankruptcy Rule 302(e), effective at that time, the deadline for filing proofs of claim was six (6) months after the date initially scheduled for the creditors' meeting. In this case, that deadline was July 20, 1983. An individual or entity that had properly filed a claim in the chapter 13 was not required to refile its proof after the case converted. See Rule 1019(4). (effective on October 14, 1986, the date on which this case was converted) Indeed, after the case was converted to chapter 7, the clerk's office sent out a notice dated December 19, 1986, informing creditors of the 341 meeting. This notice did not set another bar date because no assets existed above and beyond debtor's exemptions.
Bank of Pennsylvania ("BPA") filed two proofs of claim on December 15, 1982: one in the amount of Two Thousand Five Hundred Twenty-Six and 59/100 ($2,526.59) Dollars ("claim 1") and the other in the amount of One Thousand Seven Hundred Seventy and 40/100 ($1,770.40) Dollars ("claim 2"). On April 9, 1984, debtor filed an objection to claim 2, but he later withdrew this objection. N.T., May 24, 1984, pp. 8, 10. On May 7, 1987, debtor again objected to claim 2, alleging that it was a marital debt. We find that debtor has previously withdrawn his objection to claim 2 and has provided us with no timely rationale for rehearing the matter. Further, the "cash plus" checking agreement underlying claim 2 provides for joint and several liability, defeating debtor's argument that this is a marital debt not chargeable in full to him. Accordingly, we deny debtor's objection and allow BPA's claim 2 in full. This leaves us with claim 1, and debtor admitted on July 1, 1987, that he had no objection to this particular proof of claim.
The BIW administrative claim in the amount of Seven Hundred Ninety-Eight ($798.00) Dollars was filed on April 16, 1987. Debtor objects that the claim is ". . . without substance, nature of any specificity." The proof of claim clearly indicates that it covers expenses incurred in ". . . moving Debtor's possessions out of Debtor's home." At the hearing, BIW presented the testimony of Scott Goetz, an owner of BIW, that the amount claimed represented the customary, reasonable charges in Berks County for such work....
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