Enns et al v. Enns

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
ANDREA GAYE ENNS
DEBTOR
CASE NO.
05-02434-5-ATS
BRAD ENNS AND
SUSAN SCHERF ENNS
Plaintiffs
v.
ANDREA GAYE ENNS
Defendant.
ADVERSARY PROCEEDING NO.
S-05-00141-5-AP
ORDER ALLOWING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT,
DENYING PLAINTIFFS' CROSS-MOTION FOR SUMMARY JUDGMENT
AND DISMISSING DISCOVERY MOTIONS AS MOOT
The matters before the court are the motion for summary judgment
filed by the defendant, Andrea Gaye Enns, the response of the
plaintiffs, which was treated as a cross-motion for summary judgment,
and various discovery motions. A telephonic hearing took place on
SO ORDERED.
SIGNED this 17 day of May, 2006.
________________________________________
A. Thomas Small
United States Bankruptcy Judge
____________________________________________________________
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April 13, 2006, and a further hearing took place in Raleigh, North
Carolina on May 9, 2006.
Andrea Gaye Enns filed a petition for relief under chapter 7 of
the Bankruptcy Code on June 10, 2005. On September 2, 2005, the pro se
plaintiffs, Brad Enns and Susan Scherf Enns, filed the complaint in
this adversary proceeding contending that the debtor wrongfully removed
household goods from their home. The plaintiffs seek recovery of the
goods or compensation in the amount of $30,000. The debtor filed a
motion for summary judgment and supporting affidavits, which
essentially established the following facts:
On December 29, 2004, Mortgage Electronic Registration Systems
("MERS") foreclosed on the plaintiffs' property located at 5420 Live
Oak Trail, Raleigh, North Carolina. MERS was the successful bidder and
the foreclosure bid was subsequently assigned to Federal Home Loan
Mortgage Corporation ("FHLMC"). On January 4, 2005, FHLMC sent the
plaintiffs a letter offering them cash in exchange for their removal of
their personal property and turnover of the keys within ten days. The
plaintiffs failed to respond to the letter, and on January 18, 2005,
FHLMC issued a notice to vacate. On February 11, 2005, an application
for writ of possession was filed, and a writ of possession was
subsequently issued. The Wake County Sheriff served the writ of
possession on February 21, 2005.
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1Though the plaintiffs were the only individuals listed on the
deed to the property, the debtor and Mr. Enns are the obligors under
the deed of trust. FHLMC's agent's affidavit suggests that access was
allowed for those named on the deed of trust.
3
The plaintiffs failed to respond to any of the notices, and did
not remove their property. On March 6, 2005, the debtor was allowed
access to the property by agents of FHLMC, and she removed personal
property from the premises.
The plaintiffs submitted an affidavit contending that they did not
receive the notices related to the foreclosure and writ of possession,
that they did not abandon the real property, and that as late as March
4, 2005, they were attempting to sell the real property to a third
party. The plaintiffs further contend that when they reached agents of
FHLMC on March 7, 2005, they were told that no one other than the
debtor was allowed in the property except for the plaintiffs, and that
the plaintiffs' written approval was required before FHLMC would permit
the plaintiffs' friend from entering the property. The plaintiffs
contend that it was inconsistent for FHLMC to allow the debtor onto the
property, while insisting that written approval was required for any
other person to gain access.1 The plaintiffs also attached to their
affidavit a letter written by the debtor to the North Carolina Real
Estate Commission (in response to a complaint by the plaintiffs) in
which the debtor explained that she obtained the personal property from
the residence with the permission of the agent for FHLMC.
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"[S]ummary judgment is proper 'if the pleadings, depositions,
answers to interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.
Ct. 2548, 2552 (1986). In making this determination, conflicts are
resolved by viewing all facts and inferences to be drawn from the facts
in the light most favorable to the non-moving party. United States v.
Diebold, Inc., 369 U.S. 654, 82 S. Ct. 993 (1962). Summary judgment
should not be granted unless the moving party establishes his right to
judgment "with such clarity as to leave no room for controversy."
Portis v. Folk Constr. Co., 694 F.2d 520, 522 (8th Cir. 1982).
The plaintiffs seek to recover property or payment for property
that they contend was taken from them prepetition. The debt, if any,
is a prepetition debt that is discharged unless it falls within an
exception to discharge under 11 U.S.C. § 523(a). The plaintiffs
contend that the property was stolen from them, which would make the
debt nondischargeable pursuant to § 523(a)(4), which excepts from
discharge a debt for larceny. However, all of the evidence shows that
the debtor took possession of the property only with the permission of
the agent of FHLMC, which was in lawful custody of the property at the
time. The plaintiffs' affidavit fails to create a disputed issue of
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material fact as to whether the debtor obtained the property through
larceny.
Because there is no disputed issue of material fact that could
render the debt nondischargeable, entry of summary judgment in favor of
the defendant is appropriate without the need to reach the question of
whether the debtor was entitled to receive possession of the property
from FHLMC. Nonetheless, the court will address this issue.
The debtor relies on the North Carolina foreclosure statutes to
establish that 10 days after the writ of possession was served, FHLMC
had the right to throw away, dispose of or sell the personal property
within the premises. See N.C. Gen. Stat. §§ 45-21.29, 42-25.9(g). The
term "dispose of" has been interpreted to include more than the power
to sell, and means "to transfer into new hands or to the control of
someone else: relinquish." See Hill v. Summer, 132 U.S. 118, 124-25,
10 S. Ct. 42 (1889); Roberts v. First Citizens Bank and Trust, 124 N.C.
App. 713, 478 S.E.2d 809 (1996) (adopting definition found in Webster's
Third International Dictionary 654 (1968)). Because the agent of FHLMC
had the right to dispose of the property, when she gave the debtor
permission to remove personal property from the real property, she
transferred both title and lawful possession of the personal property
to the debtor.
The court agrees with the debtor that FHLMC followed the
guidelines set forth in the statute after the foreclosure sale and had
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the right to transfer the personal property to the debtor. Though the
plaintiffs deny having received notices related to the foreclosure and
the writ of possession, the plaintiffs contend that their realtor was
in communication with FHLMC as late as March 2005 trying to sell the
property on behalf of the plaintiffs. FHLMC's agent's affidavit
establishes that she repeatedly explained to the plaintiffs' realtor
that the property had been foreclosed and that the plaintiffs no longer
retained any ownership rights. The plaintiffs' contention that they
did not receive notice does not, in this case, create a disputed issue
of fact that would change the result of this adversary proceeding.
Based on the foregoing, the court will enter summary judgment in
favor of the defendant. The defendant has shown that there is no
disputed issue of material fact and that she is entitled to judgment as
a matter of law, as there are no facts in evidence that would make any
debt owed to the plaintiffs nondischargeable. Because the plaintiffs
have not provided any evidence that would support entry of judgment in
their favor, the cross-motion for summary judgment will be denied.
There are several discovery motions also pending, including the
plaintiffs' motion to conduct a deposition of the debtor by telephone,
the defendants' motion for a protective order, and the plaintiffs'
motion to compel discovery. Because summary judgment will be entered
in favor of the debtor, the discovery motions will be dismissed as
moot.
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The debtor's motion for summary judgment is ALLOWED. The
plaintiffs' cross-motion for summary judgment is DENIED. The
plaintiffs' motion to conduct a deposition of the debtor by telephone,
the defendants' motion for a protective order, and the plaintiffs'
motion to compel discovery are DISMISSED AS MOOT. A separate judgment
will be entered.
SO ORDERED.
END OF DOCUMENT
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