Williamson v. Busconi

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 95-2311
ALAN D. WILLIAMSON,

Appellant,

v.

LEWIS J. BUSCONI,

Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Torruella, Chief Judge,

Cyr, Circuit Judge,

and Cummings,* Circuit Judge.

Rosario Mario F. Rizzo for appellant.

Howard P. Blatchford, Jr., with whom Bruce F. Smith and Jager,

Smith, Stetler & Arata, P.C. were on brief for appellee.

July 3, 1996

*Of the Seventh Circuit, sitting by designation.

CYR, Circuit Judge. Appellant Alan D. Williamson
CYR, Circuit Judge.

challenges a bankruptcy court ruling excluding evidence probative

of the chapter 7 debtor-appellee Lewis J. Busconi's putative

intent to defraud Williamson in a substantial real estate

transaction. In due course Williamson commenced an adversary

proceeding in the bankruptcy court to except his claim from the

chapter 7 discharge on the ground that the debt had been induced

by fraud. See Bankruptcy Code 523(a)(2)(A), 11 U.S.C.

523(a)(2)(A) (1994). Following careful review of the entire

record, we conclude that the bankruptcy court abused its

discretion by excluding the proffered evidence, but that the

error did not affect substantial rights.

At the bench trial, Williamson unsuccessfully attempted

to introduce evidence as to various events, including Busconi's

conduct, subsequent to the closing of their real estate

transaction, from which a factfinder reasonably could have

inferred that Busconi had not intended to pay the note at the

time it was executed. The evidence was excluded as irrelevant.

Nonetheless, after hearing the testimony of both parties, the

bankruptcy judge expressly credited Busconi's testimony, found

that Williamson had failed to establish the requisite fraudulent

intent, and ruled the Williamson debt dischargeable. On

intermediateappeal, thedistrictcourtaffirmed withoutelaboration.1

1The district court's conclusions of law are reviewed de

novo, Petit v. Fessenden, 80 F.3d 29, 32 (1st Cir. 1996); Fed. R.

Bankr. P. 8013. The bankruptcy court's factual findings are
reviewed for clear error. Id. Evidentiary rulings by the

bankruptcy court are subject to the "abuse of discretion"

2

As direct evidence is seldom available, fraudulent

intent normally is determined from the totality of the

circumstances. Charlie Kelton's Pontiac, Cadillac, Oldsmobile &

Isuzu Truck, Inc. v. Roberts (In re Roberts), 82 B.R. 179, 184

(Bankr. D. Mass. 1987). And since "subsequent conduct may

reflect back to the promisor's state of mind and thus may be

considered in ascertaining whether there was fraudulent intent"

at the time the promise was made, proper application of the

"totality" test in the instant context often warrants

consideration of post-transaction conduct and consequences, as

well as pre-transaction conduct and contemporaneous events. See

Krenowsky v. Haining (In re Haining), 119 B.R. 460, 464 (Bankr.

D. Del. 1990); cf. United States v. Rodriguez, 858 F.2d 809, 816

(1st Cir. 1988) ("later events often may shed light on earlier

motivations"). In sum, the bankruptcy court ruling excluding

Busconi's relevant post-closing conduct constituted an abuse of

discretion.

Williamson must also show, however, that the

evidentiary ruling adversely affected his "substantial rights."

See Fed. R. Bankr. P. 9005, 9017 (incorporating Fed. R. Civ. P.

61; Fed. R. Evid. 103(a)). At a minimum, Williamson would need

to demonstrate clear error in the ultimate assessment that the

testimony given by Busconi was more credible than that given by

Williamson. In light of all the evidence in the record, we are

standard. See United States v. Cotto-Aponte, 30 F.3d 4, 6 (1st

Cir. 1994).

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not persuaded that the challenged judgment was substantially

influenced by the erroneous evidentiary ruling. See Lubanski v.

Coleco Indus., Inc., 929 F.2d 42, 46 (1st Cir. 1991). As there

was no clear error in the bankruptcy court's findings, the

district court judgment is affirmed. The parties shall bear
affirmed The parties shall bear

their own costs.
their own costs.

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