In re Ramsey

• Decision Date: 30 October 2009
• Docket Number: Adversary No. 07-01053-NPO.,Bankruptcy No. 06-12746-NPO.
• Citation: 424 B.R. 217
• Parties: In re Cyrus Wade RAMSEY, Jr., Debtor. Cyrus Wade Ramsey, Plaintiff v. Countrywide Home Loans, Inc., Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Mississippi

424 B.R. 217

In re Cyrus Wade RAMSEY, Jr., Debtor.

Cyrus Wade Ramsey, Plaintiff v. Countrywide Home Loans, Inc., Defendant.

Bankruptcy No. 06-12746-NPO.

Adversary No. 07-01053-NPO.

United States Bankruptcy Court, N.D. Mississippi.

October 30, 2009.

Robert E. Buck, Greenville, MS, for Plaintiff.

Harold H. Mitchell, Jr., Campbell DeLong, LLP, Greenville, MS, for Defendant.

MEMORANDUM OPINION AND ORDER GRANTING COMPLAINT

NEIL P. OLACK, Bankruptcy Judge.

This matter came on for trial (the "Trial") on September 9, 2009, on the Complaint Seeking Declaratory Judgment (the "Complaint")(Adv.Dkt. No. 1) filed by the Plaintiff, Cyrus Wade Ramsey, Jr. ("Wade Ramsey"), and the Answer and Affirmative Defenses (the "Answer")(Adv.Dkt. No. 14), filed by the Defendant, Countrywide Home Loans, Inc. ("Countrywide"), in the above-styled adversary proceeding (the "Adversary"). At the Trial, Robert E. Buck represented Wade Ramsey, and Harold H. Mitchell, Jr. represented Countrywide. The Court, having considered the pleadings as well as the testimony, exhibits, and arguments of counsel presented at Trial finds that the Complaint is well-taken and should be granted as set forth herein. Specifically, the Court finds as follows:¹

Jurisdiction

This Court has jurisdiction over the parties and the subject matter of this proceeding pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(H) and (K). Notice of the Trial was proper under the circumstances.

Facts

I. The following facts were stipulated by the parties in the Pretrial Order ("Pretrial Order")(Adv.Dkt. No. 88) which was approved by the Court:

The deed of trust ("Deed of Trust")(Ex. CHL 4) at issue in this Adversary was executed by Tammy Ramsey. Western Surety Company and Rebecca Jean Long ("Rebecca Long"), the notary public who acknowledged the Deed of Trust, were dismissed as Third-Party Defendants in the third-party action filed by Countrywide by the entry of a Stipulation of Dismissal (Adv.Dkt. No. 55) on July 22, 2008.

II. The following facts were established at Trial:

At all times pertinent to this Adversary, Wade Ramsey worked for Tackett Fish Farms as a truck driver, earning approximately $35,000 per year. (Tr. 24, 32-33).² Additionally, he lived at 1206 Saffold Street, Greenwood, Leflore County, Mississippi (the "Property"), which was his homestead. (Tr. 4-5). He filed a voluntary petition (the "Petition")(Dkt. No. 1) in this Court under chapter 13 of the Bankruptcy Code on October 27, 2006. By Order of this Court (Dkt. No. 17), the case converted to a case under chapter 7 of the Bankruptcy Code on December 6, 2006. At the time he filed the Petition, he was married to Tammy Ramsey.³ Wade Ramsey and Tammy Ramsey acquired title to the Property on March 1, 1996, by virtue of a warranty deed which conveyed title to them as "tenants by the entirety with full rights of survivorship and not as tenants in common." (Ex. CHL 1).

A. The Testimony of Wade Ramsey.

This case proves the old adage that love is blind. While under oath, Wade Ramsey stated that he and Tammy Ramsey were actually married to each other twice. (Tr. 36). Wade Ramsey admitted that Tammy Ramsey had a criminal record for passing bad checks which contributed to their first divorce. (Tr. 29, 36). He also admitted that during their second marriage, even though he was aware of Tammy Ramsey's criminal history, he trusted her to do all the family's banking and did not look at the bank statements. (Tr. 33-36).

In January 2001, Wade Ramsey received approximately $900,000 in net proceeds from the settlement of a personal injury claim ("Settlement Proceeds")(Tr. 15-16). Approximately $350,000 of the Settlement Proceeds was placed in certificates of deposit at Planters Bank & Trust Company. (Tr. 16, 38, 47, 53). Much of the rest of the Settlement Proceeds was spent by the Ramseys between 2001 and 2004 (Tr. 31-32). The Ramseys renovated the Property, including building an addition and adding a pool. (Tr. 31-32, 48). They also purchased a second house ("Taylor Drive House")⁴ and new vehicles. (Tr. 31-32, 47-49).

Wade Ramsey testified that he received a call in August 2005, from his insurance agent who informed him that the homeowners' policy on the Property needed to be renewed to comply with the terms of the mortgage taken on the Property in August 2004. (Tr. 17). Wade Ramsey also stated he did not know what she was talking about because any debts associated with his home were paid. Id. He further stated that to his knowledge there was no need to borrow money because he still had $350,000 in certificate of deposits in Planters Bank & Trust Company (Tr. 53).

While the signature on the note (the "Note")(Ex. CHL 2) dated August 11, 2004, memorializing a loan in the amount of $75,000, purports to be Wade Ramsey's signature, Wade Ramsey testified to the following with regard to the execution of the Note and the Deed of Trust: he did not sign the Note or the Deed of Trust; he was not present when Tammy Ramsey signed the Note and the Deed of Trust; he did not authorize anyone to sign the Note or the Deed of Trust on his behalf; he was not aware until later that Tammy Ramsey had borrowed money against the Property or executed the Note or Deed of Trust; he knew Rebecca Long because her children attended the same school his children did and she worked at a car dealership from whom he had once purchased a truck, but he had not executed any documents before her in August 2004; and, he did not know Andrew or Millie Justis, who signed the Deed of Trust as witnesses (Tr. 9-14, 56).

Wade Ramsey testified that he retained Mr. Buck to represent him and executed a Uniform Affidavit for Identity Theft pursuant to Mr. Buck's advice (Ex. P2, Tr. 21). Wade Ramsey also testified that he never made any payments on the Note because he felt he was not responsible for the debt. (Tr. 21-22). According to the undisputed testimony of Wade Ramsey, the Property was the homestead of Wade Ramsey and Tammy Ramsey at all times pertinent to this matter. (Tr. 4, 30). The Court found the testimony of Wade Ramsey credible.

B. The Testimony of Tammy Ramsey.

Tammy Ramsey testified by deposition⁵ that Wade Ramsey signed the Deed of Trust. (Ex. CHL 23, pp. 81-82). The Court, however, found that Tammy Ramsey's testimony regarding the execution and acknowledgment of the Deed of Trust was internally inconsistent. At one point in her testimony, Tammy Ramsey stated that she had executed the Deed of Trust before a Notary at the courthouse, and Wade Ramsey had executed it before a Notary at his place of work. (Ex. CHL 23, p. 80). She later stated that both she and Wade Ramsey executed the Deed of Trust before the Notary at the car lot at the same time. (Ex. CHL 23, p. 81). She stated that she did not know the people whose names appeared as witnesses and that "these people" were not present when she executed the Deed of Trust. (Ex. CHL 23, p. 82). The Court did not find credible Tammy Ramsey's testimony that Wade Ramsey actually signed the Note and Deed of Trust.

Issues

The issues presented to the Court are:

I. Whether the Deed of Trust is valid as to Wade Ramsey and/or Tammy Ramsey;

II. If the Deed of Trust is not valid, whether Countrywide is entitled to an equitable lien on the Property under the circumstances; and,

III. Whether Wade Ramsey can prevail on a motion made at the close of Trial to amend the Complaint to request attorney's fees.

Discussion

I. The Deed of Trust is invalid as to Wade Ramsey and Tammy Ramsey.

A. The Deed of Trust is invalid as to Wade Ramsey.

Federal Rule of Evidence 901(b)(3) allows the trier of fact to compare a controverted signature on an instrument to an authenticated exemplar for the purposes of authenticating the former. See also United States v. Garza, 448 F.3d 294, 300 (5th Cir.2006). This Court compared the purported signatures of Wade Ramsey on the Note and Deed of Trust to the exemplar signature on the warranty deed whereby Wade Ramsey and Tammy Ramsey granted title to the Taylor Drive House to LaNita Roark. ("Taylor Drive Warranty Deed")(Ex. CHL 18).⁶ It is clear to the Court that the signatures on the Note and the Deed of Trust which purport to be the signatures of Wade Ramsey are not, in fact, Wade Ramsey's. In light of this finding, coupled with the credible testimony of Wade Ramsey, the Court finds that Wade Ramsey did not sign the Note or the Deed of Trust at issue in this Adversary.

Miss.Code Ann. § 89-1-29 (1980)⁷ states that a mortgage or deed of trust on a homestead shall not be valid or binding unless signed by both husband and wife if the owner of the property is married and living with the spouse unless the spouse has been declared insane.⁸ In interpreting § 89-1-29, the Mississippi Supreme Court has steadfastly held that a deed of trust on a homestead, executed by [one spouse] alone, is void. See generally Bollen v. R.G. Lilly & Son, 85 Miss. 344, 37 So. 811 (1905); Yazoo Lumber Co. v. Clark, 95 Miss. 244, 48 So. 516 (1909); Stringer v. Arrington, 202 Miss. 798, 32 So.2d 879 (1947); Travis v. Dantzler, 244 Miss. 360, 141 So.2d 556 (1962); Thornhill v. Caroline Hunt Trust Estate, 594 So.2d 1150 (Miss.1992); Thurman v. Thurman, 770 So.2d 1015 (Miss.Ct.App.2000); Alexander v. Daniel, 904 So.2d 172 (Miss.2005). In 1987, the Mississippi Supreme Court held in Welborn v. Lowe that, "[t]he cases are legion construing [§ 89-1-29] to mean that a conveyance of homestead without a spouse joining in the execution of the deed is absolutely void." Welborn, 504 So.2d 205, 207 (Miss.1987)(emphasis added). This result is true even if the non-signing spouse agreed to the conveyance at the time but was prevented from signing the deed because of illness. Hughes v. Hahn, 209 Miss. 293, 46 So.2d 587 (1950). It is true even when the signing spouse is also the spouse who wants to avoid the conveyance based on his spouse's failure to sign. Rhymes v. Countrywide Home Loans, Inc., 2008 WL...