Jensen v. Anderson (In re Anderson)

Decision Date06 October 2016
Docket NumberCase No. 9:15-bk-06985-FMD,Adv. Pro. No. 9:15-ap-990-FMD
Citation561 B.R. 230
Parties In re: Alexander Wayne Anderson, Debtor. Diane Jensen, Chapter 7 Trustee, et al., Plaintiffs, v. Alexander W. Anderson, et al., Defendants.
CourtU.S. Bankruptcy Court — Middle District of Florida

Alberto F. Gomez, Jr., Esq., Tampa, Florida, Counsel for Debtor/Defendant

Jon D. Parrish, Esq., Donald G. Peterson, Esq., Naples, Florida Counsel for Defendants

Donald R. Kirk, Esq., Tampa, Florida, Counsel for Plaintiff, Diane Jensen, Chapter 7 Trustee

John D. Emmanuel, Esq., Tampa, Florida, Counsel for BMO Harris Bank, N.A.

ORDER GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT IN PART

Caryl E. Delano, United States Bankruptcy Judge

THIS PROCEEDING came on for hearing on April 26, 2016, on Defendants' Motion for Partial Summary Judgment (Doc. No. 35). The Court having considered the undisputed facts and the argument, the parties' written submissions (Doc. Nos. 35, 51, and 60), and the arguments of counsel, makes the following findings of fact and conclusions of law:

Findings of Fact

A. This Chapter 7 bankruptcy case was commenced by the filing of an involuntary petition on July 6, 2015 by BMO Harris Bank (the "Bank") as petitioning creditor. Diane Jensen (the "Trustee") is the duly appointed bankruptcy trustee.

B. Debtor, Alexander Wayne Anderson ("Debtor") and his wife Karen Anderson ("Karen") have been married continuously since 1965.

C. On or about March 1, 2004, Debtor and Karen opened Account No. 48081 at Morgan Stanley.2 The account application allowed the applicant to select from the following ownership options: Individual/Sole Proprietorship, Corporation, Partnership, or "Specify Other." After the words "Specify Other," "JTTEN" was handwritten on the account application. The parties agree that "JTTEN" refers to Joint Tenants.

D. On or about May 14, 2004, Debtor and Karen acquired title to the property at 4976 Crayton Court, Naples, Florida (the "Crayton Court Property"). The deed by which Debtor and Karen acquired title conveyed title to "Alex Anderson and Karen Anderson, husband and wife ..., grantee."3

E. On or about June 17, 2004, Debtor and Karen acquired title to the property at 1828 16th Street NW # 4, Washington D.C. (the "D.C. Property"). The deed by which Karen and Debtor acquired title to the D.C. Property states that the property is conveyed to them as "Tenants by the Entirety."4

F. In November 2005, Debtor personally guaranteed the mortgage loan obligations of Lavender Hill Holdings, LLC ("Lavender Hill") to the Bank. Lavender Hill owned condominium units, the Bank's collateral, that it leased to a hospital. In connection with his guaranty, Debtor signed a Personal Financial Statement (the "Financial Statement").5 Contrary to the Bank's assertion, the Financial Statement contains no representation regarding Debtor's ownership of assets in his individual name rather than jointly with Karen.

G. On or about June 13, 2006, Debtor and Karen opened Account No. 17456 with Morgan Stanley. The account application permitted the selection of the following forms of ownership: Joint Tenants with Right of Survivorship, with the explanation that "[i]f one owner dies, his/her interest passes to the surviving owner[s];" Tenants by the Entirety, with the explanation that "[i]f one owner dies, his/her interest passes to the surviving owner[s]. Laws vary by state. Please consult your attorney;" Tenants in Common; and Community Property. Debtor and Karen selected Joint Tenants with Right of Survivorship.7

H. Also on or about June 13, 2006, Debtor and Karen opened four additional accounts with Morgan Stanley, Account Nos. 1800, 1801, 1802, and 1803. Each account was documented by a Joint Account Agreement with Right of Survivorship (the "Account Agreements").8 Each of the Account Agreements contained the following statement: "[i]t is the express intention of the undersigned to create an estate or account as joint tenants with right of survivorship and not as tenants in common ...."

I. At some point in 2008, Lavender Hill learned that its tenant, the hospital, would not be renewing its lease. Lavender Hill could not obtain other tenants at the same lease rates, and defaulted on its mortgage obligation to the Bank.

J. On or about June 12, 2008, Karen, as Trustee of the Karen G. Anderson Revocable Living Trust 8-8-05 (the "Karen Trust"), and Debtor, as Trustee of the Alex W. Anderson Revocable Living Trust 8-9-05 (the "Alex Trust"), opened Account Numbers 02279 and 022810 with Morgan Stanley. On the applications for both of these accounts, the box marked "Individual/Joint" is checked.

K. As of at least March 1, 2008, Debtor and Karen held Account No. 5074 at Morgan Stanley.11 No later than June 30, 2008, Debtor and Karen transferred ownership of Account No. 5074 to the Karen Trust and the Alex Trust.12 Although the Court has not been provided with the signature card for this account, for purposes of Defendants' Motion for Partial Summary Judgment , Defendants have assumed that Account No. 5074, titled on the June 30, 2008 account statement in the names of the Karen Trust and the Alex Trust, is owned by the Trusts as tenants in common.13

L. As of at least January 1, 2005, Debtor and Karen held an account with Morgan Stanley, Account No. 4462, titled as tenants in common.14 As of at least January 1, 2009, Debtor and Karen had transferred ownership of Account No. 4462 to the Karen Trust.15 Sometime thereafter, upon the merger of Smith Barney with Morgan Stanley, Account No. 4462 was renumbered as Account No. 7609.16

M. On or about January 9, 2009, Debtor formed the Crayton Trust U/A DTD 1/16/2009 (the "Crayton Trust").

N. On January 28, 2009, Karen, as the Trustee of the Karen Trust, opened Account No. 023217 with Smith Barney. Sometime thereafter, upon the merger of Smith Barney with Morgan Stanley, Account No. 0232 was renumbered as Account No. 4479.18

O. On March 26, 2009, the Bank sued Lavender Hill and Debtor. Debtor was served with the Bank's summons and complaint on March 26, 2009.19 On February 7, 2011, the Bank obtained a final judgment in the Circuit Court in and for Collier County, Florida, against Debtor for over $4,000,000.00 (the "Judgment").20

P. In August 2009, Debtor and Karen sold the D.C. Property. The proceeds of sale were transferred to the Karen Trust.

Q. After entry of the Judgment, the Bank obtained consent of the Circuit Court to commence proceedings supplementary under Fla. Sta. § 56.29. In November 2014, the Bank filed its First Amended Complaint21 captioned M & I Marshall & Ilsley Bank, n/k/a BMO Harris Bank, N.A. v. Alexander W. Anderson, individually; Karen Anderson, individually; Karen G. Anderson, as Trustee of the Karen G. Anderson Revocable Living Trust U/A DTD 08/08/2005; Mallord Trust Services Ltd., as Trustee of the Crayton Trust U/A DTD 01/16/2009; Alexander W. Anderson, as Trustee of the Alexander W. Anderson Revocable Trust; and Alexander W. Anderson as Trustee of the Alex W. Anderson CGM IRA Rollover Custodian (the "State Court Complaint"). In the State Court Complaint, the Bank sought to avoid and recover alleged fraudulent transfers and fraudulent conversions under the proceedings supplementary provisions of Fla. Stat. § 56.29, and Fla. Stat. §§ 726.105, 726.106, 726.108, 222.30, and Chapter 85, Florida Statutes.

R. On March 30, 2015, Debtor and Karen purchased the property at 368 Hawser Lane, Naples, Florida (the "Hawser Property") as husband and wife.22 Debtor and Karen designated the Hawser Property as their homestead property.23

S. On or about May 6, 2015, Debtor and Karen transferred title of the Crayton Court Property to the Karen Trust.

T. Debtor maintains an Individual Retirement Account at Morgan Stanley, Account No. 1198, and has taken distributions from that account.

U. After the Bank filed Debtor's involuntary bankruptcy case, it removed the State Court Complaint to the United States District Court. The District Court referred the case to this Court.24

V. Thereafter, the Trustee filed an agreed motion to intervene as party plaintiff,25 which was granted.26 The Trustee then filed a motion for leave to file a second amended complaint,27 also granted.28

W. In addition to the state law claims asserted in the State Court Complaint, the Trustee, in her second amended complaint (the "Second Amended Complaint"), seeks a judicial declaration under Federal Rule of Bankruptcy Procedure 7001(9) relief and 11 U.S.C. §§ 544, 548, and 550. The Trustee seeks to avoid and recover a convoluted multitude of transactions involving at least twelve bank accounts, three trusts, and three pieces of real property.29

X. The dollar value of the transfers that the Trustee seeks to avoid total over $10,000,000.00.30 The transfers include transfers from the Morgan Stanley accounts held by Debtor and Karen to the Karen Trust, the transfer of the Crayton Court Property to the Karen Trust, the transfer of the proceeds of sale of the D.C. Property to the Karen Trust, the purchase of the Hawser Property, transfers from Debtor's Individual Retirement Account, transfers by persons other than Debtor, and inter-account transfers within the Alex Trust, the Karen Trust, and the Crayton Trust.

Y. Debtor and Karen have no joint creditors.

Conclusions of Law

A. Summary judgment is appropriate when the moving party shows that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law.31 If the non-moving party would have the burden of proof at trial to establish an essential element of its claim, the movant on summary judgment can prevail either by showing that the non-moving party has no such evidence or by presenting affirmative evidence demonstrating that the non-moving party will be unable to prove its case at trial.32 Once the moving party satisfies its initial burden on summary judgment, the burden then shifts to the non-moving party to establish with record evidence that a...

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