Brady v. Welty, III

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 04-41166 TD
Chapter 7
JOHANNA P. WELTY, etc.,
Debtor.
___________________________/
LOIS I. BRADY, Trustee, 	A.P. No. 04-4182 AT
Plaintiff,
vs.
FRANK A. WELTY, III,
Defendant.
___________________________/
MEMORANDUM OF DECISION
Lois I. Brady (the “Trustee”), chapter 7 trustee in the above-
captioned bankruptcy case, moves for summary judgment in the above-
captioned adversary proceeding, objecting to the amended claim filed
by 	defendant 	Frank 	A. 	Welty, 	III 	(“Welty”) 	on 	May 	5, 	2006 	(the
“Amended 	Claim”). 	For 	the 	reasons 	stated 	below, 	the 	Trustee’s
motion will be granted, and the Amended Claim will be disallowed as
a matter of law.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
Johanna 	A. 	Welty 	(the 	“Debtor”) 	filed 	a 	voluntary 	petition
seeking 	relief 	under 	chapter 	7 	of 	the 	Bankruptcy 	Code 	on 	March 	4,
2004. 	At 	the 	time 	she 	filed 	the 	petition, 	although 	her 	marital
relationship 	with 	Welty 	had 	been 	dissolved, 	their 	property 	rights
Signed: November 16, 2006
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
November 17, 2006
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
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had 	not 	yet 	been 	finally 	determined. 	Debtor 	and 	Welty 	were 	still
the co-owners of a home (the “Residence”). 	The Residence had been
ordered 	to 	be 	sold 	by 	the 	family 	law 	court, 	but 	no 	sale 	had 	yet
taken place.
A 	state 	court 	judge 	pro 	tem 	(the 	“family 	court 	judge”) 	had
conducted 	a 	trial 	on 	various 	issues 	in 	the 	dissolution 	proceeding
over 	several 	days 	in 	December 	2002. 	She 	had 	issued 	an 	order
resolving 	some 	of 	these 	issues 	which 	was 	filed 	on 	March 	20, 	2003
(the 	“March 	20 	Order”). 	Among 	other 	things, 	she 	granted 	Welty
$156,000 in reimbursement rights from the marital community pursuant
to 	California 	Family 	Code 	§ 	2640 	for 	his 	separate 	property
contribution to the Residence. 	After further hearings, the family
law 	judge 	issued 	another 	order, 	which 	was 	filed 	on 	April 	16, 	2003
(the 	“April 	16 	Order”). 	The 	April 	16 	Order 	established 	various
liens against the Residence, with specified priorities.
On March 1, 2004, Welty recorded an abstract of judgment (the
“Abstract”) 	against 	the 	Residence. 	The 	Abstract 	referenced 	the
March 	20 	Order 	and 	asserted 	the 	right 	to 	a 	judgment 	amount 	of
$224,224.18. 	Three 	days 	later, 	the 	Debtor 	filed 	her 	chapter 	7
bankruptcy 	petition. 	On 	or 	about 	July 	14, 	2004, 	the 	Court
authorized 	the 	sale 	of 	the 	Residence 	to 	a 	third 	party 	for 	$1.4
million.
The Residence was sold, and the first deed of trust, which was
held 	by 	Greenpoint 	Mortgage, 	was 	paid 	from 	the 	proceeds. 	The
property taxes encumbering the Residence and the costs of sale were
also paid. 	The remaining proceeds were divided between the Trustee
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and 	Welty, 	the 	Trustee 	receiving 	the 	Debtor’s 	share. 	The 	Trustee
held 	the 	Debtor’s 	share, 	subject 	to 	the 	remaining 	liens 	and 	other
charges against that share, including Welty’s claim of entitlement
to additional payment.
On February 10, 2005, this Court held a hearing on an earlier
motion for summary judgment filed by the Trustee. 	Thereafter, the
Court 	issued 	a 	memorandum 	of 	decision, 	denying 	the 	motion 	in 	part
but 	otherwise 	disposing 	of 	most 	of 	the 	issues 	raised 	by 	the
complaint. 	Based 	on 	this 	decision, 	on 	June 	7, 	2005, 	the 	Court
ordered the Trustee to pay Welty $189,700 out of the estate’s share
of 	the 	sale 	proceeds. 	The 	Trustee 	moved 	for 	reconsideration,
arguing that this amount should be reduced to $156,025. 	On July 11,
2005, 	the 	Court 	granted 	the 	Trustee’s 	motion 	for 	reconsideration,
and 	a 	check 	was 	issued 	by 	the 	Trustee 	to 	Welty 	in 	this 	lesser
amount.
On 	May 	5, 	2006, 	Welty 	filed 	the 	Amended 	claim 	(the 	“Amended
Claim”), asserting the right to receive additional payments from the
estate’s share of the sale proceeds based on the March 20 and April
16 Orders. 	In her current motion for summary judgment, the Trustee
objects 	to 	the 	Amended 	Claim. 	Welty 	did 	not 	file 	a 	substantive
objection to the Trustee’s motion. 	His only response to the motion
was a last minute letter request for a continuance of an unspecified
length until such time as he could afford to hire an attorney. 	The
Court denied Welty’s request. 	The motion was presented at a hearing
on October 24, 2006 and was taken under submission.
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DISCUSSION
A. APPLICABLE LAW
A motion for summary judgment should be granted when the Court
determines that there is no genuine issue of material fact and that
the moving party is entitled to judgment as a matter of law. 	Fed.
R. Civ. P. 56(c) (made applicable in bankruptcy proceedings by Fed.
R. 	Bankr. 	P. 	7056); 	Celotex 	Corp. 	v. 	Catrett, 	477 	U.S. 	317, 	322
(1986). 	The 	moving 	party 	must 	make 	a 	prima 	facie 	showing 	that
summary 	judgment 	is 	appropriate. 	Celotex, 	477 	U.S. 	at 	322. 	The
party opposing the motion bears the burden of overcoming the prima
facie case. 	Id. at 324.
If the moving party adequately supports the motion for summary
judgment, 	and 	the 	adverse 	party 	fails 	to 	respond, 	the 	Court 	shall
enter summary judgment, if appropriate, against the adverse party.
Fed. R. Civ. P. 56(e) (made applicable in bankruptcy proceedings by
Fed. R. Bankr. P. 7056). 	However, the Court may not grant a motion
for 	summary 	judgment 	simply 	because 	the 	nonmoving 	party 	failed 	to
file an opposition. 	Henry v. Gill Industries, Inc., 983 F.2d 943,
950 	(9th 	Cir. 	1993). 	All 	doubts 	concerning 	the 	existence 	of 	a
genuine 	factual 	issue 	must 	be 	resolved 	in 	favor 	of 	the 	party
opposing the motion for summary judgment. British Airways Board v.
Boeing Co., 585 F.2d 946, 951 (9th Cir. 1978).
If the Court is unable to determine the entire claim by summary
judgment, 	the 	Court 	may 	summarily 	adjudicate 	any 	portion 	of 	the
claim as to which there is no genuine factual issue. 	Fed. R. Civ.
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P. 	56(d) 	(made 	applicable 	in 	bankruptcy 	proceedings 	by 	Fed. 	R.
Bankr. P. 7056).
A properly executed and filed proof of claim constitutes prima
facie 	evidence 	of 	the 	validity 	and 	amount 	of 	the 	claim. 	Fed. 	R.
Bankr. 	P. 	3001(f). 	The 	party 	objecting 	to 	the 	claim 	must 	present
sufficient 	evidence 	to 	overcome 	the 	prima 	facie 	evidence. 	In 	re
Holm, 931 F.2d 620, 623 (9th Cir. 1991); In re Consolidated Pioneer
Mortgage, 178 B.R. 222, 226 (9th Cir. 1995), aff’d 91 F.3d 151 (9th
Cir. 1996).
B. DECISION
In the Amended Claim, Welty asserts the right to an unsecured
claim against the estate for $328,580 less the $156,025 already paid
for 	a 	net 	claim 	of 	$172,580. 	Attached 	to 	the 	Amended 	Claim 	is 	a
schedule 	(the 	“Claim 	Schedule”) 	in 	which 	Welty 	lists 	the 	numerous
items upon which the Amended Claim is based. 	In many instances, he
cites 	the 	paragraph 	of 	the 	family 	court 	order 	upon 	which 	he 	bases
the particular elements of his claim.
Welty asserts the right to interest on each of the items at the
rate 	of 	ten 	percent 	per 	annum. 	He 	calculates 	the 	amount 	of 	the
interest on each from the date of the order purportedly giving him
the 	right 	to 	the 	payment 	amount 	through 	May 	31, 	2006: 	i.e., 	a
hypothetical payment date. 	He also provides a daily interest amount
so that figure may be adjusted based on the actual payment date.
The Trustee objects to the Amended Claim on various grounds and
seeks 	summary 	judgment 	with 	respect 	to 	her 	objections. 	The 	Court
will address each of her objections in turn.
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1. 	Estate’s Right to Credit for $78,000 Overpayment
The Trustee contends that the Court miscalculated the portion
of the net sale proceeds that should have been paid to Welty based
on 	the 	family 	court 	order 	regarding 	Welty’s 	$156,025 	separate
property contribution to the Residence. 	She notes that the family
court 	judge 	ordered 	the 	community 	to 	reimburse 	Welty 	for 	this
contribution, not the Debtor. 	Thus, either the reimbursement should
have come from community property or, to the extent it came from the
Debtor’s 	separate 	property, 	Welty 	was 	only 	entitled 	to 	half 	this
amount: 	i.e., 	$78,012.50. 	Thus, 	according 	to 	the 	Trustee, 	the
estate 	is 	entitled 	to 	a 	credit 	of 	$78,012.50 	against 	any 	amounts
that Welty would otherwise be owed.
As noted above, Welty did not file a substantive opposition to
the Trustee’s motion for summary judgment. 	The evidence before the
Court-–i.e., 	the 	family 	court 	order–-is 	sufficient 	to 	support 	the
Trustee’s 	contention, 	and 	the 	Trustee’s 	argument 	appears 	legally
sound. 	As 	a 	result, 	the 	Trustee’s 	motion 	will 	be 	granted 	with
respect to this issue, and the bankruptcy estate will be entitled to
an 	offset 	of 	$78,012.50 	against 	any 	amounts 	found 	to 	be 	allowable
pursuant to the Amended Claim.
2. 	Welty’s Right to Interest
Twenty-eight of the items listed in the Claim Schedule are for
interest. 	As 	noted 	above, 	the 	amounts 	included 	in 	the 	claim
calculation 	are 	for 	interest 	from 	the 	date 	of 	the 	relevant 	order
through 	May 	31, 	2006. 	The 	Trustee 	objects 	to 	the 	allowance 	any
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amount of interest 	in the Amended Claim. 	She notes that Welty has
no 	right 	to 	interest 	by 	contract 	or 	statute. 	She 	notes 	that 	Cal.
Civ. Code § 3289, which provides for a ten percent per annum default
rate 	of 	interest 	on 	breach 	of 	contract 	claim, 	has 	no 	application
here since Welty’s claim is not based on a contract. 	Similarly, she
notes that Cal. Civ. Proc. Code § 685.010, which provides for a ten
percent per annum judgment rate of interest, does not apply because
no 	money 	judgment 	was 	ever 	entered. 	The 	family 	court 	orders 	were
simply 	interlocutory 	orders, 	resolving 	some 	but 	not 	all 	of 	the
issues in the dissolution proceeding. 	Finally, the Trustee asserts
that, 	because 	Welty’s 	claim 	is 	unsecured, 	pursuant 	to 	11 	U.S.C. 	§
506(b), 	he 	is 	not 	entitled 	to 	any 	interest 	accruing 	on 	his 	claim
after the petition date: i.e., March 4, 2004.
The 	Trustee 	is 	correct 	that 	a 	party 	asserting 	an 	unsecured
claim against a bankruptcy estate is not entitled to post-petition
interest. 	See 	11 	U.S.C. 	§ 	502(b)(2); 	11 	U.S.C. 	§ 	506(b). 	Thus,
Welty’s 	claim 	for 	interest 	accruing 	after 	March 	4, 	2004 	will 	be
disallowed. 	With respect to the interest accruing before March 4,
2004, the Court agrees that neither Cal. Civ. Code § 3289 nor Cal.
Civ. Proc. Code § 650.010 provides support for such a claim.
However, the Trustee does not address the applicability of Cal.
Civ. Code § 3287. 	Section 3287 provides that every person entitled
to damages in an amount that is certain or is capable of being made
certain 	by 	calculation 	is 	entitled 	to 	recover 	interest 	on 	that
amount from the date the party’s right becomes fixed. 	Some elements
of the Amended Claim are based on amounts made certain in the family
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1Cal. Fam. Code § 2640(b) specifically prohibits the award of
interest on a claim for reimbursement for a party’s separate
property contribution to the acquisition of community property.
However, Welty has not requested interest with respect to this
portion of his claim.
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court orders. 	To that extent, the Court concludes that § 3287 gives
Welty a right to interest on the amounts in question from the date
of entry of the orders through March 4, 2004. 1
Although § 3287 does not specify the rate of interest to which
the 	claimant 	is 	entitled, 	establishing 	this 	rate 	is 	within 	the
Court’s 	discretion. 	The 	judgment 	rate 	of 	ten 	percent 	per 	annum
appears reasonable. 	However, the bankruptcy estate is entitled to
include 	in 	its 	claim 	of 	offset 	interest 	on 	the 	$78,012.25
overpayment 	made 	to 	Welty 	from 	the 	sale 	proceeds 	from 	the 	date 	of
payment to the date of this decision.
Given 	that 	right, 	the 	Court 	is 	doubtful 	that 	the 	award 	of
interest to Welty on some portions of the Amended Claim will affect
the outcome of this decision. 	However, the Court hereby directs the
Trustee to calculate the interest to which Welty is entitled, based
on the Court’s rulings in this decision, and the interest to which
the estate is entitled as an offset and to file a statement of this
calculation 	to 	the 	Court 	two 	weeks 	prior 	to 	the 	status 	conference
scheduled below.
3. Specific Items of the Amended Claim
a. Line 4 Item
On Line 4 of the Claim Schedule asserts a claim for $5,000. 	It
refers to paragraph 22 of the March 20 Order. 	Paragraph 22 states
that the parties are to pay equally the fees and costs of the family
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court 	judge. 	It 	acknowledges 	the 	receipt 	of 	$5,000 	in 	payment 	of
the family court judge’s fees and expenses from Alta Welty. 	It is
undisputed that Alta Welty is Welty’s mother.
The Trustee concedes that, pursuant to the March 20 Order, the
community was required pursuant to reimburse Alta Welty $5,000 from
the Residence sale proceeds. 	However, she contends that the estate
is 	only 	required 	to 	pay 	half 	this 	amount 	or 	$2,500. 	Thus, 	she
objects to only $2,500 of the claim.
The 	Trustee’s 	rationale 	with 	respect 	to 	this 	portion 	of 	the
Amended Claim is the same as with respect to the alleged overpayment
of 	$78,012.50. 	As 	noted 	above, 	the 	Court 	is 	persuaded 	by 	this
rationale. 	However, there is no evidence that Welty has standing to
assert 	his 	mother’s 	claim. 	To 	the 	contrary, 	Alta 	Welty 	has 	filed
her own proof of claim for $5,000. 	The Trustee will probably wish
to file an objection to $2,500 of this claim if she has not already
done so.
b. 	Lines 6 and 7
Line 6 of the Claim Schedule asserts the right to $258 for half
of 	the 	community’s 	cost 	for 	Marburger’s 	tax 	calculations. 	Line 	7
asserts the right to $617 for half of the community’s cost for Kinko
copies ordered made by the Debtor’s attorney. 	There is no reference
in 	the 	Schedule 	to 	any 	paragraph 	in 	either 	of 	the 	family 	court
orders as a basis for these elements of the Amended Claim. 	However,
the Trustee declines to challenge them given their nominal amounts.
As a result, the Court will summarily adjudicate that these amounts
are allowable.
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c. Lines 8, 10, 12, 14, 16, 18, 20, 22, and 26
The amounts set forth on Lines 8, 10, 12, 14, 16, 18, 20, 22,
and 26 all relate to the Greenpoint Mortgage loan which encumbered
the 	Residence 	and 	was 	paid 	off 	when 	the 	Residence 	was 	sold. 	In
support 	of 	these 	elements 	of 	the 	Amended 	Claim, 	Welty 	relies 	on
paragraph 	2 	of 	the 	April 	16 	Order 	This 	paragraph 	required 	the
Debtor, while she was living in the Residence, to collect the rents,
pay 	the 	expenses, 	pay 	the 	reasonable 	value 	for 	her 	occupancy 	of 	a
portion 	of 	the 	Residence, 	and 	to 	provide 	a 	monthly 	accounting.
These 	elements 	of 	the 	Amended 	Claim 	all 	appear 	to 	relate 	to 	the
Debtor’s 	failure 	to 	pay 	some 	of 	the 	necessary 	expenses. 	The
specific items are as follows:
Line 8 	$1,193, for interest on payoff of Greenpoint Mortgage
loan from 6/24/04 to 7/27/04 at the rate of $72.29000
per day
Line 10 	$371.60 in late fees paid to Greenpoint Mortgage
Line 12 	$2,245 for forced insurance charges
Line 14 	$10.50 in recording fees
Line 16 	$22.50 in foreclosure fees
Line 18 	$20 	for 	fax 	charges 	and 	demand 	fees 	relative 	to the
Greenpoint Mortgage foreclosure.
Line 20 	$17.50 in other fees paid to Greenpoint Mortgage
Line 22 $12,924.20 in interest paid to Greenpoint Mortgage
Line 26 	$4,009 in unpaid property taxes
These items of the Amended Claim will be disallowed as a matter
of law. 	As the Trustee points out, some of these charges are simply
community obligations which were paid from the sale proceeds of the
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Residence before those proceeds were divided. 	Thus, the bankruptcy
estate has borne its proper share.
To the extent the charges are for expenses that would not have
been 	incurred 	had 	the 	Debtor 	performed 	her 	obligations 	under
paragraph 	2 	of 	the 	April 	16 	Order, 	Welty 	has 	failed 	to 	supply
sufficient 	evidence 	to 	support 	his 	right 	to 	the 	amounts 	claimed.
The 	April 	16 	Order 	is 	not 	sufficient 	for 	this 	purpose. 	Although
that order imposed certain duties on the Debtor, it did not specify
the consequence of the Debtor’s failure to perform those duties.
Moreover, 	no 	evidence 	has 	been 	provided 	in 	support 	of 	the
Amended Claim that the Debtor did fail to perform these duties, that
her failure was wrongful, or that these charges ensued as a result
of that failure. 	The Amended Claim is not executed under penalty of
perjury. 	Therefore, 	it 	does 	not, 	standing 	alone, 	create 	a 	prima
facie case for allowance. 	See Fed. R. Bankr. Proc. 3001(f). 	Thus,
this portion of the Amended Claim will be disallowed.
d. 	Line 24
Line 	24 	of 	the 	Claim 	Schedule 	asserts 	the 	right 	to 	$6,000 	in
principal reduction due to Johanna’s failure to pay the Greenpoint
Mortgage. 	In support of this item, Welty refers to paragraph 2A-C
of 	the 	April 	16 	Order. 	As 	noted 	above, 	these 	paragraphs 	of 	the
April 16 Order assign Johanna the duty of collecting the rents and
paying 	the 	expenses 	of 	the 	Residence, 	including 	the 	mortgage
payments.
Welty has provided no evidence to support his claim that Welty
failed to pay the mortgage payments, that her failure was wrongful,
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2Paragraph 6C charges the Debtor $3,200 for nonpayment of the
April taxes. 	However, it also notes that these taxes have been
paid out of the refinancing. 	Thus, they need not be taken into
account here.
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or 	that, 	as 	a 	result 	of 	that 	failure, 	Welty 	was 	damaged 	in 	the
amount of $6,000. 	As noted above, the form of the Amended Claim is
insufficient 	to 	establish 	a 	prima 	facie 	case 	for 	the 	validity 	and
amount of the claim without further evidence. Thus, the Court will
disallow this portion of Welty’s claim as a matter of law.
The Trustee contends that, in any event, this claim is without
merit. 	She notes that paragraph 6 of the March 20 Order charges the
community with nonpayment of the mortgage and the housing expense.
Thus, 	according 	to 	the 	Trustee, 	there 	is 	no 	basis 	for 	adding 	an
additional 	charge 	of 	$6,000, 	assessed 	only 	against 	the 	estate’s
share of the net sale proceeds.
Paragraph 6A of the March 20 Order supports this contention to
some extent. 	It charges the Debtor with collecting $75,365 in rent
and 	$3,200 	for 	nonpayment 	of 	the 	April 	10 	taxes 	for 	a 	total 	of
$78,565. 	It credits her for paying $58,370 on the mortgage, $12,800
in 	property 	taxes, 	and 	$8,500 	in 	rental 	expenses 	for 	a 	total 	of
$79,670 for an excess expenditure of $4,305. 	However, Paragraph 6B
credits 	Welty 	with 	paying 	$3,200 	in 	property 	taxes, 	thus 	reducing
the 	Debtor’s 	excess 	expenditure 	on 	behalf 	of 	the 	community 	to
$1,105. 	Thus, 	the 	Court 	concludes 	that, 	with 	respect 	to 	these
charges and credits, the estate is entitled to a offset against any
portion 	of 	the 	Amended 	Claim 	that 	is 	allowed 	of 	half 	this 	amount:
i.e., $552.50. 2
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e. 	Line 28
Line 28 of the Claim Schedule asserts the right to $6,671 based
on an advance from the community’s trust funds. 	In support of this
item, Welty refers to paragraph 5 of the March 20 Order. 	Paragraph
5 	of 	the 	March 	20 	Order 	charges 	the 	Debtor 	with 	having 	received
$6,671 in community trust funds. 	The Trustee concedes that Welty is
entitled to a claim against the estate for half this amount: i.e.,
$3,335.50. 	Thus, the Amended Claim will be allowed in this amount.
f. 	Line 30
Line 30 of the Claim Schedule asserts the right to $3,200. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 6B of the March 20 Order. 	Paragraph 6B credits Welty with
paying $3,200 in property taxes. 	However, this credit has already
been 	accounted 	for 	in 	connection 	with 	the 	portion 	of 	the 	Amended
Claim 	listed 	on 	Line 	24. 	See 	section 	B-3-d 	above. 	As 	a 	result,
this portion of the Amended Claim will be disallowed.
g. 	Line 32
Line 32 of the Claim Schedule asserts the right to $1,600. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 	6C 	of 	the 	March 	20 	Order. 	Paragraph 	6C 	of 	the 	March 	20
Order charges the Debtor $3,200 for her nonpayment of the April 10
taxes. 	As 	with 	the 	claim 	asserted 	on 	Line 	30, 	this 	charge 	has
already 	been 	accounted 	for 	in 	connection 	with 	the 	portion 	of 	the
Amended Claim listed on Line 24. 	As a result, this portion of the
Amended Claim will be disallowed.
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h. 	Line 34
Line 34 of the Claim Schedule asserts the right to $3,000. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 	9 	of 	the 	March 	20 	Order. 	Paragraph 	9 	of 	the 	March 	20
Order 	awards 	a 	1989 	Jeep 	to 	the 	Debtor, 	assigning 	it 	a 	value 	of
$3,000. 	The 	Trustee 	indicates 	that 	she 	is 	willing 	to 	accept 	the
validity 	of 	this 	portion 	of 	the 	Amended 	Claim. 	However, 	based 	on
the 	Trustee’s 	rationale 	with 	respect 	to 	other 	items 	listed 	on 	the
Amended 	Claim, 	it 	is 	unclear 	why 	the 	entire 	amount 	of 	this 	claim
would be chargeable to the bankruptcy estate. 	The allowable portion
of 	this 	claim 	would 	appear 	to 	be 	half 	this 	amount: 	i.e., 	$1,500.
The 	Court 	will 	allow 	this 	portion 	of 	the 	claim 	in 	the 	amount 	of
$1,500.
i. 	Line 38
Line 38 of the Claim Schedule asserts the right to $17,569. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraphs 	5F(10) 	of 	the 	April 	16 	Order. 	Paragraph 	5F(10) 	of 	the
April 16 Order provides that various liens granted to the parties’
attorneys against the Residence are junior to various other charges
against 	the 	Residence, 	including 	the 	Debtor’s 	obligation 	to 	pay
Welty $950 per month from January 16, 2003 until she terminates her
occupancy 	of 	the 	Residence. 	The 	claim 	is 	for 	18-1/2 	months. 	The
Trustee questions whether Welty is entitled to claim $950 per month
for the period after the bankruptcy petition was filed: i.e., March
4, 2004. 	However, given the short time span involved, the Trustee
is 	willing 	to 	concede 	this 	point. 	In 	this 	instance, 	the 	entire
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26 	3Neither party has provided the Court with a copy of an order
dated April 28, 2003.
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amount 	of 	this 	claim 	appears 	chargeable 	against 	the 	bankruptcy
estate’s 	share 	of 	the 	net 	proceeds. 	As 	a 	result, 	this 	portion 	of
the Amended Claim will be allowed.
j. 	Lines 36, 40, and 48
Line 36 of the Claim Schedule asserts the right to $6,130. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 15A & B of the March 20 Order. 	Paragraph 15A & B of the
March 20 Order refer to two checking accounts at Wells Fargo Bank.
The 	Debtor 	is 	awarded 	$1,882 	from 	one 	account 	and 	$4,248 	from 	the
other 	for 	a 	total 	of 	$6,130. 	The 	Trustee 	indicates 	that 	she 	is
willing 	to 	accept 	this 	claim 	as 	valid. 	However, 	as 	stated 	above,
the allowable claim appears to be for only half this amount: i.e.,
$3,065. 	This amount will be allowed.
Line 40 of the Claim Schedule asserts the right to $8,000. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 	12A 	of 	the 	March 	20 	Order 	and 	paragraph 	5 	of 	a 	4/28/03
order. 3 	Paragraph 12A of the March 20 Order provides that the Debtor
is charged $16,000 for the sale proceeds from the Merck stock. 	The
claim 	is 	for 	half 	this 	amount: 	i.e., 	$8,000. 	This 	amount 	will 	be
allowed.
Line 48 of the Claim Schedule asserts the right to $11,677.11.
It does not describe the nature of the claim. 	However, it refers to
paragraph 12E of the March 20 Order and to paragraph 5 of a 4/28/03
order. 	Paragraph 	12E 	of 	the 	March 	20 	Order 	refers 	to 	a 	Fidelity
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Account 	and 	charges 	the 	Debtor 	with 	the 	receipt 	of 	$23,354 	in
community funds from this account. 	Welty’s claim is for half this
amount. 	The Trustee concedes that this claim appears to be valid.
The Court agrees. 	Thus, this portion of the Amended Claim will be
allowed.
k. Line 42
Line 42 of the Claim Schedule asserts a claim for $12,598. 	It
does 	not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 12B of the March 20 Order and to paragraph 5 of a 4/28/03
order. 	Paragraph 	12B 	of 	the 	March 	20 	Order 	refers 	to 	a 	Fidelity
Account. 	It 	charges 	the 	Debtor 	with 	the 	receipt 	of 	$684. 	It
reserves 	jurisdiction 	as 	to 	whether 	the 	Debtor 	should 	be 	charged
with 	an 	additional 	$24,449. 	The 	Trustee 	concedes 	that 	Welty 	is
entitled to a claim for $684 but disputes that he is entitled to a
claim for the additional $24,449.
The 	Court 	agrees 	that 	the 	claim 	for 	the 	additional 	$24,449
should be disallowed since Welty has provided no evidence that he is
entitled 	to 	any 	portion 	of 	this 	amount. 	However, 	for 	the 	reasons
discussed above, the Court concludes that Welty is only entitled to
a claim for half the $684: 	i.e., $342. 	This portion of the Amended
Claim will be allowed.
l. 	Lines 44, 46, and 50
Line 	44 	asserts 	the 	right 	to 	a 	claim 	for 	$1,986.24. 	It 	does
not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 12C of the March 20 Order and to paragraph 5 of a 4/28/03
order. 	Paragraph 	12C 	of 	the 	March 	20 	Order 	refers 	to 	a 	Fidelity
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Account and provides that the funds in the account shall be divided
between 	the 	parties. 	There 	is 	no 	quantification 	of 	the 	amount 	of
the funds in the account.
Line 46 asserts the right to a claim for $2,009. 	It does not
describe the nature of the claim. 	However, it refers to paragraph
12D 	of 	the 	March 	20 	Order 	and 	to 	paragraph 	5 	of 	a 	4/28/03 	order.
Paragraph 	12D 	of 	the 	March 	20 	Order 	also 	refers 	to 	a 	Fidelity
Account 	and 	provides 	that 	the 	stock 	and 	cash 	shall 	be 	divided
between the parties with no quantification of the amount.
Line 50 asserts the right to a claim for $17,096.42. 	It does
not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 13A of the March 20 order and to paragraph 5 of a 4/28/03
order. 	Paragraph 13A of the March 20 Order refers to a Fidelity IRA
account and provides that the assets in the account shall be divided
between the parties with no quantification of the amount.
Welty has provided no evidence to support his right to a claim
for these awards in the amount stated. 	The Trustee contends that,
for that reason, the claim should be disallowed. 	The Court agrees.
This portion of the claim will be disallowed.
m. 	Line 52
Line 	52 	asserts 	the 	right 	to 	a 	claim 	for 	$5,144.77. 	It 	does
not 	describe 	the 	nature 	of 	the 	claim. 	However, 	it 	refers 	to
paragraph 13B of the March 20 Order and to paragraph 5 of a 4/28/03
order. 	Paragraph 13B of the March 20 Order refers to a Fidelity IRA
Account and provides that the assets, consisting of $1,964, shall be
divided 	between 	the 	parties. 	Welty 	has 	provided 	no 	evidence 	to
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support 	a 	claim 	amount 	of 	$5,144.77. 	The 	Trustee 	concedes 	that
Welty 	is 	entitled 	to 	a 	claim 	for 	half 	the 	amount 	in 	the 	account:
i.e., $982. 	This amount will be allowed.
n. 	Lines 54 and 56
Line 54 asserts the right to a claim for $941. 	Line 56 asserts
the right to a claim for $2,124. 	Neither line describes the nature
of the claim. 	However, Line 54 refers to paragraph 15A of the March
20 	Order. 	Paragraph 	15A 	of 	the 	March 	20 	Order 	refers 	to 	a 	Wells
Fargo 	Checking 	Account 	and 	awards 	the 	Debtor 	$1,882 	from 	this
account. 	Line 	56 	refers 	to 	paragraph 	15B 	of 	the 	March 	20 	Order.
Paragraph 15B of the March 20 Order refers to a Wells Fargo Checking
Account and awards the Debtor $4,248 from this account.
The 	Trustee 	contends 	that 	these 	claims 	must 	be 	disallowed
because, pursuant to the March 20 Order, these amounts were awarded
to 	the 	Debtor. 	The 	Court 	disagrees. 	Moreover, 	the 	Trustee’s
contention is inconsistent with her reading of the March 20 Order in
other respects. 	The Court reads the March 20 Order in this context,
as in most the other contexts set forth above, as giving the party
not awarded the asset a claim against the other for half the value
of 	the 	asset 	awarded 	to 	that 	party. 	However, 	the 	Court 	will
disallow these claims because the allowable portion of these claims
has already been allowed in connection with the claim listed on Line
36. 	See section B.3-j.
CONCLUSION
The Trustee’s motion for summary judgment will be granted in
part and denied in part. 	Based on the foregoing legal
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conclusions, before applying the offsets to which the estate is
entitled the Amended Claim appears allowable in the following
amounts:
Claim Amount 	Claim Allowed
Line 4 	$5,000.00 	No amount allowed
Line 6 	258.00 	$ 	258.00
Line 7 	617.00 	617.00
Line 8 	1,193.00 	No amount allowed
Line 10 	371.60 	No amount allowed
Line 12 	2,245.00 	No amount allowed
Line 14 	10.50 	No amount allowed
Line 18 	22.50 	No amount allowed
Line 20 	20.00 	No amount allowed
Line 22 	17.50 	No amount allowed
Line 24 	6,000.00 	No amount allowed
Line 26 	12,924.20 	No amount allowed
Line 28 	6,671.00 	$ 3,335.50
Line 30 	3,200,00 	No amount allowed
Line 32 	1,600.00 	No amount allowed
Line 34 	3,000.00 	$ 1,500.00
Line 36 	6,130.00 	3,065.00
Line 38 	17,569.00 	17,569.00
Line 40 	8,000.00 	8,000.00
Line 42 	12,598.00 	342.00
Line 44 	1,986.24 	No amount allowed
Line 46 	2,009.00 	No amount allowed
Line 48 	$11,677.11 	$11,677.11
Line 50 	17,096.42 	No amount allowed
Line 52 	5,144.77 	982.00
Line 54 	941.00 	No amount allowed
Line 56 	2,124.00 	No amount allowed 	2,124.00
Total: 	$47,345.61
In addition, Welty is entitled to interest at the rate of ten
percent per annum on the amounts allowed, as set forth above, from
the date of the award in the family court order to March 4, 2004.
The Trustee is directed to calculate the amount of this interest.
However, the Court concludes that, as a matter of law, the
bankruptcy estate is entitled to assert two offsets against his
claim. 	The first offset is for the $78,012.50 overpayment made to
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Welty earlier in the case plus interest accruing on this
overpayment at the rate of ten percent per annum from the date of
the overpayment to the date of the continued status conference, as
set forth below. 	The Trustee is directed to calculate this amount
of interest as well.
In addition, as set forth in section B-3-d, the bankruptcy
estate is entitled to an offset against the Amended Claim for
$552.50, representing the expenses of the Residence paid by the
Debtor in excess of the rents collected. 	If, after the
calculation of interest, the amount of the estate’s offsetting
claim exceeds the amount of the portion of the Amended Claim that
the Court has determined to be allowable, the Court will grant the
Trustee’s motion for summary judgment, disallowing Welty’s claim
in its entirety. 	If not, the Court will allow Welty’s claim
against the estate in the amount of any excess.
A status conference on this proceeding is hereby scheduled
for January 18, 2007 at 11:00 a.m. 	The Trustee is directed to
file and serve 	a calculation of the interest to which Welty on
the one hand and the estate on the other are entitled, based on
the principles established in this memorandum, by no later than
December 6, 2006. 	Welty is required to file and serve any
objections to the calculation by no later than December 20, 2006.
The Trustee is directed to file and serve any reply to any such
objection by no later than January 4, 2007.
END OF DOCUMENT
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COURT SERVICE LIST
Reidun Stromsheim
Stromsheim & Associates
201 California St., Ste. 350
San Francisco, CA 94111
Frank A. Welty, III
P.O. Box 277
Dubois, WY 82513
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