In re Snyder
| Citation | 101 BR 822 |
| Decision Date | 08 June 1989 |
| Docket Number | Bankruptcy No. 84-01470-L,Adv. No. 85-0001. |
| Parties | In re Myron SNYDER, Debtor. Peter BAKIS, Sidney Bornstein, Richard Gilman, Philip Pearl and Newbury Prime Realty Corp., Plaintiffs, v. Myron SNYDER, Defendant. |
| Court | United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts |
Richard D. Gilman, Malden, Mass., for plaintiffs.
Myron Snyder, Brookline, Mass., pro se.
The above captioned adversary proceeding was filed on January 2, 1985. The original complaint seeks a determination that certain debts owed by Myron Snyder ("Snyder" or the "Debtor") to the plaintiffs are nondischargeable pursuant to sections 523(a)(2)(A) and 523(a)(4) of the Bankruptcy Code. The complaint is predicated upon a complicated series of events, including the 1978 bankruptcy of the Paul G. Roberts Realty Trust; a bankruptcy court authorized sale of that estate's interest in real estate on Newbury Street in Boston; questionable activities related to the bankruptcy proceedings involving the Debtor and his wife, who were trustees of the Paul G. Roberts Realty Trust; and a state court lawsuit commenced by the law firm of Widett and Widett against, among others, the Debtor, his wife and the plaintiffs in this proceeding.
The complaint filed in this adversary proceeding was amended to add additional defendants and inter alia to obtain relief under section 727(a) of the Bankruptcy Code.1 In July of 1986, the bankruptcy court per Judge Lavien, acting on the plaintiffs' motion for summary judgment, denied the Debtor his discharge pursuant to 11 U.S.C. § 727(a)(4)(A) and (B). The judgment was appealed first to the district court and then to the United States Court of Appeals for the First Circuit. The court of appeals reversed the district court, which had affirmed the bankruptcy court's entry of summary judgment in favor of the plaintiffs. On March 22, 1988, the district court remanded the matter to the bankruptcy court for further proceedings.
Approximately one year later, following Judge Lavien's decision to recuse himself from handling this adversary proceeding, and the issuance of numerous procedural orders by this Court, the issues in this case finally were narrowed and simplified. On March 8, 1989, the Court conducted an evidentiary hearing solely on the issue of whether certain debts owed by Myron Snyder to the plaintiffs are nondischargeble.
At the trial, two witnesses testified, the Debtor and Sidney Bornstein, and numerous exhibits were introduced into evidence, including a decision rendered on November 3, 1982 by Judge Randall of the Suffolk Superior Court, a decision rendered on August 15, 1984 by the Massachusetts Supreme Judicial Court, and a decision rendered on remand from the Supreme Judicial Court by Judge Randall on August 26, 1985. These decisions are important in view of their bearing on the issues in the case and the entry of an order by the bankruptcy court per the late Chief Judge Lawless on December 18, 1984 in response to a Motion for Relief from Stay and for Abstention Pursuant to 28 U.S.C. § 1334 filed by one of the plaintiffs in the Superior Court proceeding. That order provides in relevant part:
ORDERED that this Court shall abstain from hearing and determining any and all matters related to Case No. 57964 which is being heard by Judge William J. Randall of the Suffolk Superior Court, whether filed by Widett & Widett, et al., or any other counsel, and relief is immediately granted herein to allow any party related to said cause of action the right to proceed with motions, hearings, and any other Court proceedings before Judge Randall for the purpose of reducing any and all disputes therein to judgment.
It was Judge Lawless' clear intention to permit Judge Randall to enter judgments on the disputed matters pending before him. However, it is equally clear that Judge Lawless could not have made any decision with respect to the nondischargeability of any judgments obtained by the plaintiffs against the Debtor in the state court proceeding. Because this Court has been provided with Judge Randall's detailed findings and because there is a sufficient record from the hearings in the state court and in the bankruptcy court itself upon which the Court can make an independent assessment of whether the judgments obtained by the plaintiffs in the state court are or are not dischargeable in this bankruptcy proceeding, the Court may properly conclude this protracted proceeding by making the following findings and rulings.
It is important to stress at this juncture, however, that both the plaintiffs and the Debtor in this proceeding have sought the admission into evidence of Judge Randall's decisions. Accordingly, the Court will rely, at least in part, upon the facts found by Judge Randall in an initial proceeding that consumed 11 days of trial and involved the testimony of 18 witnesses and the introduction of 94 exhibits, and a subsequent proceeding that consumed four days of trial and involved the testimony of four witnesses and the admission into evidence of 27 exhibits. As will become clear, the debts that the plaintiffs now allege are nondischargeable were determined by Judge Randall to be due and owing by the Debtor after an exhaustive examination of the facts and the law. Although the original complaint does not enumerate them, the plaintiffs seek to have the following debts declared to be nondischargeable:
In view of the emphasis all parties have placed upon the state court proceedings, the Court does not view the plaintiff's failure to enumerate these debts as prejudicial to the Debtor in any way.
The state court proceeding was commenced by the law firm of Widett & Widett, which had been promised a third mortgage on the Debtor's residence located at 156 Dead Road, Brookline, Massachusetts, as security for the Debtor's substantial obligations to the firm. The firm sued the Debtor; the Debtor's wife, Inez Tedesco Snyder; the Debtor's son, Robert G. Snyder; G. Ropate Corp., a corporation organized by the Debtor to engage in the meat brokerage business; Newbury Prime Realty Corporation ("Newbury Prime"), a corporation organized for the purpose of operating property on Newbury Street purchased at a bankruptcy sale of assets of the Paul G. Roberts Realty Trust; and four individuals who are or were directors of Newbury Prime, namely Sidney Bornstein ("Bornstein"), Gerald Bornstein, Philip Pearl ("Pearl") and Peter Bakis ("Bakis"). The law firm sought two forms of relief: (i) a judgment against the Debtor in the amount of the principal and interest owed it on a promissory note, and (ii) a declaration that a third mortgage to Harbor National Bank on property owned by the Debtor and his wife (property that secured the debt of G. Ropate Corp. and the guarantees of the Debtor and his wife of that debt) was null and void. Newbury Prime, Sidney and Gerald Bornstein, Pearl and Bakis filed an answer in which they asserted that the Widett firm's complaint failed to set forth a cause of action against them. They also asserted cross claims against Myron and Inez Snyder.
As summarized by Judge Randall, Sidney Bornstein alleged:
1) that Myron Snyder and Inez T. Snyder by fraud and deception prevailed upon him to assign for Newbury Prime the mortgage from Myron and Inez T. Snyder to Harbor that the Snyders had had assigned to Newbury Prime without giving him a full and complete understanding of the assignment and that as a result he became involved in this action in which he has had to expend much time and money; 2) that Myron Snyder was a director of Newbury Prime and as such owed a fiduciary duty to the officers, stockholders, and directors of Newbury Prime and that he breached this duty in the matter of the assignment of the mortgage as set forth above; . . . and . . . 3) that Myron Snyder received the sum of $60,100 from Sidney Bornstein and has refused to repay the same to thesaid sic Sidney. . . .
Widett & Widett v. Snyder, No. 5764, slip op. at 2-3 (Suffolk Superior Court November 3, 1982) (hereinafter "Decision of November 3, 1982").
Gerald Bornstein, Pearl and Bakis made similar allegations. Again, according to Judge Randall, they asserted:
1) that defendants sic Snyder without the knowledge or assent of Bornstein, Pearl and Backis sic devised a plan to prevent junior lien holders Widett & Widett from advancing to a higher priority in and to certain real estate of Snyders by assigning a mortgage through Newbury Prime wherein the said Bornstein et al were involved in another action; 2) that these three Defendants were directors with Myron in Newbury Prime and that Myron breached his fiduciary duty to them in the matter of the assignment of the mortgage to Robert G. Snyder and as a result has emeshed them in this lawsuit; . . . and . . . 4) that Myron, through Inez and personally as a director of Newbury, transferred by mortgage assignment certain assets from the corporation to his son for the purpose of deterring creditors and in so doing has involved these three Defendants as parties in this law suit.
Decision of November 3, 1982 at 3. Finally, Newbury Prime, according to Judge Randall, asserted a cross-claim against the Debtor for:
1) breach...
To continue reading
Request your trial