Kasbee v. Huntington Nat'l Bank (In re Kasbee)
| Decision Date | 30 July 2010 |
| Docket Number | Bankruptcy No. 09–11575–TPA.,Adversary No. 09–1137–TPA. |
| Citation | 466 B.R. 719 |
| Parties | In re Brian K. KASBEE and Melanie K. Kasbee, Debtors.Brian K. Kasbee and Melanie K. Kasbee, Plaintiffs v. Huntington National Bank, Defendant. |
| Court | U.S. Bankruptcy Court — Western District of Pennsylvania |
OPINION TEXT STARTS HERE
Gary J. Gaertner, Esq., Pittsburgh, PA, for Huntington National Bank.
Stephen H. Hutzelman, Esq., Erie, PA, for Debtor.
Currently before the Court is a Motion for Summary Judgment (“Summary Judgment Motion”) filed at Adv. No. 09–1137, Document No. 10, by the Debtors, Brian K. Kasbee and Melanie K. Kasbee, (“Debtors”) in reference to their pending Complaint for Determination of Secured Status ( “Complaint” ). 1 Defendant, Huntington National Bank (“Huntington”) opposes entry of the summary judgment. For the reasons that follow, the Court will deny the Summary Judgment Motion.
The material facts underlying the Summary Judgment Motion currently before the Court are not in dispute. The Debtors operate a family farm, which includes their residence, on land located at 136 Oniontown Road, Greenville, Pennsylvania (“Property”). On March 20, 2006, the Debtors entered into a loan agreement with Sky Bank, now by merger Huntington, in the face amount of $267,000. This obligation was secured by a mortgage on the Property dated March 20, 2006, also in the amount of $267,000 and recorded March 27, 2006. The Debtors filed a voluntary Petition under Chapter 12 of the Bankruptcy Code on August 31, 2009. In Schedule A of the Petition the Debtors valued the Property at $285,000. On November 8, 2009, Huntington filed a proof of claim concerning the above debt in the amount of $249,903.41, designating it as a secured claim.
Also on November 8, 2009, in the main bankruptcy case, Huntington filed a Motion for Relief from Automatic Stay (“Relief Motion”) at Document No. 17. In the Relief Motion, Huntington averred that its payoff was $252,272.45 and that “[t]he fair market value of the premises was $169,000 based on an appraisal/BPO dated November 4, 2009.” Id. at ¶ 12. Debtors filed a Response to the Relief Motion in which they agreed with the value that Huntington alleged, stating:
Id. at Document No. 23. Debtors then filed a Chapter 12 Plan in which they provided:
Id. at Document No. 26. Thereafter, on December 3, 2009, the Debtors filed the within Adversary Proceeding. The initial hearing on the Relief Motion was held on December 15, 2009. The following colloquy took place at the hearing:
Court: What is the equity situation?
Atty. Gaertner: We have the mortgage on the 48 acres and on the equity issue, first of all, a claim has been filed in this case listing total indebtedness of $249,900. With respect to the issue of equity, a broker's price opinion was requested and attached to our motion and it shows a value of $169,000. My client has looked at it and has said, why in the world are we even using this because this farm has 48 acres and it is using comparables with one-third of an acre, I believe one has 4 acres. So my client has gone ahead and ordered a full interior appraisal and I will be contacting Mr. Hutzelman to basically request their cooperation so that we can get the appraisal done and get a good reliable figure on what the property is worth.
See Audio Transcript of Proceedings dated December 15, 2009, 1:38:25 to 1:39:36. After a discussion about the payments proposed under the Plan, the colloquy continued:
Court: Any objection to continuing this to the conciliation?
Atty. Gaertner: No, your honor. .... We will not object to continuing it to the conciliation conference.
Id. at 1:43:36 to 1:44:13.
The Complaint seeks a determination that the value of the Property is $169,000, the same value alleged by Huntington in its Relief Motion. On February 12, 2010, Debtors filed an Amended Schedule A in which the Debtors changed the value of the Property from the $285,000 value that they originally stated to a value of $169,000, indicating that they now agree with the value as alleged by Huntington in the Relief Motion. Huntington filed a withdrawal of its Relief Motion on May 31, 2010, which was granted by Order dated June 1, 2010. Document Nos. 72, 73. Huntington has now filed a full appraisal which asserts a value for the Property in the amount of $267,500. See Adversary Proceeding, Document No. 30.
Summary judgment, made applicable to adversary proceedings pursuant to Fed.R.Bankr.P. 7056 which incorporates Fed.R. Civ.P. 56, is appropriate if the pleadings, depositions, supporting affidavits, answers to interrogatories and admissions that are part of the record demonstrate that there exists no genuine issue of material fact and that only a legal issue exists thereby entitling the moving party to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); EarthData Int'l of N.C., L.L.C. v. STV, Inc., 159 F.Supp.2d 844 (E.D.Pa.2001); In re Air Nail Co., 329 B.R. 512 (Bankr.W.D.Pa.2005). Med. Protective Co. v. Watkins, 198 F.3d 100, 103 (3d Cir.1999) (quoting Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir.1994)); Fed.R.Bankr.P. 56(c). Here, the Parties agree, and the record is clear, that no material facts are at issue.
In their Summary Judgment Motion, the Debtors ask that judgment be entered in their favor on the issue of whether Huntington is bound by the $169,000 value it originally alleged in the Relief Motion claiming that the allegation is a binding judicial admission. If the Court were to agree, the Debtors believe entry of summary judgment would effectively resolve the Complaint in their favor. Alternatively, the Debtors claim that Huntington is judicially estopped from asserting any other value. The Court disagrees with the Debtors' position in both instances.
“Judicial admissions are concessions in pleadings or briefs that bind the party who makes them.” Berckeley Inv. Group, Ltd. v. Colkitt, 455 F.3d 195, 211 n. 20 (3d Cir.2006) citing Parilla v. IAP Worldwide Serv., VI, Inc., 368 F.3d 269, 275 (3d Cir.2004) (), citing, inter alia, Soo Line R. Co. v. St. Louis Southwestern Ry., 125 F.3d 481, 483 (7th Cir.1997) (); Glick v. White Motor Co., 458 F.2d 1287, 1291 (3d Cir.1972) ().
However, when a party making a judicial admission subsequently provides a timely explanation as to the error, the trial court must accord the explanation due weight. Sicor Ltd. v. Cetus Corp., 51 F.3d 848, 859–60 (9th Cir.1995); Schwartz v. Adams County, 2010 WL 2011582 at *4 (D.Idaho, May 20, 2010); In re LRP Mushrooms, Inc., 2010 WL 2772510 at *10 (Bankr.E.D.Pa., July 13, 2010); Adani Exports, Ltd. v. Amci (Export) Corp., 2009 WL 2485370 at *9 (W.D.Pa. August 7, 2009). Although factual assertions in a pleading can ultimately be considered judicial admissions, “admissions” made in superceded pleadings lose their binding force and have value only as evidentiary admissions. See Bank One, Tex., N.A. v. Prudential Ins. Co. of Am., 939 F.Supp. 533, 541 (N.D.Tex.1996). An unequivocal judicial admission is binding on the party who made it which is to be distinguished from an evidentiary admission which is admissible but not conclusive. In re Jordan, 403 B.R. 339, 351 (Bankr.W.D.Pa.2009). A party may introduce superceded admissions into evidence to be considered as adverse evidentiary admissions by the fact-finder. In re Gruppo Antico, Inc., 359 B.R. 578, 587–88 (Bankr.D.Del.2007) quoting In re C.F. Foods, L.P., 265 B.R. 71, 87 (Bankr.E.D.Pa.2001). Even the Debtors agree with the foregoing standard in their brief which summarizes how to apply the doctrine of judicial admissions, i.e., “statements contained in a party's pleadings are binding on that party and are considered judicial admissions unless the statements are withdrawn or amended.” See Brief in Support of Motion for Summary Judgment, p. 3, Adversary Proceeding, Document No. 21.
As demonstrated by the prior reference to the record, Huntington timely repudiated its allegation of value at the initial hearing on the Relief Motion. It explained that the value of $169,000 was the result of a broker's price opinion (“BPO”) and not a formal appraisal and that it had, by the time of the first hearing, realized that the comparables utilized in the BPO were inadequate and that as a result it was obtaining a full appraisal to determine the true value. Furthermore, it subsequently, although belatedly, withdrew the Relief Motion in which the allegation of value was set forth.
The Court finds that Huntington's timely explanation of the error at the first hearing and its subsequent withdrawal of the Relief Motion supercedes and warrants relief from the allegation of value relied upon by the Debtors in the Summary Judgment Motion. The Court did not make any determination based on the asserted value by Huntington. The Debtors were promptly made aware of Huntington's position and have had or will have adequate...
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