Court Opinion

ID: 4513233
Source: CourtListenerOpinion
Date Created: 2020-03-05 20:00:36.109891+00
Date Added: 2024-06-11T09:40:58.301731
License: Public Domain

Case: 19-12292   Date Filed: 03/05/2020   Page: 1 of 7

                                                          [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 19-12292
                         Non-Argument Calendar
                       ________________________

                   D.C. Docket No. 6:18-cv-00335-CEM
                      Bkcy No. 6:15-bkc-04605-CCJ

In re: AHMET JOHN BEDIZEL

                                                                        Debtor.

      _______________________________________________________________

DOUGLAS OLDS,
JULIA OLDS,

                                                          Plaintiffs-Appellants,

                                  versus

AHMET JOHN BEDIZEL,

                                                           Defendant-Appellee.
                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Florida
                      ________________________
                             (March 5, 2020)
              Case: 19-12292    Date Filed: 03/05/2020   Page: 2 of 7

Before JORDAN, NEWSOM, and LUCK, Circuit Judges.

PER CURIAM:

      Douglas and Julia Olds appeal the district court’s order affirming the

bankruptcy court’s denial of their motion to confirm no automatic stay of their

fraudulent-transfer claim involving the debtor in bankruptcy.           Because the

bankruptcy trustee properly asserted and settled the claim, the Oldses are barred

from pursuing it. Accordingly, we affirm.

       FACTUAL BACKGROUND AND PROCEDURAL HISTORY

      The Oldses sued Ahmet Bedizel in Florida state court. While the action was

underway, Bedizel transferred certain real property he owned to his corporation,

Cocoanut Cove Yacht Club, Inc. The Oldses then obtained an approximately three-

million-dollar judgment against Bedizel. Several years later, the Oldses moved to

implead Cocoanut Cove into the state-court action so that they could apply the

transferred property to satisfy their judgment. The Oldses argued that the transfer

was fraudulent and that they were therefore entitled to avoid the transfer under

section 56.29, Florida Statutes, which provides for “proceedings supplementary” to

the execution of a judgment.

      Soon after, Bedizel petitioned for chapter 7 bankruptcy. In his petition,

Bedizel claimed that his stock in Cocoanut Cove was exempt from his bankruptcy

estate because he and his wife owned the stock as tenants by the entirety. The

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bankruptcy trustee objected that the stock was not exempt because Bedizel had

fraudulently transferred the stock to himself and his wife. The trustee also filed a

complaint against Bedizel, Bedizel’s wife, and Cocoanut Cove, seeking to avoid the

transfer of the stock.

      In the meantime, the bankruptcy court granted Bedizel a discharge. After the

discharge, the Oldses filed a motion asking the bankruptcy court to confirm that their

proceedings supplementary were not subject to the automatic stay of collection

actions imposed in bankruptcy proceedings. The court took the motion under

advisement pending resolution of the trustee’s objection and complaint regarding the

Cocoanut Cove stock.

      While the Oldses’ motion was pending, the trustee entered into an agreement

with the Bedizels and Cocoanut Cove in which they agreed to pay the trustee $17,500

“in full settlement of the [Cocoanut Cove] stock.” Although the trustee’s objection

and complaint pertained only to the Cocoanut Cove stock, the agreement stated that

it also resolved “any and all claims that the [t]rustee ha[d] in connection with the

[Cocoanut Cove] [l]and.” The agreement acknowledged the Oldses’ pending motion

to continue their proceedings supplementary regarding the land. The bankruptcy

court approved the settlement without objection.

      Later, the bankruptcy court denied the Oldses’ motion. The bankruptcy court

concluded that Bedizel’s discharge barred the Oldses from continuing their

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proceedings supplementary. The bankruptcy court also concluded that the Oldses

were barred because “[o]nly the [t]rustee can bring federal and state law fraudulent

transfer actions” and because the trustee had settled all claims pertaining to the land.

      The Oldses appealed to the district court, which affirmed without a hearing.

The district court rejected the bankruptcy court’s conclusion that the Oldses were

barred by Bedizel’s discharge, noting that the Oldses’ claim was against Cocoanut

Cove, which was not part of the discharge. However, the district court agreed that

the Oldses’ fraudulent-transfer claim was property of the bankruptcy estate and that

the trustee had settled the claim. The Oldses now appeal the district court’s order.

                                STANDARD OF REVIEW

      “As the second court to review the bankruptcy court’s judgment, we examine

the bankruptcy court’s order independently of the district court.” Westgate Vacation

Villas, Ltd. v. Tabas (In re Int’l Pharmacy & Disc. II, Inc.), 443 F.3d 767, 770 (11th

Cir. 2005). “Specifically, we review determinations of law made by either the

district or bankruptcy court de novo, while reviewing the bankruptcy court’s findings

of fact for clear error.” Id.

                                    DISCUSSION

      The trustee’s settlement agreement purported to resolve “any and all claims

that the [t]rustee ha[d] in connection with the [Cocoanut Cove] [l]and.” It is

elementary that a party can only settle a claim that it owns. Therefore, if the Oldses’

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fraudulent-transfer claim regarding the land was not property of Bedizel’s

bankruptcy estate, then the trustee could not have settled the claim.

      One way that the fraudulent-transfer claim could have come into the

bankruptcy estate is through 11 U.S.C. § 544(a), which “confers on the bankruptcy

trustee the rights of a hypothetical ‘ideal creditor’ under state law.” City Nat’l Bank

of Miami v. Gen. Coffee Corp. (In re Gen. Coffee Corp.), 828 F.2d 699, 706 (11th

Cir. 1987). In other words, if a hypothetical creditor could have voided Bedizel’s

transfer under Florida’s fraudulent-transfer statutes, then the trustee could have

asserted the claim on behalf of Bedizel’s bankruptcy estate. For § 544(a) to apply,

the transfer must have been voidable at the time of the “commencement” of the

bankruptcy case—that is, the date that Bedizel filed his petition for bankruptcy. See

11 U.S.C. § 544(a); see also Gaudet v. Babin (In re Zedda), 103 F.3d 1195, 1201

(5th Cir. 1997) (“‘The commencement of the case’ is synonymous with the filing of

the bankruptcy petition.” (citing 11 U.S.C. § 301)).

      The Oldses readily admit that § 544(a) “was available to the [t]rustee.”

Appellants’ Br. 14. Nevertheless, they argue that “any cause of action the [t]rustee

could have had was extinguished long before the bankruptcy case was filed.” Id.

More specifically, because fraudulent-transfer claims in Florida are subject to a four-

year statute of repose, see § 726.110, Fla. Stat., and the transfer occurred more than

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six years before Bedizel filed for bankruptcy, the Oldses argue that there was no

claim for the trustee to assert.

      In doing so, however, the Oldses gloss over a one-year savings clause in the

Florida statutes. The savings clause allows a creditor to avoid a transfer that is

actually fraudulent—no matter how long ago the transfer happened—as long as the

avoidance action is filed “within 1 year after the transfer or obligation was or could

reasonably have been discovered by the [creditor].” § 726.110(1), Fla. Stat. The

Oldses point to the fact that the transfer was recorded in the Brevard County public

records, but that fact alone is insufficient to trigger the start of the one-year period.

Desak v. Vanlandingham, 98 So. 3d 710, 713 (Fla. 1st DCA 2012) (“We now hold

that the act of recording a deed does not without more, as a matter of law, start the

‘savings clause year.’”). The trustee was not jurisdictionally barred, as the Oldses

claim, from asserting and settling the fraudulent-transfer claim.

      The Oldses also argue that the trustee was estopped from or abandoned any

right to settle the fraudulent-transfer claim. But abandonment requires “notice and

a hearing,” neither of which occurred here. 11 U.S.C. § 554; see also Catalano v.

Comm’r, 279 F.3d 682, 687 (9th Cir. 2002) (“[P]roperty is not considered abandoned

from the estate unless the procedures specified in § 554 are satisfied.”). And the

Oldses have failed to show that the elements of estoppel were met. Cf. Dawkins v.

Fulton Cty. Gov’t, 733 F.3d 1084, 1089 (11th Cir. 2013) (listing the elements of

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federal common law estoppel). Indeed, there is no evidence in the record suggesting

that the trustee intended or believed that the Oldses would rely on the trustee’s

actions.

                                 CONCLUSION

      The Oldses have failed to show that the trustee could not properly assert and

settle a claim as to Bedizel’s fraudulent transfer of the Cocoanut Cove land. As a

result, the bankruptcy court properly denied the Oldses’ motion to confirm no

automatic stay.

      AFFIRMED.

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