United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 10-1499

___________

In re: Larry Weldon Treadwell; *

Carole Elaine Treadwell, *

*

Debtors. *

__________________________ *

*

Larry Weldon Treadwell; Carole *

Elaine Treadwell, *

*

Appellees, *

* Appeal from the United States

v. * Bankruptcy Appellate Panel

* for the Eighth Circuit.

Glenstone Lodge, Inc., *

* 

Appellant. *

__________

Submitted: September 21, 2010

Filed: March 9, 2011

___________

Before RILEY, Chief Judge, MELLOY and COLLOTON, Circuit Judges.

 ___________

RILEY, Chief Judge.

Larry Weldon Treadwell and his wife, Carole Elaine Treadwell, arranged and

presented a Red Hat Society event for hundreds of women at Glenstone Lodge, Inc.

(Glenstone) in Gatlinburg, Tennessee. The Treadwells promised to pay the hotel bill,

but skipped town without paying. As a result, the Treadwells owe Glenstone over
$150,000. When Glenstone tried to foreclose on the Treadwells’ Missouri home to

satisfy the debt, the Treadwells filed for Chapter 7 bankruptcy. As relevant here, the

bankruptcy court discharged Larry’s debt to Glenstone. The Bankruptcy Appellate

Panel for the Eighth Circuit (BAP) affirmed. Glenstone appeals. We reverse and

remand to the bankruptcy court for further proceedings.

I. BACKGROUND

A. Gaitlinburg Spring Fling

In 2003, the Treadwells registered Memory Travel as a fictitious name with the

Missouri Secretary of State’s Corporations Division. See Mo. Rev. Stat. § 417.210

(2001). The registration form, which the Treadwells ostensibly signed,1

 reflects that

Larry and Carole each owned 50% of Memory Travel. The form lists the Treadwells’

home in Branson, Missouri, as Memory Travel’s business address.

In 2005, Memory Travel advertised the Gatlinburg Spring Fling (Fling) to

members of the Red Hat Society (Redhatters), “a corporation with social chapters,

primarily for women over age fifty, which organizes events and gatherings for its

members around the country.” Redhatters are known to dress flamboyantly in large

red hats and red and purple clothes. The Fling included a luau with hula dancers, a

sock hop with band, a fashion show, an Elvis impersonator, cloggers, and “Jimmy

Buffett style” entertainment.

Although the Red Hat Society did not sanction the Fling, Carole testified

Memory Travel was allowed to use the Red Hat Society’s logo in its promotional

materials because Carole is Queen of the Red Hat Society’s Dixie Ladybugs Chapter. 

1

Carole testified she forged Larry’s signature on the registration form, which

required statements to be made “subject to the penalties of a false declaration under

[Mo. Rev. Stat. § 575.060 (1986)].” Larry testified he recognized his signature on the

form but then recanted, averring Carole “can sign [his] name better than [Larry] can

and [the signature] just looks too neat.”

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In April 2005, Carole contacted the Gatlinburg Department of Tourism to find

a facility to host the Fling. The Department contacted local hotels with sufficient

lodging and meeting space to accommodate 200 to 250 Redhatters in early 2006. One

of these hotels was the Glenstone Lodge. During contract negotiations with

Glenstone, Carole insisted Redhatters “book through me” and promised to pay

Glenstone “via one check” for services provided.

In June 2005, Memory Travel and Glenstone entered into a written contract,

which Carole and Glenstone’s Director of Sales, Claudette Geoffrion, signed. In

exchange for $77 per room per night (room-night), Glenstone agreed to set aside 150

room-nights during April 20-23, 2006. The contract required Memory Travel to

(1) pay a $250 deposit immediately; (2) provide a rooming list and pay the first

night’s deposit on or before March 31, 2006; and (3) remit the balance at check-in. 

In a series of addenda to the contract, Memory Travel agreed to pay Glenstone a total

of over $64,000 for lodging, meeting space, food, entertainment, and other services. 

Memory Travel paid the $250 deposit.

In the ensuing months, Memory Travel collected approximately $33,000 from

Redhatters. As early as October 2005, Carole realized she had undercharged the

Redhatters and Memory Travel would be unable to pay for the Fling. Carole misspent

nearly $9,600 and underestimated Memory Travel’s costs, including expenses for

entertainment and a large off-site lunch for the Redhatters. Carole decided not to tell

Glenstone because she “did not feel it was their problem.” Carole hoped to cover the

shortfall by encouraging Redhatters to prepay for future Memory Travel events.

 

On March 15, 2006, Memory Travel sent a rooming list to Glenstone but did

not pay the first night’s lodging expenses by the March 31 deadline. On April 18,

2006, the Treadwells arrived in Gatlinburg for the Fling. Memory Travel did not pay

the balance due under the contract, although Carole acknowledged the costs of

Glenstone’s services by signing a “trip resume” and initialing a series of invoices. 

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The Treadwells “kept offering [Glenstone] reasons why they couldn’t finalize” the

contract and promised to pay when they checked out. Glenstone’s manager, Urcella

House, testified Glenstone “expected [full payment] on the day of checkout,” April

24, 2006. Glenstone supplied the Treadwells with room keys and a registration table,

so Redhatters could check-in directly with the Treadwells in the hotel’s lobby.

The Fling otherwise was a success. From April 17 to 24, 2006, Memory Travel

booked 429 room-nights for more than 300 Redhatters, who hailed from at least

twenty states, the United Kingdom, and Australia. Glenstone “did a beautiful job,”

“[e]verything went extremely well,” and the Redhatters’ reviews were “nothing but

great.” At the Fling’s farewell breakfast, the Treadwells distributed a flyer imploring

Redhatters to “sign up now with the Treadwells so that [the Redhatters] could get their

dibs in . . . [and avoid] los[ing] out on . . . the next year.”

On or about April 24, 2006, the Treadwells left without checking out, leaving

a note, or notifying anyone of their departure and without settling the bill, which

exceeded $60,000. For two days, Glenstone unsuccessfully attempted to contact the

Treadwells via telephone, fax, and email. Glenstone needed to meet its payroll, which

was particularly burdensome because it had employed additional staff and paid

overtime to support the Fling.

On April 26, 2006, Carole sent Glenstone an email, explaining the Treadwells

left the hotel without checking out and paying the bill because there was “a medical

emergency and [the Treadwells] had to leave.” Carole complained the bill contained

minor errors, said that she was “dressing to take it to the bookkeeper for checking,”

and promised to “overnight $20,000.00 right now.” Carole did not have a

bookkeeper, and Glenstone did not receive a $20,000 check the next day.

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Glenstone asked Carole about the missing check. Carole then promised to wire

Glenstone $20,000, $15,000 that day and $5,000 the following Monday, in lieu of the

check. Carole wired $15,000, but did not wire $5,000 on Monday.

Glenstone later received a $20,000 check in a FedEx package. The check was

drawn from “The Treadwell Family Revocable Living Trust, Larry W. Treadwell,

Carole E. Treadwell” (trust), and the FedEx package was addressed from Larry.2

When Glenstone deposited the check, Carole had stopped payment on the check. 

Memory Travel never paid the remainder of Glenstone’s bill.

B. Tennessee Lawsuit

Glenstone sued the Treadwells in Tennessee state court, alleging fraud,

conversion, and breach of contract under Tennessee common law, as well as violations

of various statutory provisions, including the Tennessee Consumer Protection Act of

1977 (TCPA), Tenn. Code Ann. § 47-18-101 et seq. Glenstone prayed for a $50,000

judgment and requested the judgment be trebled pursuant to the TCPA. The TCPA

provides for treble damages when there is “a willful or knowing violation” of its

terms. See Tenn. Code. Ann. § 47-18-109(a)(3).

When the Treadwells did not answer Glenstone’s complaint, Glenstone moved

for default judgment.3

 See Tenn. R. Civ. P. 55.01. After an evidentiary hearing which

is not part of the record before us, the Tennessee state court entered judgment against

the Treadwells and the trust in the amount of $153,611.44. This sum represents treble

2

Carole testified she forged her husband’s signature because she is “from the old

school” and her “husband’s name come[s] first on everything.”

3

The Treadwells deny receiving notice of the Tennessee lawsuit, even though

the return of service purportedly bears their signatures. Carole testified someone

forged her signature. The Treadwells have not moved to set aside service of process,

and the bankruptcy court did not make findings of fact on the signature and notice

issues.

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the Treadwells’ outstanding balance with Glenstone as of August 21, 2006, plus legal

fees incurred in collection attempts to that date.4

Glenstone registered its Tennessee judgment in Missouri, placing a judicial lien

on the Treadwells’ Branson home. See Mo. Rev. Stat. § 511.350. Glenstone began

proceedings to foreclose on its lien and a sheriff’s sale was scheduled for September

2, 2008.

C. Bankruptcy

On August 27, 2008, the Treadwells filed for Chapter 7 bankruptcy, staying the

foreclosure, see 11 U.S.C. § 362(a), and seeking discharge of their debt to Glenstone,

see 11 U.S.C. § 727. The Treadwells then brought this adversary action against

Glenstone to avoid Glenstone’s lien as a preferential transfer. See 11 U.S.C.

§ 522(f)(1)(A). Glenstone answered and counterclaimed for a declaration that the

Treadwells’ debt was a non-dischargeable debt “for money, property, [or] services . . .

obtained by . . . false pretenses, a false representation, or actual fraud.” See 11 U.S.C.

§ 523(a)(2)(A).5

To prove non-dischargeability under § 523(a)(2)(A), a creditor ordinarily must

show, by a preponderance of the evidence, (1) the debtor made a representation,

4

Glenstone apparently presented the Tennessee state court with an exhibit

detailing the balance owed under the contract with 10% interest ($51,158.82) and

Glenstone’s legal expenses ($1,342.98). The exhibit contains an obvious

computational error, which the parties do not discuss.

5

For purposes of this appeal only, we follow the parties’ lead and conflate “false

pretenses, a false representation, or actual fraud” into the singular concept of “fraud.” 

Cf. Field v. Mans, 516 U.S. 59, 70 n.8 (1995); AT&T Universal Card Servs. v. Mercer

(In re Mercer), 246 F.3d 391, 402-03 (5th Cir. 2001) (en banc); Kan. Bankers Sur. Co.

v. Eggleston (In re Eggleston), 243 B.R. 365, 372-73 & nn. 8-10 (Bankr. W.D. Mo.

2000). We also note Glenstone, to our knowledge, no longer seeks a determination

of non-dischargeability under 11 U.S.C. § 523(a)(4) or § 523(a)(6).

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(2) with knowledge of its falsity, (3) deliberately for the purpose of deceiving the

creditor, (4) who justifiably relied on the representation, which (5) proximately caused

the creditor damage. See R & R Ready Mix v. Freier (In re Freier), 604 F.3d 583, 587

(8th Cir. 2010). If the creditor proves a partnership between two of its debtors, nondischargeability may be imputed from one partner to the other. See Strang v. Bradner,

114 U.S. 555, 561 (1885). Under our precedent, imputation only is proper if the

otherwise innocent debtor knew or should have known of his partner’s fraud. See

Walker v. Citizens State Bank of Maryville, Mo. (In re Walker), 726 F.2d 452, 454

(8th Cir. 1984) (per curiam).6

 Reckless indifference is evidence the innocent debtor

should have known of the fraud. See id.

1. Trial

In April 2009, the bankruptcy court held a two-day trial to determine whether

the Treadwells’ debt to Glenstone was dischargeable.7 Glenstone sought to prove

6

Walker is controversial. See Nat’l Union Fire Ins. Co. v. Bonnanzio (In re

Bonnanzio), 91 F.3d 296, 302 (2d Cir. 1996) (“Several . . . courts . . . have sharply

criticized . . . the Eighth Circuit’s decision in Walker as contrary to the legislative

history and proper statutory interpretation of § 523.”); 4 Alan N. Resnick & Henry J.

Sommer, Collier on Bankruptcy ¶ 523.08[3] (16th ed. 2010) (discussing the legislative

history and implying Walker is wrong on this point, and fraudulent intent of the

debtor’s agent or partner may be imputed to the debtor). 

7

Before trial, Glenstone moved for summary judgment, contending the

Tennessee judgment estopped the Treadwells from denying their debt was nondischargeable. See Grogan v. Garner, 498 U.S. 279, 284 n.11 (1991). Applying

Tennessee law, see Allen v. McCurry, 449 U.S. 90, 96 (1980), the bankruptcy court

denied the motion. On its own motion, the bankruptcy court questioned whether

collateral estoppel would apply when the underlying judgment is a default judgment

and the judgment “makes absolutely no findings” and does not identify “under which

of the alternative theories pled . . . it was based.” But see Lawhorn v. Wellford, 168

S.W.2d 790, 792 (Tenn. 1943) (“A judgment taken by default is conclusive by way

of estoppel in respect to all such matters and facts as are well pleaded and properly

raised, . . . and such issues cannot be relitigated in any subsequent action between the

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Larry and Carole each defrauded Glenstone or, even if Larry did not defraud

Glenstone, Larry was vicariously liable for Carole’s fraud because the Treadwells

were partners in Memory Travel.

At the conclusion of the evidence, the bankruptcy court repeatedly characterized

the Treadwells as having a “partnership,” but stated on the record the court doubted

whether Glenstone could prove the fourth element of fraud, justifiable reliance, as to

either Carole or Larry. The bankruptcy court also remarked that Larry was “not

credible” insofar as Larry had testified “he basically knew nothing about any of this,”

but the bankruptcy court was unsure whether “that gets us anywhere because I don’t

have any evidence other than his partnership in the business directly linking him to

these events, other than the fact that he was there.” The bankruptcy court asked the

parties to brief “whether [Larry] is liable for any fraud . . . based on simply . . . having

legal responsibility as a partner in the business for the fraud or the false pretenses that

were committed by [Carole].” The bankruptcy court stressed it would only reach this

imputed fraud issue if the bankruptcy court found, as a predicate matter, Carole

defrauded Glenstone.

In their post-trial brief, the Treadwells conceded that, if Glenstone were able to

prove Carole defrauded Glenstone, the bankruptcy court “may impute [Carole’s]

parties.”), adhered to, Rally Hill Prods., Inc. v. Bursack (In re Bursack), 65 F.3d 51,

54 (6th Cir. 1995) (“Even a default judgment satisfies Tennessee’s ‘actually litigated’

requirement.”). In the alternative, the bankruptcy court held summary judgment was

inappropriate absent a transcript of the default judgment hearing, because it was

unclear whether the Tennessee court found the Treadwells defrauded Glenstone. But

see Patterson v. Rockwell Int’l, 665 S.W.2d 96, 101 (Tenn. 1984) (“The rule is that

the defendant, by suffering a default judgment to be entered against him, impliedly

confesses all of the material allegations of fact contained in his complaint, except the

amount of the plaintiff’s unliquidated damages.”). Upon remand, at the bankruptcy

court’s discretion, this collateral estoppel issue may be reconsidered. See Hanig v.

City of Winner, 527 F.3d 674, 678 (8th Cir. 2008).

-8-
misrepresentations to her business partner and co-debtor, Larry.” The Treadwells

insisted “it is not necessary that [Larry] knew or should have known of [Carole’s]

fraud in order to have [Carole’s] fraud imputed.” The Treadwells reasoned Walker

“appears to still be the rule in the Eighth Circuit,” but “post-Walker, a distinction has

developed where the case involves actual fraud or misrepresentation of an agent acting

within the scope of her employment or apparent authority.”

The bankruptcy court issued a thorough opinion holding the Treadwells’ debt

to Glenstone was not excepted from discharge under 11 U.S.C. § 523(a)(2)(A). 

Stressing Geoffrion failed to testify, the bankruptcy court found Glenstone failed to

prove justifiable reliance as to either Carole or Larry.8

 The bankruptcy court found

Glenstone waived the contract’s prepayment provisions and opined Glenstone “had

many opportunities to protect itself, but for whatever reason, it did not.” The

bankruptcy court did not decide whether the Treadwells were partners in Memory

Travel or, if so, whether such partnership would impute any putative fraud of Carole 

to Larry. Despite its oral statements on the record at the close of the evidence, the

words “partner” and “partnership” do not appear in the bankruptcy court’s written

order.9

2. BAP

Glenstone appealed to the BAP, maintaining the Treadwells’ debt to Glenstone

was excepted from discharge under 11 U.S.C. § 523(a)(2)(A). As relevant here,

Glenstone argued (1) the bankruptcy court erred in finding Glenstone did not

8

The bankruptcy court also found Larry did not act with knowledge of falsity. 

Glenstone no longer challenges this finding.

9

Because Glenstone “agreed that . . . its judgment lien would be avoidable if the

debt were found to be dischargeable,” the bankruptcy court held Glenstone’s lien on

the Treadwells’ home was avoidable under 11 U.S.C. § 522(f)(1)(A). The lien

avoidance issue is not before us at the present time, was not necessary to the BAP’s

decision, and we do not discuss it further.

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justifiably rely on Carole’s misrepresentations, and (2) the Treadwells were partners

in Memory Travel, so Carole’s fraud should be imputed to Larry. The Treadwells

defended the bankruptcy court opinion. The Treadwells did not discuss the imputed

fraud issue.

The BAP reversed in part and affirmed in part. The BAP reversed the

bankruptcy court’s determination that Carole’s debt to Glenstone was dischargeable. 

The BAP held the bankruptcy court clearly erred in finding no justifiable reliance

under the “minimal standard” set forth in Field v. Mans, 516 U.S. 59 (1995). 

Stressing the Fling appeared to be a complete success and there was no evidence in

the record Carole had defrauded anyone before, the BAP held as a matter of law that

there were no “obvious warning signs of falsity.”

The BAP affirmed the bankruptcy court’s determination that Larry’s debt to

Glenstone was dischargeable. Citing Sells v. Porter (In re Porter), 375 B.R. 822, 828

(B.A.P. 8th Cir. 2007) for the proposition that the BAP “may affirm the bankruptcy

court’s decision on any basis supported by the record,” the BAP considered the

imputed fraud issue. The BAP raised and ruled on imputed fraud despite the fact that:

(1) the Treadwells had conceded the issue in the bankruptcy court, (2) the bankruptcy

court had not decided the question, and (3) the Treadwells had not briefed this issue

to the BAP. The BAP observed, “if [the bankruptcy court] had [analyzed the imputed

fraud issue], the record would not have supported a finding that Larry was a partner

in Carole’s travel business.” The BAP found:

[T]here is no evidence of an actual partnership. Larry had no

authority to control the business, did not believe himself to be a business

partner, had no authority to act on behalf of the business, and apparently

did nothing except help out at events, travel with Carole, and add his two

cents about entertainment and logistics simply because he was there. 

Carole forged Larry’s name on the fictitious name registration. His

ownership interest was described by the Treadwells as a marital interest. 

In other words, because the Treadwells share equally in everything, they

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considered Larry to be a fifty percent owner of the business, just as he

was a fifty percent owner of the household furnishings. Carole rarely,

if ever, talks to him about their income or expenses. He testified that he

never pays any bills for the household or Memory Travel. Larry’s name

does not appear anywhere on the [contract]. Carole’s e-mails do not

suggest that anyone is helping her run the business. There is no evidence

that Larry received a share of the profits, if there ever were any. There

is no evidence that Larry ever represented to Glenstone that he was

Carole’s business partner. The record would not support a finding of

partnership or agency.

In the alternative, the BAP found:

Under Walker, even if there had been evidence that Memory Travel was

a partnership, it still would not be enough to support the

nondischargeability of Larry’s debt. Glenstone would have had to prove

that Larry knew of Carole’s fraud, should have known of Carole’s fraud,

or was recklessly indifferent to Carole’s fraud, and the record does not

support that finding. The bankruptcy [court] correctly concluded that

there was no evidence that Larry knew of the fraud.

The BAP summarized its holding with respect to Larry as follows:

In conclusion, there is no legal basis for imputing Carole’s fraud

to Larry . . . . Although Larry and Carole considered Larry to be an equal

owner of Memory Travel, and although he accompanied Carole on both

the initial site visit and the [R]edhatter event, the evidence

overwhelmingly supports the conclusion that he was oblivious to the

operations of the business, merely tagged along with Carole at her

request and helped out at her direction. The record would not support a

finding that Larry and Carole had a partnership or agency relationship,

or that Larry knowingly participated in the fraud or should have known

of the fraud. We therefore affirm the bankruptcy court’s determination

that Larry’s debt to Glenstone is dischargeable.

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Glenstone appeals the BAP’s affirmance of the bankruptcy court’s

determination that Larry’s debt to Glenstone is dischargeable under § 523(a)(2)(A). 

Carole did not cross-appeal.

II. DISCUSSION

A. Standard of Review

“On appeal from a decision of the BAP, we act as a second reviewing court of

the bankruptcy court’s decision, independently applying the same standard of review

as the BAP.” McCarty v. Lasowski (In re Lasowski), 575 F.3d 815, 818 (8th Cir.

2009). We are obligated, as the BAP was, to “review[] the bankruptcy court’s

findings of fact for clear error and its conclusions of law de novo.” Eilbert v. Pelican

(In re Eilbert), 162 F.3d 523, 525 (8th Cir. 1998).

B. Remand

The parties argue at length as to whether the BAP “erred in finding” Larry and

Carole were not partners in Memory Travel and, even if there were a partnership,

whether the BAP “erred in finding” Glenstone failed to prove Larry knew or should

have known of Carole’s fraud. The parties’ arguments are misplaced, the BAP’s role

is to review, not make, factual findings. The BAP should have instructed the

bankruptcy court to decide in the first instance whether the Treadwells were partners

and, if so, whether Larry knew or should have known of Carole’s fraud. We decline

the parties’ joint invitation to review the BAP’s factual findings or make our own

factual findings.

While it is true the BAP may affirm a bankruptcy court’s decision on any basis

supported by the record, see United States v. Pierson, 219 F.3d 803, 807 (8th Cir.

2000), this familiar principle of appellate procedure does not empower the BAP to

make factual findings. When factual issues are incomplete or remain unsettled on an

alternative issue the bankruptcy court did not reach, the BAP ordinarily should

remand to the bankruptcy court for further factual findings. See, e.g., Pullman-Std.

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v. Swint, 456 U.S. 273, 291-92 & n.22 (1982) (“When an appellate court discerns that

a district court has failed to make a finding because of an erroneous view of the law,

the usual rule is that there should be a remand for further proceedings to permit the

trial court to make the missing findings.”); Brown v. Mt. Prospect State Bank (In re

Muncrief), 900 F.2d 1220, 1224 (8th Cir. 1990) (similar); Wegner v. Grunewaldt (In

re Wegner), 821 F.2d 1317, 1320 (8th Cir. 1987) (similar).

The BAP itself should not have found Glenstone failed to prove the imputation

of Carole’s fraud to Larry, because the bankruptcy court did not decide10 the

underlying issues of partnership and intent, which turn on disputed facts, credibility

determinations, and the inferences a fact finder may choose to draw therefrom. See

In re Walker, 726 F.2d at 454 (“Whether a principal knew or should have known of

his agent’s fraud is, of course, a question of fact.”). See also Agristor Credit Corp. v.

Windle (In re Windle), 653 F.2d 328, 331 (8th Cir. 1981) (“The deference owed by

appellate courts to finders of fact is at its highest where the issue turns on the

resolution of a direct conflict between live witnesses.”); Schneider v. Schneider, 146

S.W.2d 584, 587 (Mo. 1940) (“A partnership is a status; that is, it is a factual

relationship between two or more persons who are conducting a business enterprise

together. The central fact of that relation is community of ownership of the

business.”).11 The parties’ fact-intensive briefs amply support this point.

Walker is instructive. In Walker, the bankruptcy court denied discharge to a

debtor under 11 U.S.C. § 523(a)(2)(A) after finding the debtor was his wife’s agent

and thus responsible for her fraud even though he did not know about it. Walker, 726

F.2d at 453. The district court reversed, holding the wife’s fraud could not be imputed

10This is not surprising, because the Treadwells conceded in the bankruptcy

court that, if Carole defrauded Glenstone, imputation of Carole’s fraud to Larry was

proper.

11We need not and do not decide whether federal common law or Missouri law

governs the threshold partnership inquiry.

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to the debtor unless he knew or should have known of her fraud. Id. “The district

court accepted without qualification the bankruptcy court’s finding that [the debtor]

did not know of his wife’s fraud, noted the lack of clear showing that [he] should have

known of it, and held that the debt was dischargeable.” Id. 

We reversed and remanded to the bankruptcy court for further factual findings. 

Id. at 454-55. We observed:

Whether a principal knew or should have known of his agent’s

fraud is, of course, a question of fact. The question was not expressly

decided by the bankruptcy court. The bankruptcy court believed that

once it was shown that Mrs. Walker was her husband’s agent, Mr.

Walker’s knowledge of the fraud was not crucial.

Id. at 454.

As in Walker, remand here is necessary because the bankruptcy court’s factual

findings are “not presently acceptable as decisive” of the imputed fraud issue. See id.

at 455. The bankruptcy court did not rule on the imputed fraud issue and, in not doing

so, did not squarely address whether there was a partnership or what Larry knew or

should have known about the Fling. With respect to Larry, the bankruptcy court

discussed, in a series of incomplete factual findings, that (1) “Larry and Carole

Treadwell are equal owners in a travel agency business known as Memory Travel”;

(2) “although it is likely that [Larry] was also aware that they did not have the money

to pay the bill, there was no actual evidence of that fact”; and (3) “although . . . Larry

made implied representations about payment, unlike Carole, I cannot find that his

representations were knowingly false.” Referring collectively to “the Treadwells,” the

bankruptcy court arguably implied Larry also (4) “promise[d] to pay” Glenstone “by

one check when they checked out”; (5) made “repeated excuses for not complying

with the” contract; (6) “sometimes used an account held in the name of the [trust] to

operate Memory Travel”; and (7) “approved all charges for lodging and services.”

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This is not a case in which the record is clearly insufficient to impute Carole’s

fraud to Larry. We are unable to rule in Larry’s favor as a matter of law and affirm

the bankruptcy court on an alternative ground appearing in the record. Cf. Pierson,

219 F.3d at 807.

Consistent with the bankruptcy court’s oral comments at trial, there is

substantial evidence of a partnership between Carole and Larry in Memory Travel. 

Previously we have characterized registration of a fictitious name with the State of

Missouri as part of “abundant written material evidencing [a p]artnership.” Weston

v. Donnelly, 927 F.2d 369, 372-73 (8th Cir. 1991). Memory Travel’s registration

form lists Larry as a 50% owner. The Treadwells’ bankruptcy schedules say Memory

Travel reported income and losses under Larry’s social security number and do not

reflect that Memory Travel was Carole’s sole proprietorship.12 There is evidence in

the record from which the bankruptcy court could find Larry co-owned the trust,

Memory Travel deposited its receipts into the trust, which was the Treadwells’

primary source of income, and Larry received complimentary lodging for the Fling

because of the large number of rooms Memory Travel booked.

Evidence also exists indicating Larry knew or should have known of Carole’s

fraud. A finding of partnership would constitute some evidence in itself. Further, one

of Glenstone’s managers, Urcella House, testified Larry was “actively engaged” in

planning the Fling at a site visit in January 2006. Larry offered opinions about food

choices, room sizes and locations, and other arrangements. House insisted “it was an

effort of both of them” and not the case that “she did it all and he didn’t.”

House testified Larry and Carole were equally involved during the Fling. Larry

coordinated with Glenstone’s staff as the Fling progressed to ensure an enjoyable

12Carole testified the Treadwells had not filed federal or state tax returns since

1997. Larry said he did not know whether he had ever filed his taxes, remarking, “If

she filed them, we have, if she didn’t, then we haven’t.”

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experience for the Redhatters. In House’s words, Larry was not merely “following

[Carole] around,” but was present for all Fling events, wore a staff name tag, and

entertained the Redhatters during the luau “buying drinks with wads of money.” Rita

Marshall, Glenstone’s controller, testified she saw Larry coordinating events and

activities at the Fling. Although the Treadwells testified Larry was not a partner in

Memory Travel and did not know about Carole’s fraud, a reasonable trier of fact may

find the Treadwells’ self-serving testimony incredible and may draw the inference the

Treadwells were dissembling to hide the truth. Cf. Reeves v. Sanderson Plumbing

Prod., Inc., 530 U.S. 133, 147 (2000). Indeed, the bankruptcy court did find Larry

lacked credibility, and Carole does not appeal the BAP’s ruling that she engaged in

fraud.

III. CONCLUSION

We reverse and remand to the bankruptcy court for factual findings on the

imputed fraud issue. On remand, the bankruptcy court retains the discretion to reopen

the record and revisit the collateral estoppel issue. See Hanig, 527 F.3d at 678

(affirming the district court’s decision to consider the collateral estoppel issue);

Harker v. United States ex rel. IRS, 357 F.3d 846, 849-50 (8th Cir. 2004) (affirming

the trial court’s discretion on remand to reopen the record). The BAP’s opinion of

February 1, 2010 in this matter is vacated, with the exception of Part A.1 thereof. We

do not retain jurisdiction.

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