Hill v. Jankowski (In re Dey)

Citation:
Hill v. Jankowski (In re Dey), BAP No. CO-14-026 (BAP 10th Cir. Feb. 17, 2015)
Tag(s):
Ruling:
The 10th Circuit BAP (Judges Thurman and Jacobvitz, with Judge Cornish dissenting) reversed the bankruptcy court, concluding that perjury is insufficient grounds to vacate a defense verdict on a trustee’s preference suit after the trustee filed a Rule 60(b) motion establishing that the defendant had lied at trial about receiving funds. The BAP concluded that defendant's "misleading the bankruptcy court" through “misleading” testimony was insufficient grounds to vacate a judgment in his favor under Rule 60(b)(3). The panel concluded that Rule 60(b)(3) and established case law required the bankruptcy court to make a necessary finding that defendant's perjury on a material fact element "substantially interfered with the trial process," such as by interfering with the trustee's ability to fully and fairly prepare for and present his case for avoidance. The majority of the panel reversed based on the absence of findings from the bankruptcy court regarding "interference," i.e., the absence of a finding that defendant's perjury interfered with plaintiff's ability to prepare his case, such as by impeding the trustee from obtaining the necessary impeachment document from the bank prior to the original trial. The panel concluded that trustee's decision to not obtain the documentary evidence prior to trial was his election and strategy, and was not impeded by defendant's perjury at trial. The dissent disagreed, finding that defendant's perjury satisfied the elements of Rule 60(b)(3) and the bankruptcy court's ruling was not clearly erroneous.
Procedural context:
Trustee sued debtor's ex-husband to recover preference, and following trial, bankruptcy court entered judgment in favor of defendant. Trustee moved to vacate judgment under Rule 60(b)(3) after obtaining documentary evidence that defendant had lied at trial. Following evidentiary hearing, bankruptcy court vacated defense judgment, and entered judgment for trustee avoiding transfer. Defendant appealed to BAP for 10th Circuit.
Facts:
The Chapter 7 trustee sued debtor's ex-husband for recovery of preference ($8,100) based on transfer from debtor. Defendant asserted he had never received funds. At trial, trustee presented debtor's SOFA (indicating transfer), transcript of debtor's 341 meeting testimony regarding transfer, debtor's bank statement (showing withdrawal of funds), and debtor's testimony that she had provided defendant with a cashier’s check for $8,100 for rent. Defendant presented his bank statements, which showed no deposit, and testified that he never received funds. Trustee did not obtain a copy of the cancelled cashier's check that debtor alleged she had provided to defendant. The bankruptcy court ruled in favor of defendant, finding that trustee had failed to prove that defendant received funds. Following trial, trustee obtained a copy of the cancelled check, which showed an endorsement by defendant. Trustee filed a motion to vacate judgment under Rule 60(b)(3) ("fraud, misrepresentation, or misconduct by an opposing party") based on the check. At a hearing on the trustee's motion, defendant and a handwriting expert for defendant testified that the signature was not his. The bankruptcy court found that neither defendant's nor his expert's testimony was credible, that defendant had "misled" the court, and that defendant's testimony contained "misrepresentations" and "constituted misconduct" warranting relief from judgment, and vacated the judgment. Defendant appealed.
Judge(s):
Thurman, Cornish, Jacobvitz

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