In re Optical Technologies Inc., No. 00-14391

• Decision Date: 06 April 2001
• Docket Number: No. 00-14391
• Citation: 246 F.3d 1332
• Parties: (11th Cir. 2001) 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.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1332

246 F.3d 1332 (11th Cir. 2001)

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.

April 18, 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. 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...