Lassman v. Angera (In re Angera)

In re Andrea A. Angera, Jr., Bankruptcy Case No. 19-10764

DONALD R. LASSMAN, Trustee, and SEA GREENS HOLDINGS, LLC, Creditor-Appellants v. ANDREA A. ANGERA, JR., Debtor-Appellee

Civil Action Nos. 1:21-CV-10547-RWZ, 1:21-CV-10560-RWZ

United States District Court, D. Massachusetts

November 4, 2021

MEMORANDUM & ORDER

RYA W ZOBEL JUDGE.

By an order entered on March 18, 2021, the United States Bankruptcy Court for the District of Massachusetts overruled objections of the Chapter 7 Trustee, Donald R. Lassman, and a creditor Sea Greens Holdings, LLC (“SGH”) (collectively “Appellants"), to the Debtor Andrea A. Angera Jr.'s (“Angera”) claimed homestead exemption. The matter is now before me on appeal by the objectors to that order, together with Angera's motions to dismiss the appeal as frivolous (Docket #18) and for legal fees and costs incurred thereof (Docket #20). For the reasons explained below, the bankruptcy court's order is AFFIRMED; the motions to dismiss and for legal fees and costs are DENIED.

I. Procedural Background

Angera filed for Chapter 7 bankruptcy on March 11, 2019. On his Schedule C, he claimed as exempt under Massachusetts law his real property located at 3 Muskoday Way in Edgartown, Massachusetts on the island of Martha's Vineyard (the “Property”). Angera's claimed exemption was based on a Declaration of Homestead of the Property recorded on November 4, 2014. Appellants timely objected to that claim of exemption.

In February 2021, the bankruptcy court held a three-day evidentiary hearing by videoconference on Appellants' consolidated objections. It issued its findings orally on March 16, 2021 and entered judgment overruling Appellants' objections on March 18, 2021.

Each Appellant timely appealed. On May 27, 2021, the appeals were consolidated and the parties' briefing schedule set. In addition to the appellate briefing, Angera filed two motions: (1) a motion to dismiss the appeal as frivolous (Docket #18), and (2) a motion for the award of damages in the form of legal fees and costs due to the purported frivolous appeal (Docket #20).

II. Standard of Review

In considering an appeal from an order of a bankruptcy court, a district court reviews the bankruptcy judge's conclusions of law de novo but the findings of fact for clear error. Tl Fed. Credit Union v. DelBonis, 72 F.3d 921, 928 (1st Cir. 1995). “A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” In re Hill, 387 B.R. 339, 345 (B.A.P. 1st Cir. 2008) (quoting Anderson v. Bessemer City, 470 U.S. 564, 573 (1985)). “If the trial court's account of the evidence is plausible, in light of the record in its entirety, a reviewing court may not reverse, even if convinced that if it had been sitting as a trier of fact, it would have weighed the evidence differently.” Id. "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.” Anderson, 470 U.S. at 574.

Whether a debtor is entitled to claim an exemption in a bankruptcy proceeding is a question of law and is reviewed de novo. See, e.q., In re Morad, 323 B.R. 818, 822 (B.A.P. 1st Cir. 2005). The question at the heart of this appeal, however, is whether Angera was domiciled in Massachusetts during the relevant statutory period thereby entitling him to claim the homestead exemption under Massachusetts law. That question, although a mixed question of law and fact, requires a fact-intensive determination for which the bankruptcy judge had to weigh the evidence and make credibility judgments and is therefore reviewed for clear error. JcL (citing Valentin v. Hosp. Bella Vista, 254 F.3d 358, 365 (1st Cir. 2001)); see also, e.q., In re Felix, 582 B.R. 915, 921 (6th Cir. 2018). Appellants, as the objecting parties, had the burden of proving that Angera is not entitled to his claimed exemption. In re Morad, 323 B.R. at 822.

III. The Bankruptcy Court's Findings

During the March 16, 2021 proceeding, the bankruptcy court orally provided the parties with its findings of fact and conclusions of law based on the record developed during the three-day evidentiary hearing. A summary of those findings and conclusions is as follows.

Angera has owned the Property since 1992. Docket #16-2 at 7.^[1] Around 2005, he took up residence in the Property with his wife, Barbara Sabia, and their two young children. Id. Angera is a licensed pilot and would commute by private plane for work outside the state. Id. Ultimately Ms. Sabia was not happy living year-round on Martha's Vineyard, so, in 2006, the family relocated to Richfield, Connecticut. Id. Angera moved his business to Connecticut around this time as well. Id.

In 2011, Angera's financial situation began to deteriorate as did his marriage. Ji at 7-8. At some point before 2016, he and Ms. Sabia began to consider themselves as maintaining separate households although they stayed married for the sake of their children. Id. at 8. In 2016, the family moved into a rental home in Middlebury, Connecticut after Ms. Sabia's free housing from her employer ended, Id. Angera signed the lease as did his wife at the landlord's insistence. Id. By this time, however, Angera regularly spent time at the Property on Martha's Vineyard, li He continued to work in Connecticut and regularly visited his children. Id. He no longer owned a plane and, because the commute between Connecticut and Martha's Vineyard could take three to four hours or longer depending on ferry service, he had to stay in Connecticut for extended periods to earn a living. Id.

Angera worked primarily in Connecticut during 2016 through the summer of 2017. Between February and August 2017, he provided consulting services to SGH. Id. He gave SGH the Middlebury, Connecticut address as his place of residence. Id. at 9.

Angera and SGH ended the consulting relationship after a falling out in the second half of 2017. Id. at 9. After that, Angera moved his primary work location from Connecticut to Maine, where he worked through the date he petitioned for bankruptcy. Id. In an amended complaint he filed pro se in a 2017 lawsuit against SGH in the federal district court in Connecticut, Angera stated that since May 2017 he was a resident of Massachusetts and domiciled in Maine. Id. at 13. Angera retracted that statement in a subsequent filing in the same case, clarifying that he was actually a temporary resident of Maine and that since 1983 he has been a permanent resident, citizen, and domiciliary of Massachusetts. Id. at 16-17.

At the time he filed the bankruptcy petition, Angera had a Massachusetts driver's license, owned a motor vehicle that was registered and kept at the Property, and owned various watercraft that were titled in Massachusetts, registered with the Massachusetts Office of Environmental Affairs before and after the 24 months preceding his bankruptcy filing, and also kept at the Property. Id. at 11. Angera had been registered to vote in Edgartown, the town in which the Property is located, since 2008, his registration was active in 2018, and he voted in Edgartown in 2012, 2013, 2016, and 2020. Ji He was summoned for jury duty at the Edgartown Superior Court in 2016, 2018, and 2019. Ji at 12. During the relevant period, Angera maintained memberships in local organizations on Martha's Vineyard, including membership in the Island Club and Martha's Vineyard Rod and Gun Club. He had an active bank account at a local Martha's Vineyard bank, received year-round utility and internet service at the Property, and paid real estate taxes on the Property. Id. He filed Massachusetts resident tax returns in 2017 and 2018. Id. His credit card records showed that during 17 of the 24 months preceding the bankruptcy he spent time on Martha's Vineyard, li at 15.

Angera and his wife allowed several acquaintances to stay at the Property periodically during the 24-month pre-petition period when Angera was not present there and listed the Property as rental property on their 2015, 2016, and 2017 state and federal tax returns. Id. at 13. However, they never reported any rental income from the property on those returns. Id. at 15. They also filed 2016, 2017, and 2018 Connecticut state tax returns, the first of which was a Connecticut resident return. Id. at 13. Their Connecticut accountant prepared their 2015, 2016, and 2017 tax returns. Id.

Based on the foregoing, the bankruptcy court concluded that although Angera worked primarily in Connecticut first and then in Maine during 2017 to 2019, and maintained residences in each state while he worked there, he was domiciled in Massachusetts throughout the relevant period. Id. at 9, 17. Accordingly, Massachusetts law governed his claimed exemption. Id. at 17.

On the other issues raised by SGH, the bankruptcy court concluded the following. First, Angera's November 4, 2014 Declaration of Homestead was valid because while his wife was named in the declaration she was not an owner of the Property and thus not obligated to sign the declaration. Id. at 18-19. Furthermore, the representation on the declaration that the Property was, or was intended to be, Ms. Sabia's primary residence, even if no such corroborating facts existed, did not invalidate the declaration because it was Angera, not his wife, who was claiming the exemption. Id. Second, although the evidentiary record established that Angera maintained a residence in Connecticut between 2014 and 2017, it did not show that Connecticut was his principal residence or that he had abandoned the Property on Martha's Vineyard, Id. at 20-21.

IV. Discussion

Appellants argue that the bankruptcy court erred in concluding that Angera...