Opinion ID: 197463
Heading Depth: 3
Heading Rank: 1

Heading: The Stahelski Settlement Transfer

Text: 24 The stated basis for denying the Trustee's motion to amend the judgment to conform with the evidence introduced at trial, in relation to certain cash transfers from Stahelski to Mrs. Rauh, was the mistaken understanding by the bankruptcy judge that the Trustee had never filed such a motion and that any amendment therefore would have been unfair because Mrs. Rauh had not had an opportunity to present a defense. The bankruptcy court docket sheet reveals, however, that the Trustee did file such a motion on April 19, 1994, and that Mrs. Rauh later filed a reply. As the denial therefore constituted an abuse of discretion, the judgment must be amended provided the motion was meritorious. See Webb v. Hiykel, 713 F.2d 405, 407-08 (8th Cir.1983) (appellate court reverses trial court and orders judgment where plaintiff was entitled to relief on unpled theory and defendants would not experience undue prejudice). 25 At trial, without objection, the Trustee introduced competent evidence of the $15,000 cash payment Mrs. Rauh received from Stahelski. See Conjugal Partnership of Jones v. Conjugal Partnership of Pineda, 22 F.3d 391, 400-01 (1st Cir.1994) (One sign of implied consent is that issues not raised by the pleadings are presented and argued without proper objection by opposing counsel.... Under Rule 15(b), lack of consent is manifested by an objection on the ground that the evidence is not within the issues raised by the pleadings.) (citation and internal quotation marks omitted). Mrs. Rauh contends on appeal, however, that she did not object at trial because the Trustee introduced the $15,000 cash payment only to prove that her receipt of the promissory note had been fraudulent. See DCPB, Inc., 957 F.2d at 917 (Consent to the trial of an issue may be implied if, during the trial, a party acquiesces in the introduction of evidence which is relevant only to that issue.) (emphasis added); Luria Bros. & Co., 780 F.2d at 1089 (That such evidence, relevant to both pled and unpled issues, was introduced without objection does not imply consent to trial of the unpled issues, absent some obvious attempt to raise them.); Ellis v. Arkansas Louisiana Gas Co., 609 F.2d 436, 440 (10th Cir.1979) (Implied consent may not be inferred merely because evidence relevant to a properly pleaded issue incidentally tends to prove a fact not within the pleadings.), cert. denied, 445 U.S. 964, 100 S.Ct. 1653, 64 L.Ed.2d 239 (1980). We disagree. 26 At trial, the Trustee maintained that the Stahelski Settlement proceeds received by Mrs. Rauh constituted fraudulent conveyances under ch. 109A because (1) the Debtor, with intent to keep assets from his creditors, diverted to Mrs. Rauh the bulk of the consideration he otherwise would have received in settlement of his claims against Stahelski; and (2) none of the settlement proceeds received by Mrs. Rauh were attributable to the settlement of her own tort claim for infliction of emotional distress. See supra p. 48. Accordingly, the only conceivable purpose of the Trustee's evidentiary proffer relating to the $15,000 cash payment was to establish the amount of the Stahelski Settlement transfer which was voidable. The evidence offered by the Trustee was not even remotely probative of whether the Debtor had conveyed the $40,000 promissory note with fraudulent intent, nor whether the transfer of the promissory note constituted consideration for Mrs. Rauh's relinquishment of her tort claim. 27 Furthermore, Mrs. Rauh has not demonstrated that any unfair prejudice would result from the postjudgment relief requested by the Trustee. See DCPB, Inc., 957 F.2d at 917; Scully Signal Co., 570 F.2d at 362. At trial, the bankruptcy court expressly rejected her contention that the Stahelski-Settlement payments were in satisfaction of her emotional distress claim. The court found instead that the Debtor thereby fraudulently transferred his interests in E.W.S. and Realty indirectly to Mrs. Rauh, see supra p. 48, a finding Mrs. Rauh does not challenge on appeal. Nor has Mrs. Rauh suggested that her contention in regard to the Trustee's $15,000 fraudulent-transfer claim differed significantly from her defense to the surrender of the $40,000 promissory note, see supra p. 48, which took place in the identical circumstances. See Modern Elec., Inc. v. Ideal Elec. Sec. Co., 81 F.3d 240, 247 (D.C.Cir.1996) (complaint amended to include unjust enrichment claim, after parties had tried similar quantum meruit claim); Morgan and Culpepper, Inc., 676 F.2d at 1068 (Federal Rule of Civil Procedure 15(b) contemplates amendments in cases where relevant issues have been litigated.); Cunningham v. Quaker Oats Co., 107 F.R.D. 66, 70-71 (W.D.N.Y.1985) (new plaintiff allowed to be named in complaint, where defense to original plaintiff's claim was primarily legal in nature, the defense had already been tried and it applied to both the original and new plaintiff). 28 As Mrs. Rauh implicitly consented to try the fraudulent-conveyance claim relating to the $15,000 cash transfer she received in the Stahelski Settlement, and she has not shown that any unfair prejudice would result from the postjudgment relief requested by the Trustee, the motion to conform the complaint and the judgment with the evidence should have been allowed.