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Nature of Suit Code: 245
Nature of Suit: Real Property Product Liability
Cause of Action: 

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UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT FI LED 

In re: MORRIS KEITH cox, 

Debtor. 

DANIEL J. BEHLES, Trustee, 

Plaintiff-Appellee, 

v. 

DONNA COX, 

Defendant-Appellant. 

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ORDER AND JUDGMENT* 

United States C.OUrt of Appeals 

Tenth Circuit 

JAN 9- 1990 

AOBERT L. HOECKER 

Clerk 

No. 88-2529 

(D.C. No. 87-1595-JB) 

(D. N.M.) 

Before MOORE, BARRETT, and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Appellant appeals the district court's affirmance of a 

bankruptcy court determination that a transfer of funds from 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 88-2529 Document: 01019959033 Date Filed: 01/09/1990 Page: 1 
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debtor to appellant constituted an avoidable transfer under 11 

u.s.c. S 547. Appellant, the wife of debtor, transferred money to 

debtor, once on July 15, 1985, and again on July 25, 1985, for the 

partial repayment of debtor's loan on the house, owned by debtor, 

in which the couple resided. On August 19, 1985, debtor 

retransferred the total amount, with interest, back to appellant. 

The debtor filed for bankruptcy on August 29, 1985. 

Appellant argues the initial transfers to debtor were for the 

purchase of a property interest in debtor's house. Because debtor 

failed to transfer title to appellant, appellant asserts debtor 

held the property in constructive trust for appellant's benefit. 

The August transfer of funds from debtor to appellant represented 

debtor's repurchase of appellant's interest in the property. 

Thus, appellant argues, the August transfer was a contemporaneous 

exchange for new value and, therefore, not avoidable. See 11 

u.s.c. S 547(c)(l). 

The trustee asserts appellant's transfer of funds to debtor 

was a loan transaction, and the transfer from debtor to appellant 

represented the repayment of the loan, with interest. The 

transfer was, therefore, avoidable as a transfer for the repayment 

of an antecedent debt. 11 u.s.c. S 547(b). 

Following trial to the court, the bankruptcy court made the 

following findings: 

the sum and substance of the transaction was that [Mrs.] 

Cox paid for [Mr.] Cox's benefit, one of his debts, 

anticipating that at a later date she would receive a 

conveyance of a portion of an interest in the real 

estate, that the transaction was there for [sic] a loan 

of money, with a satisfaction to be accomplished at a 

later date by the conveyance of property. Mr. Cox, 

according to the evidence, never had any intention, 

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other than to convey that property to himself and to his 

wife, and in all respects treated this obligation with 

integrity. Unfortunately, his financial circumstances 

were such as to make it impossible for him to do this. 

There therefore seems no occasion for the court to 

create a constructive trust. It would be one of 

futility at this time. A construtive (sic] trust is a 

remedy to correct wrongdoing. 

The Court finds absolutely no wrongdoing in this 

case. There are indeed unfortunate circumstances, but 

they do not demonstrate wrongdoing. 

So, I think I must determine that there exists no 

constructive trust in this case and when the parties 

dealt with the problem which had occurred -- the problem 

was Mr. Cox's financial distress -- they agreed upon an 

alternative method of satisfaction of Mr. Cox's 

obligation, that there was no consideration valid, 

invalid, worthy or unworthy flowing from Mrs. Cox to Mr. 

Cox. 

Tr. Vol. II, 10-11. The bankruptcy court, therefore, held the 

August transfer from debtor to appellant was avoidable under 

S 547(b). The district court affirmed the bankruptcy court's 

determination. 

The bankruptcy court's determination of the intent of the 

parties underlying the transactions at issue in this appeal is a 

factual determination, reviewable under a clearly erroneous 

standard. In re Mullet, 817 F.2d 677, 678 (10th Cir. 1987). 

Because its decision is supported by the record, the bankruptcy 

court's determination is not clearly erroneous. See Lone Star 

Steel Co. v. United Mine Workers, 851 F.2d 1239, 1242 (10th Cir. 

1988)(quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573 

(1985)). The judgment of the United States District Court for the 

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District of New Mexico 

determination is AFFIRMED. 

affirming the bankruptcy court's 

ENTERED FOR THE COURT 

PER CURIAM 

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