In re Shoulders

1

In the Matter of: HANNAH M. SHOULDERS, Debtor(s).

No. 05-81239-CRJ-13

United States Bankruptcy Court, N.D. Alabama, Northern Division

December 11, 2024

Chapter 13

MEMORANDUM OPINION ON MOTION TO REOPEN

Clifton R. Jessup, Jr., United States Bankruptcy Judge

This case came before the Court on November 18, 2024 on the pleading styled "Motion to Reopen Chapter 13 Bankruptcy Pursuant to 11 U.S.C. § 350(b) 10 U.S.C. § 4007 Motion to Hold Creditor in Contempt Pursuant to 11 U.S.C § 105(a) and 11 U.S.C. § 524(a)(1)(2)(3) on Grounds that Creditor is Currently in Violation of the Automatic Stay and Final Discharge Injunction Each Granted by this Court Motion for Emergency Injunctive Order or Process Pursuant to 11 U.S.C. § 105(a)," ECF No. 89 (hereinafter "Motion to Reopen"), filed by Timothy Weakley Cassandra Dawson, and Jeleesa Weakley (hereinafter collectively, the "Movants"); Objection and Response by the Lauderdale County Revenue Commissioner to Motion to Reopen Chapter 13 Bankruptcy, for Contempt, and for Emergency Injunctive Order, ECF No. 92 (hereinafter "Objection"); the Memorandum and Evidentiary Exhibits filed by Movants in support of their Motion to Reopen, ECF No. 100 (hereinafter "Memorandum"); Movant's Opposition to Creditor Lauderdale County Revenue Commission's Objections [and] Movant's Motion to Strike, ECF No. 101; and The Lauderdale County Revenue Commissioner's Response to the Supporting Memorandum and Opposition to Objections/Motion to Strike, ECF No. 103 (hereinafter "Response"). Appearances were made by Timothy Weakley and Cassandra Dawson, proceeding pro se, and Jamie Helen Kidd Frawley, Esq., counsel for the Lauderdale County Revenue Commission (hereinafter "Lauderdale County").

The above-styled case has been closed for sixteen years, since December of 2008. The Movants state that they seek to reopen their mother's Chapter 13 case to "restore" certain real property located at 2033 Randolph Street, Florence, Alabama (hereinafter the "Randolph Street property") "back to the bankruptcy estate."^[1] In 2021, Hannah M. Shoulders (hereinafter the "Debtor") passed away intestate. The Movants are the Debtor's children and heirs at law. Movant Jeleesa Weakley was granted Letters of Administration dated July 15, 2021 by the Lauderdale County Probate Court as the Personal Representative of the Debtor's probate estate.^[2]

The Movants generally allege that their mother exercised her statutory right of redemption to redeem the Randolph Street property from a prepetition tax sale while her Chapter 13 case was pending and that Lauderdale County subsequently failed to withdraw the property from the tax sale to the State of Alabama Department of Revenue (hereinafter the "State") in violation of the automatic stay and/or discharge injunction. Lauderdale County asserts that the Debtor failed to redeem the Randolph Street property and that the Movant's Motion to Reopen is both untimely and an inappropriate attempt to set aside a final state court judgment entered against the Movants quieting title to the subject property.

The Court has carefully considered the pleadings, the arguments of the parties, and the applicable law, and makes the following findings of fact and conclusions of law pursuant to Rules 7052 and 9014(c) of the Federal Rules of Bankruptcy Procedure, finding that the Movants failed to establish that cause exists to reopen the above-styled case for the reasons set forth herein.^[3]

I. Background and Findings of Fact

On March 11, 2005, the Debtor filed a voluntary petition in the United States Bankruptcy Court for the Northern District of Alabama, commencing her Chapter 13 bankruptcy case (the "Petition"). On Schedule A. Real Property, the Debtor listed the following property: (i) a "home" which was identified separately in the Petition as property located at 406 Park Lane, Florence, Alabama; (ii) a house located at 233 Randolph, Florence, Alabama; and (iii) a vacant house located at 421 Irvine, Florence, Alabama.

The relevant parcel of property for purposes of the Movant's Motion to Reopen is the Randolph Street property which was misidentified in the Petition as "233 Randolph." The Movants acknowledge in their Motion to Reopen that the Debtor failed to pay the 2001 property taxes owed to Lauderdale County for the Randolph Street property and that the County sold the property to the State in 2002 for failure to pay the 2001 taxes, three years before the Debtor filed her Petition.

Lauderdale County acknowledges that the Petition tolled the Debtor's statutory right of redemption under Ala. Code §§ 40-10-120 and 40-10-121 and that it appears that the Debtor originally intended to exercise her right of redemption through her Chapter 13 Plan. On Schedule E. Creditors Holding Unsecured Priority Claims, the Debtor listed Lauderdale County as a priority creditor in the amount of $4,831.00 which she proposed to pay in full. Nevertheless, nothing was paid to Lauderdale County through the Chapter 13 Plan for the 2001 property taxes. On May 12, 2005, Lauderdale County filed Claim No. 4 in the amount of $4,151.10 for debt incurred October of 2001 related to the Randolph Street property identified in the proof of claim as "PPINN 61527."^[4] Lauderdale County subsequently withdrew the claim on May 9, 2008 and the Chapter 13 Trustee's Final Report reflects that Claim No. 4 was not allowed by the Court and that nothing was ever paid on the claim by the Chapter 13 Trustee.^[5]

The Trustee's Final Report further reflects that Lauderdale County was paid a total of $958.94 for Claim Nos. 1, 9, 10, and 11.^[6] A careful review of these claims reveals that they were filed for the following debts unrelated to the 2001 property taxes for the Randolph Street property: (i) Claim No. 1 - filed for debt incurred October 1, 2004 in the amount of $291.44; (ii) Claim No. 9 - filed for debt incurred October 1, 2005 in the amount of $205.84; (iii) Claim No. 10 - filed for debt incurred October 1, 2006 in the amount of $205.84; and (iv) Claim No. 11 - filed for debt incurred October 1, 2007 in the amount of $255.82.

Nevertheless, the Movants allege that their mother redeemed the Randolph Street property on May 12, 2005 by paying $4,551.00 directly to Lauderdale County "for the settlement of her tax debt."^[7] According to the Movants, the Debtor "redeemed two properties identified as: PPIN '10724' a.k.a. 2033 Randolph street and PPIN '61527' a.k.a. 421 West Irvine Street. [See exhibit 2 land sale redemption receipt]"(hereinafter "Movant's Exhibit 2").^[8] Thereafter, the Movants allege that Lauderdale County failed to file certain required documents with the State to have the Randolph Street property removed from the tax sale which resulted in the ultimate sale of the property by the State to a third party in 2021, thirteen years after this case was closed.

Lauderdale County argues that the Debtor did not in fact redeem the Randolph Street property and that the exhibit relied upon by the Movants as evidence that their mother redeemed the property, Movant's Exhibit 2, is not an official receipt generated by Lauderdale County evidencing redemption of the Randolph Street property as alleged.^[9] Rather, according to the Declaration of Amy Hanback, Chief Clerk of the Lauderdale County Revenue Commissioner's Office, Movant's Exhibit 2 is a "document that was generated at the request of Ms. Shoulders to inform her of the amount that would be required to redeem the property as of May 12, 2005."^[10] If the payment had been made and the property redeemed, Lauderdale County alleges that the "number field" located on the document would contain the number for the Certificate of Redemption issued by the Probate Judge.^[11] A review of Movant's Exhibit 2 reflects that the number field is blank and that the bottom of the Exhibit states "WARNING - NO PAYMENT OR REDEMPTION NUMBER".^[12]

After the Court closed the Debtor's case on December 3, 2008, it appears that the Debtor and/or members of her family continued to reside at the Randolph Street property until the property was eventually sold by the State to a third party who then filed an action to quiet title to the property. On June 23, 2021, the State sold the property to Bradley Tyler Combs ("Combs") who then filed an action in the Circuit Court of Lauderdale County, Alabama, Case No. 41-CV-2021-900251 to quiet title to the property.^[13] Movants state in their Motion to Reopen that the civil action was commenced shortly after their mother passed away and that Combs was granted a default judgment which was eventually vacated. Combs then sold the Randolph Street property to Robert and Alisa Dickson (hereinafter the "Dicksons") who commenced an ejectment action against the Movant's brother, Jason Bates, in the Circuit Court of Lauderdale County, Alabama, Case No. 41-CV-2023-900148.00.^[14] Thereafter, a flurry of state court actions were filed between the parties, summarized in an Order dated April 29, 2024 by the Circuit Court of Lauderdale County in Case No. 41-CV-2023-000027.00 as follows:

This matter was called for BENCH TRIAL on two related cases to-wit: Case No. CV-2021-900251, styled Bradley Tyler Combs v. Hannah Weakley Carroll (or, more properly, the Estate of Hannah (Shoulders) Weakley Carroll), Timothy Weakley (son of Ms. Weakley), Cassandra Dawson (daughter of Ms. Weakley), and Timothy Staggs (deceased), which was an action to quiet title that was granted by default after service by publication (despite Ms. Weakley's estate being administered in probate court). In that case (CV-2021-900251), the default was granted, an [sic] Circuit Court order issued quieting title, then the property was sold by Bradley Tyler Combs to Robert and Alisa Dickson, only later (after the sell) the

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