United States District Court, D. Massachusetts
For Donald Lassman, Plaintiff: Jeffrey J. Cymrot, LEAD ATTORNEY, Sassoon & Cymrot LLP, Boston, MA.
For Jerome J. Cronin, Jr., Defendant: Whitton E. Norris, III, LEAD ATTORNEY, Law Office of Whitton Norris, LLP, Dedham, MA.
MEMORANDUM AND ORDER
Denise J. Casper, United States District Judge.
Donald Lassman, the trustee in a chapter 7 bankruptcy proceeding, seeks to avoid and recover certain alleged pre- and post- petition transfers made by the debtor to her husband, the defendant in this action. The trustee now moves for summary judgment and the defendant, Jerome J. Cronin, Jr., cross moves for summary judgment. The Court heard the parties on the pending motions and took the matters under advisement. D. 32. For the reasons stated below, the trustee's motion for summary judgment, D. 22, is ALLOWED in part and DENIED in part. The defendant's cross-motion for summary judgment, D. 25, is DENIED.
II. Facts and Procedural History
Marie E. Cronin (the " Debtor" ) commenced a chapter 13 bankruptcy case on April 13, 2009 (the " Petition Date" ). D. 22-1 ¶ 3. Upon the Debtor's motion, the bankruptcy court converted her chapter 13 case to a chapter 7 case on July 29, 2010, and Donald Lassman (the " Trustee" ) was appointed trustee for the bankruptcy estate. Id. ¶ ¶ 7-8. The bankruptcy court entered a discharge in the Debtor's case and the case was closed on November 1, 2010. Compl. ¶ 8. Upon the Trustee's motion, the bankruptcy court reopened the Debtor's case on June 8, 2011. Id. ¶ 9. On December 12, 2011, the Trustee initiated an adversary proceeding against Jerome J. Cronin, Jr. (" Cronin" ), the Debtor's husband, to recover property of the estate. D. 22-1 ¶ 9. On August 29, 2012, upon Cronin's motion, the case was removed to this Court. Id. ¶ 10.
At the time relevant to the pending motions, the Debtor and Cronin maintained two joint bank accounts from which the
Debtor paid household bills and expenses: Account 2915 and Account 2273. Id. ¶ ¶ 14-20. It is undisputed that the Debtor engaged in three post-petition financial transactions without disclosing them to the bankruptcy court. First, on approximately July 28, 2010, the Debtor and Cronin sold their interest in a vacation condominium located at The Villas at Disney's Wilderness Lodge in Florida (the " Disney Condominium" ). Id. ¶ ¶ 21, 23. The net proceeds of $11,455.40 were deposited into Account 2273 on August 24, 2010. Id. ¶ 25. The second transaction resulted from the sale of 300 Home Resort Vacation Points (the " Vacation Points" ) to which the Debtor and Cronin were entitled by virtue of their interest in the Disney Condominium. Id. ¶ 28. In June of 2009, the Debtor sold the Vacation Points for $2,700 and deposited that amount into Account 2273. Id. ¶ ¶ 29-30. During the course of her bankruptcy proceeding, the Debtor did not disclose her interests in the Disney Condominium and the Vacation Points, nor did she seek permission from the bankruptcy court to sell those interests. Id. ¶ ¶ 26-27. The third transaction arose from an automobile accident in August 2009 in which the Debtor was injured. Id. ¶ 33. The Debtor received a cash settlement for her injuries and, after paying her attorneys' fees and other expenses, she deposited the net proceeds of $48,308.99 (the " Accident Settlement" ) into Account 2273. Id. ¶ 37. The Debtor did not alert the bankruptcy court to her claim or seek its authority to procure a settlement. Id. ¶ ¶ 38-39.
The Debtor also made three pre-petition cash advances (collectively, the " Cash Advances" ). In June 2008, the Debtor received an $8,000 advance on a Bank of America account and deposited the funds into Account 2915. Id. ¶ ¶ 40-41. Approximately two months later, the Debtor took a $15,000 cash advance by signing a credit card convenience check, again depositing the funds into Account 2915. Id. ¶ ¶ 45, 47. Four months after that, the Debtor deposited a third cash advance on the Bank of America account into Account 2915, this time for $52,115. Id. ¶ ¶ 51-52.
Counts I, II and III of the Trustee's complaint seek to avoid post-petition transfers pursuant to 11 U.S.C. § 549. Specifically, the Trustee asserts that those transfers occurred when the Debtor deposited into Account 2273 the proceeds from the sale of the Disney Condominium and the Vacation Points and from the Accident Settlement. Counts IV, V and VI of the complaint seek to avoid pre-petition transfers pursuant to 11 U.S.C. § 548. Those transfers comprise the Cash Advances deposited by the Debtor into Account 2915. In Count VII, the Trustee seeks recovery of the avoidable transfers pursuant to 11 U.S.C. § 550.
Summary judgment should be granted 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 judgment as a matter of law." Fed. R. Bankr. P. 7056 (incorporating Fed.R.Civ.P. 56(c)). The burden of proof is on the moving party in the first instance. In re Wang Labs., Inc.,155 B.R. 289, 290 (Bankr. D. Mass. 1993). To defeat the motion, the opposing party must produce substantial ...