[DO NOT PUBLISH]

 

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT 

________________________

No. 12-13936

Non-Argument Calendar 

________________________ 

D.C. Docket No. 4:12-cv-00212-WS-CAS,

BKCY No. 4:019-bk-41174-LMK

In Re: WILLIAM ARTHUR THOMAS, III,

Debtor.

_______________________________________

WILLIAM ARTHUR THOMAS, III,

Defendant-Appellant,

versus

THERESA M. BENDER, 

Plaintiff-Appellee.

________________________ 

Appeal from the United States District Court 

for the Northern District of Florida

________________________

(April 16, 2013)

Case: 12-13936 Date Filed: 04/16/2013 Page: 1 of 8 
2

Before HULL, JORDAN, and EDMONDSON, Circuit Judges.

PER CURIAM:

William Arthur Thomas, III, a Chapter 7 debtor, appeals the district court’s 

affirmance of the bankruptcy court’s grant of summary judgment in favor of the 

bankruptcy estate’s trustee, Theresa M. Bender (“Trustee”). The Trustee filed this 

action against Thomas, seeking the proceeds of a post-petition real estate sale that 

arose from a pre-petition option contract. No reversible error has been shown; we 

affirm.

Thomas is a real estate investor who was involved in “flipping” distressed 

properties for profit. In September 2009, Thomas entered into an option contract 

that gave him the right to purchase real property from Craig Mobley (“Mobley”) for 

$112,450. The principal balance of Mobley’s mortgage with Wells Fargo Bank 

was $220,000. The mortgage was facing foreclosure. 

Thomas and Mobley also signed a Short Sale Master Agreement in which 

they agreed that Thomas would use reasonable efforts to negotiate a short sale with 

Wells Fargo. The parties agreed that “[i]n the event that [Thomas] is successful in 

obtaining a Short Sale, then [Thomas] intends to sell the property and profit from the 

Case: 12-13936 Date Filed: 04/16/2013 Page: 2 of 8 
3

difference between the Short Sale payoff amount and the amount of the sale to a 

third party.” And, “[i]f [Thomas] is unsuccessful for any reason in obtaining a 

Short Sale and/or selling the Property for a profit, then the Property will likely go to 

foreclosure.” 

After recording the option contract, Thomas collected and gave Mobley’s 

financial information to Paul Elya and Ed Garcia, third-party negotiators responsible 

for negotiating a short sale price with Wells Fargo. Wells Fargo ultimately agreed 

to release Mobley’s mortgage for $130,000. 

On 20 February 2010 -- after Thomas filed for bankruptcy -- Thomas entered 

into a contract (“sales contract”) to sell Mobley’s property to Greg May and Amelia 

Rosseter (“May”) for $179,000. On 16 March 2010, Thomas exercised his option 

and bought Mobley’s property for $130,000. Then, on 12 April 2010, Thomas sold 

the property to May, who was represented by a realtor. Thomas received 

$30,839.13 in cash at the closing (“sales proceeds”). Thomas later paid Elya and 

Garcia over $22,000 for their services. 

The Trustee filed an action against Thomas, seeking the proceeds of 

Thomas’s post-petition real estate sale. The bankruptcy court granted the Trustee’s 

motion for summary judgment, concluding that the sales proceeds constituted 

Case: 12-13936 Date Filed: 04/16/2013 Page: 3 of 8 
4

property of Thomas’s bankruptcy estate. The district court affirmed the bankruptcy 

court’s decision. 

We review the bankruptcy court’s entry of summary judgment de novo, and 

we “view all evidence and make all reasonable inferences in favor of the party 

opposing summary judgment.” Gray v. Manklow (In re Optical Techs., Inc.), 246 

F.3d 1332, 1334-35 (11th Cir. 2001). The party opposing summary judgment must 

set forth specific facts showing the existence of a genuine issue of material fact. 

Eberhardt v. Waters, 901 F.2d 1578, 1580 (11th Cir. 1990). 

Section 541 of the Bankruptcy Code defines property of the estate as “all legal 

or equitable interests of the debtor in property as of the commencement of the case.” 

11 U.S.C. § 541(a)(1). “Section 541 is construed broadly, so as to effectuate 

Congressional intent that a wide range of property be included in the estate.” 

Olympia & York Fla. Equity Corp. v. Bank of New York (In re Holywell Corp.), 913 

F.2d 873, 881 (11th Cir. 1990). 

“[W]hether a debtor’s interest constitutes property of the estate is a federal 

question,” but we look to state law to decide whether the debtor had a legal or 

equitable interest in the property when he filed for bankruptcy. Bracewell v. Kelley 

(In re Bracewell), 454 F.3d 1234, 1243 (11th Cir. 2006). Under Florida law, 

Thomas’s pre-petition option contract -- which was supported by valid consideration 

Case: 12-13936 Date Filed: 04/16/2013 Page: 4 of 8 
5

and duly recorded -- gave Thomas a valid legal interest in Mobley’s property. See 

Barry v. Ippolito (In re Savel), 29 B.R. 858, 860 (Bankr. S.D. Fla. 1983). As a 

result, the option contract constituted property of the estate under section 541(a)(1). 

The bankruptcy estate’s property also encompasses the “[p]roceeds, product, 

offspring, rents, or profits of or from property of the estate, except such as are 

earnings from services performed by an individual debtor after the commencement 

of the case.” 11 U.S.C. § 514(a)(6). We agree with the bankruptcy court that the 

sales proceeds constituted proceeds of the option contract and, thus, were also 

property of the estate. 

Thomas argues that, because the sales proceeds resulted directly from the 

post-petition sales contract, they cannot be considered proceeds of the pre-petition

option contract. But both the sales contract and the option contract were necessary 

components of Thomas’s overall scheme to “flip” the Mobley property. As 

evidenced by the Short Sale Master Agreement, both parties contemplated that 

Thomas would execute the option contract only if he first was able to obtain a short 

sale and to sell the property to a buyer for a profit. 

Relying in part on our decision in Bracewell, Thomas argues that the 

connection between the sales proceeds and the option contract was too attenuated for 

the sales proceeds to be considered proceeds of the option contract. But this case is 

Case: 12-13936 Date Filed: 04/16/2013 Page: 5 of 8 
6

different from Bracewell, where we affirmed the bankruptcy court’s conclusion that 

a disaster payment for pre-petition crop losses -- authorized by post-petition 

legislation -- was no part of the bankruptcy estate. See Bracewell v. Kelley (In re 

Bracewell), 454 F.3d 1234 (11th Cir. 2006). Unlike the debtor in Bracewell, 

Thomas had more than a mere “hope, a wish and a prayer” that he might profit from 

the Mobley option contract. The option contract gave Thomas a valid legal interest 

in Mobley’s property, and Thomas was in a position to affect the outcome of the 

complete deal. Although only a small portion of Thomas’s various option contracts 

yielded a profit, that was the nature of Thomas’s business model; and that 

circumstance does not render the sales proceeds too remote to be considered 

proceeds of the option contract.

We also reject Thomas’s argument that the sale proceeds were earned only as 

a result of his post-petition services and, thus, are excluded from the estate’s 

property under section 541(a)(6). Section 541(a)(6) “excepts from proceeds of the 

estate only those earnings generated by services personally performed by the 

individual debtor.” Fitzsimmons v. Walsh (In re Fitzsimmons), 725 F.2d 1208, 

1211 (9th Cir. 1984) (emphasis added) (concluding that, “[t]o the extent that the law 

practice’s earnings are attributable not to [the debtor’s] personal services but to the 

business’ invested capital, accounts receivable, good will, employment contracts 

Case: 12-13936 Date Filed: 04/16/2013 Page: 6 of 8 
7

with the firm’s staff, client relationships, fee agreements, or the like, the earnings of 

the law practice accrue to the estate.”). 

Viewing the evidence in the light most favorable to Thomas, Thomas has 

failed to identify what post-petition services he performed personally on this deal. 

Thomas’s main role in the deal was to work with Mobley to obtain the option 

contract and to collect Mobley’s financial information, all of which Thomas 

completed pre-petition. Thomas asserts that he was also responsible for raising 

capital to fund the deal, but nothing evidences that he in this case did so 

post-petition. Thomas assigned the task of negotiating the short sale with Wells 

Fargo to Elya and Garcia. Thomas also relied on a licensed realtor to list the 

property for sale and to locate a buyer for the property. Because the post-petition 

portions of the “flipping” scheme were performed by third parties -- and not by 

Thomas himself -- the sales proceeds are not exempted under section 541(a)(6). De 

minimis acts are insufficient.

Thomas argues that -- even to the extent the sales proceeds are deemed 

property of the estate -- only the amount that he actually received ($30,839.13 minus 

the $22,000 paid to Elya and Garcia) should be turned over to the Trustee. We see 

no error in the bankruptcy court’s declaring that the full $30,839.13 amount was part 

Case: 12-13936 Date Filed: 04/16/2013 Page: 7 of 8 
8

of the bankruptcy estate.* The sales proceeds constituted property of the estate at 

the moment of the sale. That Thomas later used a portion of these funds to pay Elya 

and Garcia does not change this fact. 

No genuine issue of material fact exists; for the reasons set out in its order, the 

bankruptcy court properly granted the Trustee’s motion for summary judgment. 

AFFIRMED.

 

* We note that the bankruptcy court did not address this argument directly because Thomas raised 

it for the first time in his appeal to the district court. 

Case: 12-13936 Date Filed: 04/16/2013 Page: 8 of 8