Makeen v. Wadsworth (In re Makeen)
| Decision Date | 17 March 2022 |
| Docket Number | 1:22-cv-00023-DDD,1:21-cv-01853-DDD,Civil Action 1:21-cv-01461-DDD |
| Parties | In re AKEEM ABDULLAH MAKEEN, Debtor. v. DAVID V. WADSWORTH, Chapter 7 Trustee, Appellee and Plaintiff, AKEEM ABDULLAH MAKEEN, Debtor, Appellant and Defendant, v. MAKEEN INVESTMENT GROUP, LLC; and MAKEEN FAMILY CHILDREN'S TRUST, Defendants, v. UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO; and U.S. TRUSTEE, Interested Parties. |
| Court | U.S. District Court — District of Colorado |
In re AKEEM ABDULLAH MAKEEN, Debtor.
AKEEM ABDULLAH MAKEEN, Debtor, Appellant and Defendant,
v.
DAVID V. WADSWORTH, Chapter 7 Trustee, Appellee and Plaintiff,
v.
MAKEEN INVESTMENT GROUP, LLC; and MAKEEN FAMILY CHILDREN'S TRUST, Defendants,
v.
UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO; and U.S. TRUSTEE, Interested Parties.
Civil Action Nos. 1:21-cv-01461-DDD, 1:21-cv-01853-DDD, 1:22-cv-00023-DDD
United States District Court, D. Colorado
March 17, 2022
ORDER DISMISSING APPEALS
Hon. Daniel D. Domenico
Before the Court are three appeals filed by pro se[1] Appellant and Debtor Akeem A. Makeen, in which he challenges orders issued by the
U.S. Bankruptcy Court for the District of Colorado in ongoing Chapter 7 and adversary proceedings. Because all three appeals concern the same property, the same relevant facts and procedural history, and related legal issues, the Court considers them together.[2] For the following reasons, the appeals are dismissed.[3]
BACKGROUND
In July 2018, Mr. Makeen filed a Chapter 11 bankruptcy petition; the case was later converted to a Chapter 7 bankruptcy on motion of the Trustee, Appellee David V. Wadsworth. In re Makeen, No. 1:18-bk-15794 (Bankr. D. Colo. filed July 2, 2018).
On January 3, 2020, Mr. Makeen for the first time claimed a homestead exemption in the property at issue in the instant appeals: 3312 South Tulare Circle in Denver, Colorado. Id., ECF No. 605 at 4; see also id., ECF No. 946 at 11. On January 20, 2020, the Trustee timely
filed objections to Mr. Makeen's claimed homestead exemption.[4] Id., ECF No. 628; see also id., ECF No. 964. On January 29, 2020, the bankruptcy court held a hearing regarding various pending matters, including the disputed homestead exemption, and ordered the Trustee to file additional briefing in support of his objections to the claimed exemption. Id., ECF No. 640 at 1. Following receipt of that briefing, the bankruptcy court held another hearing in April 2020, at which it overruled the Trustee's Rooker-Feldman and issue-preclusion arguments. In making its ruling, however, the bankruptcy court noted that “other issues remain as to the Debtor's entitlement to a homestead exemption for Tulare and those issue[s] will be determined at a later date.”[5] Id., ECF No. 783 at 1.
In June 2020, the bankruptcy court determined that the remaining issues involving Mr. Makeen's claimed homestead exemption and the Trustee's objections thereto would “be heard either in conjunction with, or after resolution of, the claims” in a related adversary proceeding involving the Tulare property. Id., ECF No. 831; see also Wadsworth v. Makeen, No. 1:20-ap-01149 (Bankr. D. Colo. filed May 19, 2020). In the adversary proceeding, the Trustee alleges that in 2013 Mr. Makeen improperly transferred the Tulare property to his father and a family trust in an effort to remove it from the reach of creditors. See Wadsworth v. Makeen,
No. 1:20-ap-01149, ECF No. 1. Mr. Makeen may not claim a homestead exemption in the property if it was fraudulently transferred. See 11 U.S.C. § 522(g).
In May 2021, the bankruptcy court formally consolidated the outstanding homestead exemption issues into the adversary proceeding. In re Makeen, No. 1:18-bk-15794, ECF No. 981 at 1; Wadsworth v. Makeen, No. 1:20-ap-01149, ECF No. 44 at 1. Mr. Makeen then moved the bankruptcy court to stay the adversary proceeding until the validity of his claimed homestead exemption was determined. Wadsworth v. Makeen, No. 1:20-ap-01149, ECF No. 47. The bankruptcy court denied the motion to stay, id., ECF No. 52, and Mr. Makeen appealed that denial to this Court (No. 1:21-cv-01461, Doc. 1), the first of the three appeals at issue here.
Mr. Makeen continued to pursue adjudication of his claimed homestead exemption in the adversary proceeding. He filed (1) a motion requesting that the bankruptcy court hold an expedited exemption hearing, Wadsworth v. Makeen, No. 1:20-ap-01149, ECF No. 69, which the court denied, id., ECF No. 71; (2) a motion requesting that the court “hold [the] homestead exemption attaches automatically upon occupancy of the Tulare home, ” id., ECF No. 72, which the court denied as unnecessary, id., ECF No. 74; and (3) a motion for reconsideration of the court's order on his automatic-attachment motion, id., ECF No. 75, which the court denied, id., ECF No. 77. Mr. Makeen then appealed the bankruptcy court's denials of those three motions to this Court (No. 1:21-cv-01853, Doc. 1), the second of the three appeals at issue here. Mr. Makeen then moved the bankruptcy court to stay the adversary proceeding pending the second appeal, and the bankruptcy court denied that motion. Wadsworth v. Makeen, No. 1:20-ap-01149, ECF Nos. 85, 88, 90, 96.
The adversary proceeding remains pending, and the bankruptcy court has not yet resolved the issue of whether Mr. Makeen fraudulently transferred the Tulare property, nor has it resolved the Trustee's remaining objections to Mr. Makeen's claimed homestead exemption in the property. Those unresolved issues notwithstanding, there appears to be no dispute that Mr. Makeen had the power to control the Tulare property, whether as owner of the property or as trustee of the family trust, and that power-including the power to sell the property-is part of the bankruptcy estate. See In re Makeen, No. 1:18-bk-15794, ECF No. 1045 at 2-4; (No. 1:22-cv-00023, Doc. 18 at 8-9, 16 (acknowledging that power to sell family trust property is part of bankruptcy estate)).
In November 2021, the Trustee filed a motion in the Chapter 7 proceeding requesting permission to sell the Tulare property to satisfy claims against the bankruptcy estate. In re Makeen, No. 1:18-bk-15794, ECF No. 1011. The Trustee stated that the sale proceeds would be retained in his trust account until resolution of the litigation regarding Mr. Makeen's claimed homestead exemption. Id. ¶¶ 23-24. Mr. Makeen objected to the proposed sale, id., ECF No. 1023, and the bankruptcy court held a hearing on the Trustee's motion to sell the property in December 2021, id., ECF No. 1032; Wadsworth v. Makeen, No. 1:20-ap-01149, ECF No. 151. At the hearing, the bankruptcy court stated its intent to approve the sale of the Tulare property. In re Makeen, No. 1:18-bk-15794, ECF No. 1032; Wadsworth v. Makeen, No. 1:20-ap-01149, ECF No. 151. Mr. Makeen then filed the third of the three appeals at issue here. (No. 1:22-cv-00023, Doc. 1; see also id., Doc. 6.) He moved the bankruptcy court to stay its approval of the sale pending the third appeal, and the bankruptcy court denied that motion. In re Makeen, No. 1:18-bk-15794, ECF Nos. 1044, 1048.
On January 5, 2022, the bankruptcy court formally granted the Trustee's motion to approve the sale and overruled Mr. Makeen's objections to the sale as follows:
The Debtor currently resides at the Tulare property. The Trustee has located a buyer willing to pay $642, 000 for the property. By the Trustee's calculations, this amount will exceed the three liens on the property, which total approximately $444, 000, and the costs of sale, estimated at $41, 730. This would leave the estate with $198, 250 in net sale proceeds. The Debtor has claimed a homestead exemption in the amount of $110, 000 in Tulare. The Trustee has objected to that exemption and the Court has consolidated the exemption dispute with the Trustee's adversary proceeding . . . . However, even assuming the Debtor's exemption is ultimately allowed in full, there would remain $88, 250 in equity from the sale of Tulare.
. . . .
The Court held a hearing on December 22, 2021 to discuss the sale. At that hearing, the Debtor appeared to consent to the sale of Tulare and indicated that he had started packing his belongings and that he merely wanted to ensure he had sufficient time to move out. Despite these representations, the Debtor subsequently filed further pleadings, including a Motion to Reconsider and an Objection to Trustee's Proposed Order that make further arguments opposing the sale. As such, the Court will address the Debtor's . . . objections in this written order.
. . . .
The Debtor . . . makes various arguments related to his claimed homestead exemption in Tulare. He contends not only that the Trustee cannot sell Tulare because it is allegedly exempt but also that the Trustee has failed to comply with certain provisions of Colorado's exemption statute and that the Trustee abandoned his objection to the Debtor['s] homestead exemption. These arguments misunderstand the exemption process and how it operates within a bankruptcy case. Simply because the Debtor claimed an exemption in Tulare does not make it automatically exempt from the estate. Pursuant to § 522(1), property claimed as
exempt by a debtor on Schedule C is exempt from the bankruptcy estate “[u]nless a party in interest objects.” The Trustee filed a timely objection to the Debtor's homestead exemption claim in Tulare. Thus, the Debtor's mere claim of exemption does not automatically exempt Tulare from the bankruptcy estate.
To the extent the Debtor is arguing that the Trustee's objection has been resolved or i[s] no longer pending, that argument is also without merit. The Debtor points to a prior Minute Order issued by this Court on April 23, 2020 as resolving the Trustee's exemption objection. That Minute Order, however, . . . . specifically stated that “other issues remain as to the Debtor's entitlement to a homestead exemption for Tulare and those issues will be determined at a later date.” . . . The Trustee . . . reserved the right to file additional briefing on the homestead issue and [stated] that there were factual issues to be resolved relating to his objection, including the various title transfers of Tulare and the Debtor's inconsistent statements and actions regarding the homestead exemption....
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