In re: Grandote Country Club Co.

• Decision Date: 14 June 2001
• Docket Number: No. 99-1127,99-1127
• Parties: (10th Cir. 2001) In re: GRANDOTE COUNTRY CLUB COMPANY, LTD., debtor in a foreign proceeding, Debtor. HIDEKI KOJIMA, foreign representative for the estate of Grandote Country Club Company, Ltd.; MOUNTAIN INVESTMENT CORPORATION, Plaintiffs - Appellants, v. GRANDOTE INTERNATIONAL LIMITED LIABILITY COMPANY; SHIRLEY ZUBAL, in her official capacity as the Treasurer for Huerfano County, Colorado; RTV LLC, a Colorado Limited Liability Company; DWIGHT A. HARRISON; PAUL D. HARRISON; RESOLUTION TRUST CORPORATION, as Receiver for First Federal Savings and Loan Association of Estherville and Emmetsburg; SHIRLEY ZUBAL, in her official capacity as the Public Trustee of Huerfano County, Colorado; TSUKASA YOSHII, also known as Duke Yoshii; KOICHI HASHIMOTO; INTERNAL REVENUE SERVICE; WAHATOYAS, LLC, Defendants - Appellees
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1146

252 F.3d 1146 (10th Cir. 2001)

In re: GRANDOTE COUNTRY CLUB COMPANY, LTD., debtor in a foreign proceeding, Debtor.

HIDEKI KOJIMA, foreign representative for the estate of Grandote Country Club Company, Ltd.; MOUNTAIN INVESTMENT CORPORATION, Plaintiffs - Appellants, v. GRANDOTE INTERNATIONAL LIMITED LIABILITY COMPANY; SHIRLEY ZUBAL, in her official capacity as the Treasurer for Huerfano County, Colorado; RTV LLC, a Colorado Limited Liability Company; DWIGHT A. HARRISON; PAUL D. HARRISON; RESOLUTION TRUST CORPORATION, as Receiver for First Federal Savings and Loan Association of Estherville and Emmetsburg; SHIRLEY ZUBAL, in her official capacity as the Public Trustee of Huerfano County, Colorado; TSUKASA YOSHII, also known as Duke Yoshii; KOICHI HASHIMOTO; INTERNAL REVENUE SERVICE; WAHATOYAS, LLC, Defendants - Appellees.

No. 99-1127

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

June 14, 2001

Appeal from the United States District Court for the District of Colorado (D.C. No. 95-B-1863) [Copyrighted Material Omitted] Brian P. Halloran, Connolly, Halloran & Lofstedt, PC, Louisville, Colorado, for Plaintiffs-Appellants.

Laura B. Redstone, Ballard, Spahr, Andrews & Ingersoll, LLP, Fredric J. Lewis, Senn, Lewis & Visciano, PC, and Harry L. Simon, Denver, Colorado, for Defendants-Appellees.

Dwight A. Harrison and Paul D. Harrison, pro se.

Before SEYMOUR, McKAY, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

Plaintiff-appellant Hideki Kojima, trustee for a Japanese entity involved in bankruptcy proceedings in Japan, seeks to gain title to a golf course located in La Veta, Colorado, referred to by the parties as "the property."¹ To do so, Kojima attacks the validity of a transfer of ownership of the golf course, claiming it should be set aside under Japanese bankruptcy law and was fraudulent, as well as a subsequent tax sale--arguing it was invalid under the Colorado Uniform Fraudulent Transfer Act, Colo. Rev. Stat. 38-8-101 to 38-8-112 ("CUFTA"). We affirm the district court's grant of summary judgment.

I

This case has a tortuous procedural history. For the sake of brevity, we need not discuss in great detail all of the hearings, motions, and proceedings in state, bankruptcy, and federal district courts relating to the golf course. Plaintiff-appellant Kojima is the trustee in a Japanese bankruptcy proceeding concerning Grandote Country Club, Ltd. ("Grandote Japan").² Originally the property was owned by Grandote International L.L.C., Dwight Harrison, and Paul Harrison (collectively "Grandote Colorado"). Grandote Colorado failed to pay Colorado taxes on the property; in November 1990, the Huerfano County Treasurer offered for sale tax liens encumbering the property. Because no one bought the tax liens, tax certificates encumbering the property were "struck off" to the county.

In March-June 1991, Dwight Harrison sold most of the property to a Japanese citizen, Koichi Hashimoto, but retained some interests for himself. That sale included an acknowledgment that taxes on the property were delinquent. In February 1993, Hashimoto conveyed the property to Grandote Japan, still subject to the unpaid tax liens.

Dwight Harrison filed for bankruptcy in December 1993 in an apparent effort to forestall foreclosure on a loan currently held by defendant-appellee Wahatoyas LLC. That proceeding was dismissed on May 31, 1994. On May 2, 1994, just before the bankruptcy action was dismissed, Grandote Japan conveyed the property back to Grandote Colorado ("the Japan to Colorado transfer"). Kojima contends the Japan to Colorado transfer was fraudulent.

On July 8, 1994, Wahatoyas purchased the tax certificates for the property pursuant to a tax sale. Wahatoyas then paid all outstanding taxes, interest, and costs and, in October 1994, transferred the tax certificates to defendant-appellee RTV LLC. That same month, RTV applied for issuance of treasurer's deeds ("the Tax Deeds") to the property. (The three-year statutory period for issuance of the Tax Deeds had just expired.) The county treasurer then issued initial notice of RTV's application for the Tax Deeds pursuant to Colorado statutes and, after much litigation, issued the Tax Deeds to RTV in May 1995. Armed with the Tax Deeds, in June 1995 RTV brought a forcible entry and detainer action in Colorado state court to gain possession of the property. RTV prevailed in that action, with the state court finding that the Tax Deeds were valid and awarding RTV possession, a ruling affirmed by the Colorado Court of Appeals. RTV, L.L.C. v. Grandote Int'l L.L.C., 937 P.2d 768, 770 (Colo. Ct. App. 1996).

Meanwhile, Grandote Japan declared bankruptcy in Japan in July 1994. Kojima, as trustee for Grandote Japan, filed various legal actions seeking to prevent the issuance of the Tax Deeds to RTV, which were obviously unsuccessful. See id. Notably, Kojima filed an ancillary proceeding in bankruptcy court under 11 U.S.C. 304. The outcome of that proceeding was an order authorizing Kojima to pursue whatever litigation he wished to establish his rights and claims in the property. In re Kojima, 177 B.R. 696, 704 (Bankr. D. Colo. 1995).

As a result of that order, Kojima brought this suit, seeking to avoid the Japan to Colorado transfer and the issuance of the Tax Deeds to RTV. The district court granted summary judgment in favor of defendants, concluding that Japanese law did not apply to this case, that the Tax Deeds were properly issued, and that there was no evidence of fraudulent transfer.

II

At the time this appeal was filed, we questioned whether the district court's judgment was a final, appealable order because it dismissed some of Kojima's claims without prejudice. See Heimann v. Snead, 133 F.3d 767 (10th Cir. 1998). The district court subsequently amended its judgment to dismiss all claims with prejudice, and thus there is no longer any doubt that the judgment is appealable and that we have jurisdiction under 28 U.S.C. 1291.

III

"We review the grant or denial of summary judgment de novo, applying the same legal standard used by the district court . . . ." Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996) (citation omitted). Summary judgment is appropriate "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 a judgment as a matter of law." Fed. R. Civ. P. 56(c). In reviewing a summary judgment motion, the court is to view the record "in the light most favorable to the nonmoving party." Thournir v. Meyer, 909 F.2d 408, 409 (10th Cir. 1990) (citation omitted). The purpose of a summary judgment motion, unlike that of a motion to dismiss, is to determine whether there is evidence to support a party's factual claims. Unsupported conclusory allegations thus do not create a genuine issue of fact. See United States v. Simons, 129 F.3d 1386, 138889 (10th Cir. 1997) (citing Allen v. Muskogee, Okla., 119 F.3d 837, 84344 (10th Cir. 1997)). To withstand summary judgment, the nonmoving party "must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e)).

A. Choice of Law

Kojima brought this action as an ancillary proceeding under 11 U.S.C. 304³ pursuant to an order of the bankruptcy court granting Kojima permission to pursue its claims in federal court. See Kojima, 177 B.R. at 704. The bankruptcy judge's opinion discussed, but did not determine, whether Japanese law should be applied to Kojima's claims. Id. at 699-703. At summary judgment, the district court rejected use of Japanese law. Kojima argues that Japanese law should apply and that under Japanese law the Japan to Colorado transfer is avoidable.

Section 304 allows proceedings to be brought in the United States "to function in aid of a [bankruptcy] proceeding pending in a foreign court." Id. at 700 (citation omitted). Applying principles of "comity," such proceedings may utilize foreign law to recover property located in the United States when application of foreign law will "best assure an economical and expeditious administration" of the bankruptcy estate. 11 U.S.C. 304(c).

In determining whether to apply Japanese law, we discern two competing values. On one hand are principles of comity, which favor application of Japanese law. On the other are the interests of the locality where the property is located, which favor application of United States/Colorado law. In support of comity and applying Japanese law, Kojima cites Philadelphia Gear Corp. v. Philadelphia Gear de Mexico, S.A., 44 F.3d 187 (3d Cir. 1994). In that case, the Third Circuit announced a policy favoring application of a foreign state's laws:

In general, "[u]nder the principle of international comity, a domestic court normally will give effect to executive, legislative, and judicial acts of a foreign nation." More specifically, we have stated that "[c]omity should be withheld only when its acceptance would be contrary or prejudicial to the interest of the nation called upon to give it effect."

Id. at 191 (citations omitted); see also In re Hourani, 180 B.R. 58, 64 (Bankr. S.D.N.Y. 1995) ("[T]his nation's preparedness to grant deference to the laws and proceedings of other nations is considerable."). The bankruptcy judge's analysis in the earlier ancillary proceeding in this case also lends support to Kojima's argument. He concluded that Japanese bankruptcy law is "consonant with and complementary to the principal features which govern the United States' Bankruptcy Code." Kojima, 177 B.R. at 702.

Despite these arguments for applying Japanese law, we agree with the district court that under the facts of this case, Colorado law is the appropriate law to apply in resolving Kojima's claims. Most importantly, the fact that the only asset at issue is real...