In re: DEBBIE REID O'GORMAN
- Summarized by Michael Myers , Ballard Spahr LLP
- 2 months 3 weeks ago
- Case Type:
- Case Status:
- BAP No. NC-22-1062-BFT (9th Circuit, Dec 21,2022) Not Published
- The Ninth Circuit Bankruptcy Appellate Panel affirmed the bankruptcy court's order granting summary judgment in favor of the chapter 7 trustee on the trustee's claims against the recipients of fraudulent transfers under section 548(a)(1)(A) based on the debtor-transferor's actual intent to hinder or delay (but not necessarily defraud) creditors. The BAP also affirmed the bankruptcy court's order denying the defendants' Rule 56(d) motion for more time to conduct discovery.
- Procedural context:
- Prior to her chapter 7 bankruptcy filing, the individual debtor had conveyed her property sitting on 30 acres to a trust. After the bankruptcy filing, the chapter 7 trustee filed an adversary complaint against the trust, its trustee, and beneficiary to avoid the transfer. Five weeks after the defendants filed their answer and prior to any discovery, the trustee filed a motion for summary judgment with a supporting declaration from the debtor on her intent to delay the trustee's sale. Defendants filed an opposition mostly arguing that the motion was premature and requested additional time to conduct discovery. However, defendants failed to support their Rule 56(d) request with a declaration or even to articulate what facts were needed to oppose the motion. The court denied the defendants' Rule 56(d) request and granted the trustee's motion for summary judgment.
- In early 2020, a junior lien holder had initiated a trustee's sale on debtor's property, a home on about 30 acres in Calistoga, California. In July 2020, an attorney contacted debtor and offered to assist with the foreclosure. Based on the attorney's advice, the debtor had conveyed her property to a trust, the beneficiaries of which were the debtor's family trust and an entity controlled by the attorney. Debtor terminated her relationship with the attorney in August 2021 and filed chapter 7 bankruptcy that same month with the assistance of different counsel. Following the bankruptcy filing, the chapter 7 trustee filed an adversary complaint against the trust, the attorney's beneficiary entity, and the trust's trustee (also an entity controlled by the attorney). The motion was supported by a declaration from the debtor that she had transferred the property with the intent to delay the trustee's sale, but that she subsequently came to believe that the attorney was attempting to defraud her.
- Brand, Faris, and Taylor
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