King Louie Mining, LLC v. Comu (In re Comu)
King Louie Mining, LLC v. Comu (In re Comu)
Opinion of the Court
MEMORANDUM OPINION AND ORDER DETERMINING THAT PROPERTY AT 5301 PALADIUM DRIVE, DALLAS, TEXAS HAS BEEN ABANDONED AS DEBTOR’S AND NON-DEBTOR SPOUSE’S HOMESTEAD AND GRANTING REQUEST OF CHAPTER 7 TRUSTEE AND CERTAIN JUDGMENT CREDITORS FOR TURNOVER OF SUCH PROPERTY, IN AID OF COLLECTION OF MONEY JUDGMENT
NOW BEFORE THIS COURT is a request for relief that has been jointly sought by the Chapter 7 Trustee and certain judgment creditors in a post-judgment context in the above-referenced adversary proceeding (the “Adversary Proceeding”). The request pertains to an allegedly abandoned Texas homestead.
Specifically, as explained more fully below, both the Chapter 7 Trustee and the aforementioned judgment creditors have earlier (on July 8, 2014) obtained a postpe-tition money judgment against Cengiz J. Cornu, a/k/a CJ Cornu (the “Debtor” or “Mr. Cornu”) and related entities in this Adversary Proceeding after a five-day bench trial [DE ## 147 & 148] (hereinafter, the “Adversary Judgment”).
Just one isolated portion of the multifarious relief sought in the Post-Judgment Turnover Application is now before the court: a request that the court determine that certain unencumbered property
For the reasons set forth below, the court determines that the Debtor and non-debtor spouse have, indeed, abandoned the Paladium Property as a homestead, and the Chapter 7 Trustee and judgment creditors are entitled to and will be awarded turnover relief as to such property, as requested, in aid of collection on their Adversary Judgment. The court sets forth below its findings of fact and conclusions of law in support of this order.
Bankruptcy subject matter jurisdiction exists in this matter, pursuant to 28 U.S.C. § 1384(b). This bankruptcy court has authority to exercise bankruptcy subject matter jurisdiction pursuant to 28 U.S.C. § 157(a) & (c) and the Standing Order of Reference of Bankruptcy Cases and Proceedings (Misc. Rule No. 33), for the Northern District of Texas, dated August 3,1984. This is a core proceeding in which this court has statutory authority to issue final orders, pursuant to at least 28 U.S.C. § 157(b)(2)(A), (E), and (0).
II. FINDINGS OF FACT
A. The State Court Judgment and Commencement of Mr. Cornu’s Bankruptcy Case
1. On April 30, 2009, in a case styled Humitech Int’l Group, Inc., et al. v. Comu, et al, Index No. 06-602567 (New York 2009) (the “State Court Action”), three parties known as King Louie Mining, LLC, King Louie Enterprises, LLC and Ronald Katz (the “Katz Parties”) recovered a pre-petition judgment against Mr. Comu in the following amounts: $2,003,945.84 to King Louie Mining, LLC; $199,811.10 to King Louie Enterprises, LLC; and $75,508.22 to Ronald Katz; for a total amount of $2,279,265.16, plus post-judgment interest, until paid (the “State Court Judgment”).
2. Soon thereafter, on December 31, 2009, Mr. Comu filed the above-referenced chapter 7 bankruptcy case (the “Bankruptcy Case”). His wife, Phyllis Comu (“Mrs. Comu”), did not file for bankruptcy relief. Diane Reed was appointed as the chapter 7 trustee (the “Chapter 7 Trustee” or the “Trustee”). The State Court Judgment represented 95% of the filed claims in Mr. Cornu’s Bankruptcy Case.
3. On January 15, 2010, Mr. Comu filed his bankruptcy schedules, which reflected that he owned and claimed as his exempt homestead the Paladium Property.
4. Mr. Comu received his discharge on April 14, 2010. As explained further below, Mr. Comu’s discharge was later revoked during his Bankruptcy Case.
B. The Incorporation of Continental Investments Holding Company Limited and Continental Partnership, Inc.
5. Shortly before his discharge was initially entered (on March 18, 2010 — perhaps believing his fresh start was imminent), Mr. Comu incorporated a new entity known as Continental Investments Holding Company Limited, a United Kingdom private limited company (“Continental Holding”), utilizing nominee services of an entity known as Mansion House Capital (“Mansion House”).
6.At Mr. Comu’s instruction, Boureau signed a letter dated April 19, 2010, addressed to an individual named Cigdem Beykoylu at Turkish Bank in London, United Kingdom (“Turkish Bank UK”), authorizing Cem Comu, Mr. Comu’s brother who resides in Istanbul, Turkey,
8. Mr. Comu has testified that Continental Partnership is owned and controlled by his brother, Cem Comu. However, Mr. Comu’s testimony is not credible and is contradicted by documentary evidence. For example, Mr. Comu’s own correspondence confirms that Continental Partnership and its accounts were intended to be under Mr. Comu’s, not Cem Comu’s ownership and control: “[I]n the matter of Continental Partnership Inc. please note that this entity will be strictly under my ownership and control and therefore no further need from my brother.... As such I would like to activate some banking for this and transfer funds.”
9.All existing evidence suggests that Mr. Comu’s brother, Cem Comu, was only involved with Continental Partnership to
C. Commencement of the Section 727 Adversary Proceeding and the Purchase of the Oaks North Property (“Home # 2”)
10.A little more than eight months after the Bankruptcy Case was filed, on September 3, 2010, the Katz Parties commenced the Adversary Proceeding against Mr. Comu seeking to revoke Mr. Comu’s earlier-granted discharge, pursuant to section 727(d) of the Bankruptcy Code, primarily arguing that Mr. Comu had concealed certain assets, income, and failed to disclose various business transactions as required in his Bankruptcy Case, and the Katz Parties did not know of such fraud, until after the granting of the discharge.
11. Approximately two weeks after the Adversary Proceeding was commenced, on September 18, 2010, Continental Partnership entered into a Real Estate Contract to acquire a residence at 14873 Oaks North Place, Dallas, Texas 75254 (“Home # 2”) for $397,000 in cash.
12. The totality of the credible evidence demonstrates clearly and conclusively — in fact, beyond any shadow of a doubt — that the purchase of Home # 2 by Continental Partners was a sham transaction, designed to confiscate and hide Mr. Comu’s beneficial and de facto interest in Home # 2.
13. Besides the evidence that it was Mr. Comu (not his brother) who directed the creation and actions of Continental Holding and Continental Partnership just before the purchase by Continental Partnership of Home #2, the totality of the evidence is as follows. First, the Real Estate Contract provided that notices on behalf of the buyer should be sent to Mr. Comu.
14. Home #2 is approximately 3,000 square feet with three bedrooms and three bathrooms.
15. When Mr. Comu was asked by the Trustee if he had any personal involvement with Continental Partnership’s purchase of Home # 2, Mr. Comu testified in a less-than-candid fashion, as follows:
Q. Mr. Comu, did you have any involvement in the purchase of the Oaks North residence by CPI?
A. Could you define involvement, because I did tell my brother that there was a house in Dallas that I thought he should look at.
Q. When I say involvement, I mean did you have discussions with the seller concerning the purchase of the Oaks North property by CPI?
A. There was a real estate agent involved that represented my brother. I may have had a conversation or something. I don’t recall. I am sorry.27
16. When Mr. Comu was additionally asked by the Trustee if his brother actually ever came to Dallas to look at Home #2, Mr. Comu testified that he did, but when further asked if Mr. Comu went to look at the property with his brother, he testified, “I may have. I am not a hundred percent certain.”
17. In any event, shortly after Home #2 was purchased, Mr. and Mrs. Comu moved out of the Paladium Property and into Home #2. Mr. Comu testified that they vacated the Paladium Property so he could generate some rental income from it and hopefully improve his current financial circumstances, and his brother wanted to help Mr. Comu in his time of financial distress.
18. Regarding Home # 2, Mr. and Mrs. Comu purportedly entered into a five-year lease agreement with landlord Continental Partnership (the British Virgin Islands entity that Mr. Comu had formed just a few months earlier), which lease commenced November 1, 2010 and was to expire November 1, 2015 (the “Home # 2 Lease”).
19. The Home # 2 Lease requires Mr. Comu to pay $1,500 per month for rent to Continental Partnership.
20. Since moving into Home #2, Mr. Comu and his wife have initiated some remodeling and minor handyman work at the property, but both were somewhat evasive in their testimony as to what — admitting to having some outdoor spotlights installed and having the attic renovated into a closet — all of which (according to Mr. Cornu’s testimony) totaled around $5,000.
D. The Leasing of the Paladium Property
21. After moving out of the Paladium Property, Mr. Comu began leasing the Pa-ladium Property to two individuals named Dan and Korn Lonergan.
22. After the lease with the Lonergans was terminated or expired, Mr. Comu then leased the Paladium Property to Mervyn Price (“Mr.Price”) and his wife Marianne (“Mrs. Price” and, collectively with Mr. Price, the “Prices”). Mr. Price is the Chief Executive Officer of Regus Advisors, one of several companies owned and chaired by Mr. Comu. Mr. Price was hired by Mr. Comu in mid-2011.
23. The rent associated with the Pala-dium Property Lease was $2,500 per month to be paid — not to the Comus, who own the Paladium Property — but to Sunset Pacific.
24. The Paladium Property Lease provided that Mr. Comu was required to pay for the real estate taxes, homeowner dues, and maintenance on the Paladium Property, including the repair and maintenance of the heating and air conditioning systems.
E. The Adversary Proceeding Judgment
25. As earlier mentioned, it was in March 2014, that this court held a five-day trial in the Adversary Proceeding, and on July 8, 2014, ultimately entered the Adversary Judgment.
F. Mr. Comu’s Attempts To Obtain a Home Equity Loan on the Paladi-um Property
26.In August and September of 2014 (soon after the Adversary Judgment was entered), Mr. Comu made ultimately unsuccessful attempts to obtain a home equity loan on the Paladium Property.
Q. So on September 16, Mr. Comu is contacting you, because he is in the process of obtaining an appraisal for a home equity loan, correct?
A. Correct.
Q. And your response to him was that you were considering making an offer to purchase the Paladium yourself; is that right?
A. Correct.
Q. Is this the first time you informed Mr. Comu your interest in purchasing the Paladium?
A. No.
*382 Q. So you had earlier discussions with him about your interest in purchasing this property?
A. Yes.
Q. In those discussions, what did Mr. Comu say to you, as it relates to whether or not the Paladium was available for sale?
A. He told me it was available for sale. Q. It was?
A. It was, yes.52
This is rather inconsistent with Mr. Cornu’s testimony. Specifically, Mr. Comu testified that while Mr. Price expressed interest in buying the Paladium Property, Mr. Comu had repeatedly told Mr. Price that he was not interested in selling the property.
27. Returning to' the topic of Mr. Cornu’s efforts to obtain a home equity loan on the Paladium Property in mid-2014, in correspondence in October 2014 with an individual named Leann Ly (“Ms. Ly”), one of the home loan specialists with whom Mr. Comu was working, Ms. Ly asked Mr. Comu about several judgment liens against the Paladium Property that had been discovered by a title company. These apparently were relating to the pre-petition judgments that the Katz Parties and possibly others had obtained before the Bankruptcy Case. Ms. Ly indicated that, if the judgments were valid, she would be unable to proceed with a home equity loan on the Paladium Property.
Dear LeeAnne-
Please see attached Credit Report of August 23, 2014. The Judgment you referenced are dated June 23, 2009. As you are aware, I filed a Chapter 7 on December 31, 2009. I received a discharge on April' 4, 2010 (attached). If you look at page FOUR of my Credit Report-it shows the Judgements are PAID. Please Update your files and advise accordingly.57
As noted above, this email was many months after Mr. Cornu’s discharge had been revoked by the bankruptcy court and the Adversary Judgment had been entered. In other words, Mr. Comu was not candid with Ms. Ly. When asked about this at the hearing on this matter, Mr. Comu testified rather vaguely and incredulously, stating that he didn’t “recall” if he informed Ms. Ly that his discharge had, in fact been revoked, and that he did not know whether the credit report he sent to
28. Several months later on March 27, 2015, Mr. Comu sent Mr. Price a copy of the appraisal he had obtained on the Pala-dium Property, which appraised the Pala-dium Property at $895,000.
29. According to Mr. Price’s testimony, which seemed wholly credible, Mr. Comu always indicated a desire to sell the Paladi-um Property to Mr. Price
Q. Has Mr. Comu ever indicated to you that he had no interest in selling the house to you because he intended to move back into Paladium?
A. No, not until probably yesterday when he came into my office and made that statement.
Q. Tell me about what he said.
A. He said it was his homestead, and he intends to move back in when we move out. We will come to an agreement when we move out, something to that effect. I don’t recall it exactly, but it was different to other conversations, and it occurred yesterday. •
Q. And that’s the first time you recall him ever saying that?
A. Yes.64
Upon learning that Mr. Comu was no longer willing to sell him the Paladium Property, the Prices have started looking for another home.
III. CONCLUSIONS OF LAW
As stated above, the issue before this court does not involve section 522 of the
A. Claiming a Homestead Under Texas Law
It is well accepted that Texas law provides extremely broad protection for homesteads. A homestead is a legal interest created through the Texas Constitution and the Texas Property Code that provides prophylactic protection from seizure and encumbrances thereon in all but a narrow range of circumstances (including debts incurred to purchase the homestead, taxes, and debts owed for work or services performed on the homestead).
Here, the Comus have claimed the Paladium Property as their exempt homestead and, as the claimants, the Comus have the initial burden to establish the character of the Paladium Property as their homestead
The initial burden to establish the homestead character of property under
B. Abandoning a Homestead Under Texas Law
Under Texas law, property that has been designated as homestead will not lose that character unless abandonment, death, or alienation occurs.
Several courts have held that the best evidence of an abandonment of a residential homestead is that a new and permanent home has been acquired and occupied:
In Hinton, Uvalde Paving Company had sued Mrs. Eva Hinton (joining pro forma with W.R. Hinton, her present husband), who was administratrix of the estate of her late husband, D.H. Mitchell, to recover the balance due on two street paving certificates and to establish liens on certain property on Catherine Street.
Here, the evidence before the court regarding the Comus use of the Paladium Property and Home #2 demonstrates the following: (1) the Comus resided at the Paladium Property for several years before and on the bankruptcy petition date and claimed it as their homestead; (2) the Comus discontinued using the Paladium Property as a residence during the bankruptcy case — in fact, soon after the Chapter 7 Trustee’s and judgment creditors’ Adversary Proceeding was filed (in the Fall of 2010) — and began renting it for income, directing the rental payments to be made to an entity that this court has earlier determined to be the alter ego of Mr. Cornu; (3) the Comus have continuously, for the past five years, while renting out the Paladium Property, resided in an
Accordingly, it is
ORDERED that Mr. Comu shall turnover to the Trustee and the Katz Parties the Paladium Property, with all documents and records related to the Paladium Property, including title thereto, within ten (10) calendar days so that the Paladium Prop
. As further explained herein, the aforementioned judgment creditors also have a prepetition money judgment against the Debtor issued by a New York state court.
. More specifically, these cases dealt with the application of the Texas Proceeds Rule to a claimed homestead exemption. See Tex. Prop. Ann. § 41.001(c) (West 2015).
. See DE # 11 in the Bankruptcy Case. Note that references to "DE #_in the Bankruptcy Case” throughout this Opinion refer to the docket entry number at which a pleading appears in the docket maintained by the Bankruptcy Clerk in the above-referenced bankruptcy case. Further note that references to "DE #_in the AP” herein refer to the docket entry number at which a pleading appears in the docket maintained by the Bankruptcy Clerk in the Adversary Proceeding referenced above.
. See Tex. Fam.Code Ann. § 3.001 (West 2015).
. ee Trustee x * ^ * •
. See Transcript from hearing held 09/23/2015 regarding Post-Judgment Application [DE #261 in the AP] (the "9/23/15 Transcript”), pg. 44.
. See DE #147 in AP (Findings of Fact 349 & 395). See also AP Trial-KLM Ex. 371 (pg. 1) and AP Trial-Trustee Ex. 24 (pg. 1). Note that references throughout this Mem
. See DE #147 in AP (Findings of Fact # 338). See also AP Trial-KLM Ex. 178 at pg. 4623 (March 18, 2010 email to Mr. Comu confirming incorporation of "your company” Continental Holdings); id. at pg. 4625 (certification of Continental Holdings' incorporation). After receiving the incorporation information from Mansion House, Mr. Comu responded, "You the best!! Pis send invoice and Bank Wire Info. Many thanks again-looking forward to the many deals in front of us!!” AP Trial-KLM Ex. 211 at pg. 17647.
. See .DE # 147 in AP (Findings of Fact # 338); see also AP Trial-KLM Ex. 178 at pg. 4623_2.
.See 9/23/15 Transcript, pg. 14.
. See DE #147 in AP (Findings of Fact # 338); AP Trial-KLM Ex. 214 at pgs. 18799-18800 (Mr. Comu forwarded a form letter to Boureau for her opening of a Continental Holding's Turkish Bank Account); AP Trial-KLM Ex. 180 at pgs. 6994-6995 (the form letter after having been signed by Boureau was returned to Mr. Comu via Mansion House, with the notation "Happy hunting”); AP Trial-KLM Ex. 215 at pgs. 18829-18830 (Mr. Comu next forwarded the Boureau-signed letter to his brother Cem to facilitate opening the Continental Holding's Turkish Bank Account).
. See DE # 147 in AP (Findings of Fact #338); KLM Ex. 217 (May 22, 2010 email from Mr. Comu to Boureau, thanking her for her "assistance in opening a new Bank Account for Continental,” and informing her that Turkish Bank UK needed "to confirm your instruction and grant the authorization”).
. See DE # 147 in AP (Findings of Fact #342). On June 18, 2010, Newhaven informed Mr. Comu that "names beginning with Continental Group, Holdings Investment” (to mirror Mr. Cornu's newly created UK entity, Continental Holdings) were unavailable, and proposed the name Continental Partnership Inc. as an alternative. AP Trial-KLM Ex. 206 at pg. 15343. Mr. Comu approved Continental Partnership as the corporate name and instructed Newhaven to register the entity. AP Trial-KLM Ex. 206 at pg. 15343. Newhaven incorporated Continental Partnership, at Mr. Comu’s direction on June 18, 2010. AP Trial-KLM Ex. 204 at pg. 14676 (certificate of incorporation); id. at pg. 14676-2-23 (Memorandum of Understanding and Articles of Incorporation for Continental Partnership). Mr. Comu paid Newhaven £750 to set up Continental Partnership. AP Trial-KLM Ex. 272; see also AP Trial-KLM Ex. 206 atpg. 15341.
. See DE # 147 in AP (Findings of Fact # 343). See also AP Trial-KLM Ex. 202 at pg. 14152.
. See DE # 147 in AP (Findings of Fact #343). On August 16, 2010, a Newhaven representative forwarded to Mr. Comu certain due diligence documents that Newhaven required to set up a bank account for Continental Partnership at HSBC Bank and asked Mr. Comu to confirm the currencies to be held. AP Trial-KLM Ex. 203 at pg. 14584 (with HSBC Bank's due diligence form attached). Mr. Comu responded on August 17, 2010 that Continental Partnership's bank account would "primarily be USD,” and inquired about getting copies of incorporation documentation so that he could operate the Continental Partnership’s bank account personally. AP Trial-KLM Ex. 204 at pg. 14675. Mr. Comu inquired whether he could conduct Continental Partnership's banking individually, "or must everything go through” Newha-ven like [another entity he had named WPA], AP Trial-KLM Ex. 202 at pg. 14152. Reuben Anstock confirmed that Mr. Comu "will have to run everything through us [z.e., Newhaven] as per WPA,” and referred Mr. Cornu's banking question to "CJ” (i.e., Charlotte Jacob of Newhaven). AP Trial-KLM Ex. 202 at pgs. 14151-14152. On August 24, 2010, Newha-ven informed Mr. Comu that it was "not possible for [Newhaven] to grant control over the bank account unless we are the nominees of the company,” and that if Mr. Comu only needed the entity, and not a bank account, Newhaven "will need to resign as nominees.” AP Trial-KLM Ex. 206 at pg. 15341. AP Trial-KLM Ex. 275 at pg. 50764 ("In regards to CPI [t.e., Continental Partnership] — I would like to open & operate a Bank Acct and look to make investments of Real Estate and/or Stocks. As such could you please provide me the necessary docs and or resolutions that would allow me to have such authority?”)-
.In June of 2010, per Mr. Cornu's instructions, Newhaven asked Cem Comu to execute the necessary documents by which Newhaven resigned as Continental Partnership’s sole director, and transferred one (1) share of Continental Partnership to Cem Comu so he could vote as Continental Partnership's director. AP Trial-KLM Ex. 266 at pgs. 43349-43350 (“CJ has asked me to contact you direct, regarding the above.''); AP Trial-KLM Ex. 267 at pgs. 43444, 43445. On September 16, 2010, per Mr. Comu’s instructions, Newhaven forwarded the necessary documents for Cem Comu to temporarily assume the role of Director for Continental Partnership, which Cem Comu signed and returned. AP Trial-KLM Ex. 210 at pgs. 16771, 16774-16775. Cem Comu was appointed as a Continental Partnership director at Mr. Cornu's request, and after transferring its Continental Partnership share to Cem Comu, Newhaven resigned as Continental Partnership director on September 29, 2010. AP Trial-KLM Ex. 132.
. See DE # 20 in the AP.
. See DE # 53 in the AP.
. AP Trial — KLM Ex. 130.
. See Trustee Exhibit 3.
. Id. at pg. 000245.
. Id. at pg. 000246.
. On September 15, 2010, Mr. Comu approved the $397,000 cash offer for the Oaks North Residence. KLM Ex. 279 (“Great Job on the House Negotiation. Lets proceed— with the offer of $397,000.”).
. AP Trial-KLM Ex. 133 at pgs. 000181, 000184, 000188, 000191; AP Trial-KLM Ex. 131 at pgs. 000052-000053.
. See 9/23/15 Transcript, pg. 12.
. See Transcript for Hearing Held 10/19/2015, DE #266 in the AP (the "10/19/15 Transcript”), pg. 75.
. See 9/23/15 Transcript, pg. 13.
. Id. atpg. 25.
. See footnotes 20-24,- supra.
. See 9/23/15 Transcript, pg. 16.
. See Trustee Exhibit 4.
. Id. at ¶ 3.
. See 9/23/15 Transcript, pg. 26.
. See Trustee Exhibit 4.
. See 9/23/15 Transcript, pgs. 26-27.
. Id. at pgs. 16 & 41-42; 10/19/15 Transcript, pgs. 41-43 & 80.
. See 9/23/15 Transcript, pg. 17.
. Id. at pgs. 16 & 37.
. Mr. Price testified that he, not Mr. Comu, specifically requested that the lease be for five years. Id. at pg. 55.
. See Trustee Exhibit 2.
. See 9/23/15 Transcript, pgs. 19-20.
. See Trustee Exhibit 2.
. See DE # 147 in AP (Findings of Fact # 397).
. See 9/23/15 Transcript, pg. 21.
. See Trustee Exhibit 2 ¶¶ 11, 17 & 18; 9/23/15 Transcript, pgs. 22 & 46.
. Id. at 22 & 57.
. See DE ## 148 & 219 in the AP.
. Id.
. See 9/23/15 Transcript, pgs. 28-29 & Trustee Exhibits 10-11 & 13-14.
. See Trustee Exhibit 11.
. Id.
. See 9/23/15 Transcript, pg. 60.
. Id. at pgs. 38-40.
. Id. at 60.
.Id. at 68-70.
. See Trustee Exhibit 14.
. Id.
. See 9/23/15 Transcript, pgs. 30-31.
. See Trustee Exhibit 13.
. See 9/23/15 Transcript, pg. 64.
. Id.
. Id. The court would also note that there appears to have been a conversation between Mrs. Comu and Mrs. Price regarding the Co-mus' desire to sell the Paladium Property to the Prices at around the very same time that Mr. Comu sent Mr. Price the appraisal (end of March 2015). Specifically, Mrs. Comu and Mrs. Price spoke at a social gathering and Mrs. Comu asked if Mrs. Price was still interested in purchasing the Paladium Property. Mrs. Price credibly testified that she believed that she and her husband were no longer interested in purchasing the Paladium Property and decided to avoid responding to Mrs. Comu’s question. See 10/19/15 Transcript, pgs. 8-10.
. There was even evidence during the hearing on this matter indicating that Mr. Comu and Mr. Price had once emailed about the possibility, of Mr. Comu gifting the Paladium Property to Mr. Price as compensation, if a certain business transaction they were working on was successful. See 9/23/15 Transcript, pg. 34.
. See 9/23/15 Transcript, pgs. 67-68 (emphasis added).
. Id. at 69.
. See generally In re D’Avila, 498 B.R. 150, 153 (Bankr.W.D.Tex. 2013) (J. Davis), Cage v. Smith (In re Smith), 514 B.R. 838, 850 (Bankr.S.D.Tex. 2014) (J. Bohm), and Lowe v. DeBerry (In re DeBerry), Adv. No. 15-05054, 2015 WL 6528024, at *1 (Bank.W.D.Tex. Oct. 28, 2015) (J. Gargotta).
. See Tex. Const, art. XVI § 50; Tex. Property Code Ann. § 41.001 (West. 2015); Heggen v. Pemelton, 836 S.W.2d 145, 148 (Tex. 1992).
. Tex. Prop. Code Ann. § 41.001, .002 (West 2015).
. Inwood N. Homeowners’ Ass’n v. Harris, 736 S.W.2d 632, 634-35 (Tex. 1987).
. The court reiterates once again that this current dispute does not involve section 522 of the Bankruptcy Code, or whether Mr. Comu had a valid homestead exemption on the Paladium Property at the outset of his bankruptcy case — where Bankruptcy Rule 4003(c) would govern and provides that “the objecting party has the burden of proving that the exemptions are not properly claimed.”
. Bradley v. Pac. S.W. Bank, FSB (In re Bradley), 960 F.2d 502, 507 (5th Cir. 1992), cert, denied, Commonwealth Land Title Ins. Co. v. Bradley, 507 U.S. 971, 113 S.Ct. 1412, 122 L.Ed.2d 783 (1993) (citing Sims v. Beeson, 545 S.W.2d 262, 263 (Tex.Civ.App.—Tyler 1976, writ ref'd n.r.e.)).
. In re Mitchell, 132 B.R. 553, 558 (Bankr.W.D.Tex. 1991) (citing Greenawalt v. Cunningham, 107 S.W.2d 1099 (Tex.Civ.App. 1937)).
. Bradley, 960 F.2d at 507.
. PaineWebber Inc. v. Murray, 260 B.R. 815, 822-823 (E.D.Tex. 2001) (citing Youngblood v. Youngblood, 124 Tex. 184, 76 S.W.2d 759, 760-61 (1934)).
. In re Schott, 449 B.R. 697, 703 (Bankr.W.D.Tex. 2011) (citing In re Leonard, 194 B.R. 807, 809-10 (Bankr.N.D.Tex. 1996)) (emphasis added).
. Moreover, the court notes that a claimant's homestead designation is also considered pri-ma facie evidence of what constitutes a family homestead. See Perry v. Dearing (In re Perry), 345 F.3d 303, 311 (5th Cir. 2003).
. Thaw v. Schachar (In re Thaw), 620 Fed.Appx. 304, 309-10 (5th Cir. 2015) (unpublished) (citing Duran v. Henderson, 71 S.W.3d 833, 842 (Tex.App.—Texarkana 2002, pet. denied)); see also Majeski v. Estate of Majeski, 163 S.W.3d 102, 107 (Tex.App.—Austin 2005, pet. denied); Wilcox v. Marriott, 103 S.W.3d 469, 472 (Tex.App.—San Antonio 2003, pet. denied) (citing Garrard v. Henderson, 209 S.W.2d 225, 229 (Tex.Civ.App.—Dallas 1948, no writ)).
. Sullivan v. Barnett, 471 S.W.2d 39, 43 (Tex. 1971).
. Estate of Montague v. Nat’l Loan Investors, L.P., 70 S.W.3d 242, 248 (Tex.App.—San Antonio 2001 pet. denied) (citing Womack v. Redden, 846 S.W.2d 5, 7 (Tex.Civ.App.—Texarkana 1992, writ denied) (per curiam)); see also Hudgins v. Thompson, 109 Tex. 433, 211 S.W. 586, 587-88 (1919).
. Thomas v. Graham Mortg. Corp., 408 S.W.3d 581, 589 (Tex.App.—Austin 2013) (citing Rancho Oil Co. v. Powell, 142 Tex. 63, 68-69, 175 S.W.2d 960 (1943)); see also Tex. Prop.Code Ann. § 41.003 (West 2015) (“Temporary renting of a homestead does not change its homestead character if the homestead claimant has not acquired another homestead.”)).
. Burkhardt v. Lieberman, 138 Tex. 409, 159 S.W.2d 847, 852 (1942) (quoting Gouhenant v. Cockrell, 20 Tex. 96, 98 (Tex. 1857)).
. Corny v. Prot, 85 F.3d 244, 254 (5th Cir. 1996) (citing Panhandle Const. Co. v. Wiseman, 110 S.W.2d 615, 617 (Tex.Civ.App.—Amarillo 1937, writ dism'd)). By way of example, this could include the acquisition of another home, removal of the family from one dwelling to another, its occupancy and use as a homestead, and an absence of acts evidencing an intention to return to the former home. Kendall Builders, Inc. v. Chesson, 149 S.W.3d 796, 809 (Tex.App.—Austin, 2004, pet.denied) (citing Hinton v. Uvalde Paving Co., 77 S.W.2d 733, 736 (Tex. Civ.App.—Dallas 1934, writ ref’d)).
. See Silvers v. Welch, 127 Tex. 58, 91 S.W.2d 686, 687-88 (1936).
. See, e.g., id.; see also Carstens v. Landrum, 17 S.W.2d 803, 804-05 (Tex. 1929).
. Hinton v. Uvalde Paving Co., 77 S.W.2d 733, 734 (Tex.Civ.App.—1934, writ ref'd).
. Id.
. Id.
. Id. at 735.
. The Court of Civil Appeals also noted that "if, however, it be assumed that they did not intend to abandon the Catherine street property as a homestead, the continuity of this intention was certainly broken when they mortgaged the property to secure a loan of $1000, for it will not be assumed that they would be parties to the void, illegal, and futile act of mortgaging their homestead.” Id. at 736.
.Id. at 736.
. The Comus have argued that this court should give deference to the Comus' subjective intent to claim the Paladium Property as their homestead. However, subjective intent only becomes important in a “dual residence scenario” when there is an ambiguity regarding which of two properties owned by a claimant is being utilized as claimant’s homestead. See In re Tinsley, No. 09-36036, 2010 WL 4823208, at *6-8 (Bankr.N.D.Tex. Nov. 16, 2010). The court does not believe there to be an ambiguity with regard to which residence is being utilized as the Comus' homestead, as they are residing only at Home # 2, not the Paladium Property. Id.
. The court acknowledges the existence of both-article 16, § 50(b) of the Texas Constitution, which provides that “an owner or claimant of the property claimed as homestead may not sell or abandon the homestead without the consent of each owner and the spouse of each owner, given in such manner as may be prescribed by law,” and section 41.004 of the Texas Property Code, which provides that "if a homestead claimant is married, a homestead cannot be abandoned without the consent of the claimant’s spouse.” While Mrs. Comu has argued that she has not consented to the abandonment of the homestead exemption in the Paladium Property under both of these provisions, the court believes that there was no credible evidence showing a lack of consent. By way of example, there was no credible evidence that Mrs. Comu continued to reside at the Paladium Property, even after the purchase of Home # 2, or that she perhaps told Mr. Comu that she did not want to leave the Paladium Property and move into Home # 2. See, e.g., Cerrera v. First State Bank, Mesquite (In re Cerrera), Adv. No. 05-03103, 2006 WL 6508276, at * 5 (Bankr.N.D.Tex. Jan. 18, 2006) (unpublished) (court found a lack of consent to abandon where wife had continued to reside on property after couple had separated and husband had left property and attempted to designate a new property as the martial homestead).
Reference
- Full Case Name
- IN RE: Cengiz J. COMU, Debtor. King Louie Mining, LLC v. Cengiz J. Comu a/k/a CJ Comu, Defendant Diane G. Reed, Trustee, Intervenor, Co-Plaintiff, and Third-Party v. Cengiz J. Comu
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- 4 cases
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- Published