FILED
NOT FOR PUBLICATION
MAR 09 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: EDRA D. BLIXSETH, No. 14-35741
Debtor, D.C. No. 2:13-cv-00025-DLC
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RICHARD J. SAMSON, Chapter 7
Trustee for the Estate of Edra D. Blixseth, MEMORANDUM*
Plaintiff-Appellee,
v.
WESTERN CAPITAL PARTNERS, LLC,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Montana
Dana L. Christensen, Chief Judge, Presiding
Argued and Submitted February 7, 2017
Seattle, Washington
Before: FISHER, PAEZ and CALLAHAN, Circuit Judges.
Western Capital Partners, LLC, appeals the district court’s order affirming
the bankruptcy court’s judgment in favor of the bankruptcy trustee, Richard
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Samson, on the trustee’s claims of constructively fraudulent transfer and usury.
We have jurisdiction under 28 U.S.C. § 158(d), and we reverse in part, affirm in
part and remand.
1. Before the bankruptcy court, Samson sought to avoid debtor Edra
Blixseth’s guaranty of a $13 million loan Western Capital issued to Blixseth’s son.
A constructively fraudulent transfer claim requires proof (1) the challenged
transfer occurred within two years of the bankruptcy; (2) the debtor received less
than reasonably equivalent value for the transfer; and (3) the debtor was insolvent
at the time of the transfer. See In re Fitness Holdings Int’l, Inc., 714 F.3d 1141,
1145 (9th Cir. 2013); 11 U.S.C. § 548(a)(1)(B). The bankruptcy court concluded
Blixseth was insolvent at the time of the transfer after it excluded Blixseth’s
interest in the undivided portion of her marital community, which was worth over
$400 million at the time of the loan. This was error. Because Blixseth’s creditors
could have reached her share of the community property through legal process, the
property should have been included in the solvency analysis. See In re Marriage
of Schenk, 279 Cal. Rptr. 651, 654 n.2 (Ct. App. 1991) (creditors may collect post-
separation debts from the debtor spouse’s share of community property); see also
2-101 Collier on Bankruptcy § 101.32 (16th ed. 2016) (“[I]t is obvious that
interests which are subject to creditors’ remedies must necessarily be
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considered.”). Including these assets in the solvency analysis, Blixseth was solvent
under all of the relevant tests. See 11 U.S.C. § 548(a)(1)(B)(ii). Samson’s
fraudulent transfer claim therefore fails.
2. The district court held Western Capital waived its argument that res
judicata precluded Samson’s usury claim. Although Western Capital reasserts its
res judicata argument in conclusory fashion before this court, it has not identified
any error in the district court’s conclusion this argument was waived. We affirm
the entry of judgment for Samson on the usury claim.
REVERSED IN PART, AFFIRMED IN PART AND REMANDED.
EACH PARTY SHALL BEAR ITS OWN COSTS ON APPEAL.
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