Trittye Collins Fugett

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Baltimore
In Re: 	*
TRITTYE COLLINS FUGETT 	* 	Case No. 	05-17645DK
* 	Chapter 	13
Debtor 	*
************************************* 	*
EASTERN SAVINGS BANK, FSB 	*
* 	p.64
Movant 	*
vs. 	*
TRITTYE COLLINS FUGETT 	*
*
Respondent 	*
*
************************************* 	*
JOSEPH DUFF 	*
* 	p.61
Movant 	*
vs. 	*
TRITTYE COLLINS FUGETT 	*
*
Respondent 	*
MEMORANDUM OF DECISION
On September 22, 2005, Eastern Savings Bank, FSB (hereinafter “Bank”) filed a Motion to
Confirm Inapplicability of Stay and to Confirm Validity of Foreclosure Sale. On September 23, 2005,
Date signed October 26, 2005
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the Bank filed a withdrawal of that motion and immediately thereafter re-filed a motion containing the
identical caption and asking for the identical relief. However, the motion was docketed by counsel
under the label of “Motion For Relief From Stay” (paper no. 64). Also on September 23, 2005, Joseph
J. Duff filed a Motion For Relief From Stay concerning the same property (paper no. 61) (hereinafter
these motions are collectively referred to as the “Motions”).
Debtor filed a response to the Bank’s Motion. 	On October 17, 2005, the court held an
evidentiary hearing upon the Motions and response. At the conclusion of the hearing, the court held
the matters under advisement.
Some of the background facts for this dispute are uncontested, many of which were read into
the record by the court at the outset of the hearing and concurred with by all parties.
On May 20, 2004, Anthony Fugett, husband of Trittye Collins Fugett (Debtor herein), filed a
Chapter 11 bankruptcy case, Case No. 04-22449-JS. Schedule A filed under penalty of perjury by
Anthony Fugett testified that he was the sole owner of property described as 1 Hollyford Road,
Cockeysville, Maryland 21030 (the “Property”). Subsequently, the Bank filed a motion for relief from
stay seeking to terminate the automatic stay so as to permit the Bank to foreclose upon two deeds of
trust upon the Property. The motion for relief from stay in the case of Anthony Fugett was resolved
by a Consent Order which conditioned the continuation of the automatic stay created by 11 U.S.C. §
362(a), upon future performance by Anthony Fugett including payments. Approximately one and one
half months thereafter , case no. 04-22449-JS was dismissed. Subsequently, the Bank commenced
foreclosure in an action filed in the Circuit Court for Baltimore County (the “Foreclosure Case”). The
foreclosure auction was scheduled and noticed for April 4, 2005. 	On the morning of April 4, 2005,
Trittye Collins Fugett (Debtor), in proper person, filed the instant Chapter 13 case. Immediately after
filing the bankruptcy petition, Anthony Fugett notified counsel for the Bank of the filing and asserted
that as a result of the filing by Trittye Collins Fugett, an automatic stay pursuant to 11 U.S.C. § 362(a)
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1 Although Debtor asserted unequivocally that she had found a contract purchaser who
would purchase the Property for an amount sufficient to pay all the claims, the Bank has
contended that Debtor has been less than forthright in such assertion. The court notes that
certain statements made at a hearing held September 19, 2005, seem to bolster the Bank’s
argument. At that hearing, Debtor’s most recent attorney, Ms. Raysor-Taylor, notified the court
as follows:
Even if the Court had granted the Debtor the right to sell the property, there is no
guarantee that she would have actually sold the property. So the property would
have still remained in her possession, because, obviously, you know, a sale is
based upon contingency. 	Now that’s not to suggest that, you know, the contract
for sale was bogus, but I do have to just include, in my argument, that the Debtor
is in the property.
Transcript of 9/19/05 Hr’g. at 7.
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stayed the foreclosure auction scheduled for later that day. After researching the title to the Property,
counsel for the Bank responded to Anthony Fugett, taking the position that the stay did not arise upon
the bankruptcy filing by Trittye Collins Fugett and that the foreclosure auction would commence as
scheduled. Thereafter, the foreclosure auction was held and the highest bidder was Joseph J. Duff.
Anthony Fugett filed exceptions to the ratification of foreclosure sale (based upon adequacy of
sale price) in the Foreclosure Case. The Circuit Court for Baltimore County initially entered an Order
denying the exceptions and ratifying the sale. 	Upon a subsequent motion for reconsideration, the
Circuit Court vacated the prior order denying the exceptions and ratifying the sale, and ratification was
denied. 	The court also entered an Order denying a Motion for Judgment Awarding Possession on
September 21, 2005. Debtor’s Ex. 2, Hrg’s Oct. 17, 2005. Thereafter, the Circuit Court entered an
Order vacating its Order which granted reconsideration and denied ratification and scheduled a hearing
to consider the matter for November 4, 2005. Debtor’s Ex. 1, Hr’g Oct. 17, 2005.
Meanwhile, Debtor filed a motion (hereinafter, the “Sale Motion”) in this bankruptcy case
seeking approval for an alleged sale of the Property free and clear of liens and encumbrances.1 The
Sale Motion was filed on behalf of Debtor by attorney Charlene Wilson, who had entered her
appearance for Debtor after the commencement of the bankruptcy case. The Bank opposed the Sale
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2 If the automatic stay precluded the foreclosure action, the sale is void under federal
law, unless this court were to annul the stay ab initio. See In re Lampkin, 116 B.R. 450 (Bankr.
D. Md. 1990).
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Motion and this court held a hearing upon the disputed Sale Motion on July 20, 2005.
The Bank’s opposition to the Sale Motion asserted that Debtor held no ownership in the
Property and therefore Debtor had no ability to sell the Property. Further, the Bank, citing Culver v.
Boozer, 285 B.R. 163 (D. Md. 2002), asserted that the automatic stay had not stayed the foreclosure
sale so that the Property, solely owned before foreclosure by Anthony Fugett, had been sold to Joseph
Duff pursuant to the auction sale.
At the outset of the hearing, counsel for Debtor acknowledged that the Bank’s assertion as to
the ownership of the Property and the foreclosure sale were true “albeit unknown to me at the time.”
Transcript of 7/20/05 Hr’g. at 4. Debtor’s counsel, also stated that “the house is not legally [Debtors].”
Id. at 5. Counsel then continued that as to the Sale Motion, if counsel “had an inkling that the house
was not in her name, I certainly would not have filed it.” Id. Counsel then sought to withdraw her
appearance from the case.
Upon further inquiry by the court, counsel for Debtor stated that Debtor wished to speak
because Debtor felt that she had a cognizable interest in the Property. The court permitted this. The
Debtor’s principle argument as to an ownership interest in the property was based upon her assertion
that there was a voluntary property settlement agreement that she had entered into with her husband,
Anthony Fugett, prior to filing her bankruptcy case. No such agreement was exhibited or offered into
evidence at the hearing upon the Sale Motion.
At the conclusion of the hearing, the court held the matter under advisement and invited the
parties to submit memoranda concerning the Debtor’s argument that the alleged property settlement
agreement conferred ownership rights sufficient to invoke the automatic stay.2
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Memoranda in support and in opposition were filed respectively by attorney S.D. Raysor-
Taylor, appearing as new counsel for Debtor and the Bank. Attached to the Memorandum of Law
submitted by attorney Raysor-Taylor was a copy of the alleged property settlement agreement.
On August 16, 2005, this court entered a Memorandum of Decision and Order denying the Sale
Motion, finding that Debtor at the date of petition, held no cognizable interest in the Property that
would permit her to be the seller of the Property free and clear of the rights of other parties, including
liens and encumbrances. Debtor timely noticed an appeal of that Order, which appeal is pending before
the United States District Court for the District of Maryland.
Subsequently, Debtor filed an emergency motion to stay the Order denying the motion to sell,
pending the appeal. 	The motion to stay was opposed both by the Bank and Joseph Duff. 	After a
hearing upon the motion and opposition, on September 21, 2005, this court entered an Order denying
the emergency motion to stay pending appeal, for the reasons stated therein and on the record. The
Motions now before the court were thereafter filed.
The Movants seek a determination by this court that the automatic stay did not stay the
foreclosure and does not now stay further proceedings before the Circuit Court for Baltimore County
in the Foreclosure Case, including any future action to eject Debtor from the premises. At the hearing
upon the Motions, Debtor introduced three exhibits and three witnesses testified. The first exhibit is
the Order of the Circuit Court for Baltimore County vacating reconsideration of the Order denying
exceptions and ratifying sale. 	The second exhibit is a Circuit Court Order denying a judgment of
possession for the Property. 	The third exhibit is the Voluntary Separation, Support and Property
Settlement Agreement upon which Debtor grounds her argument that she holds an interest in the
Property sufficient to trigger the automatic stay.
The issue presented directly by the Motions is simply stated. If Debtor had held no interest in
the Property at the time of the filing of the petition in this bankruptcy case, no automatic stay arose
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pursuant to 11 U.S.C. § 362(a) as to the Foreclosure Case. In that event, the Bank was legally permitted
to go forward with its foreclosure action, including conducting the auction and seeking ratification. On
the other hand, if Debtor held an interest in the Property sufficient to trigger the automatic stay, the
Bank’s foreclosure auction is void and the automatic stay continues to prohibit the Foreclosure Case
from proceeding, unless this court grants relief from, or annulment of the stay, for cause.
The Debtor’s primary argument advanced at the hearing upon the Motions is that this court
lacks jurisdiction to determine the matter and is precluded by the doctrines of collateral estoppel, full
faith and credit, or related doctrines from determining whether the automatic stay arose as a
consequence of this federal bankruptcy case. It is the Debtor’s argument that the Circuit Court for
Baltimore County has concurrent jurisdiction to determine whether the automatic stay applied to the
Foreclosure Case and has so determined in granting the motion for reconsideration of ratification and
by vacating its Order of Ratification. In support of this argument, Debtor points to the decision of the
Court of Appeals of Maryland in the case of Klass v. Klass, 377 Md. 13 (2003), and the reported
opinion of this court in the case of Planned Parenthood of the Columbia/Willamette, Inc., et al. v Bray,
et al. (In re Bray), 256 B.R. 708 (Bankr. D. Md. 2000), and cases cited therein. 	Debtor is wholly
mistaken as to this argument.
Without question, 28 U.S.C. § 1334 confers upon this federal court jurisdiction to determine
whether or not an automatic stay exists as to an action against the debtor and/or property of the debtor
or the bankruptcy estate. Further, reported decisions agree without question that only the United States
Bankruptcy Court before which is pending the bankruptcy case, has jurisdiction to grant or deny relief
from an automatic stay. Some courts, including the highest appellate court for the State of Maryland
in Klass v. Klass, 377 Md. at 20, have opined that the state court before whom an action is pending has
concurrent jurisdiction to determine whether the automatic stay does, or does not stay the action before
that state court. A number of federal courts have agreed that the state court may have such concurrent
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3For further discussion of this issue see In re Benalcazar, 283 B.R. 514 (Bankr. N.D. Ill.
2002).
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jurisdiction, but further held that the state court’s finding is not preclusive upon the bankruptcy court.
“[A] state court has the authority to decide whether its proceeding is within the scope of the automatic
stay, but the state court’s holding is not entitled to preclusion effect in the bankruptcy court.” Lockyer,
Attorney General Et al. V. Mirant Corp., 398 F.3d 1098, 1106 (9th Cir. 2005) (citing In re Gruntz, 202
F.3d 1074 (9th Cir. 2000). 3
Even if this court were to disregard the holdings of the Circuit Courts of Appeals that have
addressed the question of the lack of preclusion arising from a state court order determining an action
not to be affected by the automatic stay (and this court does not disregard those holdings), in the case
before this court, no order determining the effect of the stay has been entered by the state court.
The Circuit Court Orders entered into evidence at the hearing upon the Motions indicate that
although the Circuit Court first vacated its Order of Ratification and denied ratification of the sale, it
has subsequently vacated that Order and set the matter for hearing.
Because this court is not precluded from determining whether or not the automatic stay arose
and stayed the auction and subsequent events in the Foreclosure Case, and as this court unquestionably
has subject matter jurisdiction pursuant to 28 U.S.C. § 1334 as referred under 28 U.S.C. § 157, this
court can and will determine the issue of the effect of 11 U.S.C. § 362(a) upon the Foreclosure Case.
For the reasons set forth in the Sale Memorandum of Decision, the court holds that Debtor held
no interest in the Property at the time of filing of the petition in bankruptcy so as to trigger the
application of the automatic stay under 11 U.S.C. § 362(a), including subsections (4) or (5). The court
will not further burden the instant Memorandum of Decision by repeating all of the words of the Sale
Memorandum of Decision. The findings and conclusions of the Sale Memorandum of Decision are
incorporated by reference herein.
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As to the new evidence presented at the hearing upon the Motions, the court took judicial notice
of the docket of this bankruptcy case and the prior case of Anthony Fugett. The docket in the instant
case of Trittye Collins Fugett includes an amended Schedule A filed under penalty of perjury by Debtor
on October 17, 2005. In Amended Schedule A, which requires a listing of interests in real property
held by Debtor at the date of the petition, Debtor testifies: “none.” 	Notwithstanding her recent
admission, Debtor testified at the hearing upon the Motions that although no divorce action has ever
been filed and Anthony Fugett continues to occasionally reside in the Property, nonetheless the parties
entered into a Voluntary Separation, Support and Property Settlement Agreement (Debtor’s Ex. 3, Hr’g
Oct. 17, 2005) under which Anthony S. Fugett intended to convey to Trittye C. Fugett an interest in the
Property. Debtor attempted to bolster this assertion by testifying as to alleged amounts of money that
she had contributed to the Property at the time of its acquisition as raw land, again during 	the
construction of a house which she asserted is valued at more than $2 million dollars, and in contributing
to mortgage payments made thereupon. However, having observed the demeanor of the witness, the
court finds no credibility as to the testimony of Debtor. Her statements as to these alleged contributions
were conflicting and changed as additional questions were asked. Her entire demeanor indicated to the
court that no weight could be placed upon this evidence. Nor did the testimony of Anthony Fugett
appear more credible.
For the reasons set forth in the Sale Memorandum of Decision, the Voluntary Separation,
Support and Property Settlement Agreement, (to the extent that it existed prior to the bankruptcy case),
did not convey to Debtor any interest in the Property that is protected by the automatic stay. This has
clearly been held by the United States District Court for the District of Maryland in the reported
decision in the case of Culver v. Boozer, 285 B.R. 163 (D. Md. 2002). The facts of the instant case
essentially are “on all fours” with the facts set forth by the United States District Court in its opinion
in Culver.
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Because the automatic stay did not stay the Foreclosure Case, the auction sale is not rendered
void by reason of derogation of the automatic stay. Nor is the Foreclosure Case stayed. Consequently,
the Circuit Court for Baltimore County may determine the issue of ratification pending before it. This
court, of course, has no jurisdiction to determine whether any other exceptions to ratification should
be sustained, or to the contrary should be denied and the sale ratified.
As to the bid purchaser’s (Joseph Duff) motion for relief from stay, this court finds that the
automatic stay should not preclude him from seeking an Order of Ejectment from the Circuit Court of
Baltimore County. While it is true that such an ejectment might cause tangible personal property of
Debtor to be removed from the Property, the action by the bid purchaser would not be directly to
enforce a lien or otherwise collect from such Property. If the sale is ratified, there would appear to be
no legal right of possession in the Debtor and the automatic stay does not protect a Debtor as to an
unlawful possession. See In re Joseph, 298 B.R. 554 (Bankr. D. Md. 2003); Homeside Lending v.
Denny (In re Denny), 242 B.R. 493 (Bankr. D. Md. 1999).
Orders in conformity with this Memorandum of Decision will be entered.
cc: 	All Counsel
All Parties
End Of Order
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