IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 97-20093
Summary Calendar
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IN THE MATTER OF:
CHEMICAL PLANTS SERVICES INC.,
Debtor.
C. BRUCE SLEDD,
Appellant,
VERSUS
W. STEVE SMITH, Trustee,
Appellee.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
(H-95-CV-1215)
_________________________
August 7, 1997
Before SMITH, DUHÉ, and BARKSDALE, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
C. Bruce Sledd and C. Bruce Sledd & Associates (collectively,
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
set forth in 5TH CIR. R. 47.5.4.
1
“Sledd”) appeal pro se a summary judgment ordering that certain
professional fees paid to Sledd pursuant to 11 U.S.C. § 327(a) be
returned to the trustee of a chapter 7 bankruptcy estate (the
“Trustee”). Concluding that the action is barred by the two-year
statute of limitations, we reverse and remand.
I.
In October 1989 the debtor, Chemical Plant Services, Inc. (the
“Debtor”), filed, on behalf of Sledd, an application for employment
as a management consultant, nunc pro tunc, pursuant to § 327(a).
Finding, among other things, that Sledd was a “disinterested
person” pursuant to 11 U.S.C. § 101, the bankruptcy court approved
the application for Sledd to perform professional services.1 The
court’s order required, however, that all payments to Sledd be
authorized by the court prior to disbursement.
The Trustee filed the instant action in June 1994, alleging
that Sledd had received monies from the Debtor in exchange for
professional services without obtaining the court’s prior approval.
The bankruptcy court granted the Trustee’s motion for summary
judgment, finding that Sledd had received from the post-petition
estate payments of $49,749.74 without authorization, that he was
1
According to an exhibit attached to the court’s order, Sledd was supposed
to provide “professional services on a best efforts basis, in the following
business activities: collection of monies due from customers and insurance
companies; cost reductions in insurance, direct labor and administrative staff;
review reported claims for accuracy and eliminate unsupported claims; confer with
potential investors; and review documentation for court reports.”
2
not a “disinterested” party, and that he had misrepresented his
expertise in working with environmental waste companies. The court
ordered that the funds be disgorged and that Sledd pay pre- and
post-petition interest on the outstanding balance. The district
court affirmed.
II.
We review a grant of summary judgment de novo. See Hanks v.
Transcontinental Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir.
1992). Summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” FED. R. CIV. P. 56(c).
A.
Sledd argues first that this action for recovery of post-
petition assets is barred by the two-year statute of limitations of
11 U.S.C. § 549(d).2 It is undisputed that Sledd did not receive
any contested payments from the Debtor later than March 1990 and
2
Section 549(d) provides:
An action or proceeding under this section may not be commenced
after the earlier ofSS
(1) two years after the transfer sought to be avoided; or
(2) the time the case is closed or dismissed.
3
that the Debtor’s counsel (while the Debtor was acting as debtor in
possession) wrote Sledd in October 1991 demanding return of the
approximately $50,000 received as an alleged post-petition
transfer. The instant action to recover the monies was not filed
by the Trustee until July 1994, well after the applicable statute
of limitations had run.
The Trustee argues, however, that § 549(d) does not begin
running until the bankruptcy trustee becomes aware of the improper
conveyance.3 Although the Trustee was appointed in January 1993,
he avers that he did not learn of the improper conveyance until
“sometime in 1994," when his accountant found the October 1991
correspondence from the Debtor’s attorneys to Sledd directing him
to return the payments. According to the Trustee, he filed the
instant action within one year of this discovery.
Although we do not doubt the Trustee’s diligence, the statute
of limitations for bringing actions pursuant to § 549 begins to run
from “the date of the transfer sought to be avoided,” 11 U.S.C.
§ 549(d)(1), not from the date of the appointment of the trustee.4
3
See, e.g., Olsen v. Zerbetz (In re Olsen), 36 F.3d 71, 73 (9th Cir. 1994)
(noting that “[b]ecause the trustee remained in the dark without any fault or want
of due diligence or care on his part, the statute did not begin running until he
discovered the conveyance”) (internal quotes and citations omitted).
4
See Weld v. Robert A. Sweeney Agency, Inc. (In re Patton’s Busy Bee Disposal
Serv.), 182 B.R. 681, 688 (Bankr. W.D.N.Y. 1995); Sapir v. Hudson Realty Co. (In re
Rosalind Gardens Assocs.), 157 B.R. 75, 82 (Bankr. S.D.N.Y. 1993). In contrast,
the statute of limitations for preference and fraudulent transfer causes of
actions, among others, begins to run from the appointment of the trustee, where
one is in fact appointed. See 11 U.S.C. § 546(a)(1); Johnson Southwest, Inc. v.
Harbert Energy Corp. (In re Johnson Southwest, Inc.), 205 B.R. 823, 825 (N.D.
Tex. 1997).
4
Thus, the statute of limitations for the § 549 action began to run
from March 1990SSthe date of the transfer sought to be avoidedSSand
expired on March 1992; the appointment of the Trustee in January
1993 did not re-start the § 549 limitations period.5
B.
Finally, the Trustee contends that 11 U.S.C. § 328(c), which
permits the court to deny compensation to a professional person
employed under § 327 if, at any time during the person’s
employment, he is not a “disinterested” person or has interests
adverse to the estate, is self-executing and not subject to a
statute of limitations. The Trustee does not cite any authority
for this proposition, nor are we aware of any. In any event, the
instant action is not one in which the court is denying
compensation, but rather is an action for recovery of post-petition
assets actually paid from the estate, and, therefore, is subject to
the § 549(d) statute of limitations.
Because the instant action is time-barred, we REVERSE the
summary judgment and REMAND for appropriate proceedings.
5
Compare Johnson Southwest, 205 B.R. at 825 (noting that the § 546(a)(1)
statute of limitations re-commences upon the appointment of a trustee in place of
the debtor in possession and runs for two years thereafter).
5