Central State Bank v. Volas et al
Filing
7
MEMORANDUM OPINION AND ORDER affirming US Bankruptcy Court's order entered 12/14/2011; signed by Judge Gordon J. Quist (Judge Gordon J. Quist, jmt)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
__________________________
CENTRAL STATE BANK,
Bankruptcy Court
Case No. 11-999-swd
Creditor-Appellant,
v.
Case No. 1:12-CV-75
PETER JOHN VOLAS,
HON. GORDON J. QUIST
Debtor-Appellee.
____________________________/
MEMORANDUM OPINION AND ORDER
Creditor-Appellant, Central State Bank, has appealed the United States Bankruptcy Court's
order entered December 14, 2011, (docket no. 1-5), finding that Debtor-Appellee, Peter John Volas,
owned property that had a value of $50,000. Creditor argues that the bankruptcy court made two
errors and, to correct those errors, asks this Court to value the property at $140,000. The bankruptcy
court’s findings of fact shall not be set aside unless the findings are clearly erroneous. Fed. R. Bank.
P. 8013; In re DSC, Ltd., 486 F.3d 940, 944 (6th Cir. 2007). The Court will affirm the bankruptcy
court's order.
First, the bankruptcy court did not clearly error by characterizing the property as residential,
rather than commercial. The property has a greenhouse on it, and the uncontroverted testimony was
that the property was zoned to require the use of the greenhouse to be “incidental” to the property’s
residential use.
The bankruptcy court also found that the property’s zoning classification
undermined Creditor’s appraiser’s opinion that the property should be classified as commercial.
Even though the property is classified as a “family farm” for Chapter 12 purposes, the property can
be primarily for residential purposes and still have a greenhouse that is an incidental commercial
use, which is consistent with the property’s zoning classification. Moreover, the property is
classified as a “family farm” because of the debts and income from the property, not because of the
property’s use.
Second, the district court did not clearly error by valuing the property at $50,000. Besides
finding that the property is used primarily for residential purposes, the bankruptcy court provided
three other reasons to value the property at $50,000, all of which were common-sense reasons to
choose $50,000 as the value of the property, even though $50,000 derives from comparables that
were bank-owned properties. Therefore,
IT IS HEREBY ORDERED that the United States Bankruptcy Court's order entered
December 14, 2011, (docket no. 1-5), is AFFIRMED.
This appeal is concluded.
Dated: July 26, 2012
/s/ Gordon J. Quist
GORDON J. QUIST
UNITED STATES DISTRICT JUDGE
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