No. 01-05127-JAR7, A03-00237-JAR.United States Bankruptcy Court, E.D. Washington.
November 22, 2010
James B. King, Christopher J. Kerley, Evans, Craven Lackie, P.S., Spokane, WA, COUNSEL FOR DEFENDANTS, JOE ESPOSITO, ET UX.
FINDINGS OF FACT AND CONCLUSIONS OF LAW RE INTEREST OF KELLY CASE IN KETTLE FALLS PROPERTY
JOHN ROSSMEISSL, Bankruptcy Judge
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On September 21, 2010 a bench trial took place in this adversary proceeding, with Bankruptcy Judge John A. Rossmeissl presiding, to address the following factual issues:
1. Whether Plaintiff Kelly Case (hereinafter referred to as “Mr. Case”) received appropriate notice under the Washington statute governing the non-judicial forfeiture of real estate contracts;
2. Whether Mr. Case had a valid contract with his mother (referred to in this litigation and in the Court’s previous decisions and orders as “Contract #2”);
3. What, if anything, was or is owed to Mr. Case under Contract #2. At trial, Mr. Case participated pro se, and Defendant Grabicki, the bankruptcy trustee, was represented by Christopher J. Kerley.
Based on the evidence adduced at trial, pursuant to BR 7052 and Fed.R.Civ.P. 52(c), the Court makes the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
1. On February 22, 2003, Linda Bays and Mr. Case entered into a written agreement which read as follows:
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Linda Bays does agree and consent to the following:
• In exchange for continual ongoing loans for legal expenses, monies used for property improvement and maintenance, or moneis [sic] extended for any reason to Linda Bays AKA any other aquired [sic] name, or on behalf of K.C. Lingeric Society shall be reimbusrst [sic] in full on the appointed day in November of 2005, according to the agreement we have. I consent and agree to the fact that 1698 nicholes rd, Kettle Falls, WA 99141 is also the home of Kelly Case untill [sic] such time as he shall be reimburst [sic] on the appointed day, I will forever relinquish the right to redeem the property, but I will have an irrevocable life time estate on said property. Kelly agrees to help pay expenses and utilities without reimburstment [sic].
2. This agreement was prepared by Mr. Case, and signed by Linda Bays and Kelly Case on February 27, 2003.
3. At trial, Mr. Case did not produce any evidence that he advanced any money to Linda Bays pursuant to this agreement. More specifically, there was no evidence adduced that, at the time the Notice of Forfeiture was filed and mailed by the bankruptcy trustee on July 11, 2003, and/or at the time the Declaration of Forfeiture was filed and mailed on October 22, 2003, there was any money due and owing on the aforementioned agreement.
4. Mr. Case conceded there was no money due and owing him on Contract #2 at any relevant time. In moving for judgment in its favor after Mr. Case rested, the trustee argued, among other things, that any loans Mr. Case
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made to Linda Bays in connection with the Kettle Falls property were satisfied in full when Linda Bays paid Mr. Case $2,400 via cashier’s check on September 26, 2003, a check which Mr. Case cashed after consulting with a lawyer. During his argument in opposition to the trustee’s Motion to Dismiss, Mr. Case, in response to this contention, stated “I won’t deny that the contracts were fulfilled . . . “.
CONCLUSIONS OF LAW
1. This trial was a core proceeding under 28 U.S.C. § 157(b).
2. Any interest of Mr. Case in the Kettle Falls property was, at most, a security interest.
3. Because, at the time the Notice of Forfeiture and Declaration of Forfeiture were filed and mailed, nothing was owed to Mr. Case on Contract #2, an obligation purportedly secured by a Quit Claim Deed, Mr. Case had no security interest in or lien or mortgage upon the Kettle Falls property.
4. Because Mr. Case had no security interest in the Kettle Falls property, he was not entitled to notice of the forfeiture proceedings and has no standing to challenge the forfeiture.
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5. A judgment should be entered quieting title in the Kettle Falls property in Tony Grabicki, trustee of David Bays’ bankruptcy estate, confirming that Mr. Case does not have any interest in that property.
Done this 22rd day of November 2010
Notice Recipients