ELIZABETH A. FORESTA, RITA C. PAOLINI, THOMAS R. PREVITE, and JOSEPH A. PREVITE v. PETER J. PREVITE and FRANK STAVRIANOPOULIS, as he is Trustee of 87 Gray Street Trust and not individually.
FOSTER, J.
Record title to the property at 112 Atlantic Avenue in Hull appears in the defendant 87 Gray Street Trust. The plaintiffs, along with defendant Peter J. Previte, are the children of the late Peter Previte and Josephine Previte. The plaintiffs allege that they hold title to the Hull property because a 1977 judgment of the Superior Court found that the property had been fraudulently transferred to the 87 Gray Street Trust and ordered the property reconveyed to Mr. Previte, the father. The plaintiffs contend that the property then passed through Mr. Prevites and Ms. Prevites estates to them as tenants in common. The 87 Gray Street Trust and the plaintiffs have brought cross-motions for summary judgment. Because the judgment in the Superior Court action violated the automatic stay that entered when Mr. Previte filed for bankruptcy, it is void ab initio. Title to the property never passed to Mr. Previte, and the property remains in the hands of the 87 Grey Street Trust to this day. Judgment shall enter for the defendants.
Procedural Background
On February 12, 2013, the plaintiffs Elizabeth A. Foresta, Rita C. Paolini, and Thomas R. Previte filed their original complaint against defendants Peter J. Previte, Joseph A. Previte, and Frank Stavrianopoulos, as he is trustee of 87 Gray Street Trust (Trustee). A case management conference was held on March 21, 2013. On April 16, 2013, the plaintiffs filed their amended complaint. Joseph A. Previte joined the amended complaint as a plaintiff. The amended complaint has two counts. Count I seeks a declaration that the real property located at 112 Atlantic Avenue, Hull, Massachusetts is held as tenants in common by the plaintiffs, Elizabeth Foresta, Rita Paolini, Thomas Previte, and Joseph Previte, and by the defendant, Peter Previte. Count II seeks partition.
The defendant Trustee filed his answer to the plaintiffs first amended complaint on May 20, 2013. On June 6, 2013, a status conference was held and defendant Peter Previte was defaulted for failure to appear personally or be represented by counsel as ordered by the court and for failure to timely answer the amended complaint. His default was lifted on October 14, 2014.
The Trustee filed his Motion for Summary Judgment on October 3, 2013, along with his Brief in Support of Defendant Trustees Motion for Summary Judgment, Defendants Statement of Material Facts, and Defendant Trustees Rule 4 Appendix of Materials Referenced in Summary Judgment Brief. The plaintiffs filed the Cross Motion of Plaintiffs, Elizabeth A. Foresta, Rita C. Paolini, & Thomas R. Previte, for Summary Judgment on November 7, 2013, along with the Brief of Plaintiffs, Elizabeth A. Foresta, Rita C. Paolini, and Thomas R. Previte, in Opposition to Defendant Trustees Motion for Summary Judgment and in Support of Their Cross-Motion for Summary Judgment and Plaintiffs Response to Defendants Statement of Material Facts and Their Statement of Facts. The Trustee filed Defendant Trustees Response to Plaintiffs Statement of Additional Facts and his Reply Memorandum in Support of Defendant Trustees Motion for Summary Judgment on November 18, 2013. The court heard the cross- motions for summary judgment on December 6, 2013, and took them under advisement. This decision follows.
Summary Judgment Standard
Summary judgment may be entered if the pleadings, depositions, answers to interrogatories, and responses to requests for admission . . . together with affidavits . . . show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Mass. R. Civ. P. 56(c). In viewing the factual record presented as part of the motion, I am to draw all logically permissible inferences from the facts in favor of the non- moving party. Willitts v. Roman Catholic Archbishop of Boston, 411 Mass. 202 , 203 (1991). Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law. Regis Coll. v. Town of Weston, 462 Mass. 280 , 284 (2012), quoting Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991). Where the non-moving party bears the burden of proof, the burden on the moving party may be discharged by showing that there is an absence of evidence to support the non-moving partys case. Kourouvacilis v. General Motors Corp., 410 Mass. 706 , 711 (1991); see Regis Coll., 462 Mass. at 291-292.
Undisputed Facts
The court finds that the following facts are undisputed.
1. In 1944, Peter R. Previte purchased the property at 112 Atlantic Avenue, Hull, Massachusetts (Property), by a deed from Elizabeth Rogers Donovan, Adminstratrix of the Estate of Elizabeth Rose Donovan, dated May 23, 1944, and recorded in the Plymouth Registry of Deeds (registry) at Book 1861, Page 578.
2. Morgan Hill Wholesale Florists, Inc. (Morgan Hill) filed suit against Peter R. Previte in Boston Municipal Court in July 1976 (the BMC Action).
3. On August 13, 1976, Mr. Previte and his wife, Josephine M. Previte, created the 87 Gray Street Trust (Trust) under a Declaration of Trust which was recorded at the Middlesex South Registry of Deeds at Book 13038, Page 672, on August 17, 1976.
4. Under the terms of the Declaration of Trust, Ms. Previte was named the trustee of the Trust.
5. Ms. Previte, as trustee of the Trust, acquired title to the Property by a quitclaim deed from Mr. Previte, dated August 16, 1976, and recorded in the registry at Book 4190, Page 678, on August, 19, 1976 at 9:50 AM (the Trust Deed).
6. The Trust Deed states that Mr. Previte conveyed the Property to Ms. Previte, as trustee of the Trust, [s]ubject to existing mortgages of record, for consideration of $3,000.00.
7. On August 17, 1976, the Boston Municipal Court issued a writ of attachment in the BMC Action attaching the real estate of Mr. Previte (the BMC Attachment). The BMC Attachment was recorded in the registry in Book 4191, Page 162 on August 19, 1976 at 2:30 PM.
8. On or about September 3, 1976, Morgan Hill filed a civil action (Docket No. 16597) against Mr. Previte and Ms. Previte, as trustee of the Trust, in the Suffolk County Superior Court, claiming that Mr. Prevites transfer of the Property to Ms. Previte, as trustee of the Trust, was a fraudulent conveyance (the Superior Court Action).
9. Morgan Hill obtained a lis pendens in the Superior Court Action, and on September 7, 1976, recorded the lis pendens in the registry at Book 4196, Page 271. The lis pendens refers to the Trust Deed and recites, In its Complaint, the plaintiff asks, inter alia, that the conveyance of said property to Josephine M. Previte, trustee, by deed dated August 16, 1976 be declared null and void.
10. On April 5, 1977, Mr. Previte filed a bankruptcy petition with the United States Bankruptcy Court for the District of Massachusetts (Docket No. 77-00994) seeking protection from his creditors (the Bankruptcy Proceeding).
11. In the schedules filed in the Bankruptcy Proceeding, Mr. Previte stated that he owned no real property in Massachusetts. He identified Morgan Hill as one of his creditors. The amount of Morgans claim was $3,982.50, which Mr. Previte listed as disputed and unliquidated.
12. In the Superior Court action, Morgan Hill filed a Motion for Entry of Separate and Final Judgment as to Ms. Previte, as trustee of the Trust. At the time it filed its Motion for Entry of Separate and Final Judgment, Morgan Hill was aware that Mr. Previte had filed the petition in the Bankruptcy Proceeding.
13. In the Motion for Entry of Separate and Final Judgment as to Ms. Previte, as Trustee of the Trust, Morgan Hill stated that it was automatically stayed from proceeding against Mr. Previte by reason of his bankruptcy petition.
14. On April 29, 1977, the Suffolk County Superior Court allowed the Motion for Entry of Separate and Final Judgment as to Ms. Previte, as trustee of the Trust, and entered a judgment in the Superior Court Action in which the Court declared that said real property shall be deemed to have been standing in the name of the grantor at all times from the execution of said deed until the entry of this Judgment (Superior Court Judgment).
15. On April 14, 1977 the following entry was made into the indices of the registry, Party- or: Name/Corporation-Peter R. Previte; Doc Num- 1000716; Book-0000; Page-0; Type- Bkcy; Date Recorded- 04/14/1977; Town-None; Description- Case 694 of 1977, Florist filed 4/5.
16. On May 3, 1977 a copy of the Superior Court Judgment was recorded in the registry at Book 4274, Page 243.
17. On November 3, 1978, Mr. Previte was discharged from bankruptcy.
18. Mr. Previte died on August 1, 1979.
19. At the time of his death, the terms of Mr. Prevites last will and testament provided that any real property he owned would be placed into a trust for the benefit of his wife, Ms. Previte, and upon her death, distributed in equal parts to his children or their issue.
20. At the time of his death, Mr. Prevites heirs at law and next of kin were Ms. Previte (wife), Peter J. Previte (son), Joseph A. Previte (son), Elizabeth A. Foresta (daughter), Rita Paolini (daughter), and Thomas R. Previte (son).
21. Plaintiff Joseph A. Previte was appointed Special Administrator of Mr. Prevites estate on August 10, 1979.
22. Plaintiff Elizabeth A. Foresta was appointed Administratrix of Mr. Prevites estate on November 1, 1979.
23. On December 5, 1979, plaintiff Joseph A. Previte, as Special Administrator of Mr. Prevites estate, filed with the Middlesex Probate and Family Court a list which he certified under the penalties of perjury was a true and perfect inventory of all the estate of Mr. Previte which had come to his possession or knowledge. Plaintiff Joseph A. Previte certified that Mr. Previte owned no real estate.
24. Plaintiff Joseph A. Previte and Elizabeth A. Foresta did not include the Property in the inventory of Mr. Prevites estate.
25. Ms. Previte died on September 21, 2009.
Discussion
Because it violated the automatic stay, the Superior Court Judgment is void ab initio. Therefore, the Property was never reconveyed to Mr. Previte, but rather still belongs to the Trustee, Frank Stavrianopoulis, as the current trustee of the Trust. Kalb v. Feuerstein, 308 U.S. 433, 438-39 (1940); In re Soares, 107 F.3d 969, 976 (1st Cir. 1997); In re Advent Corp., 24 B.R. 612, 614 (1st Cir. 1982).
The filing of Mr. Prevites bankruptcy petition triggered an automatic stay. Former Bankruptcy Rule 401, promulgated by the Supreme Court in 1973, made the stay automatic and allowed it to last for the duration of the proceeding unless vacated or modified by the court. 3 Collier on Bankruptcy §362.LH[3] (Alan N. Resnick & Henry J. Sommer eds.,16th ed.); see Soares, 107 F.3d at 975. The purpose of the automatic stay is to give debtors refuge from creditor harassment, protect the property of the estate against piecemeal liquidation, and ensure an equitable distribution of the estate. 3 Collier on Bankruptcy §362.03[4]. Thus, the automatic stay effected an immediate freeze of the proceedings commenced by Morgan Hill in 1976 against Mr. Prevites estate if the debt Mr. Previte owed Morgan Hill was both unsecured and provable. Former Bankruptcy Rule 401; ICC v. Holmes Transp., Inc., 931 F.2d 984, 987 (1st Cir. 1991), and cases cited.
The Morgan Hill debt was unsecured. The BMC Attachment did not secure any property owned by Mr. Previte because the Trust Deed transferring the Property to Ms. Previte as trustee of the Trust was recorded in the registry on August 19, 1976 at 9:50 AM, before Morgan Hill recorded the BMC Attachment at 2:30 PM that day. Therefore, the BMC Attachment caught nothing, making Morgan Hill the creditor on an unsecured debt. See In re Hawkins Mfg., 11 B.R. 512, 514 (1981) (debt unsecured because lien did not attach any equity in real property).
Morgan Hill also caused a lis pendens in the Superior Court Action to be recorded on September 3, 1976. The lis pendens on the Property did not provide Morgan Hill with security interest in the Property. It functioned simply as a constructive notice to third parties of pending judicial proceedings involving the Property. Debral Realty, Inc. v. DiChiara, 383 Mass. 559 , 560 (1981).
A debt is provable if it is either a fixed liability as evidenced by an instrument in writing , absolutely owing at the time of the filing of the petition, or a contingent contractual liability[y]. In re Kalnas, 1 B.R. 193, 195 (1979) (quoting Section 63a of the Bankruptcy Act, listing which type of debts may be proved); In re Crisp, 521 F.2d 172 (2d. Cir. 1975). Since the exact amount of the debt owed by Mr. Previte could have been ascertained at any particular point in time by reference to the contract between him and Morgan Hill, or, in the alternative, was a contingent contractual liability challenged by Mr. Previte in the Bankruptcy Proceeding, the debt was provable. The plaintiffs argument that debt was not provable because the Superior Court Judgment only nullified the deed is unfounded. It is the nature of the debt that is significant under Bankruptcy Rule 401, not the nature of the legal proceedings. That the Superior Court Action centered on providing equitable relief did not change the debt on which Morgan Hill based the action. The debt remained provable under Section 63a of the Bankruptcy Act. The Morgan Hill debt was unsecured and provable.
The Superior Court Action was stayed because Mr. Prevites debt was unsecured and provable. Because the Superior Court Action was stayed, the Superior Court Judgment, declaring that the conveyance of the Property between Mr. Previte and Ms. Previte as trustee of the Trust was fraudulent and the Property to be reconveyed to Mr. Previte, violated the stay. The stay appl[ies] to an attempt to collect a prepetition claim out of property that was fraudulently transferred by the debtor before the commencement of the case. 3 Collier on Bankruptcy §362.03[8][c]. The automatic stay precluded the Superior Court from entering a judgment on the validity of the transfer between Mr. Previte and Ms. Previte as trustee because the fraudulent transfer claim that was the subject of the Superior Court Action belonged to the bankruptcy trustee. 3 Collier on Bankruptcy §362.03[8][c]. Any claims pertaining to the fraudulent conveyance needed to be pursued by the bankruptcy trustee and not the creditor. Glenny v. Langdon, 98 U.S. 20, 27-28 (1878); In re Ontos, Inc., 478 F.3d 427, 431 (1st Cir. 2007) (creditors have no standing to pursue a fraudulent conveyance claim after a bankruptcy petition is filed).
Because the Superior Court Judgment violated the automatic stay, it is void ab initio. Advent Corp., 24 B.R. at 614. The automatic stay imposed by Bankruptcy Rule 401 is an exercise of federal power. In issuing the Superior Court Judgment, the Superior Court directly contradicted federal law. Any judgments by a state court entered in violation of the stay are beyond [the courts] power, void, and subject to a collateral attack. Kalb, 308 U.S. at 438; Soares, 107 F.3d at 976. A court of competent jurisdiction does not bear a presumption of regularity in this instance because Congresss authority over bankruptcy law is plenary. Kalb, 308 U.S. at 438-439.
The plaintiffs have not presented any facts which would support the conclusion that the automatic stay should not apply. The Property was conveyed to Josephine Previte, the trustee of the Trust. The Property was never conveyed back to Mr. Previte. Rather, title to the Property remains to this day with the Trustee. The passage of time does not change this conclusion; indeed, at least some of the plaintiffs acknowledged at the time of Mr. Prevites death that he held no real estate and that the Property was not part of his estate. The plaintiffs, as a matter of law, have no claim to title to the Property. Summary judgment shall enter in the defendants favor declaring that the Property is held by the Trustee.
Conclusion
For the foregoing reasons, the Trustees Motion for Summary Judgment is ALLOWED. The Cross Motion of Plaintiffs, Elizabeth A. Foresta, Rita C. Paolini, & Thomas R. Previte, for Summary Judgment is DENIED. Judgment shall enter declaring that the Trustee holds title to the Property and dismissing the amended complaint with prejudice.
Judgment accordingly.