2005 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

4-29-2005

In Re: Melvin Shaw

Precedential or Non-Precedential: Non-Precedential

Docket No. 04-3575

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Recommended Citation

"In Re: Melvin Shaw " (2005). 2005 Decisions. Paper 1290.

http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1290
NOT PRECEDENTIAL

IN THE UNITED STATES COURT 

OF APPEALS

FOR THE THIRD CIRCUIT

 

NO. 04-3575

 

 IN RE: MELVIN SHAW, Debtor

Melvin Shaw,

Appellant

 

On Appeal From the United States 

District Court

For the District of New Jersey 

(D.C. Civil Action No. 04-cv-02473)

District Judge: Hon. Robert B. Kugler

 

Submitted Pursuant to Third Circuit LAR 34.1(a)

April 22, 2005

BEFORE: ROTH, FUENTES and STAPLETON, Circuit Judges

(Opinion Filed: April 29, 2005)

 

OPINION OF THE COURT

 
2

STAPLETON, Circuit Judge:

Appellant/Debtor Melvin Shaw appeals from a District Court order affirming the

dismissal of his Chapter 7 petition in bankruptcy for lack of “good faith” pursuant to 11

U.S.C. § 707(a). We will affirm.

Shaw filed his voluntary Chapter 7 petition on June 5, 2003. It listed five

unsecured creditors, including one Janine Hamilton, whose claim was described as

involving “guarantor liability for loan to Philly Motor Sport, Inc.,” in the amount of

$180,000.

Shaw pled guilty to Count Fourteen of a federal indictment which charged him

with using a wire communication in interstate commerce to execute a scheme to defraud. 

Specifically, his plea constituted an admission that he devised and executed a scheme

from October 2001 to August 2002 to defraud business associates of Shaw Auto Sport

and Philly Motor Sport. “It was part of the scheme that [inter alia]:”

3. Defendant MELVIN D. SHAW borrowed money from third

parties and pledged as collateral certain cars, fraudulently misrepresenting

that he owned such cars and that no other person had any interest in or

claim against such cars.

4. Defendant MELVIN D. SHAW borrowed money from a third

party and agreed to share with that party profits earned from the purchase

and re-sale of a particular car, fraudulently misrepresenting the condition

and history of that car.

App. at Pa-3.

Hamilton successfully moved to dismiss Shaw’s petition for cause under 11 U.S.C.
 The Court also noted that Shaw had obstructed the bankruptcy proceedings by failing 1

to cooperate with his attorney.

3

§ 707(a). In support of her motion, Hamilton filed a sworn certification which advised

the Court as follows:

Beginning on October 11, 2001, I made loans to debtor and his

corporations (Shaw Auto Sport, Inc., a New Jersey corporation [SAS] and

Philly Motor Sport, Inc. a Pennsylvania corporation [PMS] totaling

$150,000.00 to be used only for the purchase of automobile inventory. 

Debtor and his corporations gave plaintiff promissory notes and securing

agreements evidencing and securing the loans. Debtor was personally

obligated as well as the corporations. 

App. at Pa-23. The certification went on to aver that Shaw’s representations with respect

to the condition of the pledged vehicles was material and knowingly false and that Shaw

falsely represented that he owned the vehicles and that no other person had any interest in

them. Based on these fraudulent misrepresentations, Hamilton secured a judgment

against Shaw and Philly Motor Sport in the amount of $180,000.

Hamilton also supplied the Bankruptcy Court with a Victim Notification Letter she

had received from the United States Attorney’s Office referencing Shaw and his

indictment.

Following a hearing, the Bankruptcy Court concluded, not surprisingly, that

Hamilton was a victim of the fraudulent scheme to which Shaw had confessed. It also

concluded on the basis of a defaulted adversarial complaint of the Trustee that Shaw had

failed to list many of his creditors. The Court ultimately concluded that “[t]his 1

individual is not an honest debtor seeking to discharge creditors.” 
4

We reject Shaw’s arguments for essentially the reasons given in the District

Court’s opinion. Shaw pled guilty to having conducted the fraudulent scheme described

in Count Fourteen, not just to sending the wire communication noted in paragraph 6 of

that Count. Given that fact, the record provides ample support for the Bankruptcy Court’s

conclusion that Shaw’s petition sought discharge of a $180,000 debt which he knew to be

non-dischargeable.

Judd v. Wolfe, 78 F.3d 110 (3d Cir. 1996), does not stand for the proposition that

there can be no finding of a lack of good faith in a no-asset case.

The judgment of the District Court will be affirmed.