Cadlerock Joint Venture II, L.P. v. Beaudoin

388 B.R. 6, 2008 U.S. Dist. LEXIS 41612
CourtDistrict Court, D. Connecticut
DecidedMay 29, 2008
DocketCivil Action No. 3:08CV338 (MRK)
StatusPublished
Cited by1 cases

This text of 388 B.R. 6 (Cadlerock Joint Venture II, L.P. v. Beaudoin) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cadlerock Joint Venture II, L.P. v. Beaudoin, 388 B.R. 6, 2008 U.S. Dist. LEXIS 41612 (D. Conn. 2008).

Opinion

RULING AND ORDER

MARK R. KRAVITZ, District Judge.

Pending before the Court is the second appeal by CadleRock Joint Venture II, L.P. (“CadleRock”) from the Bankruptcy Court’s (Krechevsky, J.) decision granting judgment to Marc and Loretta Beaudoin on CadleRock’s five-count complaint and granting Marc Beaudoin a discharge from bankruptcy pursuant to Bankruptcy Code § 727. See CadleRock v. Beaudoin (In re Beaudoin), No. 03-2018 (Bankr.D.Conn. Feb. 4, 2008) (“Beaudoin II”). Upon review of Judge Krechevsky’s comprehensive decision, and the arguments of CadleRock and Mr. and Ms. Beaudoin, the Court affirms the judgment of the Bankruptcy Court.

I.

The facts of this case and issues presented are recited in the previous decisions in this case, and they will not be repeated here. See Cadlerock v. Beaudoin (In re Beaudoin), 380 B.R. 121 (D.Conn.2007) (“Remand Decision”); CadleRock v. Beaudoin (In re Beaudoin), No. 02-22859, 2007 WL 1020787 (Bankr. D.Conn. Mar. 30, 2007) (“Beaudoin I”); Beaudoin II. Suffice it to say that following the filing of a Chapter 7 bankruptcy petition by Mr. Beaudoin, CadleRock (and John J. O’Neil, Jr., in his capacity as Chapter 7 Trustee), filed a five-count complaint against Mr. and Ms. Beaudoin, seeking to prevent Mr. Beaudoin from obtaining bankruptcy discharge pursuant to Bankruptcy Code §§ 727(a)(2)(A), 727(a)(2)(B), and 727(a)(4)(A), and requesting a finding of unjust enrichment against Ms. Beaudoin and imposition of a constructive trust regarding the “Corbin Avenue property.” In his first decision— Beaudoin I — Judge Krechevsky rendered judgment in favor of Mr. and Ms. Beau-doin on all of CadleRock’s claims. In doing so, he found that Mr. Beaudoin did not retain a beneficial interest in the Corbin Avenue property as required for a denial of discharge under §§ 727(a)(2)(A), 727(a)(2)(B), and 727(a)(4)(A) of the Bankruptcy Code. Judge Krechevsky further found that Ms. Beaudoin was not unjustly enriched by the disputed transfer of the Corbin Avenue property to her because she had provided adequate consideration, and consequently, he refused to impose a constructive trust on that property. On appeal, this Court vacated Judge Krechev-sky’s decision and remanded the case for clarification of certain statements made by Judge Krechevsky in his first decision and for additional findings of fact on several issues. On February 4, 2008, the Bankruptcy Court issued its second decision, Beaudoin II, providing the requested clarifications and additional findings. This appeal followed.

II.

This Court described its standard of review in its Remand Decision. A district court “reviews the bankruptcy [9]*9court’s conclusions of law de novo and its findings of fact under a clearly erroneous standard.” D.A.N. Joint Venture v. Cacioli (In re Cacioli), 332 B.R. 514, 517 (D.Conn.2005) (citations omitted). “ ‘A finding is “clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ ” Zervos v. Verizon New York, Inc., 252 F.3d 163, 168 (2d Cir.2001) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948)). A finding of whether a debtor retained a secret interest under § 727 of the Bankruptcy Code is a factual determination, see Rosen v. Bezner (In re Rosen), 996 F.2d 1527, 1532 (3d Cir.1993), as is a finding of adequate consideration, see Klein v. Tabatchnick, 610 F.2d 1043, 1047 (2d Cir.1979) (“Fairness of consideration is generally a question of fact.”).

III.

The first issue raised on appeal concerns Judge Kreehevsky’s response to the Court’s request, in its Remand Decision, for clarification on the Bankruptcy Court’s statements pertaining to whether Mr. Beaudoin retained a secret interest in the Corbin Avenue property. In its Remand Decision, this Court made the following observation:

In the course of rejecting CadleRock’s argument that Mr. Beaudoin had retained an interest in the Corbin Avenue property after the transfer of title to Ms. Beaudoin, the Bankruptcy Court made the following statement: “The facts and circumstances described by both the plaintiffs and the defendants do not support an inference that the debtor retained any property interest in assets which he concealed for the purpose of hindering, delaying, or defrauding creditors.” In re Beaudoin, 2007 WL 1020787, at *6 (emphasis added)----It is unclear to this Court (and was unclear to counsel for each party at oral argument) whether the foregoing statement merely represents the Bankruptcy Court’s overall assessment of and conclusion regarding all of the facts and circumstances of the case — that is, a factual finding — or instead whether it reflects the Bankruptcy Court’s understanding of the relevant legal principles governing this case. Because of this lack of clarity, the Court believes that it is most appropriate to remand the case to the Bankruptcy Court for clarification.

Remand Decision at 125-26. After discussing the factors that might give rise to an inference, this Court went on to note that “whether a debtor retained a secret interest in a property is ultimately a factual question to be decided based on the totality of circumstances. Therefore, any inference of a retained interest that may arise from certain facts — even if the inference is strong — is nonetheless rebuttable.” Id. at 128 (citations omitted).

On remand, Judge Kreehevsky clarified that the above-quoted statement in his first decision

represents [the Bankruptcy Court’s] finding of fact, i.e., its ‘overall assessment of and conclusion regarding all of the facts and circumstances of the case,’ and not a statement of legal principles .... While the factors indicated by CadleRock may, under certain circumstances, give rise to an inference of retained ownership, the debtor may rebut any such inference by providing a credible alternative explanation for his conduct. The court, after considering all the evidence, both testimonial and documentary, presented at trial, is satisfied that the debtor’s explanations, which the court finds both credible and reasonable, are sufficient to rebut any inference that the debtor retained an interest in the Corbin property. Thus the court made [10]*10a finding of fact that the debtor neither retained nor concealed any interest in the Corbin property following the Transfer.

Beaudoin II at 3-4 (emphasis added) (quoting Remand Decision at 125). Having reviewed the record on appeal as well as the Bankruptcy Judge’s factual finding that Mr. Beaudoin successfully rebutted any inference that might attach from the circumstances surrounding the transfer, this Court finds no clear error. See In re Rosen, 996 F.2d at 1532; Keeney v. Smith (In re Keeney), 227 F.3d 679 (6th Cir.2000); United States v. Edwards, 572 F.Supp. 1527, 1535-36 (D.Conn.1983).

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Bluebook (online)
388 B.R. 6, 2008 U.S. Dist. LEXIS 41612, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cadlerock-joint-venture-ii-lp-v-beaudoin-ctd-2008.