UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
April 17, 2006
ROBERT E. HARRIS, APPELLANT,
ALBANY COUNTY OFFICE, AND DAVID P. POLAN, AS COMMISSIONER OF MANAGEMENT AND BUDGET OF THE COUNTY OF ALBANY, APPELLEES,
MARK SWIMELAR, TRUSTEE.
The opinion of the court was delivered by: Gary L. Sharpe U.S. District Judge
MEMORANDUM-DECISION AND ORDER
Appellant-debtor, Robert Harris, seeks review of the Bankruptcy Court's (1) dismissal with prejudice of debtor's bankruptcy petition (Case No. 04-15335); and (2) dismissal of debtor's adversary proceeding (Adv. Pro. No. 04-90287). Harris also seeks the court's reconsideration of it's denial to reopen Case No. 1:03-CV-1404. For the reasons that follow: (1) The Bankruptcy Court's decisions are AFFIRMED; (2) Harris' appeal is DISMISSED; and (3) the court declines to revisit its decision in Case No. 1:03-CV-1404.*fn2
Harris purchased rental income property at 323 State Street, Albany, New York, in 1976 and at 38 South Main Avenue, Albany, New York in 1979.*fn3 Harris fell behind on property taxes on both properties, and in 1997, the County of Albany initiated a tax foreclosure action. On January 5, 2001, appellee County took deed title to properties located at 38 South Main Avenue and 323 State Street in Albany. On January 24, 2001, Harris filed a Chapter 13 bankruptcy petition and plan.*fn4 Consistent with that plan, Harris sought to avoid the two deeds conveying the properties to the County. The Bankruptcy Court dismissed the case without confirming any of Harris' proposed plans because Harris failed to provide copies of his tax returns and pay post-petition real property taxes. Harris refiled for Chapter 13 on November 6, 2003, and the court dismissed his case for a second time. On June 2, 2004, the County commenced another in rem proceeding against a third parcel, 24 Spring Street, claiming a $25,000.00 debt.*fn5 On August 13, Harris filed a third Chapter 13 bankruptcy petition, and on November 16, he filed an adversary proceeding.
Harris refers to a court-approved Stipulation agreed to by the parties on November 18. The Stipulation states: (1) that the preferential transfer issue of the first two parcels would be added to and decided in the new adversarial proceeding along with the preferential transfer issue of the third parcel; (2) that the debtor would withdraw his claim to the properties in favor of a claim to the proceeds of the sales; (3) that the sales by the County would be confirmed by the court; and (4) that the proceeds from the sales would be invested in three separate escrow accounts, with the proceeds to go to the successful party on the preferential transfer issue. The Bankruptcy Court dismissed both the substantive bankruptcy petition and the adversary proceeding. On March 11, 2005, Harris filed a notice of appeal for the adversary proceeding, and on March 18, he filed a notice of appeal of the Chapter 13 case.
A. Issues on Appeal
Harris challenges as legal error: (1) the Bankruptcy Court's dismissal with prejudice of his Chapter 13 petition due to his failure to formulate a feasible plan, file federal and state income tax returns, and pay post-petition real property taxes, and (2) the Court's dismissal with prejudice of his adversary proceeding as moot after the dismissal of his Chapter 13 petition. The County maintains that the Bankruptcy Court properly dismissed with prejudice Harris' Chapter 13 petition and the related adversary proceeding.
B. Standard of Review
The court has appellate jurisdiction pursuant to 28 U.S.C. § 158(a). In regard to findings of law, the court may "affirm, modify or reverse a bankruptcy judge's judgment, order or decree or remand with instructions for further proceedings." FED. R. BANKR. P. 8013. The court reviews the bankruptcy court's findings of fact under a "clearly erroneous" standard, and its legal conclusions de novo. See FED. R. BANKR. P. 8013; In re U.S. Lines, Inc., 318 F.3d 432, 435-36 (2d Cir. 2003). In applying the "clearly erroneous" standard of review, a district court may reverse the bankruptcy court only where it is "left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). Mixed questions of law and fact are reviewed de novo. See In re Vebeliunas, 332 F.3d 85, 90 (2d Cir. 2003) (citations omitted). A court's interpretation of the text of court orders is considered a conclusion of law, and is subject to de novo review. See In Re Duplan Corp., 212 F.3d 144, 151 (2d Cir. 2000). In matters committed to the discretion of the bankruptcy judge, the legal and factual findings are reviewed for abuse of discretion. See In re Blaise, 219 B.R. 946, 949-950 (B.A.P. 2d Cir. 1998). "The bankruptcy court abuses its discretion if it bases its decision on an erroneous view of the law or upon clearly erroneous factual findings." Id.
1. One-year Look Back Period
Harris claims that the property transfers by Albany County are avoidable under 11 U.S.C. § 548.*fn6 In support of this theory, he claims that the County waived the one-year look back period in a purported stipulation between Harris and Albany County.*fn7
11 U.S.C. § 548*fn8 provides: "The trustee may avoid any transfer ... of an interest of the debtor in property, or any obligation ... incurred by the debtor, that was made or incurred on or within one year before the date of the filing of the petition."
Therefore, where payment was made more than one year after debtor's bankruptcy petition was filed, payment is not recoverable under preference or fraudulent transfer statutes. The County took deed to the two properties which Harris seeks to recover in January of 2001. Harris' current Chapter 13 petition was filed in August of 2004, over three years after the transfer of the properties in question. The Bankruptcy Court properly found that the sale of the two properties in 2001 occurred well before the one-year look-back period of 11 U.S.C. § 548 and that the County of Albany did not intend to waive this time limitation.*fn9
In regard to the third property, the Bankruptcy Court found that, even if Harris was successful on the fraudulent transfer issue, the proceeds from that sale are insufficient to satisfy his debt in full to his creditors.*fn10 Judge Littlefield found that Harris is in arrears on property taxes in the amount of approximately $446,000.00, and the value of the property at 24 Spring Street is $46,000.00. Even if Harris were successful on the fraudulent transfer issue with regard to the Spring Street property, this amount would be insufficient to redress his creditors' tax claims.*fn11 Therefore, as Judge Littlefield properly noted, Harris would be unable to propose a confirmable plan.*fn12
11 U.S.C. § 548 establishes a bright-line one-year time limit for avoiding fraudulent transfers. Harris sought avoidance of two transfers which occurred outside of the one-year time period. In addition, Harris would be unable to propose a confirmable plan even if he were successful on the fraudulent transfer issue regarding the third transfer at 24 Spring Street. Accordingly, upon review, there was no error in the Bankruptcy Court's ruling on the one-year look back period, and Harris' petition is DISMISSED.
2. Adversary Proceeding
In dismissing with prejudice the Chapter 13 petition, Judge Littlefield's ruling mooted any other matter ancillary to Harris' substantive claim. Accordingly, upon review, there was no error in the Bankruptcy Court's ruling, and Harris' adversary proceeding is DISMISSED.
WHEREFORE, it is hereby
ORDERED that the Bankruptcy Court's final decision and order is AFFIRMED; it is further
ORDERED that Harris' Chapter 13 petition is DISMISSED with prejudice; it is further
ORDERED that Harris' adversary proceeding is DISMISSED with prejudice; and it is further
ORDERED that the Clerk of the Court serve a copy of this Order upon the parties.