Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-05106/USCOURTS-ca10-91-05106-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

In re: VERNON RAE TWYMAN, Jr. , 

a/k/a Vernon Ray Twyman, 

) 

) 

) 

Debtor, ) 

----------------------------------------) 

J. WAYNE PHILPOT; WAYNE LEASING, INC., 

Plaintiffs-Appellees, 

v. 

VERNON RAY TWYMAN, Jr., 

Defendant-Appellant. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

ORDER AND JUDGMENT* 

OCTO 41991 

ROBERT L. HOECKER 

Clerk 

No. 91-5106 

(D. C. No. 90-C-466-E) 

(N.D. Okla.) 

Before ANDERSON, TACHA, 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 cause is therefore ordered 

* be 

for 

res 

This order and judgment has no precedential value and shall not 

cited, or used by any court within the Tenth Circuit, except 

purposes of establishing the doctrines of the law of the case, 

judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 91-5106 Document: 010110090762 Date Filed: 10/04/1991 Page: 1 
Mr. Twyman (Debtor) filed for bankruptcy and the bankruptcy 

court subsequently determined that two separate debts owing to Mr. 

Philpot (Creditor) were not dischargeable. Debtor appealed to the 

district court, who affirmed. Debtor now appeals this district 

court decision. We affirm. 

Debtor and Creditor were apparently good friends. Debtor 

held himself out as a financial advisor and began performing his 

services for Creditor. While Creditor lost in excess of 

$1,000,000 by following Debtor's "advice," only two of those many 

transactions are involved in this case. 

The first debt involved a complex transaction, which we 

summarize by stating that Creditor loaned Debtor $150,000 to be 

placed in Debtor's bank account as "show money." Debtor assured 

Creditor that he would not spend or in any way place the money at 

risk. However, the undisputed evidence established that Debtor 

instructed an employee to spend this money for Debtor's benefit 

prior to its receipt from Creditor. The bankruptcy court 

concluded this debt was nondischargeable under 11 U.S.C. § 523 as 

the monies were obtained by misrepresentation and further upon the 

grounds of fraud and defalcation by a fiduciary. 

Debtor contends that when Creditor discovered the promises to 

keep the funds in escrow had been broken, Creditor allowed Debtor 

to make interest payment upon this debt thereby treating it as a 

loan. Debtor also contends that Creditor treated this loan as an 

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Appellate Case: 91-5106 Document: 010110090762 Date Filed: 10/04/1991 Page: 2 
ordinary business transaction bad debt by deducting the loss on 

his income tax return. Debtor argues that this conduct 

constitutes either a waiver of the fraud or an estoppal to urge 

the fraud. 

This argument has no merit. Waiver is the intentional 

relinquishment, by express words or unequivocal action, of a known 

right. FDIC v. Palermo, 815 F.2d 1329, 1338 (10th Cir. 1987). 

The actions described, even if supported by the evidence, are not 

sufficient to establish a waiver. Nor are these actions 

sufficient to invoke the doctrine of estoppal. See Western 

Contracting Corp. v. Sooner Constr. Co., 256 F. Supp. 163, 168 

(W.D. Okla. 1966) (applicable elements of estoppal explained). 

The second debt involves an unrelated transaction. Again, 

the transaction was complex; however, for the purpose of brevity, 

we will summarize it by stating that Debtor advised Creditor to 

purchase personal property from Debtor in order to gain investment 

tax credits. The essence of this transaction is that Debtor would 

sell to Creditor approximately $288,000 worth of office equipment, 

half of which he owned and half of which he would acquire at a 

later date. Creditor would then lease this equipment back to 

Debtor. The bankruptcy court found that Debtor never intended to 

carry out the proposed sale and lease-back transaction. Instead, 

Debtor converted approximately $43,000 of Creditor's monies to his 

own use. The bankruptcy court concluded this $43,000 was 

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Appellate Case: 91-5106 Document: 010110090762 Date Filed: 10/04/1991 Page: 3 
nondischargeable for the same reasons that barred discharge of the 

other debt under 11 u.s.c. § 523. 

Debtor contends the bankruptcy court's conclusion that Debtor 

never intended to perform the contract is "plain error." To 

support this conclusion, Debtor points to selected portions of the 

trial testimony that tend to show that office furniture to be 

purchased by Debtor for resale to Creditor was in fact purchased. 

Debtor fails to note, however, that the evidence clearly 

established, and the bankruptcy court found, that Debtor failed to 

execute a bill of sale to the property; that Debtor was aware that 

he did not have the financial ability to purchase the items needed 

to complete the transaction; and that Debtor intended to, and did 

in fact use the $43,000 to pay his existing debts. Another fact 

overlooked by Debtor is that the testimony he relies upon shows 

the values placed on some of the items were grossly inflated by a 

factor of ten to one -- a fact emphasized by the trial judge 

and this alone would justify the bankruptcy court's rejection of 

this testimony. In reviewing the decision of a bankruptcy court, 

the district court and the appellate court apply the same 

standards of review de nova for legal determinations and 

clearly erroneous for factual findings -- that govern appellate 

review in other cases. Virginia Beach Fed. Sav. & Loan Ass'n v. 

Wood, 901 F.2d 849, 851 (10th Cir. 1990). A trial court's factual 

findings "may not be reversed if its perception of the evidence is 

logical or reasonable in light of the record." In re Branding 

Iron Motel, Inc., 798 F.2d 396, 400 (10th Cir. 1986). Based on a 

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Appellate Case: 91-5106 Document: 010110090762 Date Filed: 10/04/1991 Page: 4 
review of the entire record, we cannot say the bankruptcy court's 

finding that Debtor had no intention of performing the contract at 

and prior to the time the contract was negotiated and executed is 

clearly erroneous. In fact, the bankruptcy court's factual 

findings are supported by abundant evidence and we therefore 

reject Debtor's arguments. The district court reviewed the 

evidence supporting the bankruptcy court's findings in its Order 

affirming the bankruptcy court's judgment, and it would therefore 

serve little purpose to detail this evidence again. Suffice it to 

say the record supports the bankruptcy court's findings and the 

district court's review. 

The order of the district court affirming the judgment of the 

bankruptcy court is AFFIRMED. 

Entered for the Court: 

WADE BRORBY 

Circuit Judge 

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Appellate Case: 91-5106 Document: 010110090762 Date Filed: 10/04/1991 Page: 5