In re Walker, CASE NO. 11-60413
| Decision Date | 19 December 2011 |
| Docket Number | CASE NO. 11-60413 |
| Parties | In re: CORY CRAIG WALKER and JENNIFER PAULINE WALKER, Debtors. |
| Court | U.S. Bankruptcy Court — Northern District of Ohio |
The court incorporates by reference in this paragraph and adopts as the findings and orders of this court the document set forth below.
_________
Russ Kendig
United States Bankruptcy Judge
MEMORANDUM OF OPINION (NOT FOR PUBLICATION)
Now before the court is Debtors' Objection to Claim #13-2 by claimant David M. Williams ("Claimant").
The court has jurisdiction over this case pursuant to 28 U.S.C. § 1334 and the general order of reference entered in this district on July 16, 1984. This proceeding is a core proceeding under 28 U.S.C. § 157(b)(2)(B).
This opinion is not intended for publication or citation. The availability of this opinion, in electronic or printed form, is not the result of a direct submission by the court.
Claimant filed a proof of claim #13 in the amount of $3,786.98 on May 3, 2011. On May 20, 2011, Debtors filed an Objection to Proof of Claim #13 on the basis that "the items of damage alleged in the proof of claim are non-existent and manufactured by the claimant." Claimant filed a Response to Objection to Proof of Claim on June 3, 2011 in support of his proof of claim. On August 5, 2011, Claimant filed an amended proof of claim #13-2 ("claim") in the amount of $6,738.43. In response to the amended proof of claim, Debtors again filed an Objection to Proof of Claim ("Objection") to claim #13-2 on August 17, 2011.
The claim, in the total amount of $6,738.43 after deducting Debtors' security deposit of $1,300,00, is broken down into the following components:
On October 17, 2011 and November 21, 2011, the court held an evidentiary hearing on Debtors' Objection. Claimant called the following witnesses to testify: Debtor Jennifer Walker, Debtor Cory Walker, Claimant David Williams, Jim Dalenburg, Beauford T. Williams, and Rick Stimpert. Testifying on behalf of Debtors was Debtor Cory Walker.
A proof of claim filed pursuant to 11 U.S.C. § 501 is deemed allowed unless a party in interest objects. 11 U.S.C. § 502(a). If an "objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim ... as of the date of the filing of the petition, and shall allow such claim in such amount." 11 U.S.C. § 502(b).
Pursuant to Federal Rule of Bankruptcy Procedure 3001(f), "[a] proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim." See also 11 U.S.C. § 502(a); In re Consol. Pioneer Mortg., 178 B.R. 222, 225-26 (B.A.P. 9th Cir. 1995), aff'd on other grounds, 91 F.3d 151 (9th Cir. 1996). The objecting party bears the initial burden to produce evidence sufficient to rebut the presumption of validity of the claim. In re Pruden, No. 04-36026, 2007 Bankr. LEXIS 4385, at 29 (Bankr. N.D. Ohio Dec. 28, 2007) ); accord In re Allegheny Int'l 954 F.2d 167, 173-74 (3d Cir. 1992).
For the objecting party to negate the prima facie validity of a claim, the objection must:
(1) assert in a writing filed with the Court that there is some reason the claimant doesnot have a right to payment; (2) sign the objection; (3) if appropriate, assert that the claim is in fact based on a writing and that the documentation attached to the claim is insufficient; and (4) come forward with some legal reason or some factual evidence to defeat the claim.
In re McLaughlin, 320 B.R. 661, 665 (Bankr: N.D. Ohio 2005) (citing In re Kemmer, 315 B.R. 706, 713 (Bankr. E.D. Term. 2004)). If the objecting party meets the burden, then the burden shifts to the claimant to prove the validity and amount of the claim by a preponderance of the evidence. Leatherland, 302 B.R. at 258-59; In re Bosak, 242 B.R. 400, 405 (Bankr. N.D. Ohio 1999); In re Nelson, 206 B.R. 869, 878 (Bankr. N.D. Ohio 1997).
Claimant's claim is presumed to be prima facie evidence of the validity and amount of the claim pursuant to Federal Rule of Bankruptcy Procedure 3001(f). Debtors' Objection must meet the burden of producing evidence sufficient to rebut the presumption of the validity of the claim. The Objection asserts that the claim is unfounded, based on unnecessary costs, and has no factual or legal basis. Such assertions meet the burden by both asserting that Claimant is not entitled to payment and setting forth factual evidence to defeat the claim. The burden now shifts to Claimant to prove the validity and amount of the claim by a preponderance of the evidence.
In order to meet this burden, Claimant himself testified and called witnesses, and presented over 100 photographs to support his claim. Further, Claimant presented receipts for materials and labor for repairs. The court now considers each component of the claim to determine if Claimant has met his burden of proof.
Claimant's proof of claim seeks municipal court fees totaling $171.00 for filing fees and for a writ of restitution. Proof of Claim #13-2. Debtors dispute these court costs as a component of the claim on the basis that Claimant filed these proceedings after Debtors advised that they were vacating the property. Debtors claim that these fees were unnecessary.
At the evidentiary hearing, Claimant testified that despite Debtors notice that they intended to vacate the property, they had not removed all of their personal property from the property nor had they returned the keys to the property to Claimant. For these reasons, Claimant was unsure if Debtors had actually vacated the property. Rather than potentially face the consequences of wrongfully evicting Debtors by simply entering the property and changing the locks, Claimant proceeded to seek relief in municipal court so that legally he could change the locks and access his property.
The court finds that Claimant's actions with respect to the municipal court proceedings were reasonable. Debtors' actions did not clearly indicate that they had vacated the property and Claimant's hands were tied if he wanted to proceed legally and avoid a wrongful eviction. In an abundance of caution, Claimant sought relief in municipal court to protect his rights. Further, Claimant attempted to mitigate his claim against Debtors by formally evicting Debtors due to nonpayment of the rent for January rather than allowing his losses to grow exponentially.Claimant's costs with respect to filing the municipal court proceedings were reasonable and not unnecessarily high given the situation. The court finds that Claimant has met his burden of proof with respect to the municipal court fees.
Accordingly, the court finds that Claimant is entitled to municipal court fees totaling $171.00.
Claimant's proof of claim seeks rent in the amount of $665.00 for January 2011 and late fees totaling $82.50 related to the rent for January 2011. Proof of Claim #1.3-2 and Creditor Exhibit 19.
Debtors admit in their Objection, paragraph 3, that they did not give timely notice to exclude the rent of $665.00 for January 2011 and, therefore, are responsible for it. While the court believes that the law also supports that Claimant is entitled to receive rent for January 2011, such a review of the law is not necessary given Debtors' admission of their responsibility to pay it. Therefore, the court finds that Claimant has met his burden of proof with respect to the rent for January 2011 and is entitled to $665.00.
The remaining question is whether Claimant is entitled to the late fees totaling $82.50, comprised of a $25.00 late payment fee and $2.50 per day late fee for 23 days in the total amount of $57.50. Creditor Exhibit 19. Pursuant to the lease agreement between Claimant and Debtors, paragraph 5 provides that Debtors agreed to pay $25.00 for each late payment plus $2.50 for each additional day late. Creditor Exhibit 6. Debtors do not dispute the accuracy of the lease or that the provision applies in this circumstance. Further, Claimant seeks the late fees for only 23 days, or stated otherwise, Claimant froze the late fees as January 24, 2011 rather than allowing the late fees to continue to accrue. For these reasons, the court finds that Claimant has met his burden of proof with respect to the late fees related to the rent for January 2011 and is entitled to late fees totaling $82.50.
Accordingly, the court finds that Claimant is entitled to a total of $747.50 for rent for January 2011 and late fees associated with Debtors' failure to pay rent for January 2011.
Claimant's proof of claim seeks unpaid electricity bills totaling $475.32. Proof of Claim #13-2 and Creditor Exhibit 19. Claimant testified that the arrangement between Claimant and Debtors was that Claimant paid the electric bill for the entire property and billed to Debtors their portion of the electric bill for each month based upon a formula. Debtors do not dispute this arrangement or the accuracy of Claimant's billing practices. Debtors dispute, however, owing $475.32 for electricity on the basis that Debtors advised Claimant to have the electricity serviceswitched to his name.1
Debtors' argument fails for several reasons. First, the electricity was always in Claimant's name. As such, it was not necessary, nor even possible, for Claimant to transfer the electric service into his name upon Debtors vacating the property. Second, Claimant seeks unpaid electric bills only through December 2010 even though Debtors undisputedly has possession of the property into January...
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