In re Snyder, Bankruptcy No. 84-1470-L.

• Decision Date: 30 September 1986
• Docket Number: Bankruptcy No. 84-1470-L.
• Citation: 66 BR 886
• Parties: In re Myron SNYDER, Debtor.
• Court: U.S. Bankruptcy Court — District of Massachusetts

66 B.R. 886 (1986)

In re Myron SNYDER, Debtor.

Bankruptcy No. 84-1470-L.

United States Bankruptcy Court, D. Massachusetts.

September 30, 1986.

COPYRIGHT MATERIAL OMITTED

Charles R. Dougherty, Hill & Barlow, Boston, Mass., for SAMPCO.

John D. Mullen, Sheridan, Garrahan and Lander, Framingham, Mass., for Framingham Trust Co.

Glenn D. Barnes, Erlich & Gochros, Boston, Mass., for defendants, Inez T. Snyder.

Myron Snyder, pro se.

Richard G. Kagan, J. Christopher Robinson, Sullivan & Worcester, Boston, Mass., for trustee.

MEMORANDUM ON FRAUDULENT CONVEYANCE

HAROLD LAVIEN, Chief Judge.

The controversy before the Court is an adversary proceeding brought by the plaintiff, Sampco Incorporated against the debtor, Myron Snyder, his wife, Inez Snyder, Richard G. Kagan, who is the Court-appointed trustee in bankruptcy, and the Framingham Trust Company. All of the defendants have submitted answers, in addition, Inez Snyder has submitted three memoranda and the plaintiff, a post-trial memorandum. On August 22, 1986, the Court requested clarification as to the possible consequences of the three-year delay between the plaintiff's levy and the sale of the property. Both Sampco and Mrs. Snyder submitted briefs. A trial was held in this matter on May 16, 1986, at which time Sampco prosecuted its claim, Myron Snyder proceeded pro se, an attorney representing Inez Snyder examined witnesses on her behalf, an attorney from the Framingham Trust Company attended the trial and, although he did not examine any of the witnesses, he reserved his right to respond to the memorandum submitted by counsel for Sampco and Inez Snyder. No such response was filed. The trustee was not represented.

I make the following findings of fact. On January 10, 1980, the plaintiff commenced suit against G. Ropate Corporation, a company then controlled by the debtor, and the debtor, individually, in Suffolk Superior Court in order to collect approximately $160,000 owed the plaintiff by G. Ropate, Inc. and personally guaranteed by the debtor. A trial was held, and on November 20, 1980, the Court entered judgment for the plaintiff. On November 24, 1980, Sampco filed a post-judgment motion for real estate attachment on property known as 156 Dean Road, Brookline, Massachusetts, and the motion was set for hearing on December 4th. The property in question had been conveyed to the debtor and his wife, Inez Snyder, as tenants-by-the entirety, on September 15, 1960. On December 3, 1980, the debtor and his wife, as tenants-by-the-entirety, conveyed title to the property to their daughter, Geanne R. Snyder, in consideration of one dollar and love and affection. On the same day, Geanne R. Snyder conveyed the property back to her parents as tenants-by-the-entirety, again, for the value of one dollar and love and affection. The next day, December 4, 1980, the motion by Sampco for attachment of this property was allowed and, on December 5th, Sampco recorded the Writ of Attachment. The Writ of Attachment was executed and recorded by a bonded constable under the authority of a motion by Sampco for Special Appointment to Serve Process which had been allowed by the Suffolk Superior Court on June 10, 1979. A series of appeals by the debtor ensued up to the Supreme Judicial Court where, on June 8, 1982, the Court denied the debtor's application for further appellate review. Thereafter, the Appeals Court entered final judgment for the plaintiff in the amount of $154,916.00, plus interest.

Execution issued on June 13, 1982 in the amount of $199,858.03, with interest, to run from the date of issuance to the execution. On June 10, 1982, the Framingham Trust Company granted a mortgage to the debtor and his wife on the Dean Road property. This mortgage was recorded on June 21, 1982. On July 9, 1982, the Deputy Sheriff of Norfolk County levied an Execution on the Dean Road property. At this time, there were four liens on the Dean Road property superior in right to the plaintiff's original attachment, with an aggregate value of $400,000.

At trial, the parties agreed upon the following outline of the essential dates:

6/10/—Motion to Appoint Special Process Server, allowed.

11/24/80—Motion to Attach, filed.

12/3/80—Transfer of Property from the debtor and Inez Snyder to Geanne Snyder, and then back again.

12/4/80—Motion to Attach Dean Road property, allowed.

12/5/80—Attachment recorded.

6/21/82—Mortgage to Framingham Trust Company.

7/9/82—Dean Road property levied upon.

On November 17, 1984, the debtor filed a Voluntary Chapter 7 pursuant to 11 U.S.C. § 301. Richard G. Kagan, Esquire, a defendant in this action, was appointed trustee pursuant to 11 U.S.C. § 701. On June 3, 1985, Mr. Kagan gave notice of the intended private sale of the Dean Road property. No objections were filed as of the deadline for submitting objections, and it should be noted that none of the parties in this action have raised an objection to the sale as it was to be held. Two counter-offers were submitted to the Court and the property was sold, pursuant to a Court order, for $535,100.

ISSUES

The plaintiff alleges the following: (1) The conveyance by the debtor and his wife, on December 3, 1980, was not for fair consideration and rendered the debtor insolvent, if the debtor was not already insolvent, within the meaning of M.G.L. c. 109A, § 1, and, therefore, was a fraudulent conveyance pursuant to M.G.L. c. 109A § 4; (2) The December 3 conveyance was made with the actual intent to hinder, delay and defraud both present and future creditors of the debtor and Inez Snyder, and should be set aside pursuant to M.G.L. c. 109A § 7; (3) The debtor's share of the proceeds from the sale of the property should be paid to Sampco, subject to any exemption to which the debtor is entitled.

The debtor has not submitted any formal pleadings to the Court in this proceeding, however, at trial he made an oral statement to the Court. He stated that the conveyance by his wife and himself to his daughter and back again, was made without any intent of defrauding his creditors. Rather, the conveyance was made on the advice of counsel in order to protect his wife's position as a woman. Mr. Snyder acknowledged that the attorney who he employed on this matter and whose advice he acted on was the same attorney who was defending him in the state court suit by Sampco.

Inez Snyder, in her pleadings, raises the following contentions: (1) she contends that the attachment of the property is void because it was made by a constable whose jurisdictional authority is limited and does not include attachment. Mrs. Snyder asserts that the Court order allowing the attachment only authorizes a sheriff or deputy to effectuate the attachment, as did the statute of 1795, c. 41 § 3 and the present Mass.R.Civ.P.Rl. 4.1(c); (2) she argues that in any event, the transfer to her daughter and back again was not fraudulent because it was done with the intention of acknowledging her equality to her husband in compensation for work in his business.

Neither of the other two defendants in this action, Framingham Trust Company nor the trustee, Richard G. Kagan, challenge Sampco's position in this proceeding.

VALIDITY OF THE ATTACHMENT

The first issue to be addressed in this matter is the contention by Mrs. Snyder that Sampco's attachment of December 4, 1980 is invalid because it was made by a constable, Suvalle, Jodrey & Associates, rather than a sheriff. On June 10, 1979, the Suffolk Superior Court allowed a motion by Sampco authorizing them to use the above named constables to serve process in their suit against G. Ropate Corp. and Myron Snyder. Presumably, Sampco intended to act under the umbrella of the June 10th Order, when they used this same constable service on December 5th to serve the attachment. However, the June 10th motion was specifically limited in its request for special appointment to serve process pursuant to Mass.R.Civ.P.Rl. 4(c). Rule 4(c) addresses the limited question of who can serve process of a summons and allows for the appointment of a specially appointed process service. Service of an attachment is not made pursuant to Rule 4(c) but, rather, Rule 4.1(c) which states that an officer is to serve an attachment. According to Rule 4.1(b), a writ of attachment should be addressed to "the sheriffs of the several counties or their deputies, or any other person duly authorized by law." The Writ of Attachment issued in this case is addressed "To the Sheriffs of our several counties or their deputies."

The defendant, Inez Snyder, contends that the December 4th attachment is invalid because it was made by an unauthorized individual acting without jurisdictional authority. The plaintiff responds that this assertion is meritless form over substance and the defendant was not prejudiced by a constable serving the writ. Although there is a certain appeal to the plaintiff's position, it fails in that if adopted, a substantial portion of the judicial system's procedural rules would be rendered meaningless. For example, there is really no substantive reason for the ten-day deadline for appeals, as opposed to an eleven or twelve-day deadline, yet, as our rules provide, unless an appeal is taken within 10 days after a final Court order is issued, it is forever barred. Within the context of our judicial system, the distinction of service by a sheriff who has been granted statutory and judicial authority, as opposed to a constable who has been granted neither, cannot be dismissed as mere form over substance.

The powers conferred on a sheriff are greater than those of a constable and unless specifically authorized, the latter is without jurisdictional authority necessary to serve a Writ of Attachment in a real property action. As stated in Corpus Juris Secundum Vol. 80 §§ 1 and 3.

The sheriff ordinarily is an elective public officer and chief executive officer in his county, and is an officer of the court and subject to its orders and

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