Court Opinion

ID: 866390
Source: CourtListenerOpinion
Date Created: 2013-05-01 19:10:54.972295+00
Date Added: 2024-06-11T09:06:44.177431
License: Public Domain

Case: 12-15084   Date Filed: 05/01/2013   Page: 1 of 3

                                                     [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 12-15084
                        Non-Argument Calendar
                      ________________________

        D.C. Docket Nos. 9:12-cv-80426-KAM; 11-26694-BKC-PGH

In Re: NORMAN L. DESMARAIS,

                                                                    Debtor.

____________________________________________________

NORMAN L. DESMARAIS,

                                                     Plaintiff-Appellant,

                                   versus

JHELUM ENTERPRISES, LLC,
ANDRE GIBSON, CHARTERED,

                                                       Defendants-Appellees.

                      ________________________

               Appeal from the United States District Court
                   for the Southern District of Florida
                     ________________________

                              (May 1, 2013)
                   Case: 12-15084            Date Filed: 05/01/2013            Page: 2 of 3

Before TJOFLAT, WILSON and ANDERSON, Circuit Judges.

PER CURIAM:

        In this case, Norman Desmarais (“Debtor”), petitioned the Bankruptcy Court

for an order discharging his debt to Jhelum Enterprises, LLC and Andre΄ Gibson,

Chartered (“Creditor”) arising from a judgment a Florida court gave Creditor based

on fraudulent transfers in violation of Fla. Stat. § 726.105(1)(a). 1 Creditor,

responding to the petition, filed an adversary complaint seeking to except the debt

from discharge under 11 U.S.C. § 523(a)(6). The Bankruptcy Court granted

Creditor judgment on the ground that the state court judgment—which was based

on a fraudulent transfer made with the “actual intent to hinder, delay, or defraud a

creditor”—could support a § 523(a)(6) claim. The Bankruptcy Court then applied

the doctrine of collateral estoppel and found that all the elements of § 523(a)(6)’s

exception to discharge were met apart from the malice element. On the malice

issue, the court ruled that Debtor’s reason for transferring the assets—to start a

new business—did not constitute just cause because there was no evidence

showing that his mistaken belief, that Creditor would forego its claim for rents,

was in any way the result of Creditor’s conduct or the parties’ course of dealing.

In fine, the court ruled that “it would be a perversion of justice to allow [Debtor],
1
  In a state court lawsuit between Creditor and Oceanside Automotive Service and Towing, LLC (“Oceanside”),
Creditor obtained the judgment against Oceanside for past due rent. Thereafter, Debtor, the sole officer and insider
of Oceanside, transferred Oceanside’s assets to himself, to prevent Creditor from executing on its judgment. On
learning of the transfer, Creditor impleaded Debtor, claiming that Debtor was a fraudulent transferee of Oceanside’s
assets. Creditor obtained the judgment at issue against Debtor pursuant to Florida’s version of the Uniform
Fraudulent Transfer Act, Fla. Stat. 726.109(1)(a).

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                Case: 12-15084    Date Filed: 05/01/2013    Page: 3 of 3

who had actual intent to hinder, delay, or defraud [Creditor] and committed actual

fraud, to maintain that he had just cause for doing so.”

        Debtor appealed the Bankruptcy Court’s ruling to the District Court and it

affirmed. Debtor now appeals the District Court’s decision.

        We find no merit in Debtor’s appeal. Debtor argued to the District Court

that Florida’s fraudulent transfer statute is remedial and does not create an

independent cause of action—that Creditor had nothing more than a debt arising

from a breach of contract, and that such debts is not excepted from discharge in

bankruptcy. The court properly rejected his argument, holding that while

Creditor’s claim originally arose out of contract, by virtue of Debtor’s wrongful

conduct it ripened into a judgment for fraudulent transfer. Debtor now contends

that the court erred in this holding, and we disagree.

        Debtor also argues that the District Court’s reliance on In re Jennings, 670

F.3d 1329 (11th Cir. 2012), “either runs roughshod over binding precedent of the

United States Supreme Court and this Court, or must be limited to its facts or the

law of the forum, California.” App’t Br. at 3-4. Debtor conceded in the District

Court that it was bound by In re Jennings. He must make the same concession

here.

        Finding no error in the District Court’s decision, its judgment is

        AFFIRMED.

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