In re Sanders
| Decision Date | 14 September 1988 |
| Docket Number | Adv. No. 88-0626S.,Bankruptcy No. 87-03375S |
| Citation | 91 BR 317 |
| Parties | In re Jeffrey SANDERS, Trustee for Pentecostal Temple n/k/a Grace Community Temple, Debtor. Christine SHUBERT, Trustee, Plaintiff, v. Jeffrey SANDERS, Defendant. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Christine Shubert, Camden, N.J., interim trustee.
Harold N. Kaplan, Cherry Hill, N.J., for trustee.
Johnny Ray Brown, Philadelphia, Pa., for debtor and defendant.
James J. O'Connell, Ass't. U.S. Trustee, Philadelphia, Pa.
Jeffrey D. Sanders, Philadelphia, Pa., pro se.
This most unusual Chapter 7 bankruptcy filing and an adversary proceeding filed therein by the Trustee causes us to explore the issue of who the intended debtor in this case is and whether the intended debtor can in fact be a debtor in the configuration which he has chosen. We conclude, in light of the Debtor's explanatory Brief in this adversary proceeding, that the intended debtor is not the individual designated in the caption as "Trustee" of a church, but the church itself. We also conclude that this case can be properly maintained for the church by an individual designated as "Trustee." However, we also believe that this designation was not well-chosen, because it has apparently caused the Debtor's counsel to confuse the duties and responsibilities of the Chapter 7 Trustee appointed in the case under the Bankruptcy Code with those of the individual designated as "Trustee." As a result, we hold that the individual designated as "Trustee" owes $500.00 in rentals to the actual Debtor, i.e., the church, and may be liable for additional sums appropriated in his misdirected efforts at "administering" the case. However, we are compelled to defer disposition of any such liabilities pending legitimate administration of this case.
On July 6, 1987, the Debtor filed this voluntary case, captioned "Jeffrey D. Sanders, Trustee for Pentecostal Temple, now known as Grace Community Temple." An address of 4650 Edmund Street, Philadelphia, Pennsylvania 19124, was recited for the Debtor. The only activities in this case during its initial year of existence were as follows: (1) An unopposed motion for relief from the automatic stay was successfully filed by the mortgagee of the Edmund Street property; (2) A motion to dismiss this case was filed by the Philadelphia Missionary and Church Extension Society of the Eastern Pennsylvania Conference of the United Methodist Church (hereinafter referred to as "the Methodist Church") on the ground that neither schedules, a statement of affairs, nor a master list of creditors (matrix) had been filed by the Debtor. On February 18, 1988, the hearing date of the Methodist Church's motion, we denied same when schedules and a statement were filed that morning by the Debtor's counsel; and (3) The appointment of Christine Shubert, Esquire, as Interim Trustee of the Debtor's estate by the United States Trustee, (hereinafter "The Trustee") pursuant to 11 U.S.C. § 701(a)(1), on March 1, 1988.
The Statement of Financial Affairs for Debtor Engaged in Business, as filed on February 18, 1988, recites a business location of a church and parsonage at 4581 Torresdale Avenue, Philadelphia, Pennsylvania 19124. Almost every other question in the Statement is answered "Unknown." The only property listed on the Schedules is realty at the Torresdale Avenue address which includes, apparently, an adjoining parsonage, the address of which is 2046 Orthodox Street, Philadelphia, Pennsylvania 19124. The debts listed include a debt to the Methodist Church secured by a mortgage and about eighty (80) unsecured debts which appear to be congruent to a supplemental listing of "Church Bills," all of which are noted as "Disputed." Attached at the end of the papers is what purports to be a resolution by the sole member of the Board of Directors of the Grace Community Temple, i.e., Jeffrey D. Sanders (hereinafter "Sanders"), dated July 6, 1987, authorizing it to file the bankruptcy. The papers therefore give all indicia of listing church assets and liabilities, rather than individual assets of Sanders like, apparently, the Edmund Street property.
Unfortunately, no matrix was ever filed. This prevented the scheduling of a creditors' meeting pursuant to 11 U.S.C. § 341 in the case, which might have reduced the confusion enshrouding this matter since its inception.
On May 16, 1988, the Trustee filed the Complaint in the instant adversary proceeding against Sanders, apparently in his individual capacity, seeking to compel him to pay rent for residing in the parsonage on Orthodox Street and demanding that he turn over certain property of, apparently, the church. An Answer was filed for Sanders, by the same counsel as is representing the Debtor, admitting that Sanders lived in the parsonage for three (3) months and denying all other asserted liabilities. The first listing for trial, on June 29, 1988, was continued until August 3, 1988. On that date, defense counsel requested a further continuance, alleging that, after Sanders moved from the parsonage, he had moved about to various addresses, impeding communications and resulting in his absence. However, since it was noted that Sanders was present in court when we continued the hearing to this date, we denied this request.
The Trustee called the Reverend Mary Dorin and her husband Anthony as his sole witnesses. Rev. Dorin identified herself as pastor of the Saints Delight Pentecostal Church. Her husband testified that, in early November, 1987, he observed a newspaper advertisement regarding a sale of church articles. In response, the Dorins went to the church premises on Torresdale Avenue and met there with Sanders, who was conducting what might be termed an indoor garage sale of religious artifacts.
After purchasing some small items during their first encounter with Sanders on November 6, 1987, the Dorins thereafter placed a deposit on a pulpit, cross, and "three-piece chair" (hereinafter "the pulpit set") priced at $1,500.00. Ultimately, in December, 1987, they also negotiated a lease to use the church premises for rental of $1,000.00 monthly. An opening service in mid-January, 1988, was planned.
This escalation of amicable dealings between Sanders and the Dorins came to an abrupt halt in January, 1988, when the pulpit set suddenly disappeared from the church. At first the Dorins believed that the pulpit set was stolen, but, ultimately, Sanders admitted that he had sold it to another minister. Sanders ultimately returned $2,350.00 in payments remitted to him by the Dorins and attempted to terminate the lease, retaining $2,000.00 as rentals for the church over the period through the end of February, 1988, that the Dorins had used it. The Dorins have continued to use the church thereafter, but have remitted the rents to the Trustee at her insistence instead of to Sanders.
Sanders' counsel presented no evidence at the August 3, 1988, hearing. He stipulated that Sanders had resided in the parsonage for three months and that $500.00 monthly was the fair rental value of the premises for the entire period. He attempted to argue that the refund of $2,350.00 to the Dorins had made them whole, and that therefore the Trustee had no cause of action against Sanders. However, he also offered no denial that Sanders had sold the church's property, nor did defense counsel contend that any sort of court permission to sell the church's property had been obtained or even sought before Sanders did so.
At the close of the hearing, we expressed our frank puzzlement at not only precisely what relief was sought in the adversary proceeding, but also of the nature of the entire underlying bankruptcy case. The papers were ambiguous in describing even such a basic concept as who the debtor actually was — Sanders individually or the church. The questions of whether the church could be a debtor and what the significance of Sanders' designation in the papers as a "Trustee" of the church arose in our mind. We felt that resolutions of these questions were crucial to determining just what relief we possibly could grant to the Trustee in this proceeding. For example, we pointed out that, if Sanders individually were the Debtor, then no claim of rent for his residing in his own premises would have appeared appropriate. It was also unclear who owned the religious artifacts which Sanders had apparently sold, especially since they were clearly not listed at all in the schedules, even though they certainly appeared to have some relationship to the church.1 We therefore entered an Order of August 4, 1988, requesting counsel for the Trustee and the Debtor to submit Briefs, on or before August 15, 1988, and August 26, 1988, respectively, addressing what entity should be considered as the debtor in this case and to what relief the Trustee was entitled on behalf of whoever or whatever the debtor was. After a week's delay on the part of Sanders' counsel, the Briefs were submitted.
The Trustee, in her Brief, allowed that either Sanders individually or the church could be the debtor. She conceded that the rental claim was only viable if the church was the debtor. She further contended, apparently on the basis of the credible, but rather vague, testimony of the Dorins that the religious artifacts which they saw on sale were worth "approximately $3,000.00 to $5,000.00," that Sanders had removed items valued at this amount, and consequently, a judgment in this additional amount should be entered against Sanders.
In a responsive Brief, defense counsel clearly contended that the church was the intended debtor, and devoted much of the remainder of the Brief to attacks upon the Trustee. Some representative excerpts from the Defendant's Brief pursuant to Court's Order of August 4, 1988, appearing at pages 1-2, 4 and 5, are the following:
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