Where two creditors have objected to a homestead exemption claimed by a debtor, that objection should be sustained because the debtor failed to meet her burden of proof to show that she was the beneficiary of a resulting trust.
“This matter came before the Court on the Objection to Homestead Exemption filed by creditors Douglas and Maureen Obey. Pursuant to the Objection, the Obeys object to the homestead exemption claimed by the debtor, Donna M. Foster-Sawtelle, in real property located at 10 Old Landing Road, Pembroke, MA (‘Property’) and its proceeds. The Debtor asserts that she was an owner of the Property as of the petition date as a beneficiary of a resulting trust. For the reasons set forth more fully below, the Objection will be sustained by separate order. The Debtor failed to meet her burden of proof to show that she was the beneficiary of a resulting trust in the Property. Since she failed to prove she was an owner of the Property, the Debtor cannot claim a homestead exemption in the Property or its proceeds. …
“The Debtor is not entitled to claim a homestead exemption in the Property or its proceeds. The Debtor asserts that she was an owner in the Property as the beneficiary of a resulting trust and can claim the homestead exemption. But the Debtor has failed to carry her burden to establish a resulting trust in the Property for her benefit. She failed to show that she made a specific contribution to the purchase price of the Property. She also failed to show that her contributions were intended to entitle her to a specific percentage ownership in the Property. …
“The Debtor bears the burden of proof to establish that she was the beneficiary of a resulting trust in the Property. But she has failed to provide evidence that proves the specific contributions made by her or that the contributions were intended for a specific share of the Property. There is no evidence as to the amount the Debtor paid for the purchase price of the Property. While the parties stipulated that the Debtor and [Philip DeVasto Jr.] ‘contributed equally’ to the purchase price, this is inconsistent with the other facts in evidence. The parties stipulated that the Debtor and DeVasto agreed to ‘contribute equally’ to the down payment for the Property, but there is no evidence of the actual payment made by the Debtor or the amount of the down payment. An agreement to contribute is insufficient to show that the payment was made. In addition, the down payment did not cover the entire purchase price for the Property. At the time of the purchase, DeVasto borrowed $260,000, secured by a mortgage on the Property. The parties stipulated that the Debtor was not on the note or the mortgage. There is no evidence that the Debtor agreed to indemnify or reimburse DeVasto for the mortgage or that the Debtor and DeVasto considered the mortgage payments to be expenses of the Property that they agreed to contribute equally. ‘Where the purchase money is made up in part of cash furnished by the plaintiff (but not for an aliquot share) and in part of a mortgage back made by the defendant, there is no resulting trust in favor of the plaintiff.’ Kennerson v. Nash, 208 Mass. 393, 398, 94 N.E. 475, 475 (1911).
“In addition, the Debtor also failed to provide evidence that the payments were intended by the Debtor and DeVasto for a specific ownership interest of the Debtor in the Property, and not as a gift, loan, or settlement. There is no testimony by either the Debtor or DeVasto as to their intent at the time the deed to DeVasto was executed. There are also no stipulated facts regarding the intent of the Debtor and DeVasto at the time of the deed. Although the parties stipulated that the Debtor and DeVasto agreed to share expenses, that does not satisfy the Debtor’s burden. The payments could have been rent, a loan, or a gift. Similarly, although the Debtor received funds from the sale of the Property, such funds could have been a gift, a loan repayment, or a settlement payment to resolve the DeVasto litigation.
“Given the foregoing, the Court finds that the Debtor only made a general contribution to the purchase price of the Property. The Court also fails to find any intent by the Debtor and DeVasto that the Debtor be entitled to a specific ownership interest in the Property. Consequently, the Debtor has failed to prove that she was the beneficiary of a resulting trust in the Property. …
“Since the Debtor failed to meet her burden of proof to show that she was a beneficiary of a resulting trust in the Property, the Debtor has failed to show she had an ownership interest in the Property as of the petition date. The Debtor cannot assert a homestead exemption in the Property or the proceeds. Having found that there was no resulting trust, the Court need not address the other issues raised by the Obeys.”
In Re: Foster-Sawtelle, Donna M. (Lawyers Weekly No. 04-006-24) (6 pages) (Bostwick, J.) (Chapter 7 Case No. 19-14331-JEB) (April 11, 2024).
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