Matter of Marshall, Bankruptcy No. SH-B-81-351
| Decision Date | 17 November 1981 |
| Docket Number | Bankruptcy No. SH-B-81-351,Adv. No. 81-0272. |
| Court | U.S. Bankruptcy Court — Western District of North Carolina |
| Parties | In the Matter of Myrtle T. MARSHALL, Debtor. Myrtle T. MARSHALL, Plaintiff, v. SPINDALE SAVINGS AND LOAN ASSOCIATION, E. Thomas Hardin & Robert T. Atchley, Defendants. |
O. Max Gardner, III, Shelby, N.C., for plaintiff.
A. Clyde Tomblin, Spindale, N.C., for defendant.
THIS MATTER coming on to be heard and being heard before the undersigned Judge Presiding over the United States Bankruptcy Court for the Western District of North Carolina on Thursday, October 1, 1981, for trial on a complaint filed by the plaintiff to set aside the pre-petition sale of her single-family residence under Section 548 of Title 11 of the United States Code, and the Court, after reviewing the record, considering the evidence, and hearing the arguments of counsel, makes the following FINDINGS OF FACT and CONCLUSIONS OF LAW:
FROM THE RECORD IN THIS PROCEEDING, THE COURT FINDS AS A FACT THE FOLLOWING:
1. The underlying Chapter 13 case was commenced by the filing of a petition with this Court on July 2, 1981. In the statement of debts filed with the said petitioner, the petitioner averred that she owed Spindale Savings and Loan Association, Spindale, North Carolina, the sum of $557.44 as past due payments on a note secured by a first deed of trust on her principal residence located at 313 Ohio Street, Spindale, North Carolina.
2. On or about July 30, 1981, the debtor and plaintiff herein filed a motion with this Court pursuant to Sections 362 and 105 of the Federal Bankruptcy Code requesting this Court to enforce the automatic stay or to issue a temporary restraining order against the defendant Atchley prohibiting him from seeking to dispossess the debtor-plaintiff from her residence located at 313 Ohio Street.
3. Machine copies of the debtor-plaintiff's motion were served by United States Mail, first-class, postage prepaid, on the defendant, Spindale Savings and Loan Association, on the defendant Atchley, and on Mrs. Joan M. Jenkins, Clerk of Superior Court, Rutherford County, North Carolina.
4. On or about July 30, 1981, counsel for the debtor-plaintiff filed an affidavit with this Court indicating that he had notified all of the parties listed in paragraph 3 above by telephone on July 29, 1981, that he would apply to this Court for a ten (10) day temporary order on July 30, 1981, pursuant to Rule 65 of the Federal Rules of Civil Procedure and to Section 105 of the Bankruptcy Code, enjoining and prohibiting any party or agency from evicting the above-named debtor-plaintiff from her residence at 313 Ohio Street, Spindale, North Carolina.
5. The debtor-plaintiff's request for a temporary restraining order came on for hearing before this Court on Thursday, July 30, 1981. Based upon the verified motion filed by the debtor-plaintiff and the verified affidavit filed by counsel for the debtor-plaintiff, and upon facts of which this Court took judicial notice, a temporary restraining order was duly issued on August 3, 1981. The said order provided, inter alia, that all adverse parties should appear before this Court at 10:00 o'clock a.m. on August 10, 1981, to show cause why the order should not be continued until a final hearing and trial. In that order, the plaintiff-debtor was also directed to commence the instant adversary proceeding on or before August 3, 1981.
6. The instant adversary proceeding was commenced by the filing of a complaint with this Court on August 3, 1981. In her complaint, the plaintiff-debtor prayed that the sale of her single-family residence be voided as a fraudulent conveyance under Section 548 of the Federal Bankruptcy Code and also alleged that she was entitled to recover compensatory and punitive damages against the defendants because of the alleged breach of fiduciary duty on the part of the trustee under the said deed of trust. The plaintiff-debtor also filed the following pleadings with the Court on August 3, 1981: a motion for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure; a motion to shorten time for responding to a request for production of documents; a request for production of documents under Rule 34 of the Federal Rules of Civil Procedure; and a motion to shorten time for the defendants to file answer to the plaintiff's complaint.
7. On August 4, 1981 this Court entered an order directing the defendants to respond to the plaintiff-debtor's request for production of documents on or before August 19, 1981. In addition, this Court entered a separate order requiring the defendants to file responsive pleadings to the plaintiff's complaint on or before August 21, 1981.
8. The Clerk of this Court thereafter caused summonses to be issued in the names of the individual defendants on August 6, 1981. In the summonses, the defendants were notified that they were required to file answer to the complaint on or before August 21, 1981.
9. On or about August 20, 1981, A. Clyde Tomblin, Attorney and Counsellor at Law, filed an answer in this proceeding on behalf of all of the above-named defendants.
10. This cause was initially set for trial on Tuesday, September 1, 1981 at 2:00 o'clock p.m. Notice of the said trial date was prepared by the Clerk of this Court on August 17, 1981, and was mailed to all parties in interest on August 19, 1981.
11. On August 28, 1981, the plaintiff-debtor herein, through counsel, moved this Court pursuant to Rule 737 of the Rules of Bankruptcy Procedure and Rule 37 of the Federal Rules of Civil Procedure for an order compelling the defendants to comply with the request for production of documents previously filed in this proceeding and furthermore to require the defendants to comply with the order previously entered by the Court shortening the time for such discovery.
12. When this matter came on for trial on Tuesday, September 1, 1981, counsel for the plaintiff advised the Court that the defendants had not complied with the request for discovery. In response thereto, counsel for the defendants advised the Court that he was not aware of the pendency of any request for production of documents. As a result thereof, the trial of this matter was continued by this Court until Thursday, October 1, 1981, and the defendants were directed to comply with the request for production of documents forthwith.
13. This matter subsequently came on for trial before this Court on Thursday, October 1, 1981. At that time, the plaintiff, Myrtle T. Marshall, was represented by O. Max Gardner III, Attorney and Counsellor at Law, Shelby, North Carolina. The defendants, Spindale Savings and Loan Association, E. Thomas Hardin and Robert T. Atchley, were represented by A. Clyde Tomblin, Attorney and Counsellor at Law, Spindale, North Carolina.
14. This matter was properly called for trial before this Court on October 1, 1981, after notice to all parties, and this Court has jurisdiction over all of the said parties.
15. This Court has jurisdiction to hear this cause pursuant to Section 548 of Title 11 of the United States Code and pursuant to Section 1471 of Title 28 of the United States Code.
16. None of the parties herein have requested, by motion or otherwise, a trial by jury on any of the issues raised in this proceeding. As a result thereof, if any right to jury trial existed in this proceeding then it has been properly waived by failure of any of the parties to make a timely request for such trial.
17. The defendants herein have failed to protest by way of proper pleading or motion the sufficiency of service of process upon them, the sufficiency of process, or the jurisdiction of this Court over their person, and therefore such defenses, if any there be, have been waived as provided for by the Federal Rules of Civil Procedure and the Rules of Bankruptcy Procedure.
18. All parties are therefore properly before this Court and this Court is vested with adequate authority to decide the issues raised in this proceeding.
FROM THE EVIDENCE PRESENTED DURING THE TRIAL OF THIS CAUSE, THE COURT MAKES THE FOLLOWING ADDITIONAL FINDINGS OF FACT:
19. The plaintiff first occupied the single-family residence at 313 Ohio Street in 1961. At that time, the plaintiff rented the property.
20. The plaintiff subsequently purchased the subject property in 1976. At that time, the plaintiff paid the sum of $6,000.00 for the property.
21. After purchasing the property, the plaintiff caused considerable improvements to be made to the property including but not limited to the installation of a new roof, renovation of the bathroom, installation of wall-to-wall carpet, the construction of a utility room, the panelling of all interior rooms, the installation of lineoleum flooring in the kitchen, the installation of new screens on all windows, the installation of two storm doors, the installation of a new commode in the bathroom, and the building of two additional closets within the home. The total cost of these improvements was approximately $4,500.00. The majority of these improvements were made by Mr. D.C. Harmon, General Contractor, Forest City, North Carolina.
22. The plaintiff was able to purchase the home and to pay for all of the aforesaid improvements with the use of cash settlement proceeds that she received because of serious personal injuries that she suffered in 1975.
23. In late November or early December of 1977 the plaintiff was approached by a representative of the Phil Mechanic Construction Company about the installation of aluminum siding on her residence at 313 Ohio Street, Spindale, North Carolina. The plaintiff subsequently entered into a contract with the Phil Mechanic Construction Company to install such siding for the total sum of $5,460.00. Prior to signing the contract, the plaintiff advised the said representative that she did not have adequate funds to pay for the...
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