Collins v. Duda et al

UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
WESTERN DIVISION
_____________________________________
)
In re: 	)
) 	Chapter 7
KENNETH W. DUDA, 	) 	Case No. 07-40163-HJB
)
Debtor 	)
)
_____________________________________ )
)
)
)
In re: 	)
) 	Chapter 7
PAMELA ANN BROWN, 	) 	Case No. 05-47251-HJB
)
Debtor 	)
)
_____________________________________ )
)
JOSEPH B. COLLINS 	)
CHAPTER 7 TRUSTEE and 	)
STEVEN WEISS 	)
CHAPTER 7 TRUSTEE, 	)
) 	Adversary Proceeding
) 	No. 07-04192
Plaintiffs 	)
)
v. 	)
)
KENNETH W. DUDA, 	)
PRISCILLA A. DUDA, 	)
PAMELA ANN BROWN, and 	)
BANK OF AMERICA, 	)
)
Defendants 	)
_____________________________________ )
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MEMORANDUM OF DECISION
Before the Court is a complaint (the “Complaint”) filed by Joseph B. Collins
(“Collins”), Chapter 7 trustee of Kenneth W. Duda (“Kenneth”), against Kenneth, Priscilla
A. Duda (“Priscilla”), Pamela Ann Brown (“Pamela”), and Bank of America (together, the
“Defendants”). 	Also to be determined are competing motions (the “Sale Motions”) by
Collins and Steven Weiss (“Weiss”), Chapter 7 trustee of Pamela, seeking leave to sell
certain property located at 18 Aldrich Street in Northfield, Massachusetts (the “Property”). 1
During the course of a multi-day trial, each of the non-trustee parties testified in a
manner best described as inconsistent in both the accuracy and credibility of the versions
they presented. 	Having made its best efforts to sift through that testimony, this Court
makes the following findings of fact and conclusions of law, pursuant to Federal Rule of
Bankruptcy Procedure 7052. 2
I. 	FACTS AND TRAVEL OF THE CASE
On April 4, 1998, Kenneth and Priscilla purchased the Property, a two-family home,
for the purpose of providing their daughter Pamela and her child with a residence. At that
time, Pamela was struggling financially and not in a position to purchase the Property and
secure a mortgage on her own. Accordingly, Kenneth and Priscilla purchased the Property
themselves and obtained a mortgage in their own names. 	At the time of the closing,
1 Following allowance of his Sale Motion, Collins also seeks leave to employ Aaron Posnick
& Company, Inc. as Auctioneer.
2 Federal Rule of Bankruptcy Procedure Rule 7052 provides that “Rule 52 F. R. Civ. P.
applies in adversary proceedings.” Federal Rule of Civil Procedure 52(a)(1) provides, in relevant
part: “the court must find the facts specially and state its conclusions of law separately.”
2
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Pamela contributed some funds to the purchase, but the evidence indicates that the
transaction was almost completely financed by Kenneth and Priscilla.3
After the 1998 purchase, Kenneth made some improvements to the Property, and,
shortly thereafter, Pamela moved into one of the two units. 	However, the terms of the
arrangement between Pamela and her parents were never made explicit. 	Kenneth and
Priscilla continued to hold title to the Property, while Pamela lived in and largely managed
the Property on their behalf. 	Although there was some contradictory testimony on this
point, it appears that Pamela paid the mortgage, taxes, and other expenses from a
combination of her own funds and the rental proceeds paid by the second tenant. Kenneth
and Priscilla contributed to the costs of maintaining the Property when Pamela was unable
to do so. The Court is persuaded that Kenneth and Priscilla intended that once Pamela
had the financial wherewithal to procure her own mortgage and make regular payments
they would turn over the Property to her.
In 2002, Kenneth and Priscilla refinanced the first mortgage on the Property with
Fleet Bank, securing an indebtedness of $77,000. In 2005, however, Kenneth and Priscilla
experienced marital difficulties, and they separated. 	For reasons stated at trial but not
patently logical or obvious, Priscilla asked Kenneth to deed his interest in one of the two
3 There was significant inconsistent testimony as to whether Kenneth and Priscilla or
Pamela made the down payment for the Property. Because the checks for the down payment came
from Kenneth’s and Priscilla’s bank account, it seems most plausible that the funds were theirs.
Pamela testified, however, that she gave her parents the money, and then they paid the down
payment and the closing costs from the funds she gave them, but little evidence was presented to
support that version of events. The Court finds, by a preponderance of the evidence that, while the
down payment was paid by Kenneth and Priscilla, Pamela paid the closing costs. Regardless,
Kenneth and Priscilla took title to the Property.
3
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properties they owned to her alone.4 Since Kenneth was to remain in the marital home,
Kenneth transferred, for consideration of one dollar, his interest in the Property to Priscilla
in November of 2005, making Priscilla the sole owner. The 2002 Fleet Bank mortgage
remained on the property in the names of both Kenneth and Pamela.
In the meantime, Pamela’s financial problems had continued. She filed a Chapter
7 petition with this Court on September 29, 2005. 	Weiss was appointed her Chapter 7
trustee. In her bankruptcy schedules, Pamela indicated that she had no interest in any real
property; rather, she rented a unit in the subject Property for the sum of $550 per month.
Based on the seemingly uncontradicted assertions of Pamela, Weiss concluded that there
were no assets available for a distribution to unsecured creditors. Pamela was granted a
discharge under 11 U.S.C. § 727 on February 6, 2006, and the case closed ten days later.
In late 2006, Kenneth began preparations for a bankruptcy petition for himself. After
many years of health problems which culminated with a 2006 month-long hospitalization,
Kenneth had accumulated approximately $46,000 in unsecured medical and credit card
debt. He filed a Chapter 7 case on January 17, 2007. In his accompanying schedules,
signed on January 11, no interest in the Property was reflected.
By January of 2007, Pamela had finally secured financing for herself from Bank of
America in order to facilitate the purchase of the Property and payment of the Fleet Bank
mortgage. On January 11, 2007, the same day Kenneth signed his bankruptcy schedules,
the coincidence of which was never explained, Priscilla transferred her interest in the
4 There was conflicting evidence relative to the purpose for the transfer (whether to protect
Priscilla or to protect Pamela). All of the evidence, however, shares a common nexus that the
transfer was made to protect the Property from Kenneth’s creditors.
4
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Property. However, for reasons not immediately (or subsequently) obvious to this Court,
Priscilla’s deed described the conveyance as follows: “PRISCILLA DUDA . . . hereinafter
called GRANTOR, grants to PAMELA A. BROWN joined by her husband, KENNETH
DUDA . . . hereinafter called GRANTEES” (italics supplied). 5
Kenneth was unaware the Property had been conveyed to him at the time he signed
his bankruptcy petition and prior to the filing of the bankruptcy case. 	Nor did Bank of
America notice the problem, and the note and mortgage executed in favor of Bank of
America on the same day were signed only by Pamela, leaving Kenneth’s fifty percent
interest unencumbered.
After Collins was appointed Kenneth’s Chapter 7 trustee, he filed the instant
adversary proceeding against the Defendants to claim the estate’s interest in the Property.
As the adversary proceeding progressed, Weiss, formerly Pamela’s Chapter 7 trustee,
hypothesized that Pamela’s estate might also have an interest in the Property if it had been
concealed by Pamela during her bankruptcy case. He, therefore, filed a motion to reopen
Pamela’s case, which motion was subsequently granted.6
5 Although Priscilla and Pamela have argued that the words “joined by her husband,
KENNETH DUDA” were simply put in the wrong place and should have been contiguous to the
words “PRISCILLA DUDA,” that theory does not explain why the grantor is set forth in the singular
and the grantees in the plural.
6 All parties waived the automatic stay to resolve any concern that the reopening of the case
may have barred the continuation of this adversary proceeding. (Hr’g Tr. 6, Feb. 5, 2009).
5
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After disposing of some preliminary issues on summary judgment, further described
below, this Court consolidated all of the remaining issues surrounding the disposition of the
Property for trial and, after trial, took the case under advisement.7
II. 	POSITIONS OF THE PARTIES
The Complaint contains four counts. 	The First Count sought a finding that the
January 11, 2007 deed transferred a fifty percent interest in the Property to Kenneth prior
to the commencement of his bankruptcy case, thereby causing that interest to constitute,
pursuant to 11 U.S.C. § 541(a)(1), 8 a component of Kenneth’s bankruptcy estate; and,
correspondingly, leaving that interest unencumbered by the Bank of America mortgage.
Adopting the arguments made by Collins in open court, this Court granted summary
judgment on Count I as to all of the Defendants, but reserved until trial a right claimed by
Weiss to an equitable interest on behalf of Pamela’s bankruptcy estate.
By the Second Count of the Complaint, Collins seeks to avoid the November 29,
2005 transfer of Kenneth’s fifty percent interest in the Property to Priscilla, on grounds of
actual and constructive fraud. 	Having avoided that transfer, Collins argues that the
subsequent transfers were also voidable, notwithstanding 11 U.S.C. § 550(b), 9 because
7 Kenneth subsequently passed away. However, his passing does not impact the outcome
in this case. 	See Fed. R. Bankr. P. 1016 (stating “[d]eath . . . of the debtor shall not abate a
liquidation case under chapter 7 of the Code.”)
8 Section 541(a)(1) states that the bankruptcy estate shall include “all legal or equitable
interests of the debtor in property as of the commencement of the case.”
9 Section 550 reads in relevant part:
(a) . . . the trustee may recover, for the benefit of the estate, the property
transferred, or, if the court so orders, the value of such property, from--
6
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those transferees gained their interests in bad faith and with knowledge of the transfers’
voidability. The Third Count seeks to deny Kenneth’s discharge on the grounds that he
knowingly and fraudulently failed to disclose his fifty percent interest in the Property on his
bankruptcy petition, filed six days after the January 11, 2007 transfer. Finally, the Fourth
Count seeks leave to sell the entire Property, pursuant to 11 U.S.C. § 363(h), 10 if the
interest Collins has acquired through Kenneth’s interest is found to be less than one
hundred percent.
Weiss intervened in this adversary proceeding on the side of Collins, though his
interests diverged with those of Collins particularly on Count II. Weiss argued that Pamela
always had equitable title to the Property, including at the time she filed her bankruptcy
case in 2005. And because the Property was not disclosed on Pamela’s schedules and
no exemption therein was claimed, Weiss contends that he is entitled to all of the Property
on behalf of Pamela’s bankruptcy estate.
(1) the initial transferee of such transfer or the entity whose benefit such transfer
was made; or
(2) any immediate or mediate transferee of such initial transferee.
(b) The trustee may not recover under section (a)(2) of this section from--
(1) a transferee that takes for value, including satisfaction or securing of a present
or antecedent debt, in good faith, and without knowledge of the voidability of the
transfer avoided; or
(2) any immediate or mediate good faith transferee of such transferee.
10 Section 363(h) outlines the precise grounds under which a trustee may sell the interest
of a co-owner of estate property.
7
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The Defendants in this case take a largely united stance claiming the legitimacy of
all of the transfers. They argue that each transfer of the Property was made in good faith
and without any intent to defraud or conceal. 	Therefore, the Defendants argue that all
transfers are valid, including the transfer made on January 11, 2007 which deeded Pamela
a one-half interest in the property subject to a mortgage from Bank of America. Because
the Court has already determined that Collins is entitled to Kenneth’s interest in the
Property, the Defendants support partition of the Property rather than allowance of a sale
under § 363(f). 11 And Kenneth, insistent that he was unaware of his interest in the Property
at the time of his bankruptcy case, demands his entitlement to a discharge under § 727.
III. 	DISCUSSION
A. 	Count I: Declaratory Judgment
Although Collins was awarded summary judgment on Count I, any rights held by
Weiss, as the Chapter 7 trustee of Pamela’s bankruptcy estate were reserved. As Chapter
7 trustee of Pamela’s estate, Weiss’s interest, if any, is the interest that Pamela held in the
Property at the time her bankruptcy case was filed on September 29, 2005. Record title
was then held by Kenneth and Priscilla. Accordingly, Pamela could have held at most an
equitable interest in the Property at the date of the commencement of her bankruptcy case.
The environment has, however, now changed. Kenneth has filed a Chapter 7 bankruptcy
case and Pamela’s interest, if any, must be evaluated in the context of Kenneth’s case.
11 Section 363(f) states the grounds under which the trustee may sell property “free and
clear of any interest in such property of an entity other than the estate.”
8
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Section 544(a)(3) of the Bankruptcy Code12 provides in relevant part that:
[t]he trustee shall have, as of the commencement of the case, and without
regard to any knowledge of the trustee or of any creditor, the rights and
powers of, or may avoid any transfer of property of the debtor or any
obligation incurred by the debtor that is voidable by . . . a bona fide
purchaser of real property . . .
This artificially created status provides a Chapter 7 trustee with the ability to defeat an
“equitable interest in the Property if under Massachusetts law a bona fide purchaser . . . of
the Debtor’s interest in the subject Property would have prevailed” over the equitable
interest holder on the commencement date of the bankruptcy case. Clark v. Kahn (In re
Dlott), 43 B.R. 789, 793 (Bankr. D. Mass. 1983). Massachusetts law, in turn, provides that
a conveyance of land shall not be valid against any person without actual notice unless the
transfer is recorded. Mass. Gen. Laws ch. 183, § 4 (2003). The term “actual notice” under
the statute has been strictly construed by Massachusetts courts. See Emmons v. White,
788 N.E.2d 557, 566 (Mass. Ct. App. 2003); Tramontozzi v. D’Amicis, 183 N.E. 2d 295, 297
(Mass. 1962); McCarthy v. Lane, 16 N.E.2d 683, 685 (Mass. 1938).
If Pamela had an interest in the Property, it was not recorded. 	And Collins, as
Chapter 7 trustee of Kenneth’s bankruptcy case, is deemed, pursuant to § 544(a)(3), to be
without notice of an unrecorded interest. Accordingly, employing his bona fide purchaser
status under § 544(a)(3), Collins’s rights, on behalf of Kenneth’s estate, supercede Weiss’s
rights, on behalf of Pamela’s bankruptcy estate.
Weiss further argues that Pamela’s estate is entitled to an interest in the Property
by way of a resulting trust. That argument, too, must fail. Weiss contends that Kenneth
12 Unless otherwise noted, all statutory references will be to Title 11 of the United States
Code. 11 U.S.C. §§ 101, et seq.
9
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and Priscilla enjoyed only bare legal title to the Property and that the Property was held in
a resulting trust for Pamela from 1998 until she was deeded the Property in 2007. (Weiss,
Mem. Proposed Findings of Fact & Conclusions of Law, 16). Under Massachusetts law,
“when a person pays the purchase price of property and takes title in the name of another,
the beneficial interest in the property enures to the person who paid the purchase price by
way of resulting trust.” 	Collins v. Curtin, 89 N.E.2d 211, 212 (Mass. 1949) (citations
omitted). 	See also Meskell v. Meskell, 243 N.E.2d 804, 806 (Mass. 1969) (stating “[a]
resulting trust typically arises when a transfer of property is made to one person and the
purchase price is paid by another; in such a case a trust results in favor of the person who
furnished the consideration.”) However, key to the creation of a resulting trust is that the
parties intended that a trust relationship be created. Lammerding v. Lammerding, No. 99-
P-2101, 2001 WL 1339167, at *1 (Mass. App. Ct. Oct. 31, 2001). See also Cook v. Young,
11 N.E. 752, 753 (Mass. 1887) (resulting trusts are created only “to the extent of such
intended interest”); 76 Am. Jur. 2d Trusts § 138 (2009) (“[i]ntention, although only
presumed, implied, or supposed by law from the nature of the transaction or from the facts
and circumstances accompanying the transaction . . . is always an element of a resulting
trust.”)
Despite contradictory testimony on several points, this Court finds insufficient
evidence to conclude that Kenneth, Priscilla, and Pamela intended to create a resulting
trust, vesting in Pamela an equitable interest in the Property from 1998 forward. While it
seems clear that Pamela paid for the closing costs for the 1998 purchase, there is no
substantiated 	evidence 	that 	Pamela 	paid 	the 	down 	payment 	for 	the 	Property.
Notwithstanding Pamela’s assertions to Collins in discovery that she funded the down
10
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payment for the Property (Pamela Depo. 75), the cancelled checks in the amount of the
down payment presented at trial were drawn from Kenneth’s and Priscilla’s joint account.
Furthermore, it is telling that when Kenneth and Priscilla separated, it was Priscilla to whom
Kenneth transferred his interest, not Pamela.
Because this Court finds and rules that Pamela did not have an equitable interest
in the Property at the time she filed her bankruptcy case, Weiss, as Chapter 7 trustee, has
no interest in the Property.
B. 	Count II: Fraudulent Transfer
In the Second Count of the Complaint, Collins seeks to avoid Kenneth’s 2005
transfer of his fifty percent ownership in the Property to Priscilla. 	Collins contends that,
pursuant to various sections of the Bankruptcy Code and Massachusetts law, the 2005
transfer constituted a fraudulent transfer under the Bankruptcy Code, and consequently is
void or voidable against Priscilla and all subsequent transferees.
There is little doubt that the 2005 transfer of Kenneth’s interest in the Property from
Kenneth to Priscilla was a fraudulent transfer, recoverable by Collins, pursuant to 11 U.S.C.
§ 544(b) and Mass. Gen. Laws ch. 109A. The stated consideration for the transfer was in
the sum of one dollar, and the trial testimony of Kenneth established unequivocally that if
Kenneth was not insolvent at the time of the transfer, he was surely made so by the
transfer itself. 	But avoidance of this transfer creates an unusual problem for Collins.
Pursuant to § 550(a), Bank of America is deemed a “mediate transferee” of an immediate
transferee of that transfer,13 protected from recovery, pursuant to § 550(b)(2), if in “good
13 As to the 2005 transfer of Kenneth’s interest, Priscilla is the initial transferee; Pamela and
Kenneth are the immediate transferees and Bank of America is a mediate transferee of Pamela.
11
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faith.” Knowledge of the voidability of the transfer is not implicated. There is no evidence
whatsoever that Bank of America lacked good faith at any relevant time. 	And, even if
notice of the voidability of the transfer were relevant, there is no evidence whatsoever that
Bank of America had notice of the voidability of the 2005 transfer. Moreover, although an
argument could be made that, notwithstanding its good faith, Bank of America still had
notice of Kenneth’s purported interest as grantee under the 2007 deed and therefore is
entitled only to half of the Property as its collateral, that is the same argument made by
Collins in Count I.
Section 550(d) provides that “[t]he trustee is entitled to only a single
satisfaction. . .” Accordingly, since Collins, as Chapter 7 trustee of Kenneth’s bankruptcy
estate would still be left with half of the value of the Property, unencumbered by the
mortgage of Bank of America, Count II is moot in light of the relief already provided by the
Court under Count I.
C. 	Count III: Objection to Discharge
Section 727(a) lists the grounds under which a debtor should be denied a discharge.
Section 727(a)(4) provides that discharge shall be denied if “the debtor knowingly and
fraudulently, in or in connection with the case–(A) made a false oath or account.” In Count
III of the Complaint, Collins alleges that Kenneth “knowingly and fraudulently, in connection
with his bankruptcy case, made a false oath in that he failed to disclose the ownership
interest in the Northfield Real Estate . . .” (Compl. ¶ 52).14 At trial, Collins failed to prove,
14 This Court limits its review of Count III to the only grounds stated, i.e., Kenneth’s knowing
failure to list the Property on his bankruptcy petition. The Court’s determination in that regard is not
intended to validate Kenneth’s other testimony at trial.
12
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by 	a 	preponderance 	of 	the 	evidence, 	that 	Kenneth 	knew, 	on 	the 	date 	of 	case
commencement, that he had acquired an interest in the Property by virtue of the January
11 deed. Accordingly, judgment must be awarded to Kenneth, unfortunately post mortem,
on the question of his entitlement to a discharge under § 727.
D. 	Count IV: Sale of Co-Owner’s Interest in the Property
Due to this Court’s findings on Count I, this Court is now required to address whether
under these circumstances Collins should be authorized to sell the Property pursuant to §
363(h). Section 363(h) provides:
Notwithstanding subsection (f) of this section, the trustee may sell both
the estate’s interest, under subsection (b) or (c) of this section, and the
interest of any co-owner in property in which the debtor had, at the time
of the commencement of the case, an undivided interest as a tenant in
common, joint tenant, or tenant by the entirety, only if–
(1) partition in kind of such property among the estate and such co-
owners is impracticable;
(2) sale of the estate’s undivided interest in such property would realize
significantly less for the estate than sale of such property free of the
interests of such co-owners;
(3) the benefit to the estate of a sale of such property free of the
interests of co-owners outweighs the detriment, if any, to such co-
owners; and
(4) such property is not used in the production, transmission, or
distribution, for sale, of electric energy or of natural or synthetic gas for
heat, light, or power.
The Trustee has the burden of establishing all four elements required under § 363(h). In
re Hajjar, 385 B.R. 482, 488 (Bankr. D. Mass. 2008) (citing Kovacs v. Sargent (In re
Sargent), 337 B.R. 661, 666 (Bankr. N.D. Ohio 2006)). As § 363(h)(4) is inapplicable, the
Court must now turn to the remaining three requirements.
13
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The first 	requirement is that Collins show that partition of the Property is
impracticable. 	Pamela suggests that because the Property has two separate units with
separate electric panels and furnaces it is ideal for condominiumization. (Trial Tr. 24-25,
April 27, 2009). However, “condominiumization is not a form of partition.” 56 Assoc. & 57
Assoc. v. Diorio, 381 B.R. 431, 436 (D. R.I. 2008) (upholding the decision of the bankruptcy
court). 	And in particular cases, “converting [a] building to condominiums [makes] no
economic sense.” Id.
Even if condominiumization was an acceptable form of partition, it would be
impractical and illogical to force Collins to go through the extensive and presumably
expensive process of condominiumization under Mass. Gen. Laws ch. 183A. 	Collins
testified that Kenneth’s estate currently possesses only about $1,000–a far cry from the
amount that would be necessary to create a condominium project (Trial Tr. 30, April 27,
2009). 	To force Collins to bear the costs of condominium creation and then force the
estate to try to sell its interest to a grantee whose unit would include co-ownership of the
common areas with a disappointed Pamela would significantly devalue the interest owned
by the estate. And even this assumes that the estate’s one-half interest bears some real
relationship to the value of either of the two units. The Court, therefore, concludes that, in
this case, partition is impractical.
The second requirement is that Collins must demonstrate that the sale of estate’s
undivided interest would realize significantly less for the estate than the sale of entire
property. Collins testified at trial that the sale of partial interests “almost always [realizes]
less than the fair value of the property, the reason being no one wants to buy a partial
interest in the property.” (Trial Tr. 19, April 27, 2009). In this case, he stated that “[e]xcept
14
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perhaps other family members, I don’t know who would want to buy the Kenneth Duda
bankruptcy estate’s interest in the property and co-own it with Pamela Brown. It’s simply
something an investor wouldn’t do.” 	(Trial Tr. 20, April 27, 2009). 	That testimony was
unrebutted and the Court agrees with Collins’s conclusions.
The third requirement is that the benefit to the estate outweigh the detriment to the
co-owner. With regard to § 363(h)(3), a shifting burden applies:
Although the Plaintiff [Trustee] bears the ultimate burden of proof on
this issue, the Plaintiff’s initial burden is only to show that sale of the
property free of the Defendant’s interest would produce a benefit to the
estate: that the estate’s share of the net proceeds would exceed
existing liens on the Debtor’s interest in the property. If the Defendant
then shows that such a sale would produce a detriment to him, the
Trustee must show that the benefit to the estate is greater than the
detriment to the Defendant.
Gray v. Burke (In re Coletta Bros. of N. Quincy, Inc.), 172 B.R. 159, 165 (Bankr. D. Mass.
1994). 	However, “[i]n deciding whether to allow a sale, the Court must consider the
economic and emotional detriment which the co-owner would face in being evicted.”
Neylon v. Addario (In re Addario), 53 B.R. 335, 338 (Bankr. D. Mass. 1985).
Collins has met the initial burden of showing the sale would produce a benefit to the
estate. Because Kenneth’s fifty percent interest is not subject to any encumbrances, a sale
will realize fifty percent of the sale price for Kenneth’s bankruptcy estate. 	Without the
allowance of a § 363(h) sale, Collins holds a fifty percent interest in a piece of property that
he would not be able to sell for fair value, if at all. This interest is virtually the estate’s only
asset, as the estate only holds $1,000 otherwise. But Pamela has made it impossible to
demonstrate the detriment to her. She refused to testify, invoking her rights under the Fifth
Amendment to the United States Constitution. 	Without any testimony as to Pamela’s
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detriment were the entire Property sold, she was unable to meet her burden under §
363(h)(3). 	The Court is thereby forced to conclude that the showing by Collins under §
363(h)(3) was unrebutted. 15
Because one of the elements of § 363(h) is inapplicable and because Collins has
met his burden on the other three, Collins is entitled to a ruling in his favor on Count IV.
IV. 	CONCLUSION
Pursuant to Count I of the Complaint, this Court finds that Collins as Chapter 7
trustee in bankruptcy for the estate of Kenneth holds a fifty percent undivided interest in the
Property unencumbered by the mortgage of Bank of America. 	That interest is also
unencumbered by any interest held by Weiss, as Chapter 7 trustee in the bankruptcy of
Pamela. 	The Court holds that Weiss’s interest, if any, is void as against the interest of
Collins as Chapter 7 trustee of Kenneth’s estate.16
Count II of the Complaint should be dismissed as moot. Kenneth (or more properly
said, his probate estate) is entitled to judgment under Count III and will be granted a
discharge. Finally, on Count IV, this Court finds that Collins has met his burden under
15 This Court is permitted to draw adverse inferences from Pamela’s invocation of the Fifth
Amendment. Citizens Bank of Mass. v. Marrama (In re Marrama), 331 B.R. 10, 16 (D. Mass. 2005).
At 	the 	very 	least, 	Pamela’s 	invocation 	of 	the 	Fifth 	Amendment 	could 	be 	seen 	as 	an
acknowledgment of some very significant inconsistencies in the various statements she made
under oath. But the Court need not make those inferences. And Collins need not demonstrate
here any bad acts or bad intentions by Pamela. It is as simple as this: Collins met his burden of
proof under § 362(h)(3); Pamela, in failing to testify, failed to meet hers. 	Accordingly, Collins
prevails under § 362(h)(3).
16 Accordingly, Weiss’s motions for leave to sell the Property and to retain an auctioneer
will be denied.
16
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§ 363(h). 	Accordingly, Collins’s “Motion for Authorization of Sale of Property 18 Aldrich
St., Northfield, MA” and “Motion to Employ Aaron Posnick & Company, Inc. As Auctioneer”
will be GRANTED.
A separate judgment and orders consistent with this Memorandum will issue
accordingly.
DATED: 	January 15, 2010
By the Court,
_____________________
Henry J. Boroff
United States Bankruptcy Judge
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