Court Opinion

ID: 4096175
Source: CourtListenerOpinion
Date Created: 2016-11-07 22:01:12.225655+00
Date Added: 2024-06-11T14:19:38.995960
License: Public Domain

NOT FOR PUBLICATION

                       UNITED STATES COURT OF APPEALS
                                                                            FILED
                                FOR THE NINTH CIRCUIT
                                                                            NOV 07 2016
                                                                         MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
In re: MICHAEL DYLAN HENSHAW;                    No. 13-15331
KIMBERLY HENSHAW,
                                                 D.C. No. 1:12-cv-00513-JMS-
               Debtors,                          BMK

-----------------------------

PHILIP DANIEL HENSHAW;                           MEMORANDUM*
BARBARA WRESSEL HENSHAW,

               Debtors-Appellants,

 v.

DANE S. FIELD, Trustee of the
Bankruptcy Estate of Michael Dylan
Henshaw and Kimberly Henshaw,

               Trustee-Appellee.

                     Appeal from the United States District Court
                              for the District of Hawaii
                 J. Michael Seabright, Chief District Judge, Presiding

                        Argued and Submitted October 19, 2016
                                  Honolulu, Hawaii

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: WALLACE, FARRIS, and WATFORD, Circuit Judges.

      Philip and Barbara Henshaw (Henshaw Parents) appeal from the district

court’s summary judgment in favor of Dane Field, trustee of the bankruptcy estate

of Michael and Kimberly Henshaw. We have jurisdiction under 28 U.S.C. §

158(d)(1), and we affirm.

      Under 11 U.S.C. § 548(a)(1), as is relevant here, a transfer is constructively

fraudulent, and can thus be voided by a bankruptcy trustee, if: (1) the transfer was

made within two years of the debtor’s bankruptcy filing; (2) the debtor received

less than a reasonably equivalent value in exchange for such transfer; and (3) the

debtor was insolvent on the date that such transfer was made. At issue in our case

is the December 2009 transfer of Michael and Kimberly Henshaw’s interest in the

subject property to the Henshaw Parents. The Henshaw Parents do not dispute that

elements (1) and (3) of 11 U.S.C. § 548(a)(1) have been satisfied—the transfer was

made within two years of Michael and Kimberly’s bankruptcy filing and they were

insolvent at the time of the transfer. The Henshaw Parents, however, assert that

there is a triable issue as to whether Michael and Kimberly received reasonably

equivalent value in exchange for the transfer.

      The 2007 deed granted title to Michael Henshaw, Kimberly Henshaw, Philip

Henshaw, and Barbara Henshaw “as joint tenants, their assigns and the survivor of

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them, and the heirs, personal representatives and assigns of the survivor of them, in

fee simple, forever.” Under Hawaii law, “a joint tenant has a specific, albeit

undivided, interest in the property, and if he survives his cotenant he becomes the

owner of a larger interest than he had prior to the death of the other joint tenant.”

Sawada v. Endo, 57 Haw. 608, 613, 561 P.2d 1291, 1295 (1977). The bankruptcy

court determined that the meaning of “joint tenants” was unambiguous, and applied

the parol evidence rule to determine that Michael and Kimberly had a 50% interest

in the property. As a result, there was no issue of material fact as to whether

Michael and Kimberly received reasonably equivalent value for their interest (they

did not) and the bankruptcy court granted summary judgment on this basis. The

district court agreed.

      The precise issue before us is whether the district court erred by refusing to

consider extrinsic evidence that would modify the plain terms of the 2007 deed.

We conclude that the district court properly applied the Hawaii parol evidence rule

to exclude such evidence. In Midkiff v. Castle & Cooke, Inc., the Hawaii Supreme

Court held:

              Since there is no ambiguity in the deed as construed, the
              parol evidence rule applies. The extrinsic evidence of the
              surrounding facts and circumstances existing prior to,
              contemporaneously with and subsequent to the execution
              of the deed, as alleged in the amended complaint, is not

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             competent to contradict, defeat, modify or otherwise vary
             the meaning or legal effect of the deed.

45 Haw. 409, 421, 368 P.2d 887, 894 (1962). So too here. There is no ambiguity in

the 2007 deed and thus the parol evidence rule bars the introduction of extrinsic

evidence.

      The Henshaw Parents largely rely on the Hawaii intermediate appellate

court’s decision in Fukunaga v. Fukunaga, 8 Haw. App. 273, 800 P.2d 618 (1990),

to support their argument that extrinsic evidence should be considered to determine

the joint tenants’ true relationship. Fukunaga involved a partition action between

feuding family members who were joint tenants. Despite being named as joint

tenants, one family member argued that the other had merely been added as a joint

tenant to help secure a mortgage, and thus did not enjoy the full ownership rights

of a joint tenant. The Hawaii appellate court concluded that the parol evidence rule

was inapplicable to this evidence.

      Fukunaga, however, is distinguishable from our case, in that it did not arise

in the bankruptcy context. While it is a maxim of bankruptcy law that the trustee

stands in the shoes of the debtor, the trustee has a fiduciary duty not only to the

debtor, but also to the creditors and to the estate. Thus, third parties such as

bankruptcy trustees must be able to rely on the face of an unambiguous deed,

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without the need to consult parol evidence. See In re Teranis, 128 F.3d 469,

471–72 (7th Cir. 1997). Accordingly, the district court did not err in ruling on the

parol evidence question.

      AFFIRMED.

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