Matter of Ellison Associates
| Decision Date | 14 August 1981 |
| Docket Number | Adv. No. 80-5408A.,Bankruptcy No. 80 B 11213 |
| Citation | 13 BR 661 |
| Parties | In the Matter of ELLISON ASSOCIATES, Debtor. ELLISON ASSOCIATES, Plaintiff, v. EASTWOOD MANAGEMENT CORPORATION, Bowery Savings Bank, Harris, Beach, Wilcox, Rubin & Levey, Defendants. |
| Court | U.S. Bankruptcy Court — Southern District of New York |
COPYRIGHT MATERIAL OMITTED
Louis P. Rosenberg, Brooklyn, N.Y., for debtor; Alfred A. Rosenberg and Richard Koral, Brooklyn, N.Y., of counsel.
Skadden, Arps, Slate, Meagher & Flom, New York City, for Eastwood Management Corp.; William J. Rochelle, III and Zachary Kass, New York City, of counsel.
Cadwalader, Wickersham & Taft, New York City, for Bowery Savings Bank; David Kittay, New York City, of counsel.
Costello & Shea, New York City, for Harris, Beach, Wilcox, Rubin & Levey; Ann R. Goodwin, and Frederick N. Gaffney, New York City, of counsel.
Motions for Summary Judgment, Dismissing this Adversary Proceeding and Chapter 11 Case
Defendants, Eastwood Management Corporation ("Eastwood"), Ellison Park Enterprises ("Ellison Park"), Harris, Beach, Wilcox, Rubin & Levey ("Harris, Beach") and The Bowery Savings Bank ("Bowery") move for summary judgment dismissing the above-captioned adversary proceeding and Chapter 11 case1 on the grounds that (1) the debtor filed its petition in bad faith, (2) as to Ellison Park, the debtor is prohibited by § 549(c) from obtaining a turnover of the real property at issue (the debtor's sole claimed valuable asset), (3) the debtor is barred by the doctrines of res judicata and collateral estoppel from relitigating any claim to the property, (4) the debtor is barred by the doctrines of judicial and equitable estoppel from alleging ownership in the property, (5) the debtor is barred by the doctrine of laches from recovering the property, (6) any legal or equitable interests that the debtor may have had in the property were extinguished by the entry of a final judgment of foreclosure and sale, (7) the debtor never acquired title to the property, and (8) the debtor, not having any assets, is unable to effectuate a plan of reorganization. In summary, the debtor, by way of an unrecorded deed, claims ownership to certain real property that was foreclosed upon by senior mortgagee Bowery. Bowery was represented in the foreclosure action by Harris, Beach. The property was purchased by Eastwood at a state court ordered foreclosure sale. Shortly thereafter, Eastwood sold the property to Ellison Park. On the eve of the foreclosure sale, the debtor filed a Chapter 11 petition. Three months later the debtor commenced this adversary proceeding to chasten the defendants for the alleged violation of the automatic stay provision found in § 362(a) and recover the property.
The matter is ripe for summary judgment. See, Bankruptcy Rule 756. The debtor's Statements of Issues pursuant to S.D.N.Y. Local Civil Rule 3(g), its affidavits and materials otherwise permitted by Fed. R.Civ.Pro. 56 do not "set forth specific facts showing that there is a genuine issue for trial." Id. at 56(e). The debtor mainly disputes the legal inferences from the facts, not the facts themselves and has failed to heed the Second Circuit's recent reiteration that:
. . . the mere possibility that a factual dispute may exist, without more, is not sufficient to overcome a convincing presentation by the moving party. See Gatling v. Atlantic Richfield Co., 577 F.2d 185, 187-188 (2d Cir. 1978), cert. denied, 439 U.S. 868, 99 S.Ct. 181, 58 L.Ed.2d 169 (1979). The litigant opposing summary judgment, therefore, "may not rest upon mere conclusory allegations or denials" as a vehicle for obtaining a trial. SEC v. Research Automatic Corp., 585 F.2d 31, 33 (2d Cir. 1978).
Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980).
The materials presented in opposition to the motion lack the requisite "concrete particulars", S.E.C. v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir. 1978), necessary to show that there is a "genuine issue as to any material fact", Fed.R.Civ. Pro. 56(c) (emphasis added). Rather, they present a bundle of legal theories, unsubstantiated speculations and conclusory allegations. Typical are statements contrary to damaging prior admissions ferreted out by defendants' discovery. This is patently insufficient.
If a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact.
Perma Research & Development Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969). Likewise, debtor's call to resolve conflicting inferences that can be drawn from the facts fails to supply the predicate for a trial. Cf. State Teachers Retirement Bond v. Fluor Corp., 500 F.Supp. 278, 294 (S.D.N.Y.1980). In short, "plaintiff debtor has advanced no `plausible ground' to warrant a trial." Maldonado v. Flynn, 485 F.Supp. 274, 286 (S.D.N.Y.1980).
1. The debtor, Ellison Associates, is purportedly a New Jersey limited partnership. (Amended Complaint ¶ 1) (R.3(g) St. ¶ 2).2
2. However, Ellison Associates (a) never filed a certificate of limited partnership or made any partnership filings whatsoever in New Jersey or elsewhere; (b) never maintained a bank account in its own name; (c) never issued purchase orders or paid bills in its own name; (d) never filed a certificate of doing business under an assumed name in New York State; (e) never filed any documents with any governmental authority apart from tax returns; and (f) never prepared any balance sheets, financial statements or statements of income and loss. (R.3(g) St. ¶ 2).
3. Ellison Associates only claimed asset is an apartment complex in Rochester, New York, known as the Ellison Park Apartments (the "Property"). (R.3(g) St. ¶ 48).
4. Ellison Associates has no business other than its alleged ownership of the Property. (R.3(g) St. ¶ 2).
5. Walter Cook ("Cook")3 is the president of W.J.C. Realty Co., Inc. ("WJC"), the general partner of Ellison Associates. Cook also claims to be a limited partner in Ellison Associates. (R.3(g) St. ¶ 7).
6. Cook was primarily responsible for making the decisions regarding the alleged acquisition of the Property by the debtor and was the person ultimately responsible for the operation of the Property. (R.3(g) St. ¶ 7). It is Cook who controls Ellison Associates and it is he who was deposed on the debtor's behalf.
7. Ellison Associates claims that WJC is the holder of an $8,000,000 note and wraparound mortgage on the Property given by it to WJC. Although WJC, as holder of the note and wrap-around mortgage, would be by far the largest of the debtor's secured creditors, neither WJC nor the note and wrap-around mortgage is mentioned in any of the schedules filed by the debtor with this court, including those appended to a Supplementary Affidavit in Compliance with Local Rules, sworn to by Cook. (R.3(g) St. ¶¶ 3, 13).
8. Eastern Development & Investment Corporation ("Eastern Development") is a real estate investment company whose president is Cook. (R.3(g) St. ¶ 9).
9. Mid-City Management Corporation ("Mid-City") is a real estate management company whose president is Cook. (R.3(g) St. ¶ 10). In June or July of 1978, Mid-City took over as managing agent of the Property. (R.3(g) St. ¶ 54).
10. On July 31, 1980 at 5:15 p.m. Ellison Associates filed in this court a petition for reorganization under Chapter 11 of the Bankruptcy Code, § 1101 et seq.
11. Ellison Associates did not serve the summons and complaint initiating the above-captioned adversary proceeding until more than three months after filing its Chapter 11 petition. (R.3(g) St. ¶ 72).
12. In June of 1978 Eastern Development purportedly entered into a contract (the "Purchase Contract") to buy the Property from its then-owners, Arthur N. Bailey ("Bailey") and Warren T. Erickson ("Erickson"). (R.3(g) St. ¶ 18).
13. Thereafter, Eastern Development purportedly assigned the Purchase Contract to WJC. (R.3(g) St. ¶ 18).
14. Ellison Associates claims that WJC obtained title to the Property at a closing in or about June or July of 1978 and subsequently conveyed the Property to Ellison Associates. (R.3(g) St. ¶¶ 18, 49).
15. Ellison Associates claims an interest in the Property pursuant to a deed from WJC, which was a bargain and sale deed without warranties. (R.3(g) St. ¶ 17). This deed to Ellison Associates was dated June 20, 1978 and was never redated. (R.3(g) St. ¶ 17, Ex. H).
16. There was never a contract of sale between WJC and Ellison Associates (R.3(g) St. ¶ 28).
17. At the closing in June or July of 1978, Ellison Associates claims that WJC gave an $850,000 purchase money third mortgage on the Property to Bailey and Erickson (R.3(g) St. ¶ 51) and that Ellison Associates gave an $8,000,000 wraparound mortgage to WJC. (R.3(g) St. ¶¶ 3, 13).
18. None of the aforesaid deeds (R.3(g) St. ¶ 29) and mortgages (R.3(g) St. ¶ 26) were recorded prior to the time Ellison filed its Chapter 11 petition.
19. At the purported closing in June or July of 1978, the deed from Bailey and Erickson to WJC was not delivered to WJC. Rather, the deed was given to Robert Sylvor, Esq. ("Sylvor") as escrow agent, to hold in escrow pending the happening of certain conditions. (R.3(g) St. ¶ 19). Bailey, as seller, had insisted that the deed to WJC be held in escrow, and Cook testified that it was "part of the deal" that the deed to WJC be held in escrow. (R.3(g) St. ¶ 21).
20. Similarly, the purchase money mortgage purportedly given by WJC to Bailey and Erickson was also given to Sylvor to hold in escrow. (R.3(g) St. ¶ 26).
21. The parties signed a document...
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