Opinion ID: 466517
Heading Depth: 2
Heading Rank: 4

Heading: lease payments owed to the debtors' estate

Text: 39 The debtors made three separate leases for portions of the Muzzy Ranch with a partnership formed by their children Benjamin, Jr. and Gregory. In October, 1974, they entered into a three year lease. Payment was fixed at $70,500 per year. In November, 1975, the partnership entered into a second lease of 310 acres for five years at $50 per acre. In August, 1975, the parties enacted a third lease for five years calling for the payment each quarter of $19,000. As of November, 1980, there was a balance owing for the three leases of $374,487. 40 Benjamin, Jr. and Gregory do not allege that this amount was paid to the debtors. They attempted to prove at trial that there was an oral modification to the leases which permitted them to offset their cash payments owed with improvements to the property. Gregory and Benjamin Allustiarte, Sr. testified at trial that the leases had been so modified orally. The trial court did not find their testimony credible. The Allustiartes' accountant testified that he told Gregory Allustiarte in 1977 that the rental payments on the Muzzy Ranch were too low, and a gift tax might be imposed. Gregory informed the witness that there were offsetting charges for labor and use of equipment which accounted for the difference. The accountant told Gregory that the lease and any offsetting arrangements needed to be in writing. Gregory agreed, but never sent the witness any papers evincing a modification. It is clear from this testimony that Gregory Allustiarte had been on notice since 1977 that the claim of an oral modification to the leases was of questionable credibility. The bankruptcy court found that there was no oral modification of the written leases, and that the partnership was delinquent in its payment of rent in the amount of $374,487. 41 Under our division of judicial labor, it is the trier of fact's duty to evaluate the credibility of witnesses. We must accord great deference to the trial court's determination regarding whether a witness speaks the truth. Fed.R.Civ.P. 52; see Anderson v. City of Bessemer City, --- U.S. ----, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985) (holding that [w]hen findings are based on determinations regarding the credibility of witnesses, Rule 52 demands even greater deference to the trial court's findings.); see also Nicacio v. I.N.S., 768 F.2d 1133, 1139 (9th Cir.1985) (holding that the district court has great discretion in deciding whether to credit a witness' testimony.). The only evidence of an oral modification presented at trial was the testimony of Gregory, one of the partners who owed the unpaid amount under the written agreements, and Benjamin Allustiarte, Sr., his father who is one of the debtors. The trial court properly exercised its discretion in finding their testimony not credible. The trial court's finding that the amount of $347,487 is now owing to the debtors is not clearly erroneous.