Stephen Wright Wallace

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF WYOMING
In re
STEPHEN WRIGHT WALLACE,
)
)
)
)
)
Case No. 	11-20013
Chapter 11
Debtor.
OPINION ON OBJECTION TO CLAIMS NOS. 9, 10, 11. 12. 13, 14, and 15
FILED BY STEPHEN RAIOLA
On June 27, 2012, the court held an evidentiary video conference on the Objection
to Claims Nos. 9, 10, 11, 12, 13, 14, and 15 filed by Stephen Wallace ("Debtor") and the
responses filed by Stephen Raiola ("Claimant"). The Debtor was represented by George
Arnold. The Claimant represented himself. The court heard testimony and received
evidence on each claim separately and at the conclusion of closing arguments, took the
matter under advisement. 	The court having reviewed the record, testimony and evidence
is prepared to rule.
This court has jurisdiction of this matter under 28 U.S.C. §§ 1334 and 157. This
is a core proceeding under 28 U.S.C. § 157 (b)(2)(B). 1 The matter was brought before
the court pursuant to 11 U.S.C. § 1305 and Fed. R. Bankr. P. 3007.
The court notes that the descriptions of the original claims do not correspond to
several of the amended claims. The court determined that it would use the Amended
Claims' descriptions and amounts for identification.
1 Unless otherwise indicated, all future statutory references are to the Bankruptcy Code, Title II of the
United States Code.
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 1 of 13

At the hearing, the court reserved rulings regarding the objections to the
admissions of evidence. Listed below are the objections and the court's ruling:
Page2
1. 	Debtor entered a continuing objection to the court allowing the Claimant to
present evidence and testimony on his behalf as Claimant had not provide
an Exhibit or Witness List pursuant to the court's pre-trial order. 	The court
overrules the objection regarding allowing the Claimant to testify.
Claimant's claims are the basis of this matter. 	The Debtor cannot be
surprised by Claimant's testimony. As for the Claimant's exhibits, the
court finds that it did not receive into evidence any exhibits offered by the
Claimant, therefore, the matter is moot. 2
2. 	Debtor objected to the receipt into evidence of various affidavits submitted
by the Claimant as the Debtor was not provided copies of the affidavits and
was therefore, surprised by the contents. Additionally, the Debtor objected
on the basis that the affidavits were hearsay. 	The court sustains this
objection.
3. 	Claimant objected to the receipt of Debtor's Exhibits 1 and 2. The court
overrules the objection.
4. 	Debtor objected to the admission of e-mails presented by the Claimant
arguing that the e-mails: (1) are hearsay; (2) not identified on a proposed
2 Emphasis added to designate the court's ruling on each objection.
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 2 of 13

exhibit list; (3) not provided to the Debtor prior to the hearing pursuant to
the court's order; and, (4) lack of foundation. 	The court sustains the
objection.
5. 	Claimant objected to the receipt of Debtor's Exhibit 3, page 3 and 18. The
court overrules the objection as the documents of Exhibit 3 are the proofs
of claim filed by the Claimant and the basis of this evidentiary hearing.
Facts/Discussion
The Debtor and Claimant had a personal relationship that spanned a period of
approximately ten years. During the relationship, the parties lived together in the
Debtor's residences. At the end of the relationship, the Debtor had Claimant removed by
the use of state court proceedings. The Debtor filed his Chapter 11 bankruptcy petition
on January 10,2011. The court entered its Order Confirming Amended Plan Dated
October 17, 2011 on December 5, 2011. The court's review of the confirmed plan
reflects that it provides for the payment to Class 6 - General Unsecured Claims at an
estimated distribution percentage of thirteen percent (13%). The Claimant filed his
claims on June 8, 2011 and subsequently amended those claims on Aprill6, 2012.
A properly filed proof of claim constitutes prima facie evidence of the validity and
amount of the claim. 3 Such a claim is deemed allowed unless a party in interest objects. 4
3 Fed. R. Bankr. P. 3001(1).
4 II U.S.C. § 502(a).
Page 3
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 3 of 13

The objecting party has the burden of going forwarded with evidence supporting the
objection. Such evidence must be of a probative force equal to that of the allegations
contained in the proof of claim. However, an objection raising only legal issues is
sufficient. Once the objecting party has reached this threshold, the creditor has the
ultimate burden of persuasion as to the validity and amount of the claim. 5 The validity of
a creditor's claim is determined by state law. The bankruptcy court is required to
determine validity or invalidity of the contract by looking to the state law where the court
determined the contract was made and primarily payable.
Claimant alleges that the parties entered into an oral contract, as the basis for
many of his claims. Whether an oral contract exists is a question of fact to be determined
by the trier of fact. 6 Before a court may order a contract to be specifically performed, the
contract terms must be so certain that the court can require the specific thing agreed upon
to be done. 7 This rule applies to oral contracts. 8 "Where a[ n] .... agreement is merely an
agreement to agree in the future, the court is incapable of ordering enforcement as it
cannot supply the terms of the agreement for the parties. Unless the essential terms of
5 In re Geneva Steel Co., 260 B.R. 517 (IO" Cir. BAP 2001) and In re Harrison, 987 F.2d 677 (10" Cir.
1993).
6 Wilderv. Cody Country Chamber of Commerce, 868 P.2d 211, 218 (Wyo. 1994) as cited in Fowlerv
Fawler, 933 P.2d 502, 504 (Wyo. 1997).
7 Nolandv. Haywood, 23 P.2d 845,846 (1933).
8 Fowler at 504.
Page4
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 4 of 13

such a future agreement are defined with reasonable certainty, there is no contract for the
court to enforce." 9
Amended Claim No.9- Personal Property- furniture and appliances
Claimant filed an amended claim in the amount of$1,100.00 for personal property
consisting of: a living room arm chair, matching ottoman, matching sofa, end table
(small), microwave, kitchenware (sm. appliances), and Ikea desk. The Debtor admitted
during his testimony that the property belonged to the Claimant, but disagreed with the
values attributed to the items. 	The Debtor testified that the furniture was "well worn and
faded." The Claimant admitted that he had agreed the property would be sold with the
house and the proceeds "invested into a new house."
The Claimant filed his claim based upon new values for the property. The Debtor
objected to the claimed values and provided testimony that the furniture was not in new
condition. As the Debtor raised an objection with probative force equal to the allegations
of the claim, the burden of proving the validity and amount of the claim shifted to the
Claimant.
Claimant admitted that he agreed to the sale of the property. The proceeds were
not directed to be paid to him, but invested into a new home for the parties to live. Based
upon his own statement, there was not an agreement that Claimant would receive the
9 Rialto Theater, Inc. v. Commonwealth Theaters, Inc., 714 P.2d 328 (Wyo. 1986) citing Western Airlines,
Inc. v. Lathrop Company, Alaska, 499 P.2d I 013 (1972); Coleman Engineering Company v. North American
Aviation, 65 Cal. 2d 396, 55 Cal. Rptr. I, 420 P.2d 713 (1966); Page & Wirtz Construction Co. v. Van Doran Bri-
Tico Co., Tex.Civ.App., 432 S.W.2d 731 (1968); Witt v. Realist, Inc., 18 Wis.2d 282, 118 N.W.2d 85 (1962) I
Corbin on Contracts §95, P. 397 (1963); and 17 Am.Jur2d Contracts §26, p. 362 (1962.
Page 5
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 5 of 13

proceeds from the sale. 	Claimant did not prove the validity of the claim. Therefore,
Amended Claim No.9 is disallowed.
Amended Claim No. 10- Hot tub
Claimant filed an amended claim in the amount of$12,037.00 which included the
purchase of an outdoor hot tub/spa, the cost of delivery and installation. The Debtor
objected to the claim and testified that he did not agree to the purchase of the hot tub, as
at that time he could not afford one. It was his understanding that the hot tub was a gift.
Debtor testified that he was not billed for the purchase, delivery and installation of
the hot tub and only saw an invoice upon Claimant filing this claim. Additionally, the
Debtor testified that the trailer that was purchased to transport the hot tub was never
titled in his name, nor is it his property; and he, personally, did most of the installation
necessary to install the hot tub.
The court's review of the record reflects, that the Debtor listed a debt to Stephen
Raiola for a "Hot tub" in the amount of$6,000.00 on his Schedule F. 	He further
testified that he included this debt on his schedule, because he "thought it was
appropriate" as the real property, where the hot tub is located, has been surrendered to
the bank. It appears to be disingenuous, for the Debtor to list this debt on his Petition
and Schedule F, and now argue that there is no debt. The Debtor amended his Schedule
F several times, but did not delete Claimant's debt. The court finds that the amount of
the debt up to $6,000.00 is undisputed.
Page 6
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 6 of 13

The balance of the claim includes the cost of delivery and installation. The
Debtor raised a valid objection equal to the allegations of the claim. Therefore, the
burden shifted to the Claimant to prove the validity and amount of the claim. Claimant
failed to provide evidence of a contract between the parties. Debtor testified that he did
not authorize the purchase of the trailer for delivery, nor was the trailer titled to him.
Both parties testified that the labor to install the hot tub was provided by both of them,
although the extent of each's contribution is controverted. Claimant failed to carry his
burden to prove the validity and amount of the balance of the proof of claim. Therefore,
Amended Claim No. 10 is allowed in part, in the amount of$6,000.00 and disallowed in
the amount of$6,037.00.
Amended Claim No. 11 -Landscaping and maintenance services
Claimant filed an amended claim in the amount of $17,700.00 for labor relating to
landscaping and maintenance services that he provided to the Debtor during the period of
May 2008 to August 2008 on two properties owed by the Debtor. 	Claimant testified that
this claim was going to be part of a civil case that Claimant intended to file, prior to the
Debtor filing for bankruptcy. Claimant alleges that the parties agreed that they were
working on the property toward a common goal, their future. This claim request is for
compensation for the Claimant's contributions. The Claimant testified that his services
and the charges were to be applied to "credit joint expenses and equity credit." He
explained that meant that the services that he performed were his contributions to the
household expenses and toward building equity in the property.
Page 7
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 7 of 13

The Debtor testified that there was not any understanding between himself and the
Claimant for compensation for the services rendered or equity participation in the
property. Debtor retained professional services for the landscaping, snow removal and
lawn care. The services performed by the Claimant, included gardening, were for his
own enjoyment. 	The Debtor testified he did not agree to pay for design services, was not
invoiced or provided billing statements for these services until the Claimant filed his
proof of claim. Additionally, the Debtor testified that there was not any agreement for an
equity arrangement. The Debtor owned the homes, and in the end lost a significant
amount of money. There was not any equity.
Amended Claim No. 12- Pet Sitting
Claimant filed a claim in the amount $10,050.00 for services provided to the
Debtor for pet sitting. Claimant testified that it was his responsibility to care for the
parties' dogs while the Debtor was working out-of-town during the period of January
2008 through December 2008. Claimant charged $30.00 per day for 30 days per month
for a total of$900.00 per month for the months of January through November and
$150.00 for December.
The Debtor objected to the liability and amounts of the claim. He testified that in
2008, he worked out of town four to ten shifts (which correlated to four to ten days) per
month, not every day of each month. He stated that he had taken the pets with him on
numerous occasions or provided for their care at a kennel. The Debtor admitted that he
Page 8
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 8 of 13

had paid Claimant in full for pet care on specific occasions, but there was not any
agreement for "blanket compensation" for services in 2008.
Amended Claim No. 13- Property Management & Home Concierge Services
Claimant filed an amended claim in the amount of $22,350.00 for property
management and home concierge services. The services included snow removal, meal
preparation, laundry and housekeeping duties. The Claimant did not attach any
supporting documents to the amended claim. The Claimant testified that the claim is
based upon the parties' mutual agreement to work towards a future. The claim was based
upon pursuing compensation for his efforts during the parties' ten-year relationship.
The Debtor testified that he did not employ the Claimant for the services rendered.
He had hired services for housekeeping and snow removal. There was not an agreement
between the parties for compensation for the Claimant.
Claimant filed Amended Claim Nos. 11, 12, and 13 for landscaping and
maintenance services, pet sitting, property management and home concierge services,
respectively. The claimant testified that these services were to be part of a civil action
that he intended to file prior to the Debtor filing for bankruptcy protection. Claimant
admitted that he "had to create the documents" to file claims. He testified that his
services were his contributions toward the household expenses and building equity in the
property in furtherance of the parties' common goal of a future together.
In the Wyoming case, Fowler v. Fowler, the court found that the only evidence
that an oral contract may have existed came from one party. In the case before this court,
Page9
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 9 of 13

the allegation that there was an oral contract between the parties is asserted by the
Claimant. As in the Fowler case, neither the Claimant's testimony or any of the evidence
defined the terms of the contract. His statements regarding the terms of the agreement
were that the Debtor and Claimant were "working on the property toward a common
goal, their future." Claimant's contributions were for "credit toward joint expenses and
equity credit."
Based upon the evidence and testimony the court is not capable of enforcing a
nebulous oral contract which terms may or may not have been agreed upon between the
parties. The essential terms of any future agreement between the Claimant and Debtor
were not defined with the reasonable certainty necessary to allow the court to find that
there is a contract to enforce. Therefore, Amended Claim Nos. 11, 12 and 13 are
disallowed.
Amended Claim No. 14- Personal Propertv- (rocks)
Claimant filed an amended claim in the amount of $2,500.00 for personal property
described as a rock and mineral collection. The Debtor further testified that a plant was
included in the claim. Claimant testified that after he was removed from the Debtor's
home, he did not have access to get this rock collection.
The Debtor testified that the collection consisted of eight to ten stones picked up
on hiking trips and six to eight river rocks. The Debtor does not have possession of the
rocks as they were left by the front porch of the Bronc Road home which was
surrendered. The Debtor testified that he researched the value of the rocks with a park
Page 10
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 10 of 13

ranger. The rocks were without any relative value and he could not afford to ship the
rocks to Claimant in California. The rocks were left on the real property when he
vacated the premises. Debtor testified that he took the plant to the composting facility as
he could not ship it either.
The Debtor objected to the alleged value of the rocks by providing testimony of
the type of rock and the value as determined by his discussion with Park personnel. As
Debtor's objection and evidence was of a probative value equal to the Claimant's
allegation, the burden of proving the value of the rocks shifted to the Debtor. Debtor
failed to carry his burden as he did not present any evidence or testimony regarding the
rock's values. Therefore the claim for the rocks is disallowed. The Debtor also failed to
provide the court any value for the plant. Therefore the claim for the plant also fails.
The court considered a resolution for the return of the rocks to the Claimant
during the hearing. Debtor's counsel stated he was willing to contact the bank to
determine if the Claimant could have access to the real property to retrieve the rocks.
Other than the voluntary efforts of Debtor's counsel to contact the bank and notifY
Claimant regarding the availability of the rock collection for Claimant to retrieve,
Amended Claim No. 14 is disallowed.
Amended Claim No. 15- Emergency relocation expenses following eviction
Claimant filed an amended proof of claim in the amount of $24,630.00 for
"Emergency relocation expenses following illegal eviction by S. Wallace." The expenses
included, but are not limited to: housing (including the cost of a hotel and rent); phone,
Page 11
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 11 of 13

internet and cable service; fuel; groceries; personal items; health club membership;
doctor fees and medication; birthday expenses; and, attorney fees. 	Claimant testified that
he returned to California for a three-day weekend. During the time he was there, he was
served documents and told that he could not return to Debtor's property.
The Debtor testified that in November 2008, he determined that he did not want
the Claimant living with him any longer. The Debtor contacted the Teton County
Sheriff's Department as he did not want any altercations at the home. He was advised
and elected to get a criminal trespass order and have the Claimant served in California in
December 2008. At that time, the Debtor was living at Bronco Road, Wilson, Wyoming.
He was the sole owner of the property. The Claimant did not have a lease. 	The Debtor
testified that he did not agree to pay the claimed expenses.
The court finds that based upon the testimony and evidence, Debtor used lawful
eviction proceedings under Wyoming law. The Claimant did not present law or facts for
the court to rely upon to support the validity of the claim. Therefore, Amended Claim
No. 15 is disallowed.
Conclusion
In conclusion, the court finds Amended Claim Nos. 9, 11, 12, 13, 14 and 15 are
disallowed. Amended Claim No. 10 is allowed in the amount of$6,000.00 and
disallowed for the balance of the claim the amount of$6,037.00.
Page 12
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 12 of 13

This opinion constitutes the Court's findings of fact and conclusions oflaw. A
separate order shall be entered pursuant to Fed. R. Bankr. P. 9021.
DATEDthis 	/cP 	dayofJuly,2012
Service to:
Page 13
George Arnold
Stephen Raiola
By the Court
.MCNIFF
Case 11-20013 Doc 277 Filed 07/16/12 Entered 07/16/12 16:21:06 Desc Main
Document Page 13 of 13