Court Opinion

ID: 2961979
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:50:49.759683+00
Date Added: 2024-06-11T13:14:12.959691
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                 ____________________        No. 92-2408                                 IN RE:  MARK NELSON,                                       Debtor,                                     ____________                                     MARK NELSON,                                      Appellant,                                          v.                           LINDA WIHBEY TAGLIENTI, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. A. David Mazzone, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                           Selya and Stahl, Circuit Judges.                                            ______________                                 ____________________            Domenic S. Terranova for appellant.            ____________________            Linda T.  Wihbey, with whom Ring,  Rudnick &  Grefe, P.C., Philipp            ________________            _____________________________  _______        G. Grefe, and Ring & Grefe, P.C., were on brief for appellees.        ________      __________________                                 ____________________                                     June 3, 1993                                 ____________________                      STAHL,  Circuit  Judge.   Plaintiff-appellant  Mark                              ______________            Nelson (Mark) claims that  the bankruptcy and district courts            erred in dismissing  his suit for damages  against his former            wife, Paula  Nelson Fiorenza (Paula), and her  attorneys.  He            alleges that  defendants willfully violated an automatic stay            provided by  the bankruptcy code when  they instituted equity            actions  in state court which interfered with the sale of the            former marital home.  We disagree and affirm.                                          I.                                          I.                                          __                                      Background                                      Background                                      __________                      The Nelsons  were married on February  2, 1985, and            resided at  16 Dorchester Street,  Wilmington, Massachusetts.            On February 12, 1991, they executed a marital agreement which            subsequently became  part of a  divorce judgment.   Under the            terms of that agreement, Mark was obligated to pay Paula $200            weekly  as child support for the benefit of their eight year-            old  daughter.    The  agreement  further  obligated  him  to            maintain the first and second mortgages on the former marital                                         -2-                                          2            home,  and   actively  to list  and  market the  property for            sale.1                      On March  22, 1991, for  $1.00 consideration,  Mark            transferred  all of  his  right,  title  and interest  in  16            Dorchester Street to his  father, George Nelson, as trustee.2            When Mark failed to make child support payments,  Paula began            enforcement  efforts  in  the Middlesex  County  Probate  and            Family Court.   On  May 8,  1991, and  October 24, 1991,  the            court entered  judgments of contempt against him.  The second            contempt  judgment  resulted  in  a  120-day  jail  sentence,            suspended  until November 8, 1991, "to see if all arrears are            paid."  A                                               ____________________            1.   According to defendants' brief in  bankruptcy court, the            agreement also provided that Paula Nelson transfer her right,            title and  interest in 16 Dorchester  Street to Mark.   As we            read the agreement, she was  required to transfer her  right,            title and interest in six Wilmington properties, including 18            Dorchester  Street, but  not  16 Dorchester  Street.   It  is                                     ___            unclear to  us, therefore,  who held  title to  16 Dorchester            Street as of February 12, 1991.            2.   At oral  argument,  plaintiff's counsel  contended  that            prior  to the  transfer, the  property was  in a  real estate            trust,  with Mark  and Paula  as both  trustees and  lifetime            beneficiaries.   Counsel  argued  that a  second real  estate            trust had been established well in advance of March 1991, and            that the "transfer" really amounted to a mere substitution of            George Nelson for  Mark as trustee.  There is  no evidence in            the  record  as  to  whether  such  trust  arrangements  ever            existed.   Nor is there  any evidence that  Paula surrendered            her  interest as either trustee or lifetime beneficiary of 16            Dorchester Street in the marital agreement.  See n.1 supra.                                                         ___     _____                                         -3-                                          3            hearing on  the contempt  judgment was continued  to November            12,  1991.   On  November 8,  1991,  Mark filed  a voluntary,            "skeleton"3 petition  for bankruptcy under Chapter  13 in the            Bankruptcy  Court  for the  District  of  Massachusetts.   On            November  12,  1991,  Mark  filed  in  the  Probate  Court  a            suggestion of bankruptcy and a motion to continue the pending            contempt action.   Subsequently, on November  25, 1991, Paula            proceeded  to file another  action in  that court  seeking an            attachment and  temporary  restraining order  to prevent  the            transfer of  the 16  Dorchester Street property.4   According            to  defendants, during  these proceedings, Judge  McGovern of            the  Probate Court  directed  the parties  to  meet with  the            Chapter 13  trustee in bankruptcy, Joseph  Szabo.  Defendants            assert that  trustee Szabo  "agreed to execute  a stipulation            allowing for  the sale of  the property,  asserting that  the            bankruptcy estate did  not claim any right, title or interest                                            ____________________            3.   A "skeleton"  bankruptcy petition does  not include  the            required   itemized   lists   of  assets   and   liabilities.            Petitioners obtain leave to file those lists at a later date.            After  receiving two such extensions of time in which to file            the  supporting   documents,  Mark  filed  the  schedules  to            accompany his Chapter 13  bankruptcy petition on December 26,            1991.  He  listed 16  Dorchester Street as  real property  in            which he held an equitable interest of one-half, and on which            there were  mortgages of  $105,214.93 and $68,765.84.   Given            counsel's argument that  Paula had relinquished  all interest            in the property, see  n.1 supra, it is  unclear who held  the                             ___      _____            remaining one-half beneficial interest in the property.            4.   She  appears to  have  done so  after  learning that  16            Dorchester  Street was  the subject  of  a purchase  and sale            agreement.                                         -4-                                          4            in the property, as said property stood in the name of George            Nelson, not the Debtor  Mark Nelson."  Mark does  not dispute            defendants' version of what transpired.                      The  Probate Court  issued a  temporary restraining            order on December 9, 1991, with a return date of December 19,            1991.  On December 17, 1991, Mark filed another suggestion of            bankruptcy and motion to continue.  On December 19, 1991, the            Probate Court issued  an interlocutory  order continuing  the            restraining  order   in  force.    The  pending  sale  of  16            Dorchester Street fell through when, according to Mark, Paula            refused to provide relief from the liens on the property.                      On January 2,  1992, Paula, in a  further effort to            preserve her  rights in  16 Dorchester Street,  filed another            equitable action seeking  an attachment on the  property.  On            January 7, 1992, the Probate Court ordered the attachment.                         On  January 16, 1992,  Mark commenced  an adversary            proceeding in  the bankruptcy  court against his  ex-wife and            her attorneys,  claiming that, by pursuing  equity actions in            state  court against  property  properly  in  the  bankruptcy            estate,  they  had  willfully   violated  an  automatic  stay            provided by 11 U.S.C.   362.  He sought actual damages, costs            and attorneys' fees and  punitive damages claiming that these            arose from  defendants' obstruction  of the proposed  sale of            the marital residence.                                         -5-                                          5            In  response,  defendants moved  to  dismiss  the action  for            failure to state a claim.                      On February 15, 1992, Mark converted his Chapter 13            bankruptcy petition  to a Chapter 7  petition.  Subsequently,            the  mortgagee successfully  petitioned the  bankruptcy court            for relief from the stay in  order to permit it to proceed to            foreclose  on its  16 Dorchester  Street mortgage,  an action            which ultimately occurred.                       On May  22,  1992, the  bankruptcy court  dismissed            Mark's  adversary proceeding.   He  appealed to  the district            court  which, on September 15, 1992, affirmed the judgment of            the bankruptcy court.  From that decision he now appeals.                                         II.                                         II.                                         ___                                      Discussion                                      Discussion                                      __________                      As  a  general rule,  the  filing  of a  bankruptcy            petition  operates as  a stay  against actions  affecting the            property  of the  bankruptcy  estate.   11  U.S.C.    362(a).            Because the stay takes  effect upon filing, without  the need            for further action, it is often referred to as an "automatic"            stay.  The function of the stay is to "protect the bankrupt's            estate  from  being eaten  away  by  creditors' lawsuits  and            seizures  of   property  before  the  trustee   has  had  the            opportunity  to marshal  the  estate's assets  and distribute            them equitably  among  the  creditors."    Martin-Trigona  v.                                                       ______________                                         -6-                                          6            Champion Fed. Sav. & Loan Assoc., 892 F.2d 575, 577 (7th Cir.            ________________________________            1989) (citing H.R.  Rep. No.  595, 95th Cong.  1st Sess.  340            (1977), U.S. Code Cong. & Admin. News 1978, p. 5787).                      Ordinarily,  a  party  in  interest  must  ask  the            bankruptcy  court  for, and  receive,  relief  from the  stay            before proceeding  against the debtor's  estate.  11  U.S.C              362(d).  The code,  however, also provides numerous statutory            exceptions to the automatic stay.  11 U.S.C.   362(b).  Under            11 U.S.C.   362(b)(2),  actions to "collect[] .  . . alimony,            maintenance, or support from property that is not property of                                                          ___            the estate" are not barred by an automatic stay.  11 U.S.C.              362(b)(2)  (emphasis supplied).   Litigants  who  take action            against  a  bankruptcy  estate without  receiving  the  prior            approval of the court  or falling under one of  the statutory            exceptions are subject to sanctions.  The code  provides that            "[a]n  individual injured by any  willful violation of a stay                                              _______            provided  by  this  section  shall  recover  actual  damages,            including  costs  and attorneys'  fees,  and, in  appropriate            circumstances,  may  recover  punitive damages."    11 U.S.C.              362(h) (emphasis supplied).                      This  case turns  on  two questions:   (1)  whether            Paula's  equity  actions  in   state  court  fell  under  the              362(b)(2) exception to the automatic  stay; and (2) if not,            whether  Paula  "willfully   violated"  the  automatic  stay,            thereby  subjecting herself to penalties  under   362(h).  In                                         -7-                                          7            this  case,  the answer  to the  first question  provides the            answer to the second.                      As noted above,   362(b)(2) exempts from  automatic            stays actions seeking to  collect support from property "that            is  not property  of  the estate."    11 U.S.C.     362(b)(2)                ___            (emphasis supplied).  Paula appears to have been aware of the            following  at the time she  filed the November equity action:            (1) the  Registry  of Deeds  recorded that  ownership of  the            property had been transferred from Mark to George Nelson; and            (2)  Mark had not listed any interest in 16 Dorchester Street            as property  of the  estate because  he had  yet to  file the            documents to support his bankruptcy petition.  At or close to            the time  she filed  the  action, Paula  learned from  Joseph            Szabo, the Chapter 13 bankruptcy trustee, that the bankruptcy            estate  would not  claim  any of  the  proceeds of  the  then            pending sale of the property.5                       Given the  peculiar "facts"  of this case,  we hold            that Paula could not  have "willfully violated" the automatic            stay  applicable to  plaintiff's  property, if,  in fact,  16            Dorchester  Street was ever covered by such a stay.  Although                                            ____________________            5.  We  also  note  that  Mark's  counsel  conceded  at  oral            argument  that there was no  way for Paula  to determine from            public records  who held beneficial interest  in the property            at  16  Dorchester  Street.   Indeed,  in  retrospect,  it is            impossible for  this court to determine  whether the property            was properly part  of the bankruptcy  estate.  The  ambiguous            record of  this case contains  no evidence that  the property            was ever in a  real estate trust, and it  is unclear whether,            when and how Paula surrendered her interest in the property.                                         -8-                                          8            Paula  could have  asked  the bankruptcy  court to  determine            whether   the  property  was  subject  to  a  stay  prior  to            commencing her equity actions in state court, we hold that it            was reasonable for her  to believe that the property  was not            part  of the bankruptcy estate.6  Indeed, we believe that the            record  in this case makes it so obvious that Paula's actions            could  not  have  been  willful  that  we  find  this  appeal            frivolous.   See Fed. R. App. P. 38.  Therefore, we award the            defendants the  sum of $2,000  to cover both  appellate costs            and appellate attorneys'  fees said fees  to run jointly  and            severally against appellants and  his counsel.7  The decision                                                             ____________            of the district court is affirmed.            _________________________________                                            ____________________            6.   Mark does not explicitly  state which of Paula's actions            interfered with the  sale of  16 Dorchester Street.   To  the            extent that he argues for a distinction between actions filed            before  December  26,  1991,  when  he  filed  the  schedules            accompanying  his  bankruptcy  petition indicating  that  the            bankruptcy estate had an  equitable interest in the property,            and  those  initiated  thereafter,  he  does  so  in  a  most            perfunctory manner.   This  court has often  warned litigants            that   "issues  adverted   to   in   a  perfunctory   manner,            unaccompanied  by some effort at developed argumentation, are            deemed waived."   United States  v. Zannino, 895  F.2d 1,  17                              _____________     _______            (1st Cir.), cert. denied, 494 U.S. 1082 (1990).                        _____ ______            7.  Because  defendants did  not cross-appeal  the denial  of            their motion  for  costs  and  fees  below,  they  failed  to            preserve that issue on appeal.                                         -9-                                          9