In re Donald
| Citation | 240 BR 141 |
| Decision Date | 26 October 1999 |
| Docket Number | BAP No. MW 98-003. |
| Parties | In re James C. DONALD Sr. and Elizabeth J. Donald, Debtors. David J. Pelletier and Susan P. Pelletier, Plaintiffs/Appellants, v. James C. Donald Sr. and Elizabeth J. Donald, Defendants/Appellees. |
| Court | Bankruptcy Appellate Panels. U.S. Bankruptcy Appellate Panel, First Circuit |
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David J. Pelletier, Oxford, MA, Susan P. Pelletier, Dudley, MA, pro se, on brief for appellants.
William N. Kring, Dudley, MA, on brief for appellees.
Before VOTOLATO, Chief Judge and LAMOUTTE and HAINES, Bankruptcy Judges.
The issue on appeal is whether the bankruptcy court erred in granting debtors' motion for summary judgment and dismissing Pelletier's complaint objecting to or revoking a discharge and to determine the dischargeability of the debt.
The bankruptcy court's findings of fact are reviewed under a clearly erroneous standard, while its legal conclusions are reviewed de novo. Jeffrey v. Desmond, 70 F.3d 183 (1st Cir.1995); In re SPM Mfg. Corp., 984 F.2d 1305 (1st Cir. 1993).
The Donalds' filed a voluntary petition under chapter 7 of the Code on November 21, 1995. (See docket of bankruptcy case no. 95-45326 in appellants' appendix)1. The Pelletiers were listed as creditors in the debtors' schedules accompanying their petition. The discharge order was entered on February 22, 1996 (dkt. # 13), and the order closing the case and discharging the trustee was entered on June 14, 1996.
The Pelletiers were included as creditors in the Donalds' bankruptcy petition because of an action which is still pending in the Worcester Superior Court, case no. 91-00450. That action, filed on February 11, 1991, is based upon a boundary dispute between the parties as to the construction of a fence along their common property line. As can be gleaned from the parties' briefs and the documents contained in their accompanying appendices, this dispute erupted into an all-out war and resulted in criminal charges against both parties.2
Pelletier argues that on November 4, 1996, he wrote a letter to the United States Trustee (hereinafter referred to as "UST") alleging various irregularities regarding the Donalds' petition. As a result of Pelletier's letter, the UST wrote to the interim trustee on November 26, 1996 and again on January 23, 1997. These actions on the part of the UST apparently led Pelletier to believe that the debtors' discharge may be "reopened". However, as the time limit for filing a motion for revocation of discharge under § 727(e)(1) and Bankruptcy Rule 9006 drew near without any notice of action on the part of the trustee or UST, appellant Pelletier filed an emergency motion on February 24, 1997, to reopen the case (dkt. # 19). The bankruptcy judge entered an endorsement order on March 5, 1997, denying the motion due to untimeliness. Pelletier filed a motion for reconsideration (dkt. # 21), along with affidavits (dkt. # 22), on March 7, 1997, to which debtors objected on March 13, 1997 (dkt. # 23). The bankruptcy judge entered an endorsement order on May 16, 1997, granting the motion for reconsideration and directing Pelletier to file an adversary proceeding. The case was reopened on May 19, 1997.
The complaint objecting to discharge and to the dischargeability of the debt was filed on June 5, 1997, thereby commencing adversary proceeding no. 97-4211. Several motions for supplemental, additional and amended complaints were filed, as well as motions for injunctions and discovery-related motions.
The bankruptcy court held a hearing on debtors' motion for summary judgment on January 13, 1998, at which time it entered an order granting the motion and dismissing the complaint with prejudice. The court stated that its reasons therefore were (1) for the reasons argued by counsel set forth in the briefs3; (2) because the complaint doesn't state a cause of action4; and (3) because the complaint seeking to revoke discharge is time-barred, having been filed one day late and, further, because the complaint seeking to have the debt declared non-dischargeable by reason of fraud is also time-barred. See transcript of hearing in appellants' appendix at p. 12. Pelletier filed a motion for reconsideration which was denied by the bankruptcy court on January 22, 1998.
Subsequent to the bankruptcy court's order dismissing the complaint, the Worcester Superior Court issued an order on January 20, 1998, addressing the pending matters in the state court proceeding; specifically, the defendants' motions to vacate the judgments entered on August 27, 1997 and October 29, 1996. See appellants' appendix. The superior court judge concluded that the original allegations of the complaint, as well as all that followed, had never been adequately addressed by the parties, and that his August decision was not the most appropriate disposition of the dispute. Rather, he concluded, he should have put the parties in the position they were when the dispute began, noting the parties' stated belief that each of the parties' obligations is dependent upon the other party living up to his respective obligation, as well as the parties stated intention that if their agreement was violated it would be nullified and the parties returned to their respective positions held prior to the execution of the Agreement. Thus, the judge concluded that the final paragraph of his decision of August 26, 1997 should be vacated, as well as the Agreement for Judgment and Stipulation of Dismissal entered on October 29, 1996, stating that "all matters put in issue by the plaintiffs' original complaint and the counterclaim of the defendants are hereby revived and the case is ordered for trial, with jury, on August 24, 1998. . . . "5 Pelletier argues that the bankruptcy court erred in granting the debtors' motion for summary judgment and dismissing his complaint objecting to or to revoke discharge and to determine the dischargeability of a debt. According to Pelletier, the debtors' discharge should be revoked because they did not fully disclose the nature of the state court action which is the basis for his claim, and if they had, his claim would have been held nondischargeable as it is based upon the tort of assault and battery. Further, he alleges that his complaint objecting to discharge should be considered timely filed because it was filed in good faith and as soon as he became aware of the fraudulent activity.
The debtors argue that the bankruptcy court's order should be affirmed because Pelletier's complaint objecting to discharge was filed late; that is, one year and two days after the discharge was entered. The debtors further argue that they did not intentionally transfer or conceal any assets in order to defraud their creditors.
The bankruptcy judge articulated the following bases for his ruling when he granted the Donalds' motion for summary judgment and dismissed Pelletier's complaint with prejudice:
Although the record before this panel does include the transcript containing the aforementioned ruling, it does not include the documents upon which those findings are based and to which they refer—namely, the briefs arguing the summary judgment motion and the complaint objecting to discharge. Neither the appellate brief filed by Pelletier nor his oral argument before this panel elucidate the basis for those findings, leaving this panel with little to evaluate. It is Pelletier's obligation, as appellant, to adequately develop his factual allegations and his claims of error, and his failure to do so may be deemed waiver of those arguments. See Executive Leasing Corporation v. Banco Popular de Puerto Rico, 48 F.3d 66, 67 (1st Cir.1995). Although the grant of summary judgment is reviewed de novo, in the light most favorable to the nonmoving party and indulging all reasonable inferences in that party's favor, the appellant is not excused from arguing the issues on appeal. Id. at 68. See also, United States v. Zannino, 895 F.2d 1, 17 (1st Cir.1990) (), cert. denied, 494 U.S. 1082, 110 S.Ct. 1814, 108 L.Ed.2d 944 (1990).
Pelletier argues that the bankruptcy court erred in granting the summary judgment motion and dismissing his complaint, but rather than explaining the factual and/or legal basis for the judge's supposed error, he simply restates his allegation that the debtors failed to disclose the nature of the state court action underlying his claim, which if they had would allegedly have resulted in his claim being held nondischargeable. There is no indication that such a finding, if it were made, would constitute a basis for objection to discharge under § 727(d)(1).
Section 727(d)(1) provides that the bankruptcy court should revoke a discharge granted under § 727(a) if "such discharge was obtained through fraud of the debtor, and the requesting party did not know of such fraud until after the granting of such discharge." The fraud which must be shown is fraud "in fact", such as the...
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