Vucurevich v. Valley Exch. Bank
Decision Date | 13 February 2015 |
Docket Number | CIV. 14-4114-KES |
Court | U.S. District Court — District of South Dakota |
Parties | KENT A. VUCUREVICH, Appellant, v. VALLEY EXCHANGE BANK, Appellee. |
Appellant, Kent A. Vucurevich, appeals from the July 9, 2014, decision issued by the United States Bankruptcy Court for the District of South Dakota,1 granting appellee Valley Exchange Bank's motion for summary judgment in part and denying Vucurevich a general discharge of debts. Bankr. Docket 45.2 For the following reasons, the court affirms the bankruptcy court's decision.
BACKGROUND
The pertinent, undisputed facts of this appeal are as follows:
Vucurevich was placed into bankruptcy on June 27, 2011, following an involuntary petition filed by several creditors. See 4:11-bk-40501. On August 1, 2011, the bankruptcy court granted the petition and entered anorder for relief under Chapter 7 of U.S.C. title 11. Valley Exchange subsequently filed an adversary complaint against Vucurevich on February 2, 2012, arguing that Vucurevich was not entitled to a discharge of indebtedness. Bankr. Docket 1. The case was held in abeyance pending resolution of other adversary proceedings until the bankruptcy court issued an order on November 7, 2013, which allowed the case to resume. Bankr. Docket 29.
Valley Exchange moved for summary judgment on December 27, 2013, arguing Vucurevich was not entitled to a discharge of debts pursuant to 11 U.S.C. §§ 727(a)(3), (a)(4), and (a)(5). See Bankr. Docket 30-4. Accompanying its motion and brief for summary judgment, Valley Exchange submitted a statement of undisputed material facts and a number of evidentiary exhibits. See Bankr. Docket 30-1 to -3. Vucurevich timely responded, raised several objections to Valley Exchange's motion, and argued that summary judgment was inappropriate. See Bankr. Docket 37.
In its motion for summary judgment, Valley Exchange's statement of undisputed material facts set forth the following:
Bankr. Docket 30-1 at ¶¶ 25, 32, 47, 57, 64. Vucurevich did not object to these statements. Bankr. Docket 37-1 at ¶¶ 25, 32, 47, 57, 64.
With respect to certain assets or records of assets that Valley Exchange argued Vucurevich had not sufficiently accounted for, Valley Exchange identified as undisputed facts that:
Bankr. Docket 30-1 at ¶¶ 62-63, 65. These statements were accompanied by a transcript citation from Vucurevich's depositions. See id. (citing 30-3 (Exhibits 34a; 34b)). Vucurevich objected to ¶¶ 62-63, contending instead that the money from those sales went to pay for the living expenses of his estranged wife and his children. Bankr. Docket 37-1 at ¶¶ 62-63. Regarding records from the entity sales, Vucurevich "clarifie[d] that accurate records would exist once files were reviewed by an accountant."5 Id. at ¶ 65 (citing 30-3 (Exhibit 34b)).
With respect to other business and financial records which Valley Exchange alleged that Vucurevich had not kept or preserved, Valley Exchange's statements of undisputed material facts stated that:
Bankr. Docket 30-1 at ¶¶ 42-46 (citations omitted). Each of these facts was also accompanied by a citation to portions of Vucurevich's deposition testimony. See id. Vucurevich disputed these statements because he Bankr. Docket 37-1 at ¶ 42.
The bankruptcy court issued its decision on July 9, 2014, and ruled in Valley Exchange's favor. Specifically, the court concluded that Vucurevich was not entitled to a general discharge of debts pursuant to 11 U.S.C. §§ 727(a)(3) and (a)(5). See Bankr. Docket 45 at 6, 9. The court did not, however, grant summary judgment under 11 U.S.C. § 727(a)(4). Id. at 11.
Bankr. Docket 37-2 at 7. Vucurevich's reference and argument regarding "[t]he assets Plaintiff discusses in his brief" appears to be directed at Valley Exchange's contention that Vucurevich had not properly accounted for the $41,000 from the watch and furnishing sales, or the proceeds from the sales of several of his business entities. See Bankr. Docket 30-4 at 15.
The bankruptcy court then considered Vucurevich's deposition testimony where he stated his records from 2009 to the date of filing were poor, if not missing. Bankr. Docket 45 at 10. The court also surveyed statements Vucurevich made in depositions and answers to interrogatories in other adversary disputes wherein Vucurevich admitted that some of his schedules and statements were incomplete or inaccurate. Id. The court stated it was "left with only Debtor's sweeping explanation that he used some assets to provide for his estranged wife and children, service debt, and reinvest in other projects." Id. The court found this explanation to be "vague, indefinite, andunsatisfactory." Id. (citing In re Carter, 203 B.R. 697, 707 (Bankr. W.D. Mo. 1996)). Thus, because Vucurevich offered only "his own unsubstantiated, uncorroborated, and undocumented general statements" and a general "prospect of an accountant's aid at some unknown time" regarding the whereabouts of his assets, the bankruptcy court concluded Vucurevich had not met his burden and that there was no remaining triable issue of fact. Id. at 10-11 (citing in re Vilhauer, 458 B.R. 511, 514 (B.A.P. 8th Cir. 2011)). Consequently, the court summarily denied Vucurevich a discharge pursuant to § 727(a)(5).
Regarding § 727(a)(3), the bankruptcy court found, based on Vucurevich's admissions that he does not have a bank account and operates on a cash-only basis, that he "depriv[ed] the case trustee and his creditors of account records as a critical source of information regarding his transactions." Id. at 7-8. Further, the court took issue with Vucurevich's decision to "systematically have his e-mails deleted after two weeks." Id. at 8.6 The bankruptcy court concluded that, based on the circumstances, Valley Exchange had met its initial burden under § 727(a)(3) and therefore the burden shifted to Vucurevich to justify his failure to keep or preserve records. Id.
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