Court Opinion

ID: 621036
Source: CourtListenerOpinion
Date Created: 2012-01-18 01:01:33+00
Date Added: 2024-06-11T12:13:44.545517
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                              JAN 17 2012

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

In re: EDWARD WILLIAMS CUTTER,                   No. 11-60005
II,
                                                 BAP No. 09-1393
              Debtor,

                                                 MEMORANDUM*
EDWARD WILLIAMS CUTTER, II and
JOHN F. CUTTER, Guardian ad Litem for
Edward Williams Cutter aka Trip Cutter,

              Appellants,

  v.

DAVID SEROR, Ch 7 Trustee and
ZORAN VUJIC,

              Appellees.

In re: EDWARD WILLIAMS CUTTER,                   No. 11-60010
II,
                                                 BAP No. 10-1022
              Debtor,

DAVID SEROR,

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
               Appellant,

  v.

EDWARD WILLIAMS CUTTER, II; et
al.,

               Appellees,

_____________________________,

ZORAN VUJIC,

  and

UST - UNITED STATES TRUSTEE,
WOODLAND HILLS,

               Trustee.

                          Appeal from the Ninth Circuit
                            Bankruptcy Appellate Panel
              Pappas, Dunn, and Novack, Bankruptcy Judges, Presiding

                            Submitted December 5, 2011**
                              San Francisco, California

Before: ALARCÓN, CALLAHAN, and N.R. SMITH, Circuit Judges.

        Edward Williams Cutter, II (“Edward”), the debtor, and John F. Cutter

(“John”), as guardian ad litem for Trip Cutter (“Trip”), Edward’s son, appeal from

the opinion of the Bankruptcy Appellate Panel (“BAP”) affirming the Bankruptcy

         **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Court’s determination that certain real property located on Thurston Circle, Los

Angeles, was conveyed to Edward rather than Trip and therefore is within the

bankruptcy estate. David Seror, the Chapter 7 Trustee, cross-appeals from the

BAP’s affirmance of the Bankruptcy Court’s determination that Trip has a one-

third interest in certain property located on Whipple Street in North Hollywood.

We affirm the Bankruptcy Court.1

      In Weisman v. Roberston (In re Weisman), 5 F.3d 417, 421 (9th Cir. 1993),

we stated that “[w]hether the circumstances are sufficient to require inquiry as to

another’s interest in property for the purposes of [California Civil Code] section 19

is a question of fact, even where there is no dispute over the historical facts,” thus

invoking a clear error standard of review. In Murray v. Bammer (In re Bammer),

131 F.3d 788, 791-92 (9th Cir. 1997) (en banc), we reiterated that the Bankruptcy

Court’s determination of historical facts are reviewed for clear error, but held that

mixed questions concerning the selection of the applicable legal rules and the

application of the facts to those rules are reviewed de novo.

      1. Edward and John assert that the Bankruptcy Court failed to give proper

weight to the Declaration of John J. Ermatinger, which sets forth his intent to name

      1
            Because the parties are familiar with the facts and procedural history,
we do not restate them here except as necessary to explain our decision.

                                           3
Trip as a grantee of the Thurston Circle property. The record shows that the

Bankruptcy Court properly considered Ermatinger’s declaration, but reasonably

determined that the property was conveyed to Edward based on a number of

relevant factors. The court noted that the name on the title was “Edward W.

Cutter, a Single Man” which coincides with Edward’s name and marital status. In

addition, the court considered that: (a) Trip was a minor, (b) the California

Uniform Transfer to Minors Act was not used to attempt to convey an interest to

Trip, (c) Edward financed the purchase of the property, and (d) Edward treated the

Thurston property as his own. Edward and John have not shown that the

Bankruptcy Court erred in determining that the Thurston Circle property was

conveyed to Edward.

      2. Seror, the Chapter 7 Trustee, cross-appeals alleging that the Bankruptcy

Court erred in awarding a one-third interest in the Whipple property to Trip.

Specifically, the Trustee argues that the use of the language “Edward Williams

Cutter, Fils” did not place him on inquiry notice and that in any event, an inquiry

would not have revealed that Trip was the owner of a one-third interest.2 We agree

with the BAP that the evidence before the Bankruptcy Court presented “two

plausible interpretations of the facts, and its choice between them cannot be clearly

      2
             Seror’s request for judicial notice is granted.

                                          4
erroneous.” In re Cutter, 2010 WL 6467694, at *16 (B.A.P. 9th Cir. 2010)

(unpublished) (citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573

(1985). Seror has not demonstrated that the Bankruptcy Court erred in determining

that Trip has a one-third interest in the Whipple property.

      As neither appellants nor cross-appellee have shown that the Bankruptcy

Court erred in its rulings, its Judgment After Trial, filed and entered on October 30,

2009, is affirmed.

      AFFIRMED.

                                          5
                                                                               FILED
In re Cutter, Case Nos. 11-60005 & 11-60010                                      JAN 17 2012

                                                                            MOLLY C. DWYER, CLERK
N.R. SMITH, Circuit Judge, concurring:                                       U.S. COURT OF APPEALS

      I agree with the outcome of the majority’s Memorandum Disposition.

However, I write separately to highlight the appropriate standard of review. The

BAP applied the correct clearly erroneous standard of review and correctly found

that the bankruptcy court did not clearly err in its decisions. Cutter v. Seror (In re

Cutter), 2010 WL 6467694, *15–16 (B.A.P. 9th Cir. 2010). In their briefs, the

parties agree, proposing the clearly erroneous standard as the appropriate standard

of review.

      This court has specifically addressed the proper standard of review when

California Civil Code Section 19 is determinative, and we face such a situation

here. “Whether the circumstances are sufficient to require inquiry as to another’s

interest in property for the purposes of section 19 is a question of fact, even where

there is no dispute over the historical facts.” Weisman v. Peters (In re Weisman), 5
F.3d 417, 421 (9th Cir. 1993). Questions of fact are reviewed for clear error.

United States v. Hinkson, 585 F.3d 1247, 1259–60 (9th Cir. 2009) (en banc);

Murray v. Bammer (In re Bammer), 131 F.3d 788, 791 (9th Cir. 1997) (en banc);

In re Weisman, 5 F.3d at 419. Therefore, the proper standard of review in this case

is the clearly erroneous standard. See In re Cutter, 2010 WL 6467694, *7, 15–16.

                                           1
      In In re Weisman, the court emphasized the underlying facts that must be

determined in order to decide if the trustee was on inquiry or constructive notice. 5
F.3d at 421 (“The essential dispute between the parties is whether Peters’ and

Neergaard’s possession of the house was consistent or inconsistent with the record

title in Peters’ and Weisman’s names.”). Similarly, here, the central dispute

involves the actions by the debtor and others and their consistency with the names

on the deeds. See Maj. Memo. at 3–5. Therefore, In re Weisman held that the

specific situation we face in this appeal is a question of fact, and thus any

presumption that this case should be reviewed de novo is overcome.

      While language from In re Bammer may suggest that a de novo review is

appropriate in certain situations, its holding is narrow and does not overrule In re

Weisman here. In re Bammer considered whether the debtor’s fraudulent conduct

qualified as “malicious” under 11 U.S.C. § 523(a)(6) and did not suggest that

mixed questions are always reviewed de novo. 131 F.3d 791–92. Thus, because

the question at hand is essentially factual and In re Weisman recognized the factual

nature of this determination, see 5 F.3d at 421, the language in In re Bammer is

inapplicable.

                                           2