699 F.3d 1022 (8th Cir. 2012), 12-1138, In re Unterreiner

Docket Nº:12-1138.
Citation:699 F.3d 1022
Opinion Judge:MELLOY, Circuit Judge.
Party Name:In re Jeffrey Scott UNTERREINER; Lisa Marie Unterreiner, Debtors. v. Jeffrey Scott Unterreiner; Lisa Marie Unterreiner, Appellees. The Samuel J. Temperato Revocable Trust, Appellant
Attorney:Robert Emil Eggmann, argued, Thomas H. Riske, on the brief, St. Louis, MO, for appellant. J. Michael Payne, Cape Girardeau, MO, for appellees.
Judge Panel:Before MELLOY and BENTON, Circuit Judges, and BAKER,[1] District Judge.
Case Date:November 08, 2012
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1022

699 F.3d 1022 (8th Cir. 2012)

In re Jeffrey Scott UNTERREINER; Lisa Marie Unterreiner, Debtors.

The Samuel J. Temperato Revocable Trust, Appellant

v.

Jeffrey Scott Unterreiner; Lisa Marie Unterreiner, Appellees.

No. 12-1138.

United States Court of Appeals, Eighth Circuit

November 8, 2012

Submitted: Sept. 19, 2012.

Page 1023

Robert Emil Eggmann, argued, Thomas H. Riske, on the brief, St. Louis, MO, for appellant.

J. Michael Payne, Cape Girardeau, MO, for appellees.

Before MELLOY and BENTON, Circuit Judges, and BAKER,1 District Judge.

MELLOY, Circuit Judge.

Jeffrey and Lisa Unterreiner (together, " the Unterreiners" ) filed for bankruptcy on October 30, 2006. The Samuel J. Temperato Revocable Trust (" the Trust" ) filed an Adversary Complaint against the Unterreiners, claiming the Unterreiners owed

Page 1024

a nondischargeable debt to the Trust under 11 U.S.C. § 523. The Bankruptcy Court granted summary judgment to the Trust. The Bankruptcy Appellate Panel (" BAP" ) reversed, holding that the Trust was not entitled to judgment as a matter of law because the Trust could not meet the statutory requirements of 11 U.S.C. § 523. The Trust appealed. We affirm.

I.

Mr. Unterreiner and Ed Radetic 2 were sole shareholders of King William Management Company (" King William" ). King William operated three Dairy Queen stores in Missouri. Dairy Queen of Greater St. Louis (" DQSTL" ) was the franchisor of King William's stores. The Trust owns DQSTL. Crest Oelke (" Oelke" ) was a trustee of the Trust. Oelke was also affiliated with DQSTL.

In December 2005, King William was in such poor financial shape that it could not continue to operate without a loan. Oelke arranged for Cass Bank (" Cass" ) to make a loan of $235,000 (" the loan" ) to King William. To secure the loan, the Unterreiners signed personal guarantees as well as a Commercial Security Agreement (" Security Agreement" ). DQSTL also guaranteed the loan. The Unterreiners did not speak with Oelke, with anyone from the Trust, with anyone from Cass, or with anyone from DQSTL before signing the loan documents. Indeed, until the Trust filed its Complaint, the Unterreiners did not know the Trust owned DQSTL and did not even know the Trust existed.

The Security Agreement listed King William as borrower. The Security Agreement listed the Unterreiners and Ed Radetic and his wife as the guarantors. Finally, the Security Agreement listed " all business assets located at 1036 N. Sprigg Street, Cape Girardeau, MO 63701 and 31 S. Kingshighway, Cape Girardeau, MO 63703" as collateral.3 Some four years before Cass made the loan to King William, the Trust had signed a separate agreement with Cass under which the Trust guaranteed all of DQSTL's obligations to Cass. However, the Trust was not mentioned in the Security Agreement and was not a guarantor of the King William loan, except in its capacity as a blanket guarantor of DQSTL.

Cass distributed the loan directly to DQSTL. DQSTL retained a portion of the loan as partial repayment of King William's outstanding debt to DQSTL under the franchise agreement and distributed the remainder of the loan to...

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