Pinelope V. Alizotis

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	) Bankruptcy Case
) No. 09-33061DM
PINELOPE V. ALIZOTIS, 	)
)
Debtor. 	) Chapter 13
___________________________________)
MEMORANDUM DECISION ON MOTION TO VALUE AND AVOID LIEN
I. 	Introduction
On January 13, 2010, the court held a trial on the motion of
Pinelope V. Alizotis (“Debtor”) to value/avoid the lien of
Christina B. Drogin (“Drogin”). 	Debtor appeared by and through
Dean Lloyd, Esq., her attorney; Drogin appeared by and through
Adam C. Kent, Esq., her attorney. 	The single issue presented to
the court on the motion is the value of Debtor’s residence (the
“Residence”). 	The parties agree that the holder of the first deed
of trust on the Residence is owed $548,000 and real property taxes
are approximately $1,800. 	Thus, if the Residence is valued at
anything more than $550,000, the lien Drogin holds cannot be
altered under controlling law (see 11 U.S.C. § 1322(b)(2)) and
must be dealt with in Debtor’s Chapter 13 plan without
modification.
Debtor offered the expert testimony and written appraisal of
John K. Emery (“Emery”). 	Drogin offered the expert testimony and
Signed and Filed: January 19, 2010
________________________________________
DENNIS MONTALI
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
January 20, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-33061 Doc# 51 Filed: 01/19/10 Entered: 01/20/10 08:33:33 Page 1 of 4

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1 The following discussion constitutes the court's findings
of fact and conclusions of law. 	Fed. R. Bankr. P. 7052(a).
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written appraisal of Michael Botta (“Botta”). 	After considering
the evidence and the testimony of the two appraisers, the court
finds Botta’s appraisal to be more persuasive and finds further
that the value of the Residence exceeds $550,000, but is somewhat
less than Botta’s appraisal of $590,000. 	Thus, Debtor’s motion
must be denied.
II. 	Discussion 1
The court has a problem with Emery’s use of two pending sales
rather than completed transactions, as comparables used to value
the Residence. 	By definition, a pending sale is just that: it has
not occurred. 	Accordingly, the court will disregard those two
comparables, not only because they have little probative value but
also because Botta was convincing in his explanation that sales of
homes in the area of the Residence at the present time are closing
over the asking prices. 	Thus, Emery’s figures for those two
comparables should either be disregarded, increasing the value of
the Residence somewhat, or increased by some amount, further
compelling an even greater increase in the value of the Residence.
Emery also used two other sales that followed foreclosure
(one of which was used by Botta too). 	Botta testified, and the
court finds, that some downward pressure may exist on sale prices
when institutional lenders are selling real estate they have
acquired through foreclosure. 	This would also necessitate an
increase in the value of the Residence. 	While the court does not
know how much of an increase would be realized, even a five
percent upward adjustment of those comparables would justify an
Case: 09-33061 Doc# 51 Filed: 01/19/10 Entered: 01/20/10 08:33:33 Page 2 of 4

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increase in the value of the Residence by a meaningful amount.
Emery also presumed a repair cost of $20,000 to $25,000 for the
Residence in what he called an “extraordinary assumption.” 	Such
an assumption is not warranted by the evidence presented and
further undermines Emery’s valuation of $525,000.
Botta was also convincing that Emery’s $20,000 downward
adjustment for the view at one of the comparables relied on by
both appraisers was not justified, nor were the absence of upward
adjustments based upon more favorable traffic and noise conditions
at the Residence.
For the foregoing reasons Emery’s valuation plainly must be
adjusted to an amount in excess of $550,000 and the motion must
fail. 	While an exact valuation is not necessary, the court finds
that Botta’s own figure of $590,000 must be adjusted downward
based upon a large difference between his and Emery’s treatment of
one comparable, and also because of Botta’s unwillingness to
adjust his $590,000 value downward after viewing the interior of
the Residence and noticing problems with it.
The bottom line is that the Residence is worth no less than
$560,000; whether it is worth more is not necessary to determine
with any precision.
III. 	Conclusion
For the foregoing reasons this motion is DENIED. 	Counsel for
Drogin should submit a form of order denying the motion for the
reasons stated in this Memorandum Decision and should comply with
B.L.R. 9021-1.
**END OF MEMORANDUM DECISION**
Case: 09-33061 Doc# 51 Filed: 01/19/10 Entered: 01/20/10 08:33:33 Page 3 of 4

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COURT SERVICE LIST
Dean Lloyd, Esq.
Law Offices of Dean Lloyd
445 Sherman Ave., #1
Palo Alto, CA 94306
Adam C. Kent, Esq.
Law Office of Adam C. Kent
605 Middlefield Rd.
Redwood City, CA 94063
Case: 09-33061 Doc# 51 Filed: 01/19/10 Entered: 01/20/10 08:33:33 Page 4 of 4