A & H Insurance, Inc. v. Huff (In re Huff)

Summarized by Thomas Phinney , Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP
11 years 11 months ago

Citation:

9th Cir. BAP No. NV-13-1263-JuKiTa (March 20, 2014) (not for publication)

Tag(s):

Ruling:

The 9th Cir. BAP ruled that Debtors were entitled to discharge under Section 1141(d) since the Debtors had obtained confirmation of a non-liquidating chapter 11 plan, and thus Debtors were entitled to dismissal of nondischarge complaint under Section 727(a)(2)(A).

Procedural context:

The bankruptcy court granted summary judgment in favor of Debtors on Creditor's complaint to deny discharge under Section 727(a)(2)(A) (transfers within one year of filing with intent to hinder delay or defraud creditors). The bankruptcy court decision was based upon the merits of the section 727(a)(2)(A) complaint. On appeal, the BAP affirmed but on different grounds: because the Debtors had obtained confirmation of a nonliquidating chapter 11 plan, the Debtor was entitled to a discharge under Section 1141(d)(3), and was entitled to dismissal of the Section 727(a)(2)(A) complaint regardless of the merits. The BAP additionally reviewed the bankruptcy court's decision on the merits, and found that if Debtors were not protected by Section 1141(d)(3) in this case, the Debtors had not established a defense to the Section 727(a)(2)(A) claim, and summary judgment in favor of Debtors was improper on the merits of the claim.

Facts:

Within one year prior to filing their chapter 11 petition, the Debtor transferred $40,000 into a joint account in the name of the Debtor and the Debtor's son, and then later withdrew the money and purchased an annuity. The annuity was disclosed on the Debtors' schedules and claimed as exempt. The Debtors argued that the initial deposit into the joint account was not a "transfer" and that they had "cured" any inference of fraud by putting the money back into their account, albeit in order to purchase an annuity which they claimed as exempt. The BAP ruled that under these facts, the Creditor had properly stated a Section 727(a)(2)(A) claim and were entitled a trial, were it not for the grant of dicharge by the confirmed plan under Section 1141(d)(3).

Judge(s):

JURY, KIRSCHER, and TAYLOR

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