World Fuel Services, Inc. v. Andrew Martin ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 30 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
WORLD FUEL SERVICES, INC., No. 21-35233
Plaintiff-Appellant, D.C. No. 3:16-cv-02303-MO
v.
MEMORANDUM*
ANDREW M. MARTIN,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Oregon
Michael W. Mosman, District Judge, Presiding
Argued and Submitted May 13, 2022
Portland, Oregon
Before: HURWITZ and SUNG, Circuit Judges, and RAYES,** District Judge.
World Fuel Services, Inc., appeals the district court’s judgment after a bench
trial in favor of Andrew Martin. World Fuel, a creditor of Evergreen Holdings, Inc.
(“Holdings”), alleged that a transfer that Holdings made to Martin in exchange for
a loan Martin made to Holdings’s struggling subsidiary, Evergreen Aviation
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Douglas L. Rayes, United States District Judge for the
District of Arizona, sitting by designation.
(“Aviation”), was a fraudulent conveyance under Or. Rev. Stat. § 95.240(1). The
district court found that the transfer was not fraudulent because 1) Holdings
received “reasonably equivalent value” for the transfer as part of an integrated
transaction, or 2) Holdings received reasonably equivalent value because it
indirectly benefited from Martin’s loan to Aviation; and that, regardless, 3) Martin
was a good-faith transferee under Or. Rev. Stat. § 95.270(5)(a).
We have jurisdiction of World Fuel’s appeal under 28 U.S.C. § 1291. “The
district court’s findings of fact after a bench trial are reviewed for clear error, and
its conclusions of law are reviewed de novo.” Huhmann v. Fed. Express Corp., 874
F.3d 1102, 1106 (9th Cir. 2017). “Clear error review is deferential to the district
court, requiring a ‘definite and firm conviction that a mistake has been made.’”
Husain v. Olympic Airways, 316 F.3d 829, 835 (9th Cir. 2002) (citation omitted),
aff’d, 540 U.S. 644 (2004). We affirm on all grounds cited by the district court,
although any single one would be sufficient to uphold the judgment.
1. The district court did not clearly err in finding that Holdings received
reasonably equivalent value for the transfer because it was part of an integrated
transaction. We reject World Fuel’s contention that an integrated transaction
requires evidence that “all parties” (not just all relevant parties) knew of the
multiple transactions and intended that they be dependent on each other. In re
Adelphia Communications Corp., 512 B.R. 447, 491 (Bankr. S.D.N.Y. 2014), upon
2
which World Fuels relies, does not impose such a stringent requirement. The
record establishes that the district court considered the documentary evidence and
witness testimony, and its determination that the transfer was part of an integrated
transaction is plausible in light of the record viewed in its entirety.1
2. The district court did not clearly err in finding that Holdings received
an indirect benefit from Martin’s loan to Aviation, which enabled the completion
of the Aviation restructuring deal. Holdings received “value” from Martin’s loan to
Aviation (Holdings’s subsidiary) because Holdings’s expectation of benefit from
Aviation’s restructuring was “legitimate and reasonable.” See In re Renegade
Holdings, Inc., 457 B.R. 441, 445 (Bankr. M.D.N.C. 2011). We reject World
Fuel’s contention that Aviation’s insolvency meant that Holdings could not
indirectly benefit from the loan. Aviation’s insolvency meant only that Holdings
was not entitled to a presumption that Holdings indirectly benefited from the loan
to Aviation. See id. The district court did not err by considering evidence that
Holdings indirectly benefited from the loan to Aviation, despite Aviation’s
insolvency.
1
World Fuel also argues the district court erred by finding an integrated
transaction because the documentary evidence does not, in and by itself, establish
the required intent and integration. There is, however, no rule requiring conclusive
documentary evidence of an integrated transaction. In Adelphia, the court found
certain testimony lacked credibility; it did not preclude reliance on credible
testimony. See 512 B.R. at 490, 493.
3
3. Finally, the court did not err in finding that Martin is entitled to rely
on the statutory good faith lien defense, Or. Rev. Stat. § 95.270(5)(a). World Fuel
argues this defense is not available to Martin as a matter of law because he did not
give value directly to Holdings. The statute provides: “Notwithstanding voidability
of a transfer or an obligation under ORS 95.200 to 95.310, a good-faith transferee
or obligee is entitled, to the extent of the value given the debtor for the transfer or
obligation, to . . . [a] lien on or a right to retain any interest in the asset transferred .
. . .” Id. The statute does not require that value be given directly to the debtor. Nor
does In re Johnson, 357 B.R. 136 (Bankr. N.D. Cal. 2006), which involved a
different statute (the Bankruptcy Code), materially different factual circumstances,
and did not concern whether a good-faith transferee may give “value to the debtor”
indirectly. See id. The district court found that Martin acted with subjective good
faith, and that finding is not clear error.
AFFIRMED.
4