Court Opinion

ID: 199051
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:23:33+00
Date Added: 2024-06-11T11:52:51.849479
License: Public Domain

[NOT FOR PUBLICATION--NOT TO BE CITED AS PRECEDENT]

              United States Court of Appeals
                        For the First Circuit
                        ____________________

No. 99-2038

                           THERESA DUPRE,
                               Debtor,

                        ____________________

                     HAEMONETICS CORPORATION;
                   NOVA BIOMEDICAL CORPORATION,
                      Plaintiffs, Appellees,

                                  v.

                           THERESA DUPRE,
                         Debtor, Appellant.

                        ____________________

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Richard G. Stearns, U.S. District Judge]

                        ____________________

                                Before

                      Torruella, Chief Judge,
                   Bownes, Senior Circuit Judge,
                     and Lipez, Circuit Judge.

                       _____________________

     Charles A. Dale III, with whom Kimberly M. Parker and Gadsby &
Hannah LLP were on brief, for appellant.
     John Foskett, with whom Richard D. Bickelman, Anthony M. D'Imperio
and Deutsch Williams Brooks DeRensis Holland & Drachman, P.C. were on
brief, for appellees.

                        ____________________
    JULY 3, 2000
____________________

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          Per Curiam. This is an appeal by appellant Theresa Dupre

from the decision of the United States District Court for the District

of Massachusetts vacating the judgment of the United States Bankruptcy

Court for the District of Massachusetts and remanding the case to the

bankruptcy court with the instruction that judgment be entered for the

appellees, Haemonetics Corporation and Nova Biomedical Corporation.

See Haemonetics Corp. v. Dupre, 238 B.R. 224 (D. Mass. 1999).

          The appellant's husband Paul Dupre was convicted of

embezzling nearly one million dollars from Nova and Haemonetics between

1988 and 1994. Nova and Haemonetics brought suit against the Dupres

alleging a civil conspiracy. While motions for summary judgment were

pending, Theresa Dupre filed a Chapter 7 bankruptcy petition. The

appellees challenged the discharge of her debt relying on section

523(a) of the Bankruptcy Code which provides in relevant part:

          A discharge under . . . this title does not
          discharge an individual debtor from any debt--

                                . . .

          (2) for money, property, services, or an
          extension, renewal, or refinancing of credit, to
          the extent obtained by--

                  (A) false pretenses, a false
                  representation, or actual fraud,
                  other than a statement respecting
                  the debtor's or an insider's
                  financial condition;

                                . . .

                                 -3-
          (6) for willful and malicious injury by the
          debtor to another entity or to the property of
          another entity.

11 U.S.C. § 523(a).

          The bankruptcy court found the following relevant facts: the

embezzled funds were deposited into six joint accounts maintained by

the Dupres in six different banks. "Theresa was aware that her husband

was providing funds for the various accounts far in excess of his

earnings" and far in excess of their combined wages. Haemonetics v.

Dupre (In re Dupre), 208 B.R. 609, 611 (Bankr. D. Mass. 1997).

Nevertheless, she regularly wrote checks from those accounts, and

maintained the check registers, for expenditures that went beyond the

Dupre's disposable income from their wages. Accordingly, the court

found that Theresa was "intimately familiar" with the amount of funds

coming into the household, refuting "her attempts to appear

unsophisticated in financial dealings." Id. In addition, Theresa

Dupre deleted a Quicken software program from her home computer to

conceal the family's financial affairs from her creditors, denied this

act to the creditors, and testified falsely in court about the purpose

of the deletions.1

          Despite these findings implicating Theresa in her husband's

embezzlement, the bankruptcy court concluded that "[t]here is not an

1 For a full disposition of the facts, see Haemonetics Corp., 238 B.R.
at 226-27.

                                 -4-
iota of evidence that Theresa acted in concert with Paul in the act of

converting the Plaintiffs' funds." Id. at 612. The bankruptcy court

inexplicably determined that there was insufficient evidence that

Theresa knew the source of the funds.        See id.    Based on this

conclusion, the court held that § 523(a) did not apply and entered

judgment for Theresa Dupre.      See id.

          The district court in vacating the bankruptcy court's

judgment relied on the bankruptcy court's subsidiary findings and the

additional evidence that Theresa had occasionally reviewed the regular

bank statements sent to the Dupre home.       At least some of those

statements explicitly detailed the numerous deposits of very large sums

of money from Haemonetics and Nova. See Haemonetics, 238 B.R. at 228.

Finding both knowledge and participation, the district court properly

concluded that the appellant acted in concert with her husband in

converting the appellees' property and, consequently, that her debt

should not be discharged under § 523(a).       See id. at 229-30.

          Based on our independent judgment that the bankruptcy court's

ultimate finding is clearly erroneous, we affirm the decision of the

district court. See Palmacci v. Umpierrez, 121 F.3d 781, 785 (1st Cir.

1997). With all due deference to the bankruptcy court as the trial

court in this case, see Palmacci, 121 F.3d at 785; Williams v. Poulos,

11 F.3d 271, 278 (1st Cir. 1993), Theresa Dupre's willful destruction

of evidence, untruthful testimony, knowledge of income far in excess of

                                 -5-
earnings, and review of the bank statements indisputably establish that

she knew the illicit source of the funds. Where, as here, there is no

other plausible inference, we are compelled to hold that the bankruptcy

court's conclusion that Theresa lacked knowledge of the source of the

funds and could not therefore act in concert with her husband is

clearly erroneous. See Jackson v. United States, 156 F.3d 230, 232-33

(1st Cir. 1998); Irving v. United States, 49 F.3d 830, 835 (1st Cir.

1995); Williams, 11 F.3d at 278.

          It follows that Theresa's willful participation in the

conversion of the appellees' property through embezzlement satisfies

the exception to discharge. See § 523(a)(6); Kawaauhau v. Geiger, 523
U.S. 57, 61-62 (1998) (holding that the injury -- the deprivation of

property -- must be wilful, not just the intentional act that results

in the injury); Roumeliotis v. Popa (In re Popa), 140 F.3d 317, 318

(1st Cir. 1998) (applying Geiger); cf. Barclays American Business

Credit v. Long (In re Long), 774 F.2d 875, 879 (8th Cir. 1985)

(observing that discharge exception requires egregious conduct rather

than mere conversion).

                             CONCLUSION

          For the reasons discussed above and set forth more fully in

the district court opinion, we affirm.

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