In re Raejean S. Bonham dba World Plus
Bankruptcy No. F95-00897
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NOTE: The following motion was heard on June 24, 1996. Judge Ross has
now signed the order.
MOTION TO COMPEL ACCESS TO PREMISES
AND FOR AWARD OF COSTS
The Chapter 7 Trustee, LARRY D. COMPTON, by and through his
attorneys, Guess & Rudd, under authority of 11 U.S.C. §521
and Bankruptcy Rule 4002, moves for an order compelling the debtor to
allow the trustee and the trustee's designated agents onto the real
property of the debtor for purposes of (a) inspection, (b) valuation
or appraisal, (c) listing the real property for sale, and (d) showing
the real property to prospective purchasers.
In addition, the trustee seeks an award against the debtor of the
reasonable costs and attorneys' fees incurred in bringing this
motion.
This motion is supported by a memorandum of counsel and the Affidavit
of Larry D. Compton.
DATED at Fairbanks, Alaska this ___ day of June, 1996.
GUESS & RUDD
Attorneys for Trustee
James D. DeWitt
ABA No. 760523
MEMORANDUM IN SUPPORT OF
MOTION TO COMPEL ACCESS TO PREMISES
AND FOR AWARD OF COSTS
Once again, the trustee has been forced to bring to the court an
issue which, with a more cooperative debtor, need not arise at all.
Her latest efforts to obstruct the administration of this case need
to be viewed in the context of prior events.
In her capacity as a debtor, Raejean Bonham ("Bonham") is required to
comply with all of the duties and responsibilities imposed upon her
by the Bankruptcy Code. Bonham, like all debtors, has been served
with an order notifying her of her duties and responsibilities. She
has failed to meet or comply with all of them. Bonham has failed in
every respect to comply with the orders served upon her and her
duties under the bankruptcy code.
As previously described to the court, Bonham failed to appear at a
series of Rule 2004 examinations, or on the occasions when she has
briefly appeared, she has refused to answer substantive questions.
Not until she was compelled by court order, under threat of contempt,
did she appear and testify.
Bonham has still failed to prepare and file schedules and statements,
in violation of 11 U.S.C. §521, in violation of this court's
order of January 29, 1996, and in violation of this court's order of
March 1, 1996. This failure has reached the point that it is the
subject of a pending motion for order to show cause.
The debtor refused to allow the trustee into her home until the
trustee brought a motion to compel her to do so. The debtor has filed
motions of the most dubious merit, improper appeals and improper
pleadings far more often than her pro se status can justify.
She has sought stays of these proceedings on at least three
occasions. On information and belief, she has boasted to others that
she has "tied the trustee in knots" in his attempts to administer
this case.
The debtor has failed to surrender any of her personal property to
the trustee, even though it is impossible for all of her personal
property to be claimed as exempt. She has offered the most
implausible stories to explain her failure to produce assets of the
estate. For example, in support of her loan application to First
National Bank of Anchorage for monies to purchase the 36 foot
Bayliner in 1992, the debtor described $75,000 in jewelry. She now
claims to have essentially none of that jewelry. She claims to have
sold some $25,000 worth of jewelry by posting notes on grocery store
bulletin boards, and specifically claims to have sold the $18,500
diamond solitaire and the $7,050 ankle bracelet to a couple "from New
York," whose names she cannot remember, on a date in February 1995
she cannot remember, for "about $5,500." She cannot produce so much
as a copy of the alleged bulletin board notice. She cannot explain
why a couple from New York was in Fairbanks in February 1995,
perusing grocery store bulletin boards. This example is fairly
indicative of the kind of problems the trustee has encountered in
administering this case.
Instead of cooperating, the debtor has invested substantial time,
energy and effort in delaying and frustrating the administration of
the bankruptcy estate, by filing removal petitions in bankruptcy
court and U.S. District Court, seeking bankruptcy court and U.S.
District Court reconsideration of her efforts, and asserting
non-existent stays and seeking injunctions against the administration
of the estate. The practical effect of the obstructionist tactics of
the debtor has been to force the trustee to incur substantial costs
and attorneys' fees which would not have been required or incurred in
a case where the debtor obeyed the Bankruptcy Code and Bankruptcy
Rules without court order and motions to compel.
It is against this pattern of conduct that this court must consider
the current issue. The trustee seeks to have a realtor enter onto the
debtor's premises in order to determine the value of those premises.
The trustee's investigation has shown that, assuming certain defects
in the title can be overcome, there may be equity in the property
available for the creditors.
The debtor and her husband do not have legal title to their home.
Instead, they signed a document styled a "Lease with Option to
Purchase" dated May 18, 1989. A copy of the "Lease" is attached to
the trustee's affidavit as Exhibit A. The "Lease" is a thinly
disguised "wrap-around" real estate purchase contract. The initial
"rent" payments, totaling more than $25,000 in the first two months,
paid the "Lessor" his equity. Since then, the debtor and her husband
have paid "rent" payments equal to the principal, interest and
reserve ("PITI") payments due from the "Lessor" to the Lessor's
lender. The amount of the "rent" payment varies according to changes
in amount of the PITI payment. The "option price" is the payoff on
the "Lessor's" note. The "Lease" is unrecorded. The trustee's
investigation has shown that the debtor and her husband have expended
substantial sums of money in the improvement of the residence, and
the construction of outbuildings, greatly increasing the value of the
property from the date at which it was acquired. The debtor valued
the property at $220,000 in a 1992 loan application; the trustee's
realtor, working only from photographs and a videotape taken under an
earlier court order, estimates the value at $170,000. Alaska USA/AHFC
is owed approximately $50,000. Even assuming the debtor has a
homestead exemption in the property, an issue which the trustee does
not concede, there appears to be considerable value for the unsecured
creditors.
To fully assess and value the premises, and, if it proves
appropriate, to market the property, the trustee needs access to the
property. The debtor has on some occasions simply refused to allow
the trustee to send a realtor onto the premises. On other occasions,
she has promised to let the trustee know when it would be convenient
and then failed to contact the trustee. Most recently, by letter to
trustee's counsel dated May 29, 1996, she asserts she cannot agree to
give access, that only her "landlord" can do so.
What the trustee seeks is in point of fact nothing more than what the
debtor is required to do by force of law in any event. 11 U.S.C.
§521 provides:
The debtor shall--
(1) file a list of creditors, and unless the court orders otherwise, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor's financial affairs;
(2) if an individual debtor's schedule of assets and liabilities includes consumer debts which are secured by property of the estate--(A) within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, the debtor shall file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property;
(B) within forty-five days after the filing of a notice of intent under this section, or within such additional time as the court, for cause, within such forty-five day period fixes, the debtor shall perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph; and
(C) nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor's or the trustee's rights with regard to such property under this title;
(3) if a trustee is serving in the case, cooperate with the trustee as necessary to enable the trustee to perform the trustee's duties under this title;
(4) if a trustee is serving in the case, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate, whether or not immunity is granted under section 344 of this title, and
(5) appear at the hearing required under section 524(d) of this title.
An order requiring the debtor to perform the duties imposed upon her
by §521 should not be controversial. The plain fact is that,
with regard to the real property as well as numerous other issues,
the debtor is not only failing to cooperate but also willfully
obstructing the administration of the estate. In 1992, in her loan
application to the First National Bank of Anchorage, the debtor
claimed to own the house. Now, if the court gives credence to her
letter of May 29, 1996, she claims she lacks authority to even admit
a realtor onto the premises.
Bankruptcy Rule 4002 provides, in relevant part:
In addition to performing other duties prescribed by the Code and rules, the debtor shall . . . (3) inform the trustee immediately in writing as to the location of real property in which the debtor has an interest and the name and address of every person holding money or property subject to the debtor's withdrawal or order if a schedule of property has not yet been filed pursuant to Rule 1007; (4) cooperate with the trustee in the preparation of an inventory, the examination of proofs of claim, and the administration of the estate. . .
An order requiring the debtor to perform the duties imposed upon her
by Rule 4002 should not be controversial.
Where the debtor, by her own inactions, has made it necessary for the
trustee to compel the delivery of information necessary for the
administration of the case, she cannot be heard to complain. Indeed,
any other course of conduct exposes the debtor to criminal sanction.
18 U.S.C. §152 provides, in relevant part:
A person who--
(1) knowingly and fraudulently conceals from a custodian, trustee, marshal, or other officer of the court charged with the control or custody of property, or, in connection with a case under title 11, from creditors or the United States Trustee, any property belonging to the estate of a debtor;. . . . .
(8) after the filing of a case under title 11 or in contemplation thereof, knowingly and fraudulently conceals, destroys, mutilates, falsifies, or makes a false entry in any recorded information (including books, documents, records, and papers) relating to the property or financial affairs of a debtor; or
(9) after the filing of a case under title 11, knowingly and fraudulently withholds from a custodian, trustee, marshal, or other officer of the court or a United States Trustee entitled to its possession, any recorded information (including books, documents, records, and papers) relating to the property or financial affairs of a debtor,
shall be fined not more than $5,000, imprisoned not more than 5 years,
or both.
Plainly, it could be a violation of the criminal laws of the United
States for the debtor not to provide the information and
property the trustee seeks by this motion.
The trustee would be hard-pressed to point the court to a single
instance in which the debtor has cooperated with the trustee, except
where under a court order or imminent threat of court order. Prior
events in this case demonstrate that the debtor generally will not
cooperate until ordered to do so, and even then will sometimes ignore
a court order. In light of that experience, the trustee seeks a more
detailed and specific form of order than he would if this were the
first occasion on which this kind of problem had arisen.
Specifically, the trustee asks the court to order that:
(1) The debtor shall allow the trustee and realtors, appraisers, engineers and other real estate professionals acting for the trustee onto the premises between 10:00 AM and 2:00 PM on weekdays, on 48 hours telephone notice.
(2) "Telephone" notice, in this context, shall include a message left on the debtor's answering machine. The debtor shall have the responsibility for keeping her answering machine in place; the inability of the trustee to leave a message shall not preclude the trustee or his agent from entering onto the property.
(3) Persons authorized to act on behalf of the trustee shall have a letter of authorization from the trustee or the trustee's counsel. The debtor need not allow onto the premises anyone not possessing such a letter of authorization.
(4) If on any occasion the debtor fails to allow access, the trustee shall be authorized to re-key the premises so as to afford himself access in the future. The trustee shall in that event furnish copies of the keys to the debtor and her spouse. The trustee shall also leave a key in a "lock box" at the premises.
(5) The trustee agrees that if the debtor's spouse, Steve Bonham, is working a graveyard shift, and has given the trustee notice in advance that he is working the graveyard shift, then the authorized times will change to 4:00 PM to 8:00 PM or such other continuous four hour between 10:00 AM and 8:00 PM interval as Steve Bonham may designate in writing to the trustee and the trustee's counsel.
The trustee believes that such an order is the only effective means
of resolving this class of problems. The trustee asks that such an
order be entered.
The trustee also requests the court order the debtor to pay the costs
and attorneys' fees incurred by the trustee in bringing this motion.
As is shown by the trustee's affidavit, the trustee has incurred
costs and fees of approximately $900.00.
DATED at Fairbanks, Alaska this ___ day of June, 1996.
GUESS & RUDD
Attorneys for the Trustee
James D. DeWitt
ABA No. 760523
AFFIDAVIT OF LARRY D. COMPTON
IN SUPPORT OF
ORDER COMPELLING ACCESS TO PREMISES
AND AWARDING COSTS
LARRY D. COMPTON, being first duly sworn, states that:
1. I am the duly authorized and acting Chapter 7 trustee in this
proceeding.
2. Attached to this affidavit as Exhibit A is a true and correct copy
of the "Residential Lease with Option to Purchase" which was
discovered among the records of the debtor.
3. Attached to this letter as Exhibit B is a letter to me from the
debtor responding to my request for access to her property.
4. Attached to this letter as Exhibit C is a letter dated May 17,
1996 from my attorneys, Guess & Rudd, to the debtor, which, among
other issues, asks to provide access.
5. Attached to this letter as Exhibit D is a letter dated May 29,
1996 from the debtor to my attorneys, refusing access.
6. Several persons have told me that they have heard the debtor boast
of "tying the trustee in knots." Other persons have told me that
David Heacock, a non-lawyer who the debtor describes as performing
legal research for her, has boasted of frustrating the administration
of this case.
7. I believe that the debtor's most recent letter is yet another
example of her efforts to delay and frustrate the administration of
this case. I believe that absent the clearest possible order from the
court, the debtor will continue to attempt to evade her duties as a
debtor.
8. I am advised by my attorneys that research, drafting, preparation
and filing of these pleadings involved costs and fees of
approximately $900.00.
DATED at Anchorage, Alaska this ____ day of June, 1996.
/s/ LARRY D. COMPTON
SUBSCRIBED AND SWORN to before me this _____ day of ________________,
1996.
______________________________
Notary Public for Alaska
My commission expires:________
ORDER COMPELLING ACCESS TO PREMISES
AND AWARDING COSTS
On the motion of the trustee, and under authority of 11 U.S.C.
§§521 and 704, and Bankruptcy Rule 4002, and for good cause
shown;
IT IS ORDERED:
(1) The debtor shall allow the trustee and realtors, appraisers,
engineers and other real estate professionals acting for the trustee
onto the premises between 10:00 AM and 2:00 PM on weekdays, on 48
hours telephone notice.
(2) "Telephone" notice, in this context, shall include a message left
on the debtor's answering machine. The debtor shall have the
responsibility for keeping her answering machine in place; the
inability of the trustee to leave a message shall not preclude the
trustee or his agent from entering onto the property.
(3) Persons authorized to act on behalf of the trustee shall have a
letter of authorization from the trustee or the trustee's counsel.
The debtor need not allow onto the premises anyone not possessing
such a letter of authorization.
(4) If on any occasion the debtor fails to allow access, the trustee
shall be authorized to re-key the premises so as to afford himself
access in the future. The trustee shall in that event furnish copies
of the keys to the debtor and her spouse. The trustee shall also
leave a key in a "lock box" at the premises.
(5) The trustee agrees that if the debtor's spouse, Steve Bonham, is
working a graveyard shift, and has given the trustee notice in
advance that he is working the graveyard shift, then the authorized
times will change to 4:00 PM to 8:00 PM or such other continuous four
hour between 10:00 AM and 8:00 PM interval as Steve Bonham may
designate in writing to the trustee and the trustee's counsel.
IT IS FURTHER ORDERED that the debtor shall pay to the trustee the
costs and reasonable attorneys' fees incurred by the trustee in
bringing the instant motion, in the amount of $____________.
DATED at ______________, Alaska this _____ day of June, 1996.
Herbert A. Ross
Bankruptcy Judge
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