Connor v. Prop. Fund 629 (In re Connor)

1

IN RE: David Silas Connor, Debtor.

David Connor, Plaintiff, v. Property Fund 629, LLC, 1 Public Homes, LLC, Edward Dale Russell, and Trent Notestine, Defendants.

David S. Connor and Courtney T. Connor, Plaintiffs, v. MEB Loan Trust IV (aka Specialized Loan Servicing, LLC), ^[1] Edward Dale Russell, 1 Public Homes, LLC, Property Fund 629, LLC, Mackie Wolf Zientz & Mann, P.C., and Eric Sox, Defendants.

No. 3:21-bk-00276

Adv. Proc. Nos. 3:21-ap-90037, 3:21-ap-90051

United States Bankruptcy Court, M.D. Tennessee

June 7, 2022

Chapter 13

(Lead Adversary Proceeding)

Removed from Williamson County Circuit Court, Case No. 2021-100

MEMORANDUM OPINION IN SUPPORT OF ORDER GRANTING EDWARD RUSSELL'S MOTION FOR SUMMARY JUDGMENT

Randal S. Mashburn U.S. Bankruptcy Judge

The Court previously addressed violation of the automatic stay and trespass claims asserted against Edward Russell in the context of Rule 12(b)(6) motions to dismiss. At the time, the Court dismissed several other claims but determined that the allegations in the complaints were sufficient as to violation of the automatic stay and trespass.^[2] Now, after extensive discovery, the claims are before the court again on Mr. Russell's motion for summary judgment. As explained herein, Mr. Russell has shown that there is an absence of evidence to support either claim and he is entitled summary judgment and dismissal of the claims as a matter of law.

BACKGROUND

David S. Connor, a debtor in a Chapter 13 bankruptcy, and, as to some claims, his wife, Courtney T. Connor, sued multiple defendants in these consolidated adversary proceedings over the foreclosure sale of their residence and the subsequent eviction of their family. Mr. Russell, a lawyer, became involved late in the game, shortly before the eviction, when Public Fund 629, LLC retained him to represent it in Mr. Connor's bankruptcy.

Despite Mr. Russell's limited involvement, some background about earlier events may be helpful. For approximately 20 years, the Connors owned and resided at property in Williamson County, Tennessee. The property was subject to two deeds of trust. On November 5, 2020, the holder of the second deed of trust foreclosed on the property. Property Fund 629, LLC was the purchaser at foreclosure.

On November 23, 2020, a related company, 1 Public Homes LLC, commenced a detainer/eviction proceeding in Williamson County General Sessions Court to obtain possession of the property. When the eviction matter first came before the General Sessions Court for hearing on December 7, 2020, the case was dismissed for failure to prosecute. 1 Public Homes got an attorney involved - not Mr. Russell - and was able to have the dismissal set aside. As a part of the same order setting aside the dismissal, 1 Public Homes obtained a default judgment on January 4, 2021, for possession of the property. Mr. Russell was not involved in the detainer proceeding.

An eviction was scheduled for February 3, 2021, prompting Mr. Connor to file bankruptcy on January 28, 2021.

On Thursday, January 28, 2021, Mr. Connor's counsel sent Mr. Russell an email stating that he had been referred to Mr. Russell by the lawyer who had handled the detainer proceeding for the plaintiff and stated his understanding from the other lawyer that the client had retained Mr. Russell, a bankruptcy lawyer, to handle the matter going forward. Mr. Connor's counsel's email included the detainer proceeding case number, and a statement that Mr. Connor was interested in repurchasing the property. Mr. Russell responded saying "News to me," and said he would check with the client. That string of emails did not mention any scheduled eviction. (See Complaint, Doc. 1, ¶ 22; Ex. 7 to Compl., Doc. 1-7; Answer Doc. 57, ¶ 22).

Mr. Russell was, in fact, retained by Property Fund 629, LLC to represent it in Mr. Connor's bankruptcy.^[3] This appears to have occurred sometime between the e-mail exchange on Thursday, January 28, 2021, and the following Monday, February 1, 2021. On that day Mr. Russell called Mr. Connor's counsel and informed him in a voicemail message that his client would like for Mr. Connor to make an offer. (See Compl. and Ans. ¶ 23; Ex. 9 to Compl.).

Mr. Russell's first communications with anyone about the eviction came two days later, on Wednesday, February 3, 2021. Mr. Russell went for a run that morning, and returned at approximately 9:55 a.m. He discovered he had received a voicemail from Courtney King, an attorney for Williamson County. In her voicemail, Ms. King informed Mr. Russell that there was to be an eviction of David Connor's property that day, and she asked Mr. Russell whether Property Fund 629, LLC intended to delay the eviction.

Mr. Russell then called the principals for Property Fund 629, LLC, but did not reach them or anyone else at the company. Between 10:00 a.m. and 10:30 a.m., Mr. Russell returned Ms. King's call and spoke with her. He informed Ms. King that he had not been involved in the eviction proceeding, and he had no authority or instructions from his client regarding the eviction. She informed him that the eviction had already begun and was then underway, and their conversation ended shortly thereafter.

Mr. Russell did not himself enter the Connors' property, and he did not direct the Williamson County Sherriff's Office to enter the property.

The foregoing facts are either undisputed or effectively undisputed by lack of admissible evidence to the contrary.

DISCUSSION

I. Standard of Review

A movant is entitled to summary judgment upon a showing that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Fed.R.Bankr.P. 7056. When the movant is the defendant, he may prevail upon establishing that his "opponent cannot establish one or more elements of a claim and/or by demonstrating that the 'affirmative evidence negates an element of the non-moving party's claim.'" Weiner v. Tivity Health, Inc., 528 F.Supp.3d 795, 807 (M.D. Tenn. 2021) (quoting Rodgers v. Banks, 344 F.3d 587, 595 (6th Cir. 2003)).

In reviewing a motion for summary judgment, the Court views the evidence, all facts, and any inferences drawn therefrom in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Smith v. Perkins Bd. of Educ., 708 F.3d 821, 825 (6th Cir. 2013). A factual dispute is "genuine" if a reasonable juror could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id.

When an issue presents a mixed question of law and fact, the Court may appropriately dispose of it on summary judgment if the material facts are undisputed and questions of law predominate. Univ. of Tenn. William F. Bowld Hosp. v. Wal-Mart Stores, Inc., 951 F.Supp. 724, 725-26 (W.D. Tenn. 1996) (citing Anderson, 477 U.S. at 248); cf. U.S. Bank Nat'l Ass'n ex rel. CW Capital Asset Mgmt. LLC v. Vill. at Lakeridge, LLC, ___ U.S. ___, 138 S.Ct. 960, 967, 200 L.Ed.2d 218 (2018) (Discussing appellate review of mixed questions: "[T]he standard of review for a mixed question all depends ... on whether answering it entails primarily legal or factual work."); accord Barger v. United Bhd. of Carpenters & Joiners of Am., 3 F.4th 254, 262-63 (6th Cir. 2021)).

Factual assertions must be supported by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1). Proffered evidence must be admissible. Fed.R.Civ.P. 56(c)(2). Affidavits or declarations "must be made on personal knowledge, set out facts that would be admissible in evidence," and show competency to testify on the matters stated. Id. at 56(c)(4). Evidence that is inadmissible, such as hearsay, must be disregarded by the court. N. Am. Specialty Ins. Co. v. Myers, 111 F.3d 1273, 1283 (6th Cir. 1997) ("[P]arties may resist a summary judgment motion by presenting evidence not in an admissible form, such as an affidavit, [but] the evidence itself still must be admissible."); see also Hartsel v. Keys, 87 F.3d 795, 803 (6th Cir. 1996) (Disregarding inadmissible hearsay in considering a summary judgment motion.).

As appropriate, a party may use the record citations to "show[] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Id.; see also Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986) (A moving party may satisfy its burden "by 'showing'-that is, pointing out to the … court-that there is an absence of evidence to support the nonmoving party's case.").

Once a summary judgment movant has met his burden, the "opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 586. The nonmoving party must cite to "specific facts showing that there is a genuine issue for trial." Haddad v Gregg, 910 F.3d 237, 243 (6th Cir. 2018) (citation omitted). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-250 (internal citations omitted); see also Berryman v. Rieger, 150 F.3d 561, 566 (6th Cir. 1998) ("The non-moving party, however, must provide more than mere allegations or denials ... without giving any significant probative evidence to...