Court Opinion

ID: 993638
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:10:30.226088+00
Date Added: 2024-06-11T15:25:02.413453
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: GEORGE A. CLEMENTS,
Debtor.

CULLINAN ASSOCIATES, INCORPORATED,
                                                                No. 97-1656
Plaintiff-Appellant,

v.

GEORGE A. CLEMENTS,
Defendant-Appellee.

Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
Jackson L. Kiser, Senior District Judge.
(CA-96-915-R, BK-92-2216-7-HPR, AP-92-257)

Argued: October 27, 1997

Decided: November 24, 1997

Before WILKINS, NIEMEYER, and WILLIAMS, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Howard J. Beck, Jr., GENTRY, LOCKE, RAKES &
MOORE, Roanoke, Virginia, for Appellant. Neil Edward McNally,
KEY & TATEL, P.C., Roanoke, Virginia, for Appellee. ON BRIEF:
Leisa K. Ciaffone, GENTRY, LOCKE, RAKES & MOORE, Roa-
noke, Virginia, for Appellant.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Cullinan Associates, Inc., a creditor of George A. Clements,
appeals from a decision of the district court granting Clements a dis-
charge in bankruptcy. Cullinan claimed that Clements fraudulently
transferred property and made false statements under oath in connec-
tion with his bankruptcy case in violation of 11 U.S.C.A. § 727 (West
1993), and therefore was not entitled to a discharge. Because the
bankruptcy court's finding that Clements did not possess actual intent
to defraud is not clearly erroneous, we affirm.

Clements was the president and stockholder of George's, Inc., a
flower shop in Roanoke, Virginia. In 1989, a fire damaged a portion
of the shop's building. Clements subsequently contracted with Culli-
nan to repair the premises. After the repairs were made, a dispute
arose between the parties concerning the balance due on the construc-
tion contract; and in March 1992, Cullinan obtained a state court
judgment against Clements for $14,018.93, representing principal due
for the work performed plus interest. Between March and September,
Clements paid Cullinan approximately $11,500. In September, the
state court awarded Cullinan attorney's fees of $12,233.05 plus inter-
est. Immediately thereafter, on September 30, 1992, Clements filed a
Chapter 7 petition for bankruptcy. On October 28, 1992, Clements'
business, George's, Inc., also filed a Chapter 7 petition for relief.
Prior to filing either bankruptcy petition, Clements formed Calla Lily,
Inc., another floral shop, which bought a large amount of its inventory
from George's, Inc.

Cullinan filed a proof of claim for $14,286.41 on November 2,
1992, and subsequently filed a complaint in the bankruptcy court
seeking a denial of Clements' discharge. Cullinan alleged that Clem-
ents fraudulently transferred property to Calla Lily as prohibited by
11 U.S.C.A. § 727(a)(2) (West 1993); that Clements, as an insider,

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violated 11 U.S.C.A. § 727(a)(7) (West 1993); and that Clements
made a false oath in violation of 11 U.S.C.A. § 727(a)(4)(A) (West
1993). In response, Clements admitted that there were inaccurate
statements in the corporate bankruptcy petition. He attributed these
inaccuracies, however, to the "lapse" in time between the preparation
of the documents in early October and their actual filing at the end
of the month. Moreover, he contended that he was"confused" during
the November 1992 creditors' meetings, and had not intended to mis-
lead anyone when he misstated the status of George's, Inc. The bank-
ruptcy court rejected Cullinan's contentions and, concluding that
Clements did not act with actual fraudulent intent, granted the dis-
charge. See In re: Clements, No. 7-92-02216-HPR-7 (Bankr. W.D.
Va. Aug. 17, 1994).

Cullinan appealed the bankruptcy court's decision. The district
court remanded the case to the bankruptcy court to make additional
findings. See Cullinan Assocs., Inc. v. Clements , C.A. No. 94-0819-R
(W.D. Va. Feb. 17, 1995). The bankruptcy court reaffirmed its earlier
findings, again granting the discharge. See In re: Clements, No. 7-92-
02216-HPR-7 (Bankr. W.D. Va. Sept. 24, 1996). The district court
affirmed, holding that the bankruptcy court was not clearly erroneous
in its findings that Clements did not act with actual intent to defraud,
that he had no intent to delay or hinder his creditors, that he did not
knowingly make a false statement or oath, and that he was not reck-
lessly indifferent to the truth. See Cullinan Assocs., Inc. v. Clements,
C.A. No. 95-0915-R31-R (W.D. Va. Apr. 16, 1997). This appeal fol-
lowed.

After a careful review of the briefs and record, and after hearing
oral arguments from counsel, we, too, conclude that the bankruptcy
court's findings were not clearly erroneous. Accordingly, we affirm
for the reasons set forth in the district court's order of April 16, 1997.
See Cullinan Assocs., Inc. v. Clements, C.A. No. 95-0915-R31-R
(W.D. Va. Apr. 16, 1997), aff'g In re: Clements , No. 7-92-02216-
HPR-7 (Bankr. W.D. Va. Sept. 24, 1996).

AFFIRMED

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