In re: OPTICAL TECHNOLOGIES, INC., Debtor.
Delaine Gray, as Distribution Trustee for the Consolidated Debtors, Plaintiff-Appellant,
v.
Raymond Manklow, Jean Francois Vincens, Defendants-Appellees.
No. 00-14391.
United States Court of Appeals,
Eleventh Circuit.
April 6, 2001.
Appeal from the United States District Court for the Middle District of Florida. (No. 98-02382-CV-T-17B),
Elizabeth A. Kovachevich, Chief Judge.
Before BLACK and MARCUS, Circuit Judges, and HANCOCK*, District Judge.
MARCUS, Circuit Judge:
This is an appeal from final summary judgment entered by the bankruptcy court against Recomm
Enterprises, Inc. and Recomm Operations, Inc. ("the Debtors") in an adversary proceeding in which the
Debtors sought to recover allegedly fraudulent transfers, preference payments and damages for breaches of
fiduciary duty. The district court affirmed the bankruptcy court's order, after which the Debtors appealed to
this court. We agree with the analysis and well-reasoned opinion of the district court and affirm, but take this
opportunity to reiterate the standard of review governing both this appeal and the appeal to the district court
from the bankruptcy court's entry of summary judgment.
I.
The relevant facts are straightforward. Prior to 1994, Raymond Manklow ("Manklow") and Jean-
Francois Vincens ("Vincens") were the sole shareholders of the Debtors. In addition, they owned several
other entities, known collectively as "the Recomm Companies." Although there was a plan for a merger
between the Debtors and the Recomm Companies, no statutory merger was ever completed. Manklow and
Vincens sold their interests in the Recomm Companies to three Recomm employees in 1994, and in 1996 the
Recomm Companies and the Debtors filed for bankruptcy.
In this adversary action, the Debtors seek to avoid allegedly fraudulent transfers made by the Debtors
to Manklow and Vincens between 1992 and 1995, pursuant to 11 U.S.C. §§ 547 and 548, and Fla. Stat. §
*
Honorable James H. Hancock, U.S. District Judge for the Northern District of Alabama, sitting by
designation.
726.105(1)(a)-(b). The Debtors also allege that Vincens and Manklow breached a fiduciary duty owed to
Recomm Operations and its creditors.
Following discovery, Vincens and Manklow moved for summary judgment, arguing, inter alia, that
(1) the Debtors could not avoid the allegedly fraudulent or preferential transfers because the transfers had
actually been made by the Recomm Companies, not by either of the Debtors, and the claims were therefore
not the property of either of the Debtors' bankruptcy estates; and (2) as to the breach of fiduciary duty claim,
there was insufficient evidence that Vincens and Manklow qualified as "insiders" of Recomm Operations,
a necessary element of the claim. See 11 U.S.C. § 547(b)(4)(B). The bankruptcy court agreed with Vincens
and Manklow on both issues and entered summary judgment against the Debtors.
On appeal to the district court, as well as to this Court, the crux of the Debtors' argument is that
summary judgment was improvidently granted because there were genuine issues of material fact as to
whether the Debtors owned the claims to payments made by the Recomm Companies, and whether Vincens
and Manklow qualified as insiders.
II.
Under Fed.R.Civ.P. 56(c), made applicable to adversary proceedings and contested matters in
bankruptcy cases by Bank. R. 7056 and 9014, summary judgment is proper "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 judgment as a matter of law."
Fed. R. Civ. P 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265
(1986). " 'In making this determination, the court must view all evidence and make all reasonable inferences
in favor of the party opposing summary judgment.' " Chapman v. AI Transp., 229 F.3d 1012, 1023 (11th
Cir.2000) (en banc) (citation omitted). "Where the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party, there is no 'genuine issue for trial.' " Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).
It is axiomatic that a bankruptcy court deciding a summary judgment motion, just like a district court,
must determine whether there are any genuine issues of material fact. See Carey Lumber Co. v. Bell, 615 F.2d
370, 378 (11th Cir.1980) (per curiam) (holding that a bankruptcy court that (1) determined that there were
no issues of material fact, (2) accepted all undisputed factual allegations as true, and (3) found that summary
judgment was warranted as a matter of law, "followed the correct legal standard."). Like a district court, a
bankruptcy court may only grant summary judgment where there is no genuine issue of material fact. See
Fed.R.Civ.P. 56(c). Our law is also clear that an appellate court reviews a bankruptcy court's grant of
summary judgment de novo. See In re Walker, 48 F.3d 1161, 1163 (11th Cir.1995) ("We review the
bankruptcy court's grant of summary judgment de novo, applying the same legal standards used by the trial
court."); In re Club Assocs., 951 F.2d 1223, 1229 (11th Cir.1992) (citing In re Nash, 765 F.2d 1410, 1412
(9th Cir.1985) ("The bankruptcy court's grant of summary judgment, affirmed by the district court, is subject
to de novo review.")).
To the extent, however, that the district court's opinion may be read to suggest that appellate review
of a bankruptcy court's entry of summary judgment may be governed by a clearly erroneous standard,1 we
take this opportunity to make clear that both the district court and this Court review a bankruptcy court's entry
of summary judgment de novo. The district court relied on In re Club Assocs., which explained that "factual
findings by the bankruptcy court are reviewed under the limited and deferential clearly erroneous standard."
951 F.2d at 1228. While it is true that, in general, a district court reviews a bankruptcy court's factual findings
for clear error, we do not read In re Club Assocs. to hold, nor could it be so read in light of our precedent, that
the standard of review for summary judgment, which by definition involves no findings of fact, is anything
other than de novo. See also Rosen v. Bezner, 996 F.2d 1527, 1530 n. 2 (3d Cir.1993) ("because summary
judgment may only be granted where there is no genuine issue of material fact, any purported 'factual
findings' of the bankruptcy court cannot be 'factual findings' as to disputed issues of fact, but rather are
conclusions as a matter of law that no genuine issue of material fact exists."). Quite simply, our law is, and
has been, that a summary judgment ruling is reviewed de novo.
Our sister Circuits likewise have unanimously articulated the principle that both the district court and
the courts of appeal review a bankruptcy court's entry of summary judgment de novo. See In re Blackwood
Assocs., L.P., 153 F.3d 61, 67 (2d Cir.1998) ("[W]e review the district court's affirmance of the bankruptcy
court in accordance with our well established standards of review. Specifically, we review a grant of
summary judgment de novo ..."); In re Hudson, 107 F.3d 355, 356 (5th Cir.1997) (same); Southern Tech.
College, Inc. v. Hood, 89 F.3d 1381, 1383 (8th Cir.1996); In re Slamans, 69 F.3d 468, 472 (10th Cir.1995);
1
In laying out the standard of review, the district court stated, among other things, that "[f]indings of
fact by the bankruptcy judge shall be upheld on appeal unless found to be clearly erroneous." In re
Optical Technologies, Inc., 252 B.R. 531, 533 (M.D.Fla.2000). The district court also observed that it
reviewed the bankruptcy court's conclusions of law de novo. Id. at 537.
In re Varrasso, 37 F.3d 760, 763 (1st Cir.1994); In re Batie, 995 F.2d 85, 88-89 (6th Cir.1993); Rosen, 996
F.2d at 1530; In re Knightsbridge Development Co., 884 F.2d 145, 147 n. 3 (4th Cir.1989); In re Colonial
Discount Corp., 807 F.2d 594, 596 (7th Cir.1986); In re New England Fish Co., 749 F.2d 1277, 1280 (9th
Cir.1984).
In the instant case, the bankruptcy court properly concluded that there were no genuine issues of
material fact and that summary judgment was appropriate as a matter of law. The bankruptcy court made no
findings of fact, nor could it, on summary judgment, and accordingly, our review is de novo.
Having conducted a de novo review of the bankruptcy court's order, we agree with the district court
that summary judgment was properly granted as to all claims in this case. As the bankruptcy court noted, the
facts of this case were essentially undisputed, and, even when viewed in the light most favorable to the
Debtors, are insufficient as a matter of law to establish that the Debtors owned the claims arising from
transfers made by the other Recomm Companies, or that Vincens and Manklow were insiders of either of
Recomm Operations.
Accordingly we affirm.
AFFIRMED.