Robert G. Zepecki v. Bonnie L. Harlan ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 97-2184
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In re: Robert G. Zepecki *
*
Debtor, *
*
------------------- *
*
Robert G. Zepecki, *
* Appeal from the United States
Petitioner-Appellant, * District Court for the
* Eastern District of Arkansas.
v. *
* [UNPUBLISHED]
Bonnie L. Harlan; *
*
Respondent-Appellee, *
*
David D. Coop, *
*
Trustee-Appellee. *
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Submitted: March 6, 1998
Filed: March 30, 1998
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Before McMILLIAN, BEAM, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
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PER CURIAM.
Robert G. Zepecki appeals from the district court&s1 affirmance of the bankruptcy
court&s2 grant of Bonnie L. Harlan&s motion to convert Zepecki&s Chapter 13 proceeding
to a Chapter 7 proceeding. We affirm.
Zepecki commenced a voluntary Chapter 7 bankruptcy proceeding, which he
successfully converted to a Chapter 13 proceeding. Harlan, Zepecki&s ex-wife, moved
to convert her ex-husband&s Chapter 13 proceeding back to a Chapter 7 proceeding, on
the ground that Zepecki had attempted to hide a real estate transaction and the disposal
of its proceeds during a Chapter 7 meeting of creditors. Following a hearing, at which
Zepecki testified, the bankruptcy court found that Zepecki&s conduct warranted
conversion of his proceeding, and granted the motion. On appeal, Zepecki argues that
the bankruptcy court&s findings of fact and conclusions of law were so vague that they
failed to comply with Fed. R. Civ. P. 52(a) and, alternatively, that the bankruptcy
court&s findings of fact were clearly erroneous.
We conclude Zepecki&s argument that the bankruptcy court&s findings of fact and
conclusions of law fail to comply with Fed. R. Civ. P. 52(a) is without merit. See
Bankruptcy Rule 7052; Newton County Wildlife Ass&n v. United States Forest Service,
113 F.3d 110, 114 n.5 (8th Cir. 1997), cert. denied, 66 U.S.L.W. 3355 (U.S. Feb. 23,
1998) (No. 97-774).
We also conclude the bankruptcy court&s determination that Zepecki filed his
bankruptcy petition in bad faith is not clearly erroneous. See Wegner v. Grunewaldt,
821 F.2d 1317, 1320 (8th Cir. 1987) (standard of review). Within ten weeks before
1
The Honorable William R. Wilson, Jr., United States District Judge for the
Eastern District of Arkansas.
2
The Honorable James G. Mixon, Chief Judge, United States Bankruptcy Court
for the Eastern District of Arkansas.
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filing his bankruptcy petition, Zepecki transferred to an Alabama attorney
$102,989.17, representing the proceeds of the sale of real estate he owned in Illinois.
This transfer occurred within a month after Zepecki&s ex-wife obtained a divorce
judgment for one-half of the amount of debt reduction on the property. Zepecki
admitted he did not list the proceeds of the sale or the transfer, but instead represented
that a corporation he owned had completed the real estate transaction. He testified that,
at the time he filed the petition, the sale proceeds had gone toward an intended
purchase of another property. The bankruptcy court stated it disbelieved Zepecki&s
testimony concerning the proceeds, and noting the proximity between the divorce
decree, the transfer, and Zepecki&s bankruptcy filing, concluded Zepecki had “shown
every indication of dealing dishonestly with his creditors.” Those determinations
support a finding of bad faith warranting conversion. See In re Molitor, 76 F.3d 218,
221 (8th Cir. 1996) (affirming bankruptcy court&s finding of bad faith where it was
“undisputed at the motion hearing that [debtor] misrepresented both his tax liabilities
and his monthly rent expenses on his schedules”); cf. In re Smith, 848 F.2d 813, 821
(7th Cir. 1988) (noting, in 11 U.S.C. § 1325 case, that courts have found debtors&
conduct in filing for bankruptcy soon after entry of judgment indicates desire to
manipulate bankruptcy procedures to avoid paying debt).
Accordingly, the judgment is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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