In re Taylor
| Decision Date | 01 May 1997 |
| Docket Number | Adversary No. 96-2584.,Bankruptcy No. 95-23393 JKF |
| Parties | In re Harvey TAYLOR, Debtor. Harvey TAYLOR, Plaintiff, v. Thomas McCune SLICK, individually and as Executor of the Estate of Dorothy M. Balentine, Deceased, Defendant. |
| Court | United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Western District of Pennsylvania |
Robert O. Lampl, and John P. Lacher, Pittsburgh, PA, for Debtor.
Terence O'Halloran, and Wayne Whitehead, Greensburg, PA, for Defendant.
The matter before the court is the motion of Thomas McCune Slick to dismiss Debtor's complaint. Because we will consider matters outside the pleadings, as reflected on the state court docket and in the briefs, we will treat this motion as a motion for summary judgment. Fed.R.Civ.P. 12(b). See also Fed.R.Civ.P. 56. The complaint concerns approximately 20 acres of real estate located at R.D. # 1, West Newton, Sewickley Township, Westmoreland County, Pennsylvania. Slick is the executor of the estate of Dorothy M. Balentine, the mortgagee.1 Slick obtained a default judgment in mortgage foreclosure in 1990 in the Court of Common Pleas of Westmoreland County, Pennsylvania. Writs of Execution were issued at various times and stayed by agreement of the parties. Debtor filed the instant chapter 11 on September 1, 1995, to stay a sheriff's sale scheduled for September 5, 1995. Because the bankruptcy was filed a few days before, the sheriffs sale was continued to October 23, 1995, by oral public announcement at the time and place set for the sheriffs sale pursuant to Pa. R.Civ.P. 3129.3. Slick obtained a default order granting relief from stay on October 17, 1995, and the sheriffs sale took place on October 23, 1995.
Debtor's complaint consists of six counts. Count I seeks a declaratory judgment invalidating the sale and decreeing his ownership of the acreage. Debtor alleges that the continuation of the sheriffs sale postpetition violated the automatic stay and, therefore, the sale is void. In the general averments of the complaint, Debtor also alleges that he did not receive notice of the motion for relief from stay filed by Slick in this case. If he had, he contends, he could have shown that there was a substantial equity cushion in the property, thereby preventing entry of an order granting relief from stay.
Counts II, III, IV, and V are related. Count II seeks a judgment against Slick for conversion of wheat and straw Debtor planted on the property in 1995 that was harvested and sold by Slick in August, 1996. Count III seeks a judgment against Slick for unjust enrichment arising from the harvesting and sale of the wheat and straw by Slick. Debtor avers that he did all the work and Slick reaped the profits.
Slick has not filed a proof of claim in this bankruptcy case and Debtor did not file one on Slick's behalf. Slick obtained a judgment in foreclosure and, after obtaining an order of this bankruptcy court granting relief from stay, executed on the judgment. Unless there are grounds to vacate the order granting relief from stay and set aside the sheriff's sale, Slick is the owner of the property. Because there is no proof of claim based on a deficiency, Debtor's objection to claim is not cognizable.2
Finally, Count VI is captioned "Equitable Recoupment". Debtor alleges that Slick, whose property is adjacent to the 20 acres at issue, allowed his livestock to enter on the 20 acres and eat or otherwise destroy Debtor's crops.
The motion to dismiss alleges that this court lacks jurisdiction over this adversary because the court granted relief from stay, after which the property was sold at sheriff's sale. The motion also asserts that all of the issues raised in the complaint have or could have been litigated in numerous state and bankruptcy actions and that Debtor is merely attempting to use this forum to relitigate issues previously decided.
Based on the record before us and the applicable law, we will grant Slick's motion to dismiss with respect to Count I and Count VI. The only issues remaining, therefore, are those based on Counts II, III, IV, and V concerning the wheat and straw. There are insufficient facts alleged of record concerning Debtor's allegations with respect to the wheat and straw to permit dismissal or summary judgment. The state court had entered a temporary injunction preventing Debtor from interfering with Slick's harvesting and sale of the standing wheat crop but it was dissolved because the wheat had been harvested before a full hearing on the merits. The record before us does not support Slick's contention that the parties' rights concerning the wheat were litigated in the state court. Furthermore, the parties' rights in this regard may depend on the terms of the mortgage and note which are not part of the record.
With this background, we proceed to the facts. Because Debtor alleges that he never received notice of the motion for relief from stay, this court will exercise jurisdiction to determine whether the bankruptcy process has been followed and Debtor's right to due process protected. At this stage of the litigation, we construe the facts in the light most favorable to Debtor as the non-moving party.
A docket entry for September 20, 1990, states that the sheriff served the notice and complaint on Debtor and his wife by certified and regular mail and posted them on the property. On October 24, 1990, default judgment was entered against Debtor and his wife as follows:
unpaid principal balance: $26,852.03
interest at 10% from 6/19/84 to 9/20/89: $14,326.38
attorney's commission of 10%: $ 2,685.20
The total judgment was for $43,863.61 with interest from September 21, 1989, at "10.0% per annum, and costs". Notice of entry of the judgment was sent to Debtor and his wife pursuant to Pa.R.Civ.P. 3129.2. Also on October 24, 1990, a Writ of Execution in Mortgage Foreclosure was issued and an Affidavit Under Rule of Civil Procedure 3129.1 was filed as required by the Pennsylvania Rules of Civil Procedure. On October 29 and November 2, 1990, the Writ was served by certified and regular mail on Debtor and his wife in accordance with Pa.R.Civ.P. 3129.2. It was posted on the property on November 9, 1990. The docket reflects that the Writ was stayed and reissued several times. According to Debtor's brief, this occurred as the result of agreements between the parties that Debtor would make payment. Debtor admits that he made payments sporadically into 1994 but ceased to make payments early in 1995, according to Debtor, Brief at 2, and in June, 1994, according to Slick, Brief at 2. A Westmoreland County Court of Common Pleas docket entry of February 14, 1995, notes that the Writ was stayed again in light of the filing of Debtor's first bankruptcy on February 3, 1995, a chapter 13 filed at Bankruptcy No. 95-20353. The chapter 13 was dismissed on February 22, 1995, for failure to file required documents.6
An order dated May 31, 1995, was entered on the docket on June 1, 1995, and authorized service of the Writ of Execution by publication. This order reconfirmed the order of August 31, 1990, authorizing substitute service.7 The Writ of Execution was served on Debtor and his wife in July of 1995 by regular and certified mail and by posting the property. Debtor admits in his complaint that he received this notice. See Complaint at ¶ 17. A...
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