Williamson v. Busconi ( 1996 )

USCA1 Opinion

                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT




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        No. 95-2311

                                 ALAN D. WILLIAMSON,



                                      Appellant,



                                          v.



                                  LEWIS J. BUSCONI,



                                      Appellee.




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                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF MASSACHUSETTS



                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
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                                        Before



                               Torruella, Chief Judge,
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                                 Cyr, Circuit Judge,
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                            and Cummings,* Circuit Judge.
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             Rosario Mario F. Rizzo for appellant.
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             Howard  P. Blatchford, Jr., with  whom Bruce F.  Smith and Jager,
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        Smith, Stetler & Arata, P.C. were on brief for appellee.
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                                     July 3, 1996


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             *Of the Seventh Circuit, sitting by designation.

























                    CYR,  Circuit  Judge.   Appellant  Alan  D.  Williamson
CYR,  Circuit  Judge.
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          challenges a bankruptcy court ruling excluding evidence probative



          of  the chapter  7  debtor-appellee Lewis  J. Busconi's  putative



          intent  to  defraud  Williamson  in  a  substantial  real  estate



          transaction.   In  due course  Williamson commenced  an adversary



          proceeding in the bankruptcy  court to except his claim  from the



          chapter 7  discharge on the ground that the debt had been induced



          by  fraud.   See  Bankruptcy Code     523(a)(2)(A), 11  U.S.C.
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          523(a)(2)(A)  (1994).   Following  careful review  of the  entire



          record,  we  conclude  that   the  bankruptcy  court  abused  its



          discretion  by excluding  the  proffered evidence,  but that  the



          error did not affect substantial rights.



                    At the bench trial, Williamson unsuccessfully attempted



          to introduce  evidence as to various  events, including Busconi's



          conduct,  subsequent   to  the  closing  of   their  real  estate



          transaction,  from  which  a  factfinder  reasonably  could  have



          inferred that  Busconi had not  intended to pay  the note  at the



          time it was executed.   The evidence was excluded  as irrelevant.



          Nonetheless,  after hearing  the testimony  of both  parties, the



          bankruptcy  judge expressly  credited Busconi's  testimony, found



          that Williamson had failed  to establish the requisite fraudulent



          intent,  and  ruled  the   Williamson  debt  dischargeable.    On



          intermediateappeal, thedistrictcourtaffirmed withoutelaboration.1


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               1The  district court's  conclusions of  law are  reviewed de
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          novo, Petit v. Fessenden, 80 F.3d 29, 32 (1st Cir. 1996); Fed. R.
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          Bankr.  P. 8013.    The bankruptcy  court's factual  findings are

          reviewed  for clear  error.   Id.    Evidentiary rulings  by  the
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          bankruptcy  court  are  subject  to  the  "abuse  of  discretion"



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                    As  direct evidence  is  seldom  available,  fraudulent



          intent  normally   is  determined   from  the  totality   of  the



          circumstances.  Charlie Kelton's Pontiac,  Cadillac, Oldsmobile &
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          Isuzu  Truck, Inc. v. Roberts  (In re Roberts),  82 B.R. 179, 184
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          (Bankr.  D.  Mass.  1987).   And  since  "subsequent  conduct may



          reflect back  to the promisor's  state of  mind and  thus may  be



          considered in ascertaining whether  there was fraudulent  intent"



          at  the  time the  promise was  made,  proper application  of the



          "totality"   test  in   the   instant   context  often   warrants



          consideration  of post-transaction  conduct and  consequences, as



          well as pre-transaction conduct  and contemporaneous events.  See
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          Krenowsky v. Haining (In  re Haining), 119 B.R. 460,  464 (Bankr.
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          D. Del. 1990); cf.  United States v. Rodriguez, 858 F.2d 809, 816
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          (1st  Cir. 1988) ("later events  often may shed  light on earlier



          motivations").   In  sum, the  bankruptcy court  ruling excluding



          Busconi's relevant  post-closing conduct constituted an  abuse of



          discretion.



                    Williamson   must   also   show,  however,   that   the



          evidentiary ruling adversely  affected his "substantial  rights."



          See Fed.  R. Bankr. P. 9005, 9017  (incorporating Fed. R. Civ. P.
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          61; Fed. R. Evid. 103(a)).   At a minimum, Williamson would  need



          to demonstrate clear  error in the  ultimate assessment that  the



          testimony given by Busconi  was more credible than that  given by



          Williamson.  In  light of all the evidence in  the record, we are




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          standard.  See United  States v. Cotto-Aponte, 30 F.3d  4, 6 (1st
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          Cir. 1994).



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          not  persuaded that  the  challenged  judgment was  substantially



          influenced by the erroneous evidentiary  ruling.  See Lubanski v.
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          Coleco Indus., Inc.,  929 F.2d 42, 46 (1st Cir.  1991).  As there
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          was no  clear  error  in the  bankruptcy  court's  findings,  the



          district court  judgment  is affirmed.   The  parties shall  bear
affirmed    The  parties shall  bear
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          their own costs.
their own costs.
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