Court Opinion

ID: 2897995
Source: CourtListenerOpinion
Date Created: 2015-09-08 16:01:06.915047+00
Date Added: 2024-06-11T15:15:51.861091
License: Public Domain

Case: 15-11195   Date Filed: 09/08/2015   Page: 1 of 6

                                                        [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 15-11195
                        Non-Argument Calendar
                      ________________________

                  D.C. Docket No. 2:14-cv-00335-SPC,
                    Bkcy No. 9:12-bkc-12132-FMD

IN RE: ROBERT PAUL MOORE, JR.
       JENNIFER REBECCA MOORE,

                                   Debtors.
_____________________________________________________________

DENNIS FIANDOLA,
LISA FIANDOLA,

                                        Plaintiffs - Appellants,

versus

JENNIFER REBECCA MOORE,
ROBERT PAUL MOORE, JR.,

                                         Defendants - Appellees.

                      ________________________

               Appeal from the United States District Court
                   for the Middle District of Florida
                     ________________________
                          (September 8, 2015)
              Case: 15-11195      Date Filed: 09/08/2015   Page: 2 of 6

Before MARCUS, WILLIAM PRYOR, and DUBINA, Circuit Judges.

PER CURIAM:

      This is an appeal from the district court’s order affirming the bankruptcy

court’s final judgment in favor of the appellees, Robert and Jennifer Moore

(“Moores”) on an adversary complaint brought by the appellants, Dennis and Lisa

Fiandola (“Fiandolas”).

      After reviewing the record and reading the parties briefs, we affirm the final

judgment of the bankruptcy court.

                                  I. BACKGROUND

      The facts are taken almost verbatim from the district court’s order.

      Jennifer Moore, through her business Moore Pizazz, LLC, entered into an

agreement on February 28, 2011, to perform interior design services and provide

custom goods for the Fiandolas. As part of the agreement, the Fiandolas tendered

$30,000.00 to Moore Pizazz for custom furnishings. The agreement called for the

Fiandolas to pay 80 percent of all custom furnishings upon ordering. Jennifer

Moore subsequently requested that the Fiandolas provide another $40,000.00 for

the work. The Fiandolas questioned the need for the additional funds so soon into

the project but were assured by Jennifer Moore that the funds would not be lost and

the project would be completed.

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      Jennifer Moore was unable to complete the Fiandolas’ project and did not

deliver all of the agreed upon goods and services. The Fiandolas acknowledge that

they received some of the goods and services they paid for but not everything. As

a result of Jennifer Moore’s failure to deliver on the agreement, the Fiandolas sued

Moore Pizazz in state court. The Fiandolas prevailed in their lawsuit and a

judgment was entered against Jennifer Moore and Moore Pizazz. Robert and

Jennifer Moore and Moore Pizazz, LLC subsequently filed for bankruptcy on

August 7, 2012.

      Shortly after entering bankruptcy, the Moores disclosed their income in the

statement of financial affairs. The Moores did not list assets they had sold—

prefiling—namely two vehicles that were sold earlier that year for approximately

$35,000.00. In addition, Robert Moore failed to disclose moneys received from a

consignment shop that sold assets belonging to Moore Pizazz during the 341

meeting of creditors. The Moores amended their statement of financial affairs after

the 341 meeting and added the sale of the vehicles but still did not disclose the sale

of assets belonging to Moore Pizazz. Several months after the amendment, the

bankruptcy court entered a final judgment in favor of the Moores. The Fiandolas

then appealed the bankruptcy court’s judgment to the district court. After the

district court affirmed, this appeal followed.

                                     II. ISSUES

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      (1)    Whether the bankruptcy court erred in determining that a debtor does
             not have an obligation to explain the loss of the funds under 11 U.S.C.
             § 727(a)(5) when the funds belong to a single-member limited liability
             company.

      (2)    Whether the bankruptcy court erred in determining that the Moores
             did not deliberately omit the proceeds from the sale of vehicles from
             their petition.

      (3)    Whether the bankruptcy court erred in determining that money
             received by Robert Moore should not be imputed as income because
             the funds were not used for the maintenance and support of the
             Moores.

                           III. STANDARDS OF REVIEW

   We review the factual findings and legal conclusions of the bankruptcy court

under the same standards as the district court. Heatherwood Holdings, LLC v.

HGC, Inc. (In re Heatherwood Holdings, LLC), 746 F.3d 1206, 1216 (11th Cir.

2014). Legal questions are reviewed de novo, and factual findings are reviewed

for clear error. Id. When the district court affirms the bankruptcy court’s order,

we review only the bankruptcy court’s decision. Educ. Credit Mgmt. Corp. v.

Mosley (In re Mosley), 494 F.3d 1320, 1324 (11th Cir. 2007).

                                  IV. DISCUSSION

      We conclude from the record that the bankruptcy court correctly decided

that the Moores should not be denied a discharge of debts under 11 U.S.C.

§ 727(a)(5) because they were under no obligation to explain the loss of corporate

owned assets in a single-member limited liability corporation. The bankruptcy

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court made factual findings, after a two day trial, that the assets of the corporation

were never owned by the Moores or at any time available to them for their use and

thus were not within the reach of a creditor. These findings were not clearly

erroneous.

      Additionally, as the district court noted, even if the bankruptcy court erred in

its decision, the error was harmless because the Moores explained the disposition

of the corporate assets to the satisfaction of the trier of fact, the bankruptcy court.

To deny a discharge under § 727(a)(5), the bankruptcy court correctly found that

the Fiandolas had the burden of proving that the assets were converted by the

Moores from the limited liability corporation. The Fiandolas had to prove that the

Moores at one time owned the assets which are no longer available for creditors.

See In re Harmon, 379 B.R. 182, 190 (Bankr. M.D. Fla. 2007). The Fiandolas

failed to prove at trial that any assets were not the property of the corporation or

that any assets were not always titled in the corporation’s name.

      In sum, we conclude that there was ample evidence presented to show that

all moneys paid to Moore Pizazz were deposited in the corporation’s accounts and

were never the personal property of the Moores. Moreover, the evidence was

uncontroverted that the Moores paid corporate liabilities from the sale of corporate

assets.

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      We next conclude that the bankruptcy court was correct in concluding that

the Moores did not intentionally fail to disclose the sale of two vehicles in their

statement of financial affairs. The omitted disclosures in this case were not

material misrepresentations. First, the assets in question were not retained by the

Moores postpetition, nor were the proceeds from the sale of the automobiles

hidden from the bankruptcy trustee or the court. The Moores complied with the

trustee’s request for documentation of the sale of the automobiles and the proceeds

of each.

      We finally conclude that the bankruptcy court did not err finding that Robert

Moore’s receipt of money from sale of Moore Pizazz’s assets was not imputed

income that had to be disclosed in the Moores’ statement of financial affairs.

Thus, the bankruptcy court correctly concluded that his failure to disclose did not

constitute a false oath under 11 U.S.C. § 727(a)(4)(A).

      For the foregoing reasons, as well as the reasons set forth in the bankruptcy

court’s well-reasoned memorandum opinion filed on April 16, 2014, and the

district court’s well-reasoned order affirming the bankruptcy court’s judgment filed

on June 1, 2015, we affirm the final judgment entered in this case.

      AFFIRMED.

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