[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
May 11, 2005
No. 05-10075
THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket Nos. 04-01127-CV-ORL-31-KRS
and 94-01128-CV-ORL
IN RE:
RONALD BENDETTI,
Debtor.
__________________________________________________________________
04-cv-01127-GAP-KRS
GENE T. CHAMBERS,
Plaintiff-Appellant,
versus
RONALD BENDETTI,
RALPH L. DEBLOIS,
Defendants-Appellees.
__________________________________________________________________
04-cv-01128-GAP-DAB
IN RE:
RONALD BENDETTI,
Debtor.
__________________________________________________________________
GENE T. CHAMBERS,
Plaintiff-Appellant,
versus
RONALD BENDETTI,
RALPH L. DEBLOIS,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(May 11, 2005)
Before BLACK, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
Debtor, Ronald Bendetti, filed his Chapter 7 bankruptcy case on December
10, 1999. Trustee, Gene T. Chambers, is Trustee to the Bankruptcy Estate of
Debtor. Trustee filed proceedings in the bankruptcy court to avoid and recover
alleged fraudulent transfers by Debtor and to deny Debtor’s bankruptcy discharge.
The alleged fraudulent transfers concerned Debtor’s transfer of several pieces of
real estate, real estate projects, and bank accounts to various individuals and
corporations. The bankruptcy court, in two separate proceedings – an avoidance
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proceeding and a discharge proceeding – entered judgment for Debtor on all
counts. The district court affirmed the Bankruptcy Court.
We review the district court’s decision affirming the bankruptcy court’s
finding of facts for clear error. In re Williamson, 15 F.3d 1037, 1038 (11th Cir.
1994); see Fed. R. Bankr. P. 8013 (stating that “[f]indings of fact, whether based
on oral or documentary evidence, shall not be set aside unless clearly erroneous”).
The burden of establishing clear error is on the party seeking to overturn the
findings of the bankruptcy court. In re Caribbean K Line, Ltd., 288 B.R. 908, 911
(Bankr. S.D. Fla. 2002). The district court’s legal conclusions are reviewed de
novo. In re Bateman, 331 F.3d 821, 825 (11th Cir. 2003). Further, denial of a
motion to continue is reviewed for an abuse of discretion. In re Kellogg, 197 F.3d
1116 (11th Cir. 1999).
I.
Trustee first contends that the district court erred in finding that Debtor had
no intent to delay or defraud his creditors. Trustee argues that Debtor’s fraudulent
intent was established by the following: (1) funds in the allegedly concealed bank
accounts were transferred to the Defendants for no consideration; (2) Debtor
concealed four bank accounts created “in trust for” Debtor; (3) Debtor received no
consideration for real properties transferred to Westland and Seabrook, both
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Florida corporations owned by George Bendetti, Debtor’s brother; (4) Ralph
Deblois, the personal representative of the estates of George Bendetti and Debtor’s
mother, Lydia Bendetti, who provided accounting and tax services to Debtor for
years, was unaware of any such payments; (5) Debtor’s valuation of various
properties was false; (6) the close relationship between Debtor and Defendants; (7)
Debtor retained benefits by living in a house owned and/or paid for by Lydia
Bendetti’s estate and was supported by Margaret Morgera, sole beneficiary of
Lydia Bendetti’s estate; (8) Debtor was unable to repay various mortgages at the
time of the transfers, and many of those mortgages were in default at the time; (9)
the cumulative effect of the transfers left Debtor insolvent; (10) the chronology and
timing of the transfers shows Debtor transferring properties to insiders yet still
being supported by those transferred assets; and (11) Debtor concealed records,
accounts and property transfers.
Trustee also claims that the district court erred because he offered evidence
of the “badges of fraud” that are used to determine the existence of actual intent.
We agree with the district court that Trustee has not met his burden of proving
fraudulent intent. Trustee’s assertions are not supported by the evidence. We find
no clear error on the part of the district court as to this issue.
II.
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Trustee next argues that the district court erred in failing to find that Debtor
concealed and failed to preserve information required by 11 U.S.C. § 727(a)(2).
Among other bookkeeping deficiencies, Trustee argues that Debtor’s Bankruptcy
Schedules list only one empty bank account, no safety deposit box and no
partnership interest. All that is required is that the financial condition and
transactions of the debtor may be discerned for a reasonable period of time in the
past, and the records here appear to be sufficient in that regard. In re Gonzales,
302 B.R. 745, 753 (Bankr. S.D. Fla. 2003). Since courts have the discretion to
excuse the failure to keep or preserve records when presented with justifiable
circumstances, we find that the district court did not clearly err as to its ruling on
this issue. In re Cohen, 47 B.R. 871, 875 (Bankr. S.D. Fla. 1985).
III.
Trustee also claims that the district court erred in holding that Debtor did not
knowingly or fraudulently make a false oath or withhold information pursuant to
11 U.S.C. § 727(a)(3). In order to prevail on this issue, Trustee “must establish
that the debtor knowingly and fraudulently made a false oath and that this oath
pertained to a material fact.” In re Later, 164 BR. 692, 695 (Bank. M.D. Fla.
1994). The district court determined that Trustee failed to establish the elements of
11 U.S.C. § 727(a)(3) and § 727(a)(4)(A). We find no clear error in the district
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court’s factual determinations as to this issue.
IV.
Next, Trustee claims that the district court erred in finding that Debtor
satisfactorily explained his transfers of assets and his failure to maintain and
produce records pursuant to 11 U.S.C. § 727(a)(4) and (a)(5). Debtor’s transfers,
Trustee argues, were not corroborated by documentation or shown in good faith.
Under 11 U.S.C. § 727(a)(5) the court shall grant a discharge unless “the debtor . . .
failed to explain satisfactorily, before determination of denial of discharge . . . any
loss of assets or deficiency of assets to meet the debtor’s liabilities.” The district
court did not clearly err in finding Debtor’s explanations satisfactory.
V.
Trustee argues that he should be able to recover under the six-year statute of
limitations provided by 28 U.S.C. § 3306 and that the district court erred in not
extending the statute of limitations to Trustee as a private party. Although Trustee
cites several cases standing for the proposition that “Trustee in bankruptcy gets the
title to all property which has been transferred by the bankrupt in fraud of
creditors,” the case law cited does not address the statutory provision at issue here.
Moore v. Bay, 284 U.S. 4, 52 S. Ct. 3 (1931). 28 U.S.C. § 3306 “was enacted to
create procedures by which the United States could more efficiently collect its
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debts without relying on a patchwork of state laws.” In re Phillips & Hornsby
Lithog., 306 F. Supp. 2d 631, 636 n.13 (M.D. La. 2004) (emphasis added).
We have found no case law, and Trustee presents none, that indicates that 28
U.S.C. § 3306 extends its statute of limitations to private parties. We cannot apply
the six-year statute of limitations to Trustee just because an arguable debt is owed
to the United States. Further, we note that the United States is not a party in this
action and did not assert a claim against Debtor for unpaid taxes. Therefore, the
six-year statute of limitations under 28 U.S.C. § 3306 is not available. The district
court did not err in finding that Trustee could not recover on his fraudulent transfer
claims regarding the Royal Transfer and the transfers to Westland.
VI.
Trustee argues that there were fraudulent transfers of several pieces of real
property and bank accounts. Trustee asserts that the district court erred in its
holding that there was no evidence of fraudulent transfers.
a) Real Property Transfers
Trustee first alleges fraudulent transfers of several pieces of real property.
The District Court found that Trustee’s fraudulent transfer actions regarding
Debtor’s transfers of various real property to Westland, a Florida corporation
owned by George Bendetti, and to Royal, a Florida corporation owned by Debtor,
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are barred by Fla. Stat. ch. 726.110. The district court found, and we agree, that
the statute of limitations barred Trustee’s actions because they were brought more
than four years after Debtor made the transfers at issue.
Trustee argues that the district court ignored recent transfers that were
performed within the four-year statutory period and that they are not barred by the
statute of limitations. We review the district court’s findings of fact for clear error
and we find no such error as to this issue.
The remaining two transfers at issue are those to Seabrook, George
Bendetti’s corporation, and the transfer of a parcel of real estate to George
Bendetti. Trustee’s fraudulent transfer action was brought within four years of
these particular transfers, thus this claim is not time barred by Section 726.110.
The elements required to prove a fraudulent transfer include: (1) a creditor
that was defrauded; (2) a debtor who intended to defraud; and (3) a conveyance of
the property which could have been applicable to the payment of the debt due.
Huntsman Packaging Corp. v. Kerry Packaging Corp., 992 F. Supp. 1439, 1446
(M.D. Fla. 1998). Trustee has not met his burden in proving these necessary
elements. The evidence does not indicate that Debtor attempted to or intended to
defraud his creditors. In fact, the evidence suggests that Debtor was making efforts
to restructure his debt and assist his creditors, not hinder or delay them.
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b) Bank Account Transfers
The second category of assets subject to Trustee’s fraudulent transfer claims
are several of Debtor’s bank accounts. Under Florida law, the party seeking to
undo a transfer must show that the debtor actually owned the property at issue.
Trustee failed to make this showing, thus the fraudulent transfer claims regarding
these bank accounts necessarily fail.
We find that the district court did not err in holding that most of Trustee’s
fraudulent transfer claims were time barred. Further, we hold that Trustee failed to
meet his burden as to the remaining fraudulent transfer claims.
VII.
Trustee argues that the district court clearly erred in ruling that Trustee had
failed to establish Debtor as the de facto, constructive or equitable owner of any of
the transferred assets. Trustee claims that the district court ignored the fact that
Debtor testified in 1999 and 2000 that he was supported by his mother who utilized
rents from the transferred assets for his support; that Debtor lived in residences that
were being paid for by his mother or her estate from 1999 on; that rents were being
deposited into Debtor’s four concealed Bank of America accounts after 1997; and
that Debtor’s concealed bank accounts were being used to pay for expenses of the
estates of Lydia and George Bendetti. Neither the evidence nor Trustee’s
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assertions establish Debtor’s status as equitable owner of any of the transferred
assets. Thus, the district court did not clearly err as to this issue.
VIII.
Trustee alleges that the corporate veils of the Seabrook and Westland
Corporations were pierced and that the district court erred in finding no evidence to
support this claim. Trustee asserts that the evidence illustrated that Seabrook and
Westland were used to defraud Debtor’s creditors; that Debtor and Lydia Bendetti
controlled those entities which were mere instrumentalities of Debtor; that Debtor
and Lydia Bendetti ignored the separate corporate existence of those entities by
intermingling personal and corporate assets; and that the use of those entities was
improper as a part of a scheme to defraud creditors.
We agree with the district court that Trustee failed to establish any of the
elements required to pierce the corporate veil. Therefore the district court was not
clearly erroneous as to its ruling on this issue.
IX.
Trustee argues that the district court erred in finding no evidence that
established a constructive trust. Further, Trustee claims that the district court
ignored evidence of confidential relationships and the element of fraud as an
alternative basis for establishing a constructive trust. Trustee also argues that the
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family and personal relationships between Debtor and Defendants is necessarily
confidential. Trustee states that he proved the element of unjust enrichment
because Defendants gave nothing to Debtor for the transferred real properties and
the funds in Debtor’s concealed accounts, which resulted in unjustly enriching
Debtor who shared the benefits with Morgera.
We agree with the district court’s finding that Trustee failed to prove that
any alleged transfer of the bank accounts or various other real property assets was
fraudulent. Since a showing of fraud is necessary to establish unjust enrichment,
the argument as to constructive trust fails. Thus, the district court’s ruling on this
issue was not clearly erroneous.
X.
Trustee finally argues that the district court’s findings of fact contradict the
evidence and that the court erred in denying his motion to compel, amend the
adversary proceeding and to continue trial. Trustee asserts that the district court’s
findings of fact accept at face value the uncorroborated self-serving testimony of
Debtor. After reviewing the record and the parties’ briefs, we find that the district
court’s findings of fact did not contradict the evidence and there was no clear error.
Seeing as we found no error on the part of the district court we do not find
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that the denial of Trustee’s motion to compel, amend and continue trial was an
abuse of discretion.
Upon consideration of the record and the parties’ briefs, we find that the
district court did not err. We accordingly AFFIRM the district court’s order.
AFFIRMED.
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