United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
____________________
No. 92-2408
IN RE: MARK NELSON,
Debtor,
____________
MARK NELSON,
Appellant,
v.
LINDA WIHBEY TAGLIENTI, ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. A. David Mazzone, U.S. District Judge]
___________________
____________________
Before
Breyer, Chief Judge,
___________
Selya and Stahl, Circuit Judges.
______________
____________________
Domenic S. Terranova for appellant.
____________________
Linda T. Wihbey, with whom Ring, Rudnick & Grefe, P.C., Philipp
________________ _____________________________ _______
G. Grefe, and Ring & Grefe, P.C., were on brief for appellees.
________ __________________
____________________
June 3, 1993
____________________
STAHL, Circuit Judge. Plaintiff-appellant Mark
______________
Nelson (Mark) claims that the bankruptcy and district courts
erred in dismissing his suit for damages against his former
wife, Paula Nelson Fiorenza (Paula), and her attorneys. He
alleges that defendants willfully violated an automatic stay
provided by the bankruptcy code when they instituted equity
actions in state court which interfered with the sale of the
former marital home. We disagree and affirm.
I.
I.
__
Background
Background
__________
The Nelsons were married on February 2, 1985, and
resided at 16 Dorchester Street, Wilmington, Massachusetts.
On February 12, 1991, they executed a marital agreement which
subsequently became part of a divorce judgment. Under the
terms of that agreement, Mark was obligated to pay Paula $200
weekly as child support for the benefit of their eight year-
old daughter. The agreement further obligated him to
maintain the first and second mortgages on the former marital
-2-
2
home, and actively to list and market the property for
sale.1
On March 22, 1991, for $1.00 consideration, Mark
transferred all of his right, title and interest in 16
Dorchester Street to his father, George Nelson, as trustee.2
When Mark failed to make child support payments, Paula began
enforcement efforts in the Middlesex County Probate and
Family Court. On May 8, 1991, and October 24, 1991, the
court entered judgments of contempt against him. The second
contempt judgment resulted in a 120-day jail sentence,
suspended until November 8, 1991, "to see if all arrears are
paid." A
____________________
1. According to defendants' brief in bankruptcy court, the
agreement also provided that Paula Nelson transfer her right,
title and interest in 16 Dorchester Street to Mark. As we
read the agreement, she was required to transfer her right,
title and interest in six Wilmington properties, including 18
Dorchester Street, but not 16 Dorchester Street. It is
___
unclear to us, therefore, who held title to 16 Dorchester
Street as of February 12, 1991.
2. At oral argument, plaintiff's counsel contended that
prior to the transfer, the property was in a real estate
trust, with Mark and Paula as both trustees and lifetime
beneficiaries. Counsel argued that a second real estate
trust had been established well in advance of March 1991, and
that the "transfer" really amounted to a mere substitution of
George Nelson for Mark as trustee. There is no evidence in
the record as to whether such trust arrangements ever
existed. Nor is there any evidence that Paula surrendered
her interest as either trustee or lifetime beneficiary of 16
Dorchester Street in the marital agreement. See n.1 supra.
___ _____
-3-
3
hearing on the contempt judgment was continued to November
12, 1991. On November 8, 1991, Mark filed a voluntary,
"skeleton"3 petition for bankruptcy under Chapter 13 in the
Bankruptcy Court for the District of Massachusetts. On
November 12, 1991, Mark filed in the Probate Court a
suggestion of bankruptcy and a motion to continue the pending
contempt action. Subsequently, on November 25, 1991, Paula
proceeded to file another action in that court seeking an
attachment and temporary restraining order to prevent the
transfer of the 16 Dorchester Street property.4 According
to defendants, during these proceedings, Judge McGovern of
the Probate Court directed the parties to meet with the
Chapter 13 trustee in bankruptcy, Joseph Szabo. Defendants
assert that trustee Szabo "agreed to execute a stipulation
allowing for the sale of the property, asserting that the
bankruptcy estate did not claim any right, title or interest
____________________
3. A "skeleton" bankruptcy petition does not include the
required itemized lists of assets and liabilities.
Petitioners obtain leave to file those lists at a later date.
After receiving two such extensions of time in which to file
the supporting documents, Mark filed the schedules to
accompany his Chapter 13 bankruptcy petition on December 26,
1991. He listed 16 Dorchester Street as real property in
which he held an equitable interest of one-half, and on which
there were mortgages of $105,214.93 and $68,765.84. Given
counsel's argument that Paula had relinquished all interest
in the property, see n.1 supra, it is unclear who held the
___ _____
remaining one-half beneficial interest in the property.
4. She appears to have done so after learning that 16
Dorchester Street was the subject of a purchase and sale
agreement.
-4-
4
in the property, as said property stood in the name of George
Nelson, not the Debtor Mark Nelson." Mark does not dispute
defendants' version of what transpired.
The Probate Court issued a temporary restraining
order on December 9, 1991, with a return date of December 19,
1991. On December 17, 1991, Mark filed another suggestion of
bankruptcy and motion to continue. On December 19, 1991, the
Probate Court issued an interlocutory order continuing the
restraining order in force. The pending sale of 16
Dorchester Street fell through when, according to Mark, Paula
refused to provide relief from the liens on the property.
On January 2, 1992, Paula, in a further effort to
preserve her rights in 16 Dorchester Street, filed another
equitable action seeking an attachment on the property. On
January 7, 1992, the Probate Court ordered the attachment.
On January 16, 1992, Mark commenced an adversary
proceeding in the bankruptcy court against his ex-wife and
her attorneys, claiming that, by pursuing equity actions in
state court against property properly in the bankruptcy
estate, they had willfully violated an automatic stay
provided by 11 U.S.C. 362. He sought actual damages, costs
and attorneys' fees and punitive damages claiming that these
arose from defendants' obstruction of the proposed sale of
the marital residence.
-5-
5
In response, defendants moved to dismiss the action for
failure to state a claim.
On February 15, 1992, Mark converted his Chapter 13
bankruptcy petition to a Chapter 7 petition. Subsequently,
the mortgagee successfully petitioned the bankruptcy court
for relief from the stay in order to permit it to proceed to
foreclose on its 16 Dorchester Street mortgage, an action
which ultimately occurred.
On May 22, 1992, the bankruptcy court dismissed
Mark's adversary proceeding. He appealed to the district
court which, on September 15, 1992, affirmed the judgment of
the bankruptcy court. From that decision he now appeals.
II.
II.
___
Discussion
Discussion
__________
As a general rule, the filing of a bankruptcy
petition operates as a stay against actions affecting the
property of the bankruptcy estate. 11 U.S.C. 362(a).
Because the stay takes effect upon filing, without the need
for further action, it is often referred to as an "automatic"
stay. The function of the stay is to "protect the bankrupt's
estate from being eaten away by creditors' lawsuits and
seizures of property before the trustee has had the
opportunity to marshal the estate's assets and distribute
them equitably among the creditors." Martin-Trigona v.
______________
-6-
6
Champion Fed. Sav. & Loan Assoc., 892 F.2d 575, 577 (7th Cir.
________________________________
1989) (citing H.R. Rep. No. 595, 95th Cong. 1st Sess. 340
(1977), U.S. Code Cong. & Admin. News 1978, p. 5787).
Ordinarily, a party in interest must ask the
bankruptcy court for, and receive, relief from the stay
before proceeding against the debtor's estate. 11 U.S.C
362(d). The code, however, also provides numerous statutory
exceptions to the automatic stay. 11 U.S.C. 362(b). Under
11 U.S.C. 362(b)(2), actions to "collect[] . . . alimony,
maintenance, or support from property that is not property of
___
the estate" are not barred by an automatic stay. 11 U.S.C.
362(b)(2) (emphasis supplied). Litigants who take action
against a bankruptcy estate without receiving the prior
approval of the court or falling under one of the statutory
exceptions are subject to sanctions. The code provides that
"[a]n individual injured by any willful violation of a stay
_______
provided by this section shall recover actual damages,
including costs and attorneys' fees, and, in appropriate
circumstances, may recover punitive damages." 11 U.S.C.
362(h) (emphasis supplied).
This case turns on two questions: (1) whether
Paula's equity actions in state court fell under the
362(b)(2) exception to the automatic stay; and (2) if not,
whether Paula "willfully violated" the automatic stay,
thereby subjecting herself to penalties under 362(h). In
-7-
7
this case, the answer to the first question provides the
answer to the second.
As noted above, 362(b)(2) exempts from automatic
stays actions seeking to collect support from property "that
is not property of the estate." 11 U.S.C. 362(b)(2)
___
(emphasis supplied). Paula appears to have been aware of the
following at the time she filed the November equity action:
(1) the Registry of Deeds recorded that ownership of the
property had been transferred from Mark to George Nelson; and
(2) Mark had not listed any interest in 16 Dorchester Street
as property of the estate because he had yet to file the
documents to support his bankruptcy petition. At or close to
the time she filed the action, Paula learned from Joseph
Szabo, the Chapter 13 bankruptcy trustee, that the bankruptcy
estate would not claim any of the proceeds of the then
pending sale of the property.5
Given the peculiar "facts" of this case, we hold
that Paula could not have "willfully violated" the automatic
stay applicable to plaintiff's property, if, in fact, 16
Dorchester Street was ever covered by such a stay. Although
____________________
5. We also note that Mark's counsel conceded at oral
argument that there was no way for Paula to determine from
public records who held beneficial interest in the property
at 16 Dorchester Street. Indeed, in retrospect, it is
impossible for this court to determine whether the property
was properly part of the bankruptcy estate. The ambiguous
record of this case contains no evidence that the property
was ever in a real estate trust, and it is unclear whether,
when and how Paula surrendered her interest in the property.
-8-
8
Paula could have asked the bankruptcy court to determine
whether the property was subject to a stay prior to
commencing her equity actions in state court, we hold that it
was reasonable for her to believe that the property was not
part of the bankruptcy estate.6 Indeed, we believe that the
record in this case makes it so obvious that Paula's actions
could not have been willful that we find this appeal
frivolous. See Fed. R. App. P. 38. Therefore, we award the
defendants the sum of $2,000 to cover both appellate costs
and appellate attorneys' fees said fees to run jointly and
severally against appellants and his counsel.7 The decision
____________
of the district court is affirmed.
_________________________________
____________________
6. Mark does not explicitly state which of Paula's actions
interfered with the sale of 16 Dorchester Street. To the
extent that he argues for a distinction between actions filed
before December 26, 1991, when he filed the schedules
accompanying his bankruptcy petition indicating that the
bankruptcy estate had an equitable interest in the property,
and those initiated thereafter, he does so in a most
perfunctory manner. This court has often warned litigants
that "issues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are
deemed waived." United States v. Zannino, 895 F.2d 1, 17
_____________ _______
(1st Cir.), cert. denied, 494 U.S. 1082 (1990).
_____ ______
7. Because defendants did not cross-appeal the denial of
their motion for costs and fees below, they failed to
preserve that issue on appeal.
-9-
9