Nancy Goldfeder

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In the Matter of- ) Chapter 7

)

Nancy Goldfeder, } Case No. 17-12873 (LSS)

)

Debtor. ) Re: Docket Nos. 2], 27, 52, 62, 70, 72, 73

OPINION

Before me is the Objection to Debtor’s Claim of Exemption Filed by Deutsche Bank

National Trust Company as Trustee! (“Objection”) by which Deutsche Bank objects to

Debtor’s homestead exemption. While there have been multiple discovery disputes, the

issue before me boils down to the following question: whether, on December 7, 2017—the

day Ms. Goldfeder filed her bankruptcy petition—the real property Ms. Goldfeder seeks to

exempt was her principle residence. Because Deutsche Bank has the burden of proof and it

has not shown that Ms. Goldfeder improperly claimed her homestead exemption, I will

overrule the Objection.

The Law on Exemptions

Exemptions exist to protect “property essential to life and livelihood” from the

collection efforts of creditors.* Exemptions are provided by nearly every state and by the

! Deutsche Bank National Trust Company as Trustee for Morgan Stanley, ABS Capital 1 Inc., Trust

2005-HE2 (“Deutsche Bank”).

2 Obj. to Debtor’s Claim to Exemption Filed by Deutsche Bank National Trust Company as

Trustee, D.F. 21.

3 Reply Br. of Creditor in Further Supp. of Debtor’s Claimed Exemption (“Reply Brief”) 2, D.I. 73.

4 See 3 William L. Norton II, Norton Bankruptcy Law & Practice § 56.1 (3d ed. 2019); Law v.

Siegel, 571 U.S. 415, 427 (2014) (quoting Schwab Reilly, 560 U.S. 770, 791 (2016) (“[I}n crafting

the provisions of § 522 ‘Congress balanced the difficult choices that exemption limits impose on

debtors with the economic harm that exemptions visit on creditors.’”)).

United States Congress (through the Bankruptcy Code) to protect debtors from “destitution

and, as a consequence, dependence upon the public fisc.”’ Together with the discharge,

exemptions provide the principal way in which a debtor receives her fresh start in

bankruptcy. Because of that, exemption provisions are liberally construed.°

Delaware has opted out of the federal exemptions.’ So, as here, debtors seeking to

take advantage of exemptions look to Delaware law. As relevant, Delaware law provides:

In any federal bankruptcy or state insolvency proceeding, an individual debtor

and/or such individual’s spouse domiciled in Delaware shall be authorized to

exempt from the bankruptcy or insolvency estate, in addition to the exemptions

made in subsection (b) of this section and in § 4915 of this title, the following:

(1) Equity in real property or equity in a manufactured home (as defined in

Chapter 70 of Title 25) which constitutes a debtor’s principal residence in an

ageregate amount not to exceed $75,000 in 2010, $100,000 in 2011, and

$125,000 thereafter, except that the exemption for persons totally disabled

from working or married persons where at least 1 of the spouses is 65 years

old or older shall be $125,000 effective immediately.®

The term “principal residence” is not defined in the statute, and neither party has cited case

law defining the term or setting forth the factors a court uses to determine a debtor’s

principal residence in this context.? Debtor cited two Delaware cases in the divorce context

that examine domicile for jurisdictional purposes." Deutsch Bank does not cite any

Delaware case law.

5 Norton, supra note 4, at § 56.1; see also In re Krebs, 527 F.3d 82, 85 (3d Cir, 2008) (“The historical

purpose of exemption laws has been to protect a debtor from [her] creditors, to provide [her] with

the basic necessities of life so that even if [her] creditors levy on all of [her] nonexempt property, the

debtor will not be left destitute and a public charge.”).

6 Norton, supra note 4, at § 56.1,

7 Del. C. Ann. tit. 10 § 4914(a).

8 Del. C. Ann, tit. 10 § 4914(¢)(1).

9 Our independent research did not reveal any reported cases.

© Debtor’s Resp. to Deutsche Bank’s Letter Br. in Supp. of the Obj. to the Homestead Exemption

(“Answering Brief”) 9-10, D.I. 72 (citing Long v. State, 44 Del. 262 (1949) (discussing jury

instructions given by the lower court regarding defendant’s intent to make Arkansas his home) and

In ve Marriage of Pascavage v. Pascavage, 1994 WL 837452, at *9-10 (Del. Fam. Ct. July 1, 1994), afd

In Boyer v. Sylvester, a recent decision of the Delaware Court of Common Pleas, the

Court explored the term “principal residence” for purposes of Delaware’s Landlord Tenant

Code.!! Recognizing, as here, that the term is not defined in the statute, the Boyer Court

found instructive cases defining the term “domicile.” Citing to previous Delaware cases,”

the Boyer Court variously defined principal residence as: (i) “the combination of a temporary

or permanent presence on the property, with the intent to make the property’s one

home[sic];” (2) “the act or fact of abiding or dwelling in a place for some time; an act of

making one’s home in a place;” (3) “a temporary or permanent dwelling place, abode or

habitation to which one intends to return as distinguished from a place or temporary

sojourn or transient visit;” (4) “reside, despite the fact that it is somewhat formal, may be

the preferred term for expressing the idea that a person keeps or returns to a particular

dwelling place as his fixed, settled or legal abode;” and (5) “domicile is defined as a dwelling

place with the intention to make that place the resident's permanent home. It requires a

concurrence of the fact of living at a particular place with the necessary intention of making

that the permanent home.” Applying that standard to the facts before it, the Boyer Court

found the property at issue to be defendant’s principal residence where, among other things,

(i) defendant was the owner of record, paid the bills (e.g. utilities, mortgage) and those bills

were in her name, (ii) prior to her one year absence from the home she had lived there for

fifty years, her absence was due to her husband’s death and her desire to live with her

sub nom. Pascavage v. Aperio, 655 A.2d 1225 (Del. 1995) (ruling that “actual reside[ncy] satisfying the

jurisdictional requirements of 13 Del.C. § 1504 has been defined to mean domicile;” but recognizing

residence and domicile are not equivalent. Further stating “it is well settled that the essential

components ofa domicile are (1) the fact of physical presence and (2) the intent to permanently

make that place home.”)).

Boyer v. Sylvester, 2011 WL 2671872 at *6-7 (Del. Com. Pl. July 1, 2011).

2 Williamson v. Standard Fire Ins. Co., 2005 WL 6318348 (Del. Super. Ct. Aug. 19, 2005); Fritz v.

Fritz, 187 A.2d 348 (Del. 1962).

daughter in another state for a period of one year, (iii) the residence was rented during that

one year period and (iv) defendant intended the property to be her permanent home.

The Boyer Court’s description of principal residence and its analytical approach is

consistent with case law cited by Debtor interpreting the homestead exemption under either

non-Delaware state law or the Bankruptcy Code. Courts look at the totality of the.

circumstances with respect to where debtor is residing and. debtor’s intent.”*

Burden of Proof

A debtor must list the property she claims as exempt on her schedules,"* Unless a

party in interest objects, all property on the list is exempt.” If an objection is filed, the

objecting party has the burden of proof to show that the exemption is not properly

claimed.’°

In its Reply Brief, Deutsche Bank cites to Jn re Scioli”’ for the proposition that once an

objecting party produces evidence, the burden shifts to the debtor to come forward with

“unequivocal” evidence to show the exemption is proper.’* From this, Deutsche Bank

suggests (without actually stating) that (i) the debtor (not the objector) has the ultimate

burden of proof/persuasion at a claim exemption hearing and (i) once an objecting party

produces some evidence to support its position that the exemption is not properly claimed, a

3 Answering Brief 10-13.

4 U.S.C. §522(1) (“The debtor shall file a list of property that the debtor claims as exempt under

subjection (b) of this section. .. . Unless a party im interest objects, the property claimed as exempt

on such list is exempt.”).

Td.

16 Fed. R. Bankr. P. 4003(c).

17 9013 WL 318718, at *1 (Bankr. D. Del. Jan. 28, 2013), subsequently aff'd, 586

App’x 615 (3d Cir. 2014).

'8 Debtor did not have an opportunity to respond to this argument as it was raised in the Reply

Brief.

debtor must meet some heightened standard of evidence in response. These inferences are

not consistent with Bankruptcy Rule 4003.

Bankruptcy Rule 4003 places the burden of persuasion in claim exemption disputes

squarely on the objecting party. The rule provides: “In any hearing under this rule, the

objecting party has the burden of proving that the exemptions are not properly claimed.”””

Neither § 522(1) nor Bankruptcy Rule 4003 requires a debtor to provide “unequivocal

evidence” that it is entitled to the exemption. Further, there is an inherent inconsistency

between Rule 4003’s mandate that the objector has the burden of proof and the Sciofi court's

recitation that a debtor provide “unequivocal evidence” to show her exemption is properly

taken. While the “unequivocal evidence” standard is nowhere defined, as the common

usage of the term “unequivocal” means “unambiguous; clear; free from uncertainty,”” such

a standard would appear to be greater than “preponderance of the evidence” or even “clear

and convincing evidence.” As a practical matter, an “unequivocal evidence” standard

would certainly shift the ultimate burden of proof from the objector to the debtor.

In ve Scioli recited, but did not analyze, the burdens of production and persuasion in

the context of a claimed exemption of personal property. The totality of the discussion

(without citations) is:

Bankruptcy Rule 4003(c) provides: “In any hearing [on an objection to a_

claim of exemptions], the objecting party has the burden of proving that the

exemptions are not properly claimed.” “Such burden may be met by a

preponderance of the evidence.” Courts have uniformly held that Rule

4003(c) operates under a “burden shifting” framework. “‘A claimed

exemption is presumptively valid . . . If the objecting party can produce

evidence to rebut the exemption, the burden of production then shifts to the

19 Fed. R. Bankr. P, 4003(c).

2) Black’s Law Dictionary 1760 (10th ed. 2014); see also Unequivecal, Merriam-Webster Online

Dictionary, https://www.mertiam-webster.com/dictionary/unequivocal (last visited Aug. 17, 2020}

(defining unequivocal as “leaving no doubt; clear, unambiguous”),

debtor to come forward with unequivocal evidence to demonstrate that the

exemption is proper.’””!

For the proposition that a debtor must come forward with “unequivocal evidence,” the

Scioli court cites In re Kicenuik” citing to the Ninth Circuit’s decision in In re Carter”

In Carter, the Ninth Circuit states (again, without analysis) that: (i) a claimed.

exemption is presumptively valid; and (ii) the objecting party has the burden to prove that

the exemption is not properly claimed. While recognizing that the burden of persuasion

always remains with the objecting party, the Ninth Circuit also states that “If the objecting

41 Seioli, 2013 WL 318718, at *2 (citations omitted).

2 Ty re Kicenuik, 2012 WL 4506597, at *3 (Bankr. D, N. J. Sep. 28, 2012)

(citing Carter v. Anderson (In re Carter), 182 F.3d 1027, 1029 n.3 (9th Cir. 1999)).

182 F.3d at 1029 n.3. Scioli was affirmed by the Third Circuit in a non-precedential opinion. In re

Scioli, 586 Fed.App’x. 615, 617 (3d Cir. 2014). The Third Circuit also recites, but does not analyze,

the burden of proof/persuasion also relying on In re Carter. Id. at 617 (“A claimed exemption is

‘presumptively valid’... Once an exemption has been claimed, it is the objecting party's burden (the

trustee in this case) to prove that the exemption is not properly claimed. Initially, this means that

the objecting party has the burden of production and the burden of persuasion, The objecting party

must produce evidence to rebut the presumptively valid exemption. Ifthe objecting party can produce

evidence to rebut the exemption, the burden of production then shifts to the debtor to come forward with

unequivocal evidence to demonstrate that the exemption is proper. The burden of persuasion, however,

always remains with the objecting party.”) (internal citations omitted) (emphasis in original).

Bankruptcy Rule 4003(c) does not appear to imply burden shifting with respect to production of

evidence. The Third Circuit does recognize that concept in the context of proof of claim litigation.

See In ve Allegheny Intern., Inc., 954 F.2d 167, 173-74 (3d Cir. 1992) (“The burden of proof for claims

brought in the bankruptcy court under 11 U.S.C.A. § 502(a) rests on different parties at different

times. Initially, the claimant must allege facts sufficient to support the claim. Ifthe averments in his

filed claim meet this standard of sufficiency, it is ‘prima facie’ valid. In other words, a claim that

alleges facts sufficient to support a legal liability to the claimant satisfies the claimant's initial

obligation to go forward. The burden of going forward then shifts to the objector to produce

evidence sufficient to negate the prima facie validity of the filed claim.”) (internal citation omitted);

see also Fed. R. Bankr. P. 3001(f) (“A proof of claim executed and filed in accordance with these

rules shall constitute prima facie evidence of the validity and amount of the claim.”). There is a key

distinction, however, between claims litigation and exemption litigation. In claims litigation, the

party asserting the claim retains the ultimate burden of persuasion. In exemption litigation, the

objector—not the debtor asserting/claiming the exemption—bears the ultimate burden of

persuasion. I need not decide here whether there is a burden shifting framework in exemption

litigation because even if there is, Debtor has put forth sufficient evidence to meet any burden of

production she may have. See infra Part

party can produce evidence to rebut the exemption, the burden of production then shifts to

the debtor to come forward with unequivocal evidence to demonstrate that the exemption is

proper.””* The Ninth Circuit borrowed this standard from Jn re Moneer, a bankruptcy court

decision from the Northern District of Illinois interpreting [linois state law on exemptions.”

At issue in Moneer was whether the debtor had Jost his homestead exemption by

abandonment. Examining Illinois law, the Moneer Court determined that the question of

abandonment was largely a matter of intention, which could be shown by words or deeds.

The Moneer Court quoted Illinois decisional law for two principles: (i) “[s]uch intention to

return [to the homestead] must be unequivocal—equivocal intention to return is not

sufficient” and (ii) “[w]hen no new homestead has been acquired, absence from the old one,

unless for an extended period of time, does not create a presumption of abandonment.”

24 The footnote, in its entirety, reads:

We note that there was sustained discussion and some disagreement in the

bankruptcy court and the BAP concerning burdens of proof, production and

persuasion. The burdens of production and persuasion were properly set forth by the

BAP. A claimed exemption is “presumptively valid.” 9 Collier on Bankruptcy,

€ 4003.04 (15th ed. rev.1998); In re Patterson, 128 B.R. 737, 740 (Bankr. W.D. ‘Tex.

1991). Carter claimed $39,000 as an exemption under C.C.P. § 704.070, and this

claim is presumptively valid. Once an exemption has been claimed, it is the

objecting party's burden (the trustee in this case) to prove that the exemption is not

properly claimed. See Fed. R. Bankr. P. 4003(c). Initially, this means that the

objecting party has the burden of production and the burden of persuasion. The

objecting party must produce evidence to rebut the presumptively valid

exemption. In re Lester, 141 B.R. 157, 161 (S.D. Ohio 1991). Ifthe objecting party

can produce evidence to rebut the exemption, the burden of production then shifts to

the debtor to come forward with unequivocal evidence to demonstrate that the

exemption is proper. See In re Moneer, 188 B.R. 25, 28 (Bankr. N. D, Ill. 1995); Fed.

R. Evid. 301. The burden of persuasion, however, always remains with the objecting

party. There was no real dispute in the bankruptcy court or the BAP concerning

these burdens in the abstract. Rather, the parties disputed the relationship between a

subchapter S corporation and a shareholder/employee under C,.C.P. § 706.011,

which was reflected in the disagreement about burdens of proof, production, and

persuasion.

Carter, 182 F.3d at 1029 n.3.

25 In re Moneer, 188 B.R. 25 (Bankr. N.D. HL 1995).

6 Id. at 27 (citing Rasmussen v. Rasmussen, 13 N.E.2d 166, 168 (IIL. 1938)).

The Moneer Court then applied Federal Rules of Evidence 301” and 302% made applicable

by Federal Rule of Bankruptcy Procedure 9017 to the exemption hearing. Apparently

concluding there is a substantive presumption in the Illinois homestead law with respect to

abandonment that runs against the party claiming the exemption, the Moneer Court

concluded that “although the [objector] has the burden of proof as mandated by Bankruptcy

Rule 4003(c), under [Illinois state law] and Federal Rule of Evidence 301, the Debtor has

the burden of coming forward with unequivocal evidence to rebut the presumption that

when he left his spouse and immediate family and removed himself from the Property, he

left without any intention of returning and thereby abandoned his estate of homestead in the

Property.””

At most, Moneer stands for the proposition that bankruptcy courts applying Illinois

homestead exemption law in a scenario where abandonment is at issue require a debtor to

come forward with “unequivocal evidence” that he did not mean to abandon the

homestead. I respectfully disagree with courts that have adopted the Moneer standard

27 Federal Rule of Evidence 301 provides that “In a civil case, unless a federal statute or these rules

provide otherwise, the party against whom a presumption is directed has the burden of producing

evidence to rebut the presumption. But this rule does not shift the burden of persuasion, which

remains on the party who had it originally.” Fed. R. Evid. 301.

28 Federal Rule of Evidence 302 provides that “In a civil case, state law governs the effect of a

presumption regarding a claim or defense of which state law supplies the rule of decision.” Fed. R.

Evid. 302. Rule 302 embodies the Erie doctrine such that if state law provides a true presumption

and as such is a substantial element of the claim or defense, a federal court must apply that state law

in civil actions. 1 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Federal Evidence,

§§ 302.02[1], [2][a] (Mark S. Brodin, ed., Matthew Bender 2d ed. 1997).

22 Moneer, 188 B.R. at 28. The Moneer Court appears to have broadened the substantive requirement

to show an unequivocal intention to return to the property into “unequivocal evidence.”

wholesale in different exemption contexts, interpreting federal exemptions or interpreting

state exemptions for states other than Ilinois.*°

Delaware law governs the matter before me. Assuming, without deciding, that the

Moneer analysis is the correct approach generally with respect to the burdens on parties in

exemption disputes under the Bankruptcy Code, Deutsche Bank cites no Delaware state law

creating a presumption running against Debtor under 10 Del. C. § 4914, the relevant statute.

Therefore, Debtor is not required to provide “unequivocal evidence” that she is entitled to

her claimed exemption. Rather, as stated in Rule 4003, Deutsche Bank has the burden of

proof. As no party has cited a standard greater than “preponderance of the evidence,” that

is the standard Deutsche Bank must meet.

One court has observed: “placing the burden of proof on the objector presents a

formidable task since most of the information regarding the exempt asset will be held by the

debtor or some other third party, not the objector.”*'! But this standard reflects Congress’

goals in providing exemptions: namely, to permit debtors a fresh start with a minimal safety

net and to reduce dependence on the public fisc. It is against this backdrop that I approach

the matter before me.

Procedural Posture

On December 7, 2017 (“Petition Date”), Nancy Goldfeder (“Debtor”) filed a

voluntary bankruptcy petition” (“Petition”) under chapter 7 of the United States

Bankruptcy Code (“Code”). At each place on the Petition requiring a signature, the Petition

0 CF In re Pomeroy, 2016 WL 3564378, at *15 (Bankr. E.D. Cal. June 21, 2016) (finding Carter to

be dicta and concluding that there is no sufficient basis to hold a debtor to an unequivocal evidence

standard on an objection to an exemption).

Kieceniuk, 2012 WL 4506597, at *3.

2 DT 1.

was signed by both Debtor and Dr. Emil Mikhail who signed as “Guardian Ad Litem

(Superior Court Order).” Thereafter, on December 11, 2017, Debtor filed a motion to

appoint Mikhail as her guardian ad litem for purposes of the bankruptcy case.”’ In that

motion, Debtor represented that Mikhail had been appointed Debtor’s guardian ad litem by

order of the Superior Court dated July 26, 2012 because of Debtor’s debilitating physical

and mental illnesses, which were not anticipated to improve. No objections were filed to

Debtor’s request and an Order appointing Mikhail as Debtor's guardian ad litem was entered

on January 19, 2018.*4 Debtor received her discharge on April 10, 2018.”

The only controversy in the bankruptcy case has been with Deutsche Bank over

Debtor’s claimed exemption. On Schedule A filed with the Petition, Debtor lists a property

at 1610 North Union Street, Wilmington, Delaware 19806 as a single-family home with a

current value of $100,000 (“Union Street Property”).°° Debtor also schedules “3 Rooms

Used Household Goods” valued at $1,500. On Schedule C, Debtor claims her Delaware

exemptions, including “100% of the fair market value, up to any applicable statutory limit”

for the Union Street Property pursuant to 10 Del C. § 4914(¢)(1).

On February 9, 2018, Deutsche Bank filed the Objection. Deutsche Bank does not

take issue with Debtor’s valuation of the Union Street Property. Nor does Deutsche Bank

dispute ownership of the Union Street Property. Rather, Deutsche Bank contends that the

33 Mot. to Appoint the Guardian ad litem Nunc Pro Tunc to the Order for Relief, for the Appearance

at the 341 Meeting of Creditors, and to Assist the Trustee in Debtor’s Stead Throughout the

Bankruptcy Case, D.I. 13.

Order Appointing and Granting to The Guardian ad litem, Nunc Pro Tunc, Full Power and

Capacity to Assist Debtor and to have Standing as Debtor Throughout the Bankruptcy Case, D.I.

17.

5 Order of Discharge, D.I. 37.

%© Debtor also notes: “Property was improperly sold to Brian O’Neal in October 2015 for

$130,000.00 but sale was not consummated. Damage resulted in No running water, sewer repairs

necessary and gas heat repairs. Est. As is cost of 100K at most.” Petition 11.

10

Union Street Property is not Debtor’s principal residence and that she has not lived at the

Union Street Property for “at least approximately ten (10) years, if not longer.”

After the filing of the Objection, the parties began discovery. Deutsche Bank

diligently pursued both written discovery and deposition testimony. It sent document

requests and noticed Mikhail’s deposition.

On October 17, 2018, a Joint Stipulated Pretrial Scheduling Order was entered

setting the Objection for trial on January 2, 2019.*” The Pretrial Order also set a deadline

for completion of discovery and depositions of trial witnesses, specifically including the

deposition of Mikhail. It further contemplated that the parties might determine to resolve

the matter on the papers, rather than a trial. On November 30, 2018, the parties submitted a

joint status letter informing the court that the parties would indeed take that route.** On

December 7, 2018, a further Joint Stipulated Scheduling Order was entered setting forth

deadlines for exchanges of final exhibit lists, motions é# mine and a briefing schedule on the

Objection.”

Consistent with the agreed to schedule, on February 8, 2019, Deutsche Bank filed a

motion in fimine setting forth specific objections to potential exhibits Debtor might offer in

connection with the Objection as follows.”

Exhibit Description Admissibility Objection

Number

2 “Photographs of the home ~ 1610 N. Union | Authentication/Foundation

Street, Wilmington DE 19806”

3 “All pleadings filed to date including Authentication/Foundation;

verified statements and exhibits” Hearsay; Relevancy

7 Joint Stipulated [Proposed] Pretrial Scheduling Order, D.I. 50.

38 Joint Status Letter, D.I. 53.

Joint Stipulated Scheduling Order, D.L. 55.

40 Deutsche Bank’s Mot. in Limine to Preclude Admis. of Debtor’s Potential Ex. Nos, 2-7 (“Motion

in Limine”), D1. 58.

11 .

4 “Sworn testimony taken at 341 meeting of | Authentication/Foundation;

creditors” Hearsay; Failure to produce

in discovery

5 “Fidelity National ‘Title Insurance Authentication/Foundation;

Company title search record” Hearsay; Relevancy;

Failure to produce in

discovery

“Utility Statements and or bank statements | Authentication/Foundation;

as exchanged per Court order” Hearsay

7 “A copy of Debtor's state issued Authentication/Foundation

identification card presented to Court and

counsel”

Debtor responded to the Motion in Limine.” Ata hearing on February 21, 2019, I

determined that Deutsche Bank was entitled to a two hour deposition of Mikhail on the

issues of authentication and foundation of documents and could be examined on his

testimony at the section 341 meeting. I also determined I would consider relevancy

objections in connection with the briefing.

On May 6, 2019, Deutsche Bank filed a motion for sanctions” based on Mikhail’s

failure to appear for his deposition. Mikhail asserted that his own health was deteriorating

and he was not available to attend a deposition. In the Motion for Sanctions, Deutsche

Bank sought an order precluding Debtor from submitting into evidence the documents

identified in the Motion in Limine. Debtor’s response included a motion for a limited re-

opening of the discovery period and suggested possible alternative witnesses on the

documents.” At that hearing, | permitted another 30 days for additional discovery so that

41 Resp. to Creditor, Deutsche Bank’s, Mot. in Limine to Preclude Admis. of Debtor’s Potential

Exhibits Nos. 2-7, D.L. 60.

4 Deutsche Bank’s Mot. for Relief from Debtor’s Disc. Violations (“Motion for Sanctions”), D.I.

62.

43 Resp. to Creditor, Deutsche Bank’s, Mot. for Relief from Debtor’s Disc. Violations and Counter

Mot. to Re-Open Limited Disc., D.I. 63. Debtor’s response also attached a one page document

titled Psychological Functional Capacity signed by Nana Berkiashvili, M.D. stating, among other

things, “Pt [Mikhail] suffers from intractable insomnia nightmares and inability to function due to

severe fatigue and cognitive issues.” Jd. at 63-1.

12

either party could obtain further discovery on the authentication of documents to be

submitted. I also stated that I would decide all objections to exhibits in the context of the

briefing and directed parties to state (or re-state) any evidentiary objections in their

respective briefs.

The Opening Brief,* Answering Brief and Reply Brief were duly filed. I have

reviewed the documents submitted with the briefs, considered the objections to the

documentary evidence in Deutsche Bank’s Motion in Limine as well as its objection to

further documents submitted by Debtor with her Answering Brief® and the Motion for

Sanctions. The matter is ripe for decision.

The Parties’ Positions

In the Objection, Deutsche Bank asserts that the Union Street Property is not

Debtor’s principal residence because she has not lived there for at least ten years, Detusche

Bank makes two legal arguments in its Opening Brief. First, Deutsche Bank argues that

Debtor is estopped from arguing that the Union Street Property is her principal residence

because of positions she took before the Delaware Superior Court and Supreme Court in

prepetition foreclosure litigation regarding the Union Street Property. Second, it argues

“Debtor has failed to establish through credible evidence that the [Union Street Property] is

her principal residence.”*° Deutsche Bank argues that the evidence produced by Debtor is

inconsistent, non-credible or contradictory. Further, Deutsche Bank questions Mikhail’s

“4 Opening Br, of Creditor in Supp. of Obj. to Debtor’s Claimed Exemption (“Opening Brief”), □□□□

Reply Brief 3 n.4. Deutsche Bank objects to the Certification of Stacey Mattia attached to

Debtor’s Answering Brief on the basis of hearsay, lack of authentication, late production, inability to

depose declarant and as an improper attempt to inject opinion testimony into the case after the close

of the discovery period.

46 Opening Brief 4.

13

interest in the Union Street Property. While making this argument, Deutsche Bank barely

challenges Debtor’s intent to live at the Union Street Property. Rather, the argument is that

she does not live there.”

Debtor argues that by any measure the Union Street Property 1s Debtor’s principal

residence as she owns the Union Street Property, was living there on the Petition Date, her

personal belongings were there as of the Petition Date, and while she was absent from the

Union Street Property over the years due to her medical condition, Debtor always intended

The word “intent” is not found in the Objection or the Opening Brief. 'The word “intent” shows

up in the Reply Brief as follows:

The only testimonial evidence to support that Debtor intends to, permanently reside

at the Property now comes from Debtor herself and Guardian, and such testimony

lacks credibility due to substantial inconsistencies. For example, Debtor alleges in

her Schedules that the Property is in complete disrepair, has no running water, and

sewer and gas heat repairs are necessary such that the as-is cost of the Property has

likely been reduced to $100,000. (D.I. 72-3; D.I. 72-4; D.I. 72-5), She also argued as

much in response to Creditor’s Objection and during the 341 hearing. (D.I. 72-7 at 7)

(stating that Debtor uses “alternative water tanks and sources and showers at her

Guardian’s property nearby, and also freely uses her neighbor’s bathroom facilities”)

(DI. 72-8 at 9:1-2) (the house is “really in deplorable condition”). This is of course

consistent with the fact that the house was condemned previously, and

representations to the State Court up to the date of the Petition that the house was in

disrepair. (D.I. 21, Exs. B, C, E; D.I. 70 at 2-3). However, after Creditor filed tts

Objection, and Debtor was put on notice of the issue regarding her principal

residence, Debtor then produced pictures that purport to show the house with

running water, and water bills reflecting water usage throughout the time frame she

claimed she did not have running water. (D.I. 72-19), Guardian also stated that the

Property had running water in response to Creditor’s interrogatories, only after

Creditor filed the Objection. (D_I. 48, Ex. B).

Unlike the cases cited by Debtor, this is not a case where Debtor recently purchased

the Property or was unable to live there due to hurricanes or total incapacity. (D.I. 72

at 14). She has lived at multiple addresses, and apparently is capable of living by

herself upon her own admission. Instead, Debtor allegedly has chosen to live at the

Property when, and if, most convenient to her in connection with her legal pursuits.

She demonstrated no intent to permanently reside at the Property throughout the

pendency of the State Court Action, which persisted up until the date of the Petition,

in order to avoid foreclosure. Her post-petition evidence—which Creditor continues

to assert is inadmissible—simply fails to support that the Property was Debtor’s

principal place of residence on the date she filed the Petition.

Reply Brief 4-6 (emphasis added).

14

to make the Union Street Property her home. Debtor argues that Deutsche Bank has not

sufficiently established that the Union Street Property is not Debtor’s principal residence,

Finally, Debtor argues that Deutsche Bank should be held in contempt for its overly litigious

stance.

Discussion

I. Debtor is not Estopped from Arguing that the Union Street Property is her

Principal Residence

Deutsche Bank’s main argument is that Debtor is estopped from arguing that the

Union Street Property is her principal residence because of positions taken by her (or on her

behalf) in a foreclosure proceeding commenced by Deutsche Bank in the Superior Court of

the State of Delaware (“Foreclosure Action”) and/or findings made by the judge overseeing

that action. In the Foreclosure Action, Deutsche Bank foreclosed on a mortgage

encumbering the Union Street Property, which went to a sheriff's sale. Debtor successfully

argued that she did not receive notice of the Foreclosure Action because she was not living

at the Union Street Property at the time. Indeed, the Superior Court found that at the time

of the sheriff's sale, Ms. Goldfeder was living in the basement of the property located at 205

Ayre Street, Newport, Delaware (the “Ayre Street Property”), Mikhail’s home. As a result,

the trial court vacated the sheriff's sale, returning the parties to their original positions. The

Supreme Court ultimately affirmed the trial court’s ruling.*

Deutsche Bank argues that the position taken by Debtor in the Foreclosure Action—

that she did not live at the Union Street Property-—is inconsistent with the position taken in

her bankruptcy case that the Union Street Property is her principal residence, Deutshe Bank

48 See Deutsche Bank Nat. Tr. Co. v. Goldfeder, 2014 WL 644442 (Del. 2014).

15

cites cases for the proposition that if a party takes inconsistent positions, she may be

estopped from later making a contradictory argument.” Defendant is correct. Applying

that doctrine here, however, does not result in the application of any estoppel theory

because Debtor is not taking inconsistent positions.

Because Deutsche Bank’s estoppel position is firmly rooted in the Foreclosure

Action, a chronology assists in evaluating the estoppel argument. The following chronology

is largely gleaned from the Supreme Court’s February 14, 2014 Opinion (which contains the

most complete timeline): ©

2004 Debtor enters into a mortgage with MERS as nominee for Home

Funds Direct. The mortgage is secured by the Union Street Property.

2007 Debtor defaults on the mortgage.

2008 Deutsche Bank files an In Rem Scire Facias Sur mortgage action.”

April 13,2010 | Default judgment entered against Debtor for failure to appear.

November, Writ of levari_ facias issued and sheriff's sale held. Deutsche Bank is

2011 declared the high bidder.

Opening Brief 6-7 (citing, among other authorities, New Hampshire v. Maine, 532 U.S. 742, 749

(2001) (“This rule, known as judicial estoppel, ‘generally prevents a party from prevailing in one

phase of a case on an argument and then relying on a contradictory argument to prevail in another

phase.’” (quoting Pegram v. Herdrich, 530 U.S, 211, 227 n.8 (2000)) and 18 C. Wright, A. Miller, & E.

Cooper, Federal Practice and Procedure § 4477 (1981) (“absent any good explanation, a party

should not be allowed to gain an advantage by litigation on one theory, and then seek an

inconsistent advantage by pursuing an incompatible theory.”)).

°° The last four entries ate taken from Judge Butler’s November 12, 2013 ruling. Opening Brief, Ex.

A (“Superior Court Ruling”).

5! Debtor states that the mortgage was rescinded. Response to the Deutsche Bank National Trust

Company’s Objection to Debtor’s Claim of Certain Exemptions Pursuant to Fed. R. Bankr. P.

4003(b) (“Debtor’s Initial Response”) 6, 8, D.L. 27; Answering Brief 6. It is unclear to me why (or

exactly when) this happened, but Deutsche Bank has not contended otherwise. In any event, in

2017, Deutsche Bank was back in the Delaware state courts on a sheriff's sale resulting from a

judgment lien.

16

December 23, Sheriff sale is confirmed.

2011

January 25, Sheriff deeds Union Street Property to Deutsche Bank.

2012

January, 2012 | Mikhail becomes aware of the sheriffs sale.

July 27, 2012 Superior Court finds Ms. Goldfeder to be incompetent on matters

relating to the sheriff's sale and grants Mikhail guardian ad /item status.

August 8,2012 | Ms. Goldfeder (through her guardian ad litem) files motion to vacate

the sheriff's sale, vacate confirmation of the sale and set aside the

sheriff's sale (“Motion to Vacate”).

August 23, Superior Court grants Motion to Vacate.

2012”

Deutsche Bank appeals Order granting Motion to Vacate.

May 10, 2013 Delaware Supreme Court remands case to Superior Court for further

findings.

September 13, | Delaware Superior Court holds evidentiary hearing.

2013

November 12, Delaware Superior Court issues its additional factual finding again

2013 concluding that the Motion to Vacate should be granted.

February 14, Supreme Court affirms Superior Court’s judgment.

2014

As is evident from the chronology, Debtor’s argument before the state courts that she did

not live at the Union Street Property at the time that the sheriff served the writ of /evari

facias, focused on the time frame at and before November, 2011—a full six plus years before

Debtor filed her petition on December 7, 2017. This is verified by the Superior Court’s

finding that Debtor lived at the 205 Ayre Street Property from 2007 until 2011.”

Answering Brief, Ex. 5.

Superior Court Ruling 6. The Superior Court further finds that Mikhail evicted Debtor in 2011

because she threatened to burn his house down and “a social worker found Debtor an alternative

residence in a communal atrangement on West Street in Wilmington.” Jd. 'The Superior Court does

not specify the duration of that arrangement.

17

Here, the question is whether the Union Street Property was Debtor’s principal

residence on the Petition Date, some six years after the time period addressed by the

Superior Court in the Foreclosure Action. Defendant’s estoppel theory based on her

representations in filings with the Delaware Superior Court and Delaware Supreme Courtt,

thus, fails. At most, the position taken by Debtor in the Foreclosure Action is some evidence

that she did not always live at the Union Street Property and can be factored into whether

Deutsche Bank has met its burden of proof on the Objection.

IL. Other Evidence Submitted by Deutsche Bank Does Not Establish that the

Union Street Property is not Debtors’ Principal Residence

Throughout Deutsche Bank’s submission is an underlying theme that the Union

Street Property is not habitable and so Ms. Goldfeder could not have been living at the

Union Street Property on the Petition Date. Alternatively, Deutsche Bank insinuates that

Mikhail’s actions undercut the position that the Union Street Property is Debtor’s principal

residence. .

With its Objection or its Opening Brief, Deutsche Bank submitted documentation in

support of its position, as follows:

e The November 12, 2013 Superior Court decision supplying answers to

questions upon remand from the Delaware Supreme Court in the Foreclosure

Action.

e A transcript of a December 7, 2017 hearing in the Foreclosure Action.”

e A printout of a docket sheet for the case styled Nancy Goldfeder v. McCloskey

and Mikhail, CPU4-17-000010 filed December 21, 2016 by attorney Darrell J.

Baker, which lists Ms. Goldfeder’s address as the Ayre Street Property.~®

54 Opening Brief, Ex. A.

5 Opening Brief, Ex. B.

56 Opening Brief, Ex. C.

18

e A Delaware State Identification Card dated 12-29-2014 showing Ms.

Goldfeder’s address as the Ayre Street Residence.”

¢ copy of Page 36 of 39 of a document titled City of Wilmington, Delaware

Vacant Property List updated 1/12/2018 listing the Union Street Property

with a Vacant Date of 12/18/2008.°°

e Acopy of a what appears to be a return on an Alias Fi Fa Levy on personal

property dated 10/19/2017.”

e A transcript dated August 23, 2012 in the Foreclosure Action.”

« Copies of documents issued to/mailed to/or otherwise directed to Mikhail at

the Union Street Property:

> Delaware Driver License issued to the Guardian on August 9, 2016."

> Letter dated October 25, 2012 from UBS Financial Services, Inc.

addressed to the Guardian at the Property.”

>» PNC bank statements for an account in Mikhai’s name for the periods

of 12/05/2015 to 01/07/2016, 4/7/2015 to 5/6/2015, 4/9/2014 to

5/6/2014 and 8/7/2014 to 9/5/2014."

> A Subpoena Duces Tecum from the Attorney General of the State of

Delaware in the case of State v. George in September 2009.

While Debtor did not file a motion in imine or otherwise seek to exclude this evidence,

Deutsche Bank did not file a declaration in support of its Objection or authenticate any of

the documents it submitted for consideration.

57 Debtor’s Initial Response, Ex. D-1A; see a/so Answering Brief 6 n.3.

8 Objection, Ex. A.

Objection, Ex. G.

6 Opening Brief, Ex. H.

Opening Brief, Ex. D.

6 Opening Brief, Ex. E.

6 Opening Brief, Ex. F.

(pening Brief, Ex. G.

19

A review of the briefs show that Deutsche Bank is using much of this evidence

affirmatively to support its estoppel argument, in an attempt to show that the Union Street

Property is uninhabitable and therefore could not be Debtor’s principal residence or that the

Union Street Property is being used for some other, unspecified, purpose.

Four of the documents are close in time to the Petition Date and merit consideration.

First, the Vacant Property List reflects the Union Street Property on a list dated 1/12/18,

one month after the Petition Date. This page also lists the owner of the Union Street

Property as Select Portfolio Servicing. The ownership listing is incorrect or, at best,

outdated, which calls into question the accuracy of the remaining information on the Vacant

Property List. At no point in time has Deutsche Bank suggested that Debtor was not the

legal owner of the Union Street Property on the Petition Date.® So, while the Vacant

Property List may be some evidence that the Union Street Property was vacant on

12/18/2008—nine years before the Petition Date—the inaccurate ownership information as

of the printout date does not provide convincing evidence that the Union Street Property

was vacant on 1/12/18, or the Petition Date.

Second, Deutsche Bank relies on the October 19, 2017 sheriffs return of an alias fi fa

levy of Debtor’s goods and chattel and lands and tenements at the Union Street Property.

Deutsche Bank correctly states that the sheriff writes: “Deputy spoke with neighbor at 1608,

she informed deputy that home is vacant @ 2 years.” But, Detusche Bank ignores the

immediately previous sentence in which the sheriff writes: “Defendant [Ms. Goldfederj

6 Indeed, such a position would be wholly inconsistent with the Foreclosure Action and Deutsche

Bank’s actions to satisfy its judgment by a sheriff sale of the Union Street Property. And, in fact,

Deutsche Bank conceded in its Motion in Limine that Debtor owns the Union Street Property.

Motion in Limine at ¥ 19 (“There has never been any dispute as to whether Debtor is the owner of

the Property; Deutsche Bank agrees that she is.”).

6 Objection, Ex. G.

20

refused to grant access to the property resulting in Nulla Bona as to G&C; thereafter L&T

levied.”®’ In her response to the objection, Ms. Goldfeder asserts that she has had

significant problems with one of her neighbors.® In any event, the statement from the

neighbor contradicts the sheriff's statement that Debtor refused him access to the Union

Street Property so he was unable to levy on Debtor’s goods and chattels. If the Union Street

Property were vacant, the sheriif could have (and presumably would have) simply noted

that as the reason he was unable to levy on Debtor’s goods and chattels.

Third, the Docket Sheet (presumably containing information supplied by attorney

Darrell J, Baker) provides some evidence that the Union Street Property was not Debtor’s

principal residence one year prior to the Petition Date.

Fourth, Deutsche Bank submitted a transcript of a teleconference on an emergency

motion to set aside a sheriff's sale before Judge Butler. This hearing occurred on

December 7, 2017—the Petition Date. Deutsche Bank argues the transcript reflects that

Judge Butler “presumed Debtor lived [at the Ayre Street Property] on the date she filed her

petition.”

Deutsche Bank takes Judge Butler’s statement out of context. As reflected in the

transcript, during the teleconference, Judge Butler had not seen Debtor and Deutsche Bank

for at least a year (maybe two), and he poses questions regarding the condition of the Union

6 Ms. Goldfeder writes off the neighbor as a “nasty neighbor, who has repeatedly tormented Debtor

[and] made misstatements.” Debtor’s Initial Response 3-4, 6.

® Opening Brief 5.

21

Street Property. The following colloquy took place between Judge Butler and Debtor’s

counsel:

The Court: So, let’s say that this property goes to sheriff's sale. The

last I heard it was in a state of serious disrepair. | doubt

the guardian has done diddly squat to repair it. So, is it

still the case that the place’s in bad shape?

Mr. Brown: ‘Your Honor, that is my understanding. My

understanding is that Miss Goldfeder resides there. But

due to the condition of the property, she actually spent a

fair amount of time taking advantage of the amenities

that guardians do to, you know, provide for her, and

stuff.”

After that, the following colloquy took place between Judge Butler and Deutsche Bank’s

counsel:

Ms. Rogin: Your Honor, well, there’s a couple things. I do not

believe anyone does live in the house because every time

the sheriff has tried to serve Mrs. Goldfeder or the

guardian at the property, they’ve been told by neighbors

that it’s vacant and they can never find anyone there.

So, you know, ?m not sure that the arguments that, you

know, that she was being devastated by the sale of the

house holds up.

The Court: She lives in the basement of Mikhail’s house in

Newport.

Ms. Rogin: Right, that’s what I believe is true.”

Contrary to Deutsche Bank’s contention that Judge Butler “presumed” Debtor lived at the

Ayre Street Property, he appears to simply be recalling the previous status. Taken in

context, Judge Butler is not making any statement about where Debtor lived on the Petition

Date, and certainly, he is not making any finding. Moreover, as reflected in the transcript,

” Opening Brief, Ex. B. 11:19-12:6.

Td. at 15:2-15:13.

22

Debtor’s counsel states his understanding that Debtor was living at the Union Street

Property on the Petition Date.

The remainder of the documents submitted by Deutsche Bank suggest that Mikhail

was listing the Union Street Property as his address. While these documents perhaps raise

some questions regarding Mikhail or his motivations (or, perhaps not}, these documents do

not support a conclusion that the Union Street Property is not Debtors’ principal residence.”

Reviewed in its totality, the evidence submitted by Deutsche Bank does not persuade

me, by a preponderance of the evidence, that the Union Street Property was not Debtor’s

principal residence on the Petition Date. Consistent with Deutsche Bank’s estoppel

argument, much of the evidence significantly pre-dates the Petition Date. The evidence on

or close to the Petition Date contains statements that may support Deutsche Bank’s

position, but also support Debtor’s claimed exemption. To the extent the evidence is

contradictory, Deutsche Bank has not met its burden of proof.

Il. Evidence submitted by Debtor

Assuming Debtor had a burden of production with respect to the Objection (see supra

n. 23), she has met it. In addition to the Petition and Schedules” (which show the Union

Street Property as her address}, Debtor submitted documentary evidence in opposition to

the Objection as follows:

e A Delaware Polling Place Card from the Department of Elections dated

3/20/2018 showing the Union Street Property as Debtor’s residence.”

® Of course, to the extent that Mikhail was also living at the Union Street Property, that ts not

evidence that it is not Debtor’s principal residence.

Answering Brief, Exs. 1-4.

4 Answering Brief, Ex. 8.

23

e Three Delaware state issued identification cards showing the Union Street

Property as Debtor’s residence (one date is not readable, the other dates are

02-26-2013, 08/20/2018).”

* Various mortgage statements (or segments thereof) from Select Portfolio

Servicing mailed to Debtor at the Property with statement dates of

8/13/2015, 1/12/2016, 4/14/2016, 10/13/2016, 11/14/2016, 2/15/2017,

8/15/2017, 11/15/2017, 7/12/2018, 10/15/2018, 11/15/2018.”

e Various photos of the Property, both inside and out taken April 20, 2018

reflecting furnishings and personal items in the living space, bedroom,

bathroom and kitchen.”

e The Certification of Stacey A. Mattia dated June 27, 2019 regarding a May 2,

2019 and May 8, 2019 visit to the Union Street Property to meet Ms.

Goldfeder and to take pictures together with the pictures taken. The pictures

reflect furnishings and personal items in the living space, bedroom, bathroom

and kitchen.”

e A Memorandum written by Stacey A. Mattia regarding her May 2, 2019 visit

reflecting her discussion with Ms. Goldfeder.”

« Various Delmarva Power bills for the Union Street Property, including a

statement for the period of 12/17/2017- 1/18/2018 with new electric charges

of $151,99.%

e Quarterly Utility Statements from the City of Wilmington (water) showing

usage for the periods of Gi) 12/2/17 to 3/6/18, Gi) 3/6/18 to 6/1/18 and (iii)

8/22/18-9/18/18.""

e Various printouts from Walgreens dated 12/5/17 through 8/7/18 listing

Debtor and the Union Street Property address.”

Statements from M&T bank addressed to Ms. Goldfeder at the Union Street

Property for the period of 3/31/18-4/30/18, 5/1/18-5/30/18, 5/31/18-

6/29/18, 6/30/18-7/30/18, 5/1/19-5/30/19).™

Answerme Brief, Ex. 8.

*® Answering Brief, Exs. 9, 10.

” Answering Brief, Ex. 11.

Answering Brief, Ex. 12.

79 id.

Answering Brief, Ex. 19.

$1 id.

82 id.

83

24

e The transcript of the Section 341 meeting held April 9, 2018 at which the

Guardian testified that Debtor lives at the Union Street Property, but that she

goes to the Guardian’s house for taking showers and food. He further

testified that Debtor is “emotionally attached to the house and she want to go

every day.’**

As stated above, Deutsche Bank objects to much of this evidence. In particular, Deutsche

Bank asserts authentication and foundation objections to the photographs of the Union

Street Property, and the Delaware state identification cards. Deutsche Bank adds hearsay

objections to the bank and utility statements. And, Deutsche Bank adds “failure to

produce” in discovery as grounds to preclude the section 341 meeting transcript and the

National Title Insurance Company record.

(i) Authentication / Foundation

In the Third Circuit, the standard for authenticating evidence is “slight.”® Only a

prima facie showing is necessary, and once made, it is for the fact finder to ultimately

determine the authenticity of the evidence. Federal Rule of Evidence 901 provides

examples of appropriate methods of authentication, such as “reliance on appearance,

contents, substance, internal patterns of other distinctive characteristics of the item.”* But,

this list is not exhaustive and circumstantial evidence can suffice to show authenticity.®’

I conclude that the Delaware Polling Place Card, state issued identification cards,

mortgage statements, Delmarva Power bills, quarterly utility statements from the City of

Wilmington, and the bank statements from M&T meet the slight burden to show

authenticity, and as the fact finder, I find them authentic. The appearance of these

Answering Brief, Ex. 7.

85 United States v. Turner, 718 F.3d 226, 232 (3d Cir, 2013) (citing McQueeney v. Wilmington Trust Co.,

779 F.2d 916, 928 (3d Cir, 1985)).

% Ped. R. Evid 901(b)(4).

8? Turner, 718 F.3d at 232.

25

documents appear as they should, and contain the information such documents would

typically have. And, the documents were produced by Debtor during discovery.”

Further, while it is Debtor’s burden to prove authentication, Deutsche Bank has not

suggested any credible reason to doubt authenticity.”

I also conclude that I can consider these documents under Federal Rule of Evidence

807, the residual hearsay exception. While I recognize the rule is to be used rarely, these

documents have “exceptional guarantees of trustworthiness” because Debtor, banks and

others rely on them to show evidence of residency.” I also note that the mortgage

88 Turner, 718 F.3d at 233.

® Id. at 232 (“considering that documents were produced in response to a discovery request as

evidence of authenticity”) (citing McQueeney, 779 F.2d at 929), In its Interrogatories, Deutsche Bank

asked the following questions:

6, Do you pay for any utilities, including but not limited to gas, oil, electric, or

water for the Property? If you answer is in the affirmative, identify and describe

what utilities you pay with respect to the Property, and attached a copy of the most

recent bili to these interrogatories.

7, Please provide a copy of all heating, electric, water, cable, mternet, phone

and oil bills for the Property from Novernber 1, 2017 to the present.

13. Do you have an account with any bank? If your answer is in the affirmative,

identify and describe the account, and attached a copy of the most recent statement

to these interrogatories.

14. Do you have any form of state or government issued identification card? If

your answer is in the affirmative, identify the source of identification, and attach a

copy of each such identification card to these interrogatories.

Exs. A through J (Corrected) in Supp. of Mot. to Compel Disc. Responses, Ex. A (Deutsche Bank

National Trust Company’s Interrogatories and Requests for Production Directed to Debtor)

(“Deutsche Bank’s Discovery Requests”), D.I. 48.

Turner, 718 F.3d at 233.

| See, e.g., 2217 Driver License and Identification Card Application Procedures for Delaware

Compliant and Delaware Non-Compliant Identification Documents:

8.0 Principal Residence Address.

8.1 The division and Delaware State Police must be able to contact every

identification document holder at the physical location where he lives in this State.

Therefore, every applicant must provide two documents that show the individual's

name and principal Delaware residence using such documents as utility bills, auto or

life insurance policies, W-2 or filed tax forms, voter registration card, bank account

records, credit card statements, employment records, signed contract to purchase

home in this State, rental agreement or any other document specifically approved by

the Chief of Driver Services or Director. These source documents will be

electronically stored and when possible, verified. The applicant should notify the

26

statements are from Select Portfolio Servicing, Deutsche Bank’s agent and/or predecessor.

Further, Deutsche Bank is capable of verifying such documents through discovery requests

to third parties and so was in a position to debunk these documents if they were in error or

falsified in any way.”

The photographs of the Union Street Property, Ms. Mattia’s certification and

memorandum, however, are not the type of information that Deutsche Bank was in a

position to independently validate. The photographs show both the outside and inside of

the Union Street Property as of two points in time: April, 2018 (“Initial Photographs”) and

May, 2019. The photographs reflect furnishings and personal belongings in the living

spaces, or, in other words, a house that is lived in.

Debtor points out the photographs were produced in direct response to Deutsche

Bank’s interrogatories and document requests. On March 27, 2018, Deutsche Bank

propounded the following document requests:

3, Produce pictures of the Property which show its current physical

condition,

4, For each and every room within the Property, produce pictures of the

Property which show its current interior physical condition, ”

division within 30 days after he changes his address. No proof is needed to change a

person's address, and it can be accomplished by mail. A Delaware compliant driver

license or identification card will not be issued to an applicant unless the applicant

has established a principal residence address in this State at the time of application.

2 Del. Admin. Code. §§ 2217-8,0-8.1.

2 The rules of evidence are to be construed to administer justice. Fed, R. Evid. 102 (“These rules

should be construed so as to administer every proceeding fairly, elrminate unjustifiable expense and

delay, and promote the development of evidence law, to the end of ascertaining the truth and

securing a just determination”). Accepting this evidence furthers this purpose. And, as already

stated, Deutsche Bank did not submit declarations attesting to authenticity and submitted

documents that were clearly hearsay. Under these circumstances, it is fair to consider documents

with intrinsic guarantees of trustworthiness.

* Deutsche Bank’s Discovery Requests.

27

In August, 2018, Deutsche Bank acknowledged receipt of the Initial Photographs taken in

April 2018 and as a follow-up asked Debtor to “[p|lease confirm that the pictures produced

reflect each and every room within the Property.”"’ Debtor further explains that because

Mikhail was not available for a deposition, Debtor’s counsel sent her paralegal, Ms. Mattia,

to retake photographs of the Union Street Property to, in essence, recreate the photographs

taken in April 2018. Ms. Mattia was also offered up for a deposition at the May 30, 2019

hearing.

While I believe these photographs to be authentic, these are not the types of

documents that lend themselves to the authentication and admission analysis in Turner.

Further, Mikhail did not submit to a deposition and so Deutsche Bank did not have an

opportunity to explore the genesis of the photographs or his testimony at the section 341

meeting. Deutsche Bank’s Motion i# Limine and/or Motion for Sanctions is granted as to

the photographs and Ms. Mattia’s certification and I will not consider them.”

But, even without the photographs and other excluded evidence, the admitted

evidence is more than enough to meet the evidence submitted by Deutsche Bank in support

of the Objection. The Delaware Polling Place Card, state issued identification cards, .

mortgage statements, Delmarva Power bills, quarterly utility statements from the City of

Wilmington (subject to the caveat below) and M&T bank statements all evidence that

Debtor was living at the Union Street Property on the Petition Date. While Deutsche Bank

questions this and makes sweeping conclusions because of Debtor’s admitted inability to

live in the Union Street Property for long periods of time, Debtor’s evidence is sufficient to

*4 Exs. A through J (Corrected) in Supp. of Mot. to Compel Disc. Responses, Ex. J (August 17,

2018 Letter from Alexandra D. Rogin, Esquire to Erin K. Brignola, Esquire),

* Neither will I consider what appears to be a one page handwritten title search of the Union Street

Property.

28

meet Deutsche Bank’s evidence and suppositions. Simply put, to the extent that Debtor has

a burden of production, Debtor’s evidence is sufficient to bring the burden of persuasion—

which falls on Deutsche Bank— into play.

IV. Deutsche Bank Fails to Meaningfully Impeach Debtor

In its Reply Brief, Deutsche Bank proffers, in a footnote, that it seeks to use

“photographs and documents produced by Debtor” for impeachment purposes.”* Deutsche

Bank does not articulate specific documents or an impeachment purpose for each document

(e.g., contradictory facts, prior inconsistent statement, bias, efc.), Nonetheless, Deutsche

Bank raises what it terms inconsistencies that discredit Debtor’s testimony.

First, Deutsche Bank correctly states that Debtor produced a Delaware issued

identification card that lists her address as the Ayre Street Property.” This identification

card was issued in December of 2014." Thus, at the most, the identification card listing the

address of the Ayre Street Property is some evidence that Debtor, years ago, purported to

live at the Ayre Street Property. It does not, however, establish that Debtor did not live at

the Union Street Property as of the Petition Date. While there is certainly an inconsistency

among the various Delaware identification cards Debtor produced, I do not find that this

discrepancy sufficiently impeaches Debtor’s credibility.

% The full footnote reads: “Creditor reasserts its objection to the introduction of any photographs

and documents produced by Debtor for use as substantive evidence by Debtor, and instead relies

upon the documents solely for impeachment purposes.” Reply Brief 5 n.9.

Opening Brief 4-5 (‘Post-petition, Debtor has produced only inconsistent, non-credible, or

contradictory evidence to support her claims. For example, in response to Creditor’s Objection,

Debtor actually produced an identification card listing her address as that of her Guardian’s: the

East Ayre Street Address.”). The identification card was attached to Debtor’s response to Deutsche

Bank’s objection as Exhibit D-1A. Debtor’s Initial Response, Ex. D-1A.

% Debtor’s Initial Response, Ex. D-1A; Answering Brief 6 n.3.

29

Second, Deutsche Bank takes issue with the fact that Debtor alleged in her Schedules

and stated in response to an interrogatory that there was no running water at the Union

Street Property but now has produced utility bills reflecting water usage.” As for the

Schedules, the objection!‘ and the interrogatory responses,’ they reflect different points

in time: December 7, 2017 (no running water), March 16, 2018 (no running water) and

April 10, 2018 (running water). There is not necessarily, therefore, any inconsistency in

these responses. The water bill and/or its history is a little hard to decipher and Deutsche

Bank does not provide me the benefit of its thinking or why the water bill/history calls

Debtor’s credibility into question, generally. But, given what appear to be many identical

quarterly charges, the bill could reflect a minimum charge, and is therefore of little

assistance,’™

Third, Deutsche Bank points to a contradiction contained in Debtor’s schedules.

On Schedule A/B, in response to the question “Do you own or have any legal or equitable -

interest in [Electronics],” Debtor checked the box “No.”'® However, on Schedule J, Debtor

” Reply Brief 4-5.

100 Petition,

101 Debtor’s Initial Response 7.

2 Exs. A through J (Corrected) in Supp. of Mot. to Compel Disc. Responses, Ex. B at 1 (April 10,

2018 email from Mikhail to Stacey Mattia),

13 In a one sentence footnote, Deutsche Bank also contends the electric bills impeach Debtor’s

credibility “as although barely legible the statements show higher usage in 2016 when she was

allegedly not living at the Property than in 2017 when the Petition was filed.” Reply Brief 5. I

cannot discern anything of relevance for impeachment purposes from the electric bill nor does

Deutsche Bank point me to any specific statement made by Debtor it is seeking to impeach. But, as

stated supra, the electric bills do show current charges for the period of September 13, 2017 to

October 10, 2017 and for December 17, 2017 to January 2018. This evidence tends to corroborate

that Debtor was living at the Union Street Property on the Petition Date.

104 7d, (“Similarly, Debtor alleges in one Schedule before this Court related to her assets that she has

no electronics .. , and she contradictorily admits to having a cell phone and internet access.”).

5 Answering Brief, Ex. 4.

30

purports to have expenses for “Cell Phone” and “Internet Access.”'’ These responses are

internally, but openly, contradictory. This discrepancy carries little, if any, weight.'*’

Finally, I have considered Deutsche Bank’s inability to depose either Debtor or

Mikhail. ‘This is less than ideal. But, because of this, I have excluded certain evidence as

requested in the Motion in Limine and the Motion for Sanctions. | observe that Deutsche

Bank was not precluded from deposing Debtor’s neighbors or issuing subpoenas to third

party custodians of relevant documents. Deutsche Bank chose not to go this route. It also

chose to submit this dispute on paper rather than forcing a trial.

Conclusion

After considering the evidence submaitted, I find that Deutsche Bank has not satisfied

its burden of proof to show that the claimed homestead exemption is not properly claimed.

Its main argument—that Debtor is estopped from arguing she lives at the Union Street

Property—is not well taken. Debtor’s argument before the Delaware State Courts that she

was not properly served with process in November, 2011 because she did not then live at the

Union Street Property is not inconsistent with her position that the Union Street Property

was her principal residence on the Petition Date. Neither the Delaware Superior Court nor

the Delaware Supreme Court made any finding with respect to where Debtor lived on the

0 Answering Brief, Ex, 5.

07 Further, Deutsche Bank alleges that certain photographs Debtor sought to introduce into

evidence show a TY, printer, microwave and kitchen appliances. The photographs showing the TV

and printer were taken on May 2, 2019, over a year and a half after the Petition Date. These later

photographs were taken in an attempt to reproduce photographs taken by Mikhail on or about April

17, 2018 in an effort to overcome Deutsche Bank’s objections. Answering Brief, Exs. 11, 12.

Moreover, the microwave and kitchen appliances constitute “Household goods and furnishings,”

not electronics, for purposes of Schedule A/B. Debtor properly acknowledged ownership of the

microwave and kitchen appliances on Schedule A/B, by checking the “Yes” box next to Household

goods and furnishings and and further stating she had “3 Rooms Used Household Goods”

Answering Brief, Ex. 3.

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Petition Date as that question was not an issue in the Foreclosure Action. Further,

Deutsche Bank’s argument that Debtor’s evidence is inconsistent, non-credible or

contradictory does not win the day even excluding evidence in response to Deutsche Bank’s

Motion in Limine and Motion for Sanctions. Deutsche Bank, not Debtor, has the burden of

proof.

Deutsche Bank’s frustration at spending years obtaining a judgment only to have

Debtor file bankruptcy to avoid execution is understandable,’ and perhaps explains why it

has continued to pursue the Union Street Property, worth less than $125,000, for over ten

years. But, it is quite common for a debtor to file a bankruptcy proceeding only after a

judgment is obtained in order to avoid execution. And, in this instance, Deutsche Bank

simply did not meet its burden to show that Debtor’s homestead exemption is not properly

claimed.

An order will enter consistent with this Opinion.

Dated: October 26, 2020 Ji hy, A AL

SILVERSTEIN

UNITED STATES BANKRUPTCY JUDGE

8 Reply Brief 8-9. See also Opening Brief 4 n.1 (“Debtor has essentially taken the Property that she

now claims as exempt from creditors without making any substantial payment towards the

Property.”).

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