In re Sussman
| Decision Date | 03 June 2019 |
| Docket Number | Case No. 8:17-bk-08959-RCT |
| Parties | In re Sarah Katherine Sussman, Debtor. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
(Docs. 7, 28, 85, and 113)
On April 15, 2019, the court conducted a day-long trial on (1) the Debtor's Emergency Motion to Enforce the Automatic Stay and Request for Damages, Fees and Costs (Doc. 7), (2) the Emergency Motion for Relief from Stay (Doc. 28) filed by Creditor, Phillip A. Baumann, as Administrator Ad Litem of the Estate of John J. Gaffney, deceased (the "Administrator"), (3) the Administrator's Motion to Dismiss Case for Debtor's Failure to Comply with 11 U.S.C. §§109(h)(1) and 521(b) and for Debtor's Fraud on the Court (Doc. 85), and (4) the Administrator's Objection to Debtor's Claim of Exemptions on Amended Schedule C (Doc. 113) (collectively, the "Contested Matters").
The journey to trial was tortured and populated by a series of disputes between the Debtor and her family on one side and the Administrator on the other. All these disputes, including the Contested Matters, center on the parties' competing claims to a parcel of real property located at 119 S. Clark St., Tampa, FL (the "Clark Street Property").
At trial, the court heard testimony from Debtor Sarah Katherine Sussman, Administrator Phillip A. Baumann, attorney Richard J. McIntyre, attorney Gilbert M. Singer, Debtor's mother Teresa M. Gaffney, in-house counsel to the Hillsborough County Sherriff's Office ("HCSO") Jason Gordillo, and the following members of the HCSO: Sergeant Michele Polk, Corporal Gary Harris, and Deputy Jonathan Carlton. The court admitted thirty-two exhibits offered by the Administrator, some limited in scope.1 No exhibits were offered by the Debtor.2
This court has jurisdiction over this proceeding under 28 U.S.C. §§ 157 and 1334(b). This is a core proceeding under 28 U.S.C. §§ 157(b)(2)(A), (B), and (G).
Based on the documentary evidence and credible testimony adduced at trial, the following are the court's findings of fact and conclusions of law as required by Fed. R. Bankr. P. ("Rule(s)") 7052, made applicable by Rule 9014(c).
The Clark Street Property once belonged to Debtor's grandfather, John J. Gaffney, who passed away in December 2011. Before he passed, in or about June 2009, the property was conveyed to Teresa M. Gaffney subject to a life estate retained by Mr. Gaffney. Quite soonafter Mr. Gaffney passed, Ms. Gaffney, by deed dated January 20, 2012, conveyed the Clark Street Property to Debtor as trustee of The Sussman Family Trust Living Trust.3
Sometime in early 2014, the Administrator was appointed by the state probate court to commence a state court action to recover the Clark Street Property from Debtor and her family and to void the deeds that purported to convey title to Ms. Gaffney and Debtor as trustee. The Administrator filed the action4 shortly after his appointment and duly recorded a Notice of Lis Pendens dated April 10, 2014.5 Attempts by Debtor and her family to dissolve the lis pendens were unsuccessful.6
On April 22, 2016, the state court entered an order that struck, as a sanction, Ms. Gaffney's and Debtor's answer and affirmative defenses to the Administrator's complaint (the "Sanctions Order").7 Thereafter, the state court entered defaults against Ms. Gaffney and Debtor.8 After dispensing with additional and ultimately unsuccessful motion practice instigated by Ms. Gaffney and Debtor,9 the state court entered its Final Judgment Upon Default dated October 16, 2017 (the "Final Judgment").10
In the Final Judgment, the state court adjudged two distinct matters, both of which it noted were pled in the Administrator's complaint. First, the court declared "null and void" asa fraudulent transfer the deed that transferred title for the Clark Street Property into Debtor as trustee. Avoidance of that deed effectively returned title to the property to Ms. Gaffney. Second, the state court declared that Ms. Gaffney had obtained title to the Clark Street Property through the exploitation of her father. The court therefore entered judgment against Ms. Gaffney ordering that "legal and beneficial title to and possession of" the Clark Street Property be vested in and held by the Administrator.
The Final Judgment expressly states that it is a conveyance of the Clark Street Property in accordance with Florida Rule of Civil Procedure 1.570(d). It also directs the state court clerk to immediately issue a writ of possession commanding the HSCO to place the Administrator in possession of the property. The Final Judgment was entered by the state court on October 16, 2017, and a writ of possession was issued promptly the next day.11 Both the state trial court and the appellate court denied Debtor's requests for a stay of the Final Judgment pending appeal.12 Proceedings in the state appellate court have yet to conclude.
Deputy Carlton served the writ of possession on the Clark Street Property early on October 23, 2017. He spoke with Debtor's father and current counsel, Dov Sussman, and advised that he would return on the morning of October 25, 2017, to execute on the writ.
The service of the writ of possession prompted a flurry of activity and ultimately led to the filing of this bankruptcy case.
Shortly after the writ was served, Ms. Gaffney contacted attorney Gil Singer, an insolvency professional she had known for several years. Ms. Gaffney was in tears, claiming she was about to lose her home. Because he was unable to represent her, Mr. Singer referredMs. Gaffney to three other insolvency attorneys including attorney Richard McIntyre.
Later that same day, Ms. Gaffney met with Mr. McIntyre and members of his law firm.13 Mr. Singer attended the meeting at Ms. Gaffney's request. Though he was in and out of the meeting, Mr. Singer recalled a bankruptcy being "bandied about." He specifically recalled discussion of the Debtor, who was not present, being placed in a bankruptcy. This consultation notwithstanding, Debtor's initial bankruptcy petition was not filed by Mr. McIntyre's firm.14
Also, on October 23, 2017, Ms. Gaffney contacted the HCSO regarding the writ. She was referred to Sgt. Polk, supervisor of the civil process section, with whom she spoke numerous times over the course of the next few days. After Ms. Gaffney mentioned a bankruptcy, Sgt. Polk reached out to HCSO's in-house counsel, Mr. Gordillo. Sgt. Polk indicated to Ms. Gaffney that execution of the writ would be temporarily on hold pending Mr. Gordillo's review.
This bankruptcy case was commenced at 11:24 a.m. on October 24, 2017.15 The petition was filed, in person, by Ms. Gaffney.16 The petition is handwritten and was not accompanied by bankruptcy schedules or all required initial disclosures and statements.17
After learning of the bankruptcy filing and the circumstances more generally, Mr. Gordillo conducted a review of the matter to determine whether execution of the writ would be stayed or go forward. After a targeted review of the state court docket and his own legalresearch, Mr. Gordillo concluded that the Clark Street Property was not property of the bankruptcy estate and therefore the automatic stay did not apply. Accordingly, he determined that execution of the writ of possession as to the Clark Street Property could proceed.
On the evening of October 24 upon learning that the eviction would go forward, Sgt. Polk promptly called Ms. Gaffney and left her a voicemail message. Sgt. Polk called again early the next morning to reiterate that execution of the writ was no longer on hold.
Deputy Carlton and Corp. Harris arrived at the Clark Street Property to execute on the writ at about 1:00 p.m. on October 25, 2017. When the officers arrived, Mr. Sussman was the only person present. Ms. Gaffney arrived about thirty minutes later. Both Mr. Sussman and Ms. Gaffney were afforded the opportunity to remove their personal belongings from the property, and both did remove several such items. Additional time was allowed, with the consent of the Administrator who was also present, for a large number of cats to be removed safely from the property. After what Deputy Carlton described as a not insignificant period of time, the locks were changed, and the former occupants were escorted from the property.
Deputy Carlton and Corp. Harris searched the property to ensure no persons or pets remained on the premises. Both reported that the house was very cluttered and smelled of cat urine. Photos admitted as Administrator's Exhibit 14 accurately depicted the condition of the Clark Street Property at the time the writ was executed.18 The photos confirm the officers' reports as to the condition of the property.
Both Deputy Carlton and Corp. Harris characterized the events of October 25, 2017, as peaceful. No damage to the property occurred. While the Administrator and his counsel were present, the officers observed no threats being made, nor were reports of threats filed afterward.
Typically, when executing a writ of possession, a trespass warning would be issued by the officers to the parties being removed. Neither Mr. Sussman nor Ms. Gaffney were trespassed because the Administrator had agreed that they could return at a future time to collect the rest of their personal belongings.
At the time of the execution of the writ, the Administrator was aware of Debtor's bankruptcy filing. Though he knew of the filing, the Administrator did not take any action to stay execution of the writ. Rather, being unfamiliar with the effect of the automatic stay on the writ, he deferred to and relied upon Mr. Gordillo's determination that the writ was not stayed.
Since October 25, 2017, neither Debtor nor her family have returned to the Clark Street Property. The Administrator made several attempts to arrange for Debtor and her family to return to the property to collect their belongings.19 Debtor never availed herself of the opportunity and her...
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