US District Court affirms Boston Bankruptcy Court’s Judgment in favor of Amann Burnett’s Clients

March 30, 2024

In a relatively brief, nineteen (19) pages, Judge Mastroianni, U.S.D.J. , Massachusetts, affirmed Judge Bailey’s decision in Watkinson vs. Distressed Capital Management, Urban league of San Diego County, Statebridge Mortgage Company and Christina Trust.  Attorneys Josh Burnett and William Amann represented Statebridge in the Bankruptcy and on the successful appeal.   See, In re Watkinson vs.  Distressed Capital Mangement, et al., U.S. D. Mass. 22-10674-MGM.

While this appeal did not involve any novel issues, it did involve a smattering of bedrock trial topics such as standing, evidence (hearsay), claims in bankruptcy, evidentiary burdens of persuasion, default judgments, document admissibility and witness testimony.   The case also dealt with legal issues such as the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601, M.G.L. 93A, Excusable Neglect, Insurance placement, Declaratory Judgment and the trial court’s discretion concerning certain, case deadlines and trial procedures.

Appellant raises six arguments on appeal. She argues the Bankruptcy Court erred by: (1) failing to extend Appellant’s discovery deadline; (2) allowing Appellees’ witness to testify following a review of documents outside of court; (3) finding that Christiana had standing to enforce the Note against Appellant; (4) depriving her of a fair hearing on the merits based on certain statements made by the Bankruptcy Court during the trial; (5) finding that Appellant had not met her burden of proving that she had obtained homeowner’s insurance; and (6) failing to enter a declaratory judgment against the DCM and Urban under Count IV.

When a district court reviews a decision of a Bankruptcy Court, it applies a clearly erroneous standard to findings of fact, de novo review to conclusions of law, and abuse of discretion review to discretionary rulings.  See In re López-Muñoz, 983 F.3d 69,71 (1st Cir. 2020). “A [factual] finding is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.In re IDC Clambakes, Inc., 727 F.3d 58, 63–64 (1st Cir. 2003). Moreover, “[m]ixed questions of law and fact invoke a sliding standard of review,” whereby “[t]he more fact intensive the question, the more deferential the level of review . . . [and] the more law intensive the question, the less deferential the level of review.” Id. at 64.

Among other rulings in the case, the Court found that the testimony of the appellee’s witness, who was called by Amann & Burnett, was properly allowed and admissible, despite the appellant’s objection.  The standard of review applied to a bankruptcy court’s evidentiary rulings is abuse of discretion. Williams v. Drake, 146 F.3d 44, 47 (1st Cir. 1998). Under Federal Rule of Evidence 602, “[a] witness may testify to a matter only if evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter.” Fed. R. Evid. 602; see Fed. R. Bank. P. 9017 (stating that the Federal Rules of Evidence apply). Evidence that a witness has personal knowledge may come in the form of that witness’s own testimony. Id. “Evidence is inadmissible under Rule 602 ‘only if in the proper exercise of the trial court’s discretion it finds that the witness could not have actually perceived or observed that which he testified to.’” United States v. Neal, 36 F.3d 1190, 1206 (1st Cir. 1994) (quoting Hallquist v. Local 276, Plumbers & Pipefitters Union, 843 F.2d 18, 24 (1st Cir. 1988)).

Read the full decision by clicking on the link below and please do not hesitate to contact Amann Burnett, PLLC for any questions or issues you might have related to complex bankruptcy, commercial litigation, trials and Federal Court appeals.

In re Watkinson Decision on Appeal



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