Opinion
Case Number: 12-49433-399
04-30-2015
In Re: PATRICIA A. SEGRAVES, Debtor.
Chapter 13
NOT FOR PUBLICATION
MEMORANDUM OPINION
The matter before me concerns two amendments to Alan B. Curtis's original proof of claim and the corresponding objections filed by Patricia A. Segraves (Debtor). The first amended claim was filed on March 25, 2015 (March Amendment) and the second was filed on April 20, 2015 (April Amendment) (together Amendments). The Amendments are yet additional offerings from Mr. Curtis and Jeanine R. Saxton in a long line of frivolous filings directed at "righting" the Debtor's "wrongs." The March Amendment and the April Amendment assert secured status with respect to a previously allowed unsecured claim for $200,577.96 relating to a 2010 Final Judgment of Dissolution of Marriage (Divorce Judgment). They also increase the amount of unsecured debt that he seeks by six million dollars. The Amendments provide additional supporting documentation—none of which is particularly enlightening or helpful to Mr. Curtis or Ms. Saxton—not included in Mr. Curtis's original proof of claim. For the reasons that follow, the March Amendment and the April Amendment are disallowed to the extent that either was filed by or on behalf of Ms. Saxton as a creditor. They are also disallowed in that they seek secured status and additional amounts not previously allowed by this Court.
BACKGROUND AND FACTS
On September 27, 2012, the Debtor filed a petition for relief under Chapter 13 of the bankruptcy code. On January 17, 2013, Mr. Curtis filed an amended proof of claim seeking secured status in the amount of $599,000 and unsecured status for an additional $140,912.11. Mr. Curtis's request for secured status related to the marital home he shared with the Debtor in Florida. The unsecured amounts that Mr. Curtis sought were for prepetition and postpetition interest on the secured claim, property taxes on the Florida property, property damage on the Florida property, a private investigator fee, and a fee for Mr. Curtis's agent.
On February 11, 2013, Mr. Curtis filed an amended proof of claim. This time, Mr. Curtis removed his request for secured status and, instead, sought $364,917.53 of unsecured debt relating to the proceeds of the sale of the marital home ($175,759.26 rather than the alleged $599,000 value of the home), prepetition and postpetition interest, property taxes on the Florida property, property damage on the Florida property, a private investigator fee, an agent fee, and $106,328.60 which Mr. Curtis alleges that the Debtor took from his business entities. The following day, Mr. Curtis again amended his second proof of claim. He increased his claim relating to the business entities from $106,328.60 to $300,000.
I issued an order concerning Mr. Curtis's February 12, 2013 amended claim on May 14, 2013 (May Order) allowing Mr. Curtis an unsecured claim in the amount of $200,577.96. This amount represents the $175,759.26 Divorce Judgment, $23,318.70 of interest from the date of his judgment to the date of filing of the Debtor's Chapter 13 petition, and $1,500.00 in prepetition investigative expenses. I disallowed Mr. Curtis's claim for $300,000 because he was unable to demonstrate that any amounts were transferred after July 12, 2010, the date on which the Divorce Judgment was entered. I also disallowed his claim for property taxes, property damage, and agent fees. The May Order settled these matters. No appeal was taken.
However, on March 25, 2015, despite the May Order entered 22 months earlier, Mr. Curtis filed the March Amendment seeking $6,001,518.53 more relating to the business entities. Mr. Curtis claimed secured status for the $175,759.26 Divorce Judgment, $33,469 more for postpetition interest on the Divorce Judgment, new amounts relating to a variety of vehicles purchased during the course of the Debtor's marriage to Mr. Curtis, and additional amounts for postpetition investigative expenses. A couple weeks later, Mr. Curtis filed the April, 2015 Amendment. The April Amendment is identical to the March Amendment in the secured and unsecured amounts that it claims. The Debtor filed objections to the March Amendment and the April Amendment on March 27, 2015 and April 21, 2015, respectively.
DISCUSSION
I must decide whether to allow the Amendments. I will not. First, Ms. Saxton is not a creditor in this case so the Amendments are disallowed to the extent that they were filed by or on behalf of her. Second, I can find no reason to permit amendments two years after the original proof of claim was allowed. Third, Mr. Curtis provides insufficient evidence to support his secured status. Finally, the additional amounts sought in the Amendments relate to claims that were or could have been, litigated and determined in the 2010 divorce proceedings.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§1334(b), 157(b)(2)(b) and Local Rule 9.01(B) of the United States District Court for the Eastern District of Missouri. A. Who Filed the Amendments?
As submitted, it is unclear who filed the Amendments. The March Amendment and the April Amendment list Alan B. Curtis and Jeanine R. Saxton as creditors under the "Name of Creditor" block. Each name appears on the "Print Name" line of the signature block. However, it appears that only Mr. Curtis signed the March Amendment. Adding to the confusion, Mr. Curtis and Ms. Saxton listed their titles as "Trustees and Beneficiaries" in the "Title" line of the signature block on the March Amendment and the April Amendment. Therefore, it is unclear whether Ms. Saxton is actually claiming to be a creditor. It is also unclear whether she and Mr. Curtis submitted the proof of claim in their individual capacities or, instead, attempted to submit it on behalf of a trust.
Ms. Saxton is not a creditor in this case. The debtor does not owe Ms. Saxton any amount. Indeed, in Mr. Curtis's correspondence with the Court submitted on April 8, 2015, he admits that "Jeanine R. Saxton is not the creditor in this case." Mr. Curtis states that Ms. Saxton's inclusion as a creditor on the March Amendment is a "clerical error." Mr. Curtis then suggests that he is the sole creditor.
I explicitly stated so in my February 11, 2015 order in the adversary proceeding commenced by the Debtor.
I interpret Mr. Curtis's assertion that he is "the Creditor [sic] in this case" to mean that he is the sole creditor as between him and Ms. Saxton.
It is clear, then, that the amended proof of claim must be treated as though it were filed by Mr. Curtis. And, because Mr. Curtis elected to check the "I am the creditor" box instead of the "I am the creditor's authorized agent" box on both the March Amendment and the April Amendment, Mr. Curtis did not submit the amended proof of claim in his capacity as a trustee. Therefore, I conclude that the Amendments should be treated as if it were submitted on behalf of Mr. Curtis acting in his individual capacity. B. Bankruptcy Code § 502
A claim is allowed unless a party in interest objects. 11 U.S.C.A. § 502(a). If an objection is made, the bankruptcy court determines the amount of the claim. § 502(b). "If the proof of claim conforms with the rules it constitutes prima facie evidence of the claim. The burden of proof then shifts to the objector to establish that the claim fits within one of the exceptions set forth in Section 502(b) of the Bankruptcy Code." In re Dove-Nation, 318 B.R. 147, 152 (B.A.P. 8th Cir. 2004) (citing Kimmons v. Innovative Software Designs, Inc. (In re Innovative Software Designs, Inc.), 253 B.R. 40, 44 (B.A.P. 8th Cir. 2000) and Consumers Realty & Dev. Co., Inc. v. Goetze (In re Consumers Realty & Dev. Co., Inc.), 238 B.R. 418, 422-23 (B.A.P. 8th Cir. 1999)). "If a security interest in property of the debtor is claimed, the proof of claim shall be accompanied by evidence that the security interest has been perfected." Fed. R. Bankr. P. 3001(d). If any evidence in support of the objection is presented, "the ultimate burden of persuasion would have shifted to the Claimant to establish its entitlement to the claims." Dove-Nation, 318 B.R. at 152. C. Permitting Amendment Two Years after the Proof of Claim was Filed would be Unjustified
I issued an order establishing a deadline of January 22, 2013 to file proofs of claim. This court has the discretion to determine whether amendments to the proof of claim filed after January 22, 2013 should be allowed. See In re Vantage Investments, Inc., 385 B.R. 670, 690 (Bankr. W.D. Mo. 2008) (citing In re Wrenn Ins. Agency of Mo., Inc., 178 B.R. 792, 798 (Bankr.W.D.Mo.1995). I conclude that they should not.
"As a general rule, 'amendment to a claim is freely allowed where the purpose is to cure a defect in the claim as originally filed, to describe the claim with greater particularity or to plead a new theory of recovery on the facts set forth in the original claim'." (emphasis added) Id. "Still, the court must subject post bar date amendments to careful scrutiny to assure that there was no attempt to file a new claim under the guise of amendment." In re Int'l Horizons, Inc., 751 F.2d 1213, 1216-17 (11th Cir. 1985). "[T]he justification for the inability to file the amended claim at the time the original claim was filed" is relevant in determining whether allowing an amendment would be equitable. In re Vantage Investments, Inc., 385 B.R. 670 at 690.
Mr. Curtis has not met any of these criteria. The Amendments do not cure a defect, provide greater particularity, or plead a new theory of recovery based on old facts. Instead, the Amendments provide entirely new facts—all of which were available to Mr. Curtis at the time he filed the original proof of claim—to augment his existing theory of recovery. The Amendments read, in both status and amount, more like new proofs of claim than amended proofs of claim.
All of the rights to payment asserted in the Amendments for amounts I did not previously allow are associated with events that occurred long before Mr. Curtis filed his original proof of claim in December 2012. For instance, the "Corporate Bank records," which relate to Mr. Curtis's business entities, reflect account activity occurring at various times during 2005, 2006, and 2007. Similarly, the vehicles for which Mr. Curtis only now seeks payment were all purchased prior to 2010. Finally, the alleged registration of the Divorce Judgment in St. Charles County, Missouri must have occurred before December 2012. Mr. Curtis has waited so long, in fact, that payments under the plan have already been made for more than two and a half years! "The law ministers to the vigilant not to those who sleep upon perceptible rights." In re Mason, 520 B.R. 508, 519 (Bankr. S.D. Miss. 2014) (quoting Puleio v. Vose, 830 F.2d 1197, 1203 (1st Cir.1987)). Therefore, because Mr. Curtis did not see fit to bring any of this old information to light in his original proof of claim, I do not see any reason to allow him to do so now.
Mr. Curtis does not provide enough information to show that he registered the Divorce Judgment in St. Charles County. Even assuming that he had registered the judgment, he should have asserted secured status on his original proof of claim. If, on the other hand, he had not yet registered the judgment when he filed his original proof of claim, registering the judgment would have been void as a violation of the automatic stay under 11 U.S.C. 362. In either case, Mr. Curtis's secured status must fail.
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Furthermore, the Amendments do not assert a new theory of recovery. All of the rights to payment asserted in the Amendments are associated with claims that were decided in the Divorce Judgment. I already allowed Mr. Curtis an unsecured claim of $200,577.96 for the Divorce Judgment in the May, 2013 Order. I will not increase this amount. To do so would permit Mr. Curtis to do an end run around the Divorce Judgment and the May Order.
In fact, it is procedurally improper to file amendments to a proof of claim after the bankruptcy court has issued an order allowing or disallowing the original proof of claim. "[W]hen a proof of claim has in fact been litigated between parties to a bankruptcy proceeding, the litigants must seek reconsideration of the bankruptcy court's determination pursuant to the usual Rule 60 standards if they elect not to pursue a timely appeal of the original order allowing or disallowing the claim." In re Patriot Coal Corp., 511 B.R. 563 (B.A.P. 8th Cir. 2014) (quoting Colley v. Nat'l Bank of Texas (In re Colley), 814 F.2d 1008, 1010 (5th Cir. 1987)). Even if Mr. Curtis had filed a Federal Rule of Civil Procedure Rule 60 motion, made applicable by Federal Rule of Bankruptcy Procedure 9024, relief from the May Order would be improper. Mr. Curtis fails to meet the criteria for relief under FRCP 60(b) for the same reasons that he fails to satisfy the criteria for amendment of his claim. Therefore, Mr. Curtis's claims would fail even if he had proceeded under FRCP 60(b).
Finally, the amount Mr. Curtis seeks for postpetition investigative expenses must be disallowed because his request would be more appropriately characterized as a request for an administrative expense claim. However, administrative expenses may not be requested on a proof of claim as stated on the first page of Official Form 10. Therefore, because Mr. Curtis could not have properly included these amounts on his original proof of claim, equity and common sense leads me to conclude that I will not allow them now D. The Basis of the Claims Underlying the Amendments are Barred by Res Judicata
Aside from the $200,577.96 that I previously allowed in the May Order, the remaining rights to payment asserted in the Amendments are disallowed. Mr. Curtis has been unable to demonstrate that he holds any other rights to payment that occurred after the date on which the Divorce Judgment was entered. As such, res judicata bars the Amendments.
Res judicata is a principle of "substantive law requiring the application of the law of the forum state. This court must give preclusive effect to state court judgments whenever the courts of the state would do so." See Baker Elec. Coop., Inc. v. Chaske, 28F.3d 1466, 1475 (8th Cir. 1994) (internal citations omitted). In Florida, "under res judicata, a judgment on the merits bars a subsequent action between the same parties on the same cause of action." State v. McBride, 848 So.2d 287, 290 (Fla. 2003).
The Amendments seek a determination on claims that were, or could have been, litigated and determined in the Divorce Judgment. I have allowed Mr. Curtis a claim for the amount of the Divorce Judgment in the May Order. However, litigation associated with the existence, validity, or amount of any alleged debts under the Divorce Judgment are now barred. Any claims associated with rights to payment that relate to marital vehicles and funds the Debtor allegedly took from Mr. Curtis's business bank accounts are, therefore, barred. I will not allow Mr. Curtis to have another bite at the apple. E. The Divorce Judgment is Not Entitled to Secured Status
Mr. Curtis is not entitled to secured status for the Divorce Judgment because he did not provide enough evidence under FRBP 3001(d) to show that he registered the Florida judgment in Missouri. Mr. Curtis has only submitted the Florida state court judgment and an untitled document filed on behalf of Mr. Curtis in St. Charles County, Missouri with a prayer for relief that the Florida judgment be registered in St. Charles County. This is insufficient "evidence" under FRBP 3001(d) to establish that Judgment was registered in Missouri. Therefore, Mr. Curtis is not a secured creditor. He holds nothing more than an unsecured claim which I previously allowed in the May Order for $200,577.96 representing the amount that he is owed under the Divorce Judgment.
CONCLUSION
For these reasons, the Debtor's objections to the Amendments are sustained. The Amendments are disallowed to extent that they were filed by or on behalf of Jeanine Saxton. To the extent that the Amendments were filed by or on behalf of Alan Boyd Curtis, the Amendments are disallowed in that they seek secured status and additional amounts not previously allowed. The May Order remains in full force and effect. DATED: April 30, 2015
St. Louis, Missouri
uvb
/s/_________
Barry S. Schermer
United States Bankruptcy Judge
Copies to: Alan Boyd Curtis, 459710
S.B.C.F.
P.O. Box 7171
South Bay, Florida 33493
Alan Boyd Curtis, 459710
South Bay Correctional Facility
600 US Highway 27S
South Bay, Florida 33493
Jeanine Saxton
4712 Haney Way
Louisville, KY 40272
Kimber Houpt Baro
Baro Law Firm
1605 N. Lindbergh Blvd
Florissant, MO 63031
Patricia A. Segraves
17 Osperey Way
O'Fallon, MO 63368
John V. LaBarge, Jr
Chapter 13 Trustee
P.O. Box 430908
St. Louis, MO 63143
U.S. Trustee
Office of US Trustee
111 S Tenth St, Ste 6.353
St. Louis, MO 63102