Cadleway Properties v. Cox ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
June 3, 2003
For the Fifth Circuit
Charles R. Fulbruge III
Clerk
No. 02-41538
Summary Calendar
In the Matter of: GEORGE THOMAS COX
Debtor
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CADLEWAY PROPERTIES,
Appellant,
VERSUS
GEORGE THOMAS COX,
Appellees.
Appeal from the United States District Court
For the Eastern District of Texas, Tyler Division
(6:01-CV-576)
Before JONES, STEWART, and DENNIS, Circuit Judges.
PER CURIAM:*
Appellants Cadleway Properties (“Cadleway”) appeals the
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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bankruptcy court’s grant of summary judgment, affirmed by the
district court, in its suit against George Thomas Cox (“Cox”)
seeking to prevent the discharge of Cox’s debts pursuant to 11
U.S.C. § 727(a)(2)(A). We review the bankruptcy court’s factual
findings for clear error and its legal conclusions de novo. In re
Luce, 960 F.2d 1277, 1280 (5th Cir. 1992) (per curiam).
§ 727(a)(2)(A) states:
The Court shall grant the debtor a discharge, unless–
the debtor, with intent to hinder, delay or defraud a
creditor...has transferred, removed, destroyed,
mutilated, or concealed, or has permitted to be [the
same]--
property of the debtor, within one year before the
date of filing of the petition.
11 U.S.C. § 727(a)(2)(A). The bankruptcy court and the district
court granted summary judgment to Cox because they determined that
the properties challenged by Cadleway were not the properties of
Cox, but rather the separate property of his wife Kristi Cox. The
lower courts based this decision on the fact that Cox paid for her
property investments out of her separate funds.1 Edsall v. Edsall,
1
Both below and here Cadleway points to a series of bankruptcy
decisions in which courts applied § 727. In re Penner,107 F.R. 171
(Bankr. N.D. Ind. 1989); Metropolitan Petroleum Co. v. Frumovitz
(In re Frumovitz), 10 B.R. 61 (Bankr. S.D. Fla. 1988); Teilhaber
Mfg. Corp. v. Hodge (In re Hodge), 92 B.R. 919 (Bankr. D. Kan.
1988); In re Elliott, 83 F. Supp. 771 (E.D. Pa. 1948). But as the
district court noted, in those cases, unlike here, the bankrupt
spouse transferred his property interest to the non-bankrupt
spouse, or used the non-bankrupt spouse to conceal the bankrupt
spouse’s continued property interest. Here, Cox never had a
property interest in Kristi’s property.
2
240 S.W.2d 424, 426 (Tex. Civ. App. 1951) (holding that presumption
of common marital property is overcome with evidence that property
was paid for by separate funds of spouse).
On appeal Cadleway argues that because Cox is entitled to a
right of reimbursement for his work in Kristi Cox’s property
investments, those properties should be treated as Cox’s for the
purposes of § 727. TEX. FAM. CODE § 3.408 (Vernon Supp. 2003)
(granting right of reimbursement for spouse for inadequate
compensation for “time, toil and effort” of spouse in business
arrangement). Even assuming arguendo that the right of
reimbursement at divorce is property in terms of § 727, here Cox
does not enjoy that right because of a pre-marital agreement
between himself and Kristi Cox in which he relinquished his
statutory rights. Thus, there is no “property of the debtor”
involved here, preventing § 727 from being triggered.2
The judgment of the district court is AFFIRMED.
2
To the extent that Cadleway seeks to challenge the bankruptcy
court’s determination that the Cox’s home was exempt property for
§ 727 purposes, that argument is waived for inadequate briefing.
L & A Contracting Co. v. Southern Concrete Servs., 17 F.3d 106, 113
(5th Cir. 1994).
3