2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 4-29-2005 

# In Re: M el vin S h a w P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 04-3575

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a nova . e du/thir dc ir c uit_2005

Thi s de c i sion i s br ou ght t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. It h as be e n a c c ept e d for inclusion in 2005 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a

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. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C a rl s on@l a

w . vi l l a no va . e du . Re c omme nde d C it at ion
" In Re: M e lvin S h a

w " (2005). 2005 D e cisio n s . P ape r 1290. http://d i git alc ommon s .l a

w . vi l l a nova . e du/thir dc ir c uit_2005/1290NOT P RE CE DE NT I AL
I N TH E UN I TED STATES CO UR T

OF A PP EALS F O R T H E T H IR D C IR C U IT
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I N R E : M E L V I N SH A W , D ebt or

M e l v i n S h a w, A ppel l ant

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D istri ct C o u rt F o rt h e D i s t r i c to f

N e w J e r s e y ( D . C
. C i vi l A ct i on N o. 04- cv- 02473) D i s t r i ctJ udge: H on. R ober tB . K ugl er Subm i t t ed Pur s uantt o T hi r d C i r cui tL A R 34. 1( a)

A pr i l 22, 2005 B E FO R E : R O T H , FU E N T E S and ST A PL E T O N , C i r cui tJ udges

( O pi ni on Fi l ed: A pr i l 29, 2005)

OPI NI ON O F THE COURT2

ST A PL E T O N , C i r cui tJ udge: A ppel l ant/ D ebt orM el vi n Shaw appea l s fr om a D i s t r i ctC our tor deraff i r m i ng t he di s m i s s al of hi s C hapt er7 pet i t i on i n bankrupt cyforl ack of “good fa i t h” pur s uantt o 11 U. S
. C. § 7 0 7 ( a )
. W e wi l l a f f i r m. Shaw fi l ed hi s vol unt aryC hapt er7 pet i t i on on J une 5, 2003. I tl i s t ed fi ve
uns ecur ed cr edi t or s , i ncl udi ng one J ani ne H ami l t on, w hos e cl ai m w as des cr i bed as i nvol vi ng “guar ant orl i abi l i t yforl oan t o Phi l l yM ot orSpor t , I nc. , ” i n t he amountof $180, 000. S h a w p led g u iltyto C o u n t F o u rte e n o f a f e d e ra l in d ictm e n t w h ich c h a rg e d h im
w ith u s in g a w ir e c o m m u n ic a tio n in in te rs ta te c o m m e rc e to e x e c u te a s c h e m e to d e f ra u d
. S p e c i f i c a l l y , h i s p l e a c o n s t i tu t e d a n a d mi s s i o n t h a th e d e v i s e d a n d e x e c u t e d a s c h e me fro m O ctob er 2 0 0 1 to A u g u st 20 0 2 to d ef rau d b u sine ss as so ciates o f S h aw A u to S p o rt
a n d P h ill yM o to r S p o rt. “It w a s p a rt o f th e sc h e m e th a t [ in ter a lia]:” 3
. D ef en d an t M E L V IN D . S H A W b o rrow ed m o n eyfro m thir d par t i es and pl edged a s col l at er al cert ai n car s , fr audul ent l ym i s r epr es ent i ng t hathe ow ned s uch ca r s and thatno ot herper s on had anyi nt er es ti n or cl ai m againstsuch ca rs . 4
. D ef en d an t M E L V IN D . S H A W b o rrow ed m o n eyfro m a third partyand agreed to shar e w i t h thatpartyprofi t s earned from t he p urchase and r e- s al e of a par t i cul arcar , fr audul ent l ym i s r epr es ent i ng t he condi t i on an d h ist o ryo f th at ca r. A pp. atPa- 3. Ha mi l t o n s u c c e s s f

u l l ymo v e d t o d i s mi s s S h a w’ s p e t i t i o n f o rc a u s e u n d e r1 1 U. S
. C.T he C our tal s o not ed thatShaw had obs t ruct ed the bankrupt cypr ocee di ngs byfai l i ng 1 t o c o o p e r a t e w i t h h i s a t t o r n e y. 3 § 707( a)
. I n s uppor tof herm ot i on, H ami l t on fi l ed a s w or n cert i fi cat i on w hi ch advi s ed t he C ou rtas fol l ow s:

B e g in n in g o n O c to b e r 1 1 , 2 0 0 1 , I m a d e lo a n s to d e b to r a n d h is corpor at i ons ( Shaw A ut o Spor t , I nc. , a N ew J er s eycorpor at i on [SA S] and Phi l l yM ot orSpor t , I nc. a Penns y l vani a corpor at i on [PM S] t ot al i ng $ 1 5 0 ,0 0 0 .0 0 to b e u s e d o n ly f o r t h e p u rc h a s e o f

a u to m o b ile in v e n to ry. D ebt orand hi s corpor at i ons gave pl ai nt i ff pr om i s s or ynot es and s ecur i ng a g re e m e n ts e v id e n c in g a n d se c u rin g th e lo a n s. D e b to r w a s p e rso n a lly o b lig a te d a s w e ll a s th e c o rp o ra tio n s . A pp. atPa- 23. T he ce r t i fi cat i on w enton t o avert hatShaw ’ s r epr es ent at i ons w i t h r es pect t o t he condi t i on of the pl edged ve hi cl es w as m at er i al and know i ngl yfal s e and thatShaw f a lse lyre p re se n ted th a t h e o w n e d th e v e h icle s a n d th a t n o o th e r p e rso n h a d a n yin ter e st in t hem. B as ed on thes e fr audul entm i s r epr es ent at i ons , H ami l t on s ecur ed a j udgm ent agai ns tShaw and Phi l l yM ot orSpor ti n t he amountof $180, 000. H ami l t on al s o s uppl i ed the B ankrupt cyC our tw i t h a V i ct i m N ot i fi cat i on L et t ers he h a d re c e iv e d f

ro m th e U n ited S tate s A tto rn e y ’s O f f ice re f e re n c in g S h a w a n d h is in d ictm e n t. Fol l ow i ng a hea r i ng, t he B ankrupt cyC our tconcl uded, nots urpr i s i ngl y , t hat H am i l t on w as a vi ct i m of the fraudu l ent s chem e t o w hich Sh aw had con fessed. Ital so concl uded on the bas i s of a de faul t ed adve r s ar i al compl ai ntof the Trus t ee thatShaw had f a iled to list m a n yo f

h is c re d ito rs. T h e C o u rt u lti m a telyc o n c lu d e d th a t “[ t]h is 1 i ndi vi dual i s notan hones tdebt ors eeki ng t o di s char ge cr edi t or s . ”4

W e r ej ectShaw ’ s ar gum ent s fores s ent i al l yt he r eas ons gi ven i n the D i s t r i ct C our t ’ s opi ni on. Shaw pl ed gui l t yt o havi ng conduct ed the fr audul ents cheme des cr i bed i n C ountFour t een, notj us tt o s endi ng t he w i r e comm uni cat i on not ed i n par agr aph 6 of that C o u n t. G iven that fa ct, the re co rd p rov ides am p le su p p o rtfo r th e B an k rup tcyC o u rt ’s concl us i on t hatShaw ’ s pet i t i on s oughtdi s char ge of a $180, 000 debtw hi ch he kne w t o be
non- di s char geabl e. J u dd v . W o lfe , 78 F. 3d 110 ( 3d C i r . 1996) , does nots t and fort he pr opos i t i on t hat t her e ca n be no fi ndi ng of a l ack of good fai t h i n a no- as s etcas e. T he j udgm entof the D i s t r i ctC our tw i l l be af fi r m ed.