United States District Court, E.D. Michigan, Southern Division
ORDER DENYING APPELLANT'S BRIEF ON APPEAL [Doc.
Victoria A. Roberts United States District Judge
Marique Sharp (“Sharp”) appeals a ruling from the
Bankruptcy Court, denying her Motion for Reconsideration.
After filing for bankruptcy, Sharp filed an amendment to her
schedules, claiming a homestead exemption. Trustee Stuart A.
Gold (“Gold”) objected to this amendment, since
Sharp transferred the house she sought to exempt to her
mother via a quit claim deed before filing for bankruptcy.
The Bankruptcy Court sustained the objection and disallowed
the amendment. Sharp filed a motion for reconsideration,
which the Bankruptcy Court denied. She appeals that decision
to this Court.
Sharp voluntarily transferred her interest in her home before
she filed for bankruptcy, she cannot claim a homestead
exemption, and the Bankruptcy Court ruling is AFFIRMED.
and her mother, Yvette Saltmarshall
(“Saltmarshall”) reside together at 4574
6th Street, Ecorse, Michigan (“the
property”). Sharp was the sole owner of the property,
but due to her poor credit and lack of funds, she was unable
to acquire homeowners insurance for the property. By quit
claim deed recorded on July 24, 2015, Sharp conveyed her
interest in the property to Saltmarshall for $1.00. Sharp
claims that the transfer was made in order to get homeowners
insurance, which was obtained shortly after the transfer.
Sharp maintains that she still has an interest in the
property, which is not contested by Saltmarshall. According
to Sharp, Saltmarshall is also willing transfer the property
back to Sharp via quit claim deed, if required or allowed
under the law.
November 1, 2016, nearly sixteen months after transferring
the property to her mother, Sharp petitioned for Chapter 7
bankruptcy. She indicated on her Schedule A/B form that she
did not own or have any interest in any property. Sharp also
did not claim an exemption in the Ecorse property on her
Schedule C form. She disclosed that she lived at the
property, but that she transferred the property to
Saltmarshall in July 2015.
March 14, 2017, Gold filed an adversary proceeding to avoid
the transfer of the property to Saltmarshall as a fraudulent
transfer under 11 U.S.C. §§ 544(b), 548, 550(a),
and the Michigan Uniform Fraudulent Transfer Act. Gold argued
that the transfer was fraudulent because: 1) Sharp made the
transfer within two years (in accordance with 11 U.S.C.
§ 548(a)(1)) and six years (in accordance with 11 U.S.C.
§ 544) of filing her bankruptcy petition; 2) she did not
receive reasonably equivalent value of the property in
exchange for the transfer, as she only received $1.00; and 3)
she was insolvent at the time of the transfer, and reasonably
should have believed she would incur debts beyond her ability
to pay when due.
then filed amendments to the schedules, seeking to claim an
interest in the property of $18, 000, and an exemption of
$18, 000 in the property pursuant to 11 U.S.C. §
522(d)(1), on April 12, 2017. Gold filed objections to
Sharp's claimed exemptions pursuant to § 522(g). His
objection was based on Sharp's voluntary transfer of the
property to Saltmarshall before filing for bankruptcy. After
a hearing, on June 2, 2017, the Bankruptcy Court sustained
Gold's objections and denied Sharp's amendments.
Sharp filed a motion for reconsideration; Gold objected to
18, 2017, the Bankruptcy Court granted Gold's motion for
summary judgment in the adversary case, ordering that the
bankruptcy estate had 100% interest in the property, and that
it could be liquidated for the benefit of the estate.
Bankruptcy Court denied Sharp's motion for
reconsideration on August 15, 2017. The Bankruptcy Court
found that Sharp failed to establish that a palpable defect
occurred, and, inter alia, that Sharp did not own
any interest in the property at the time she filed her
bankruptcy petition, and thus could not exempt it on her
appeal, Sharp argues that the Bankruptcy Court: 1) erred in
not allowing her to claim an exemption based on her
fraudulent concealment of the property; and 2) created an
appearance of judicial bias by allowing Gold to file a late
response to her motion for reconsideration (43 days after she
filed the motion), and by denying her motion to strike
argues that the Bankruptcy Court: 1) did not rely on
equitable considerations, but on the language of §
522(g), in disallowing Sharp to claim an exemption; and 2)
did not err in denying Sharp's motion to strike
Gold's response to her motion for reconsideration.
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