Bevill v. Bevill Family Trust ( 2022 )

NOT FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
30-SEP-2022
07:51 AM
Dkt. 69 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
SPENCER JAMES BEVILL, NANCY LYNN BEVILL and
BEVILL FAMILY TRUST, Plaintiffs-Appellants,
v.
FRANK LEWIS MAURIZIO aka FRANK MAURIZIO, and
FRANK GAETANO MAURIZIO, Defendants-Appellees,
and by LINNAE SAMUELSON BELLAVER,
Nominal Defendant-Appellee
APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 17-1-0305(2))
SUMMARY DISPOSITION ORDER
(By: Leonard, Presiding Judge, Nakasone and McCullen, JJ.)
Plaintiffs-Appellants Spencer James Bevill, Nancy Lynn
Bevill, and Bevill Family Trust (collectively, Bevills) appeal
from the (1) Findings of Fact and Conclusions of Law (FOFs/COLs)
and Order by the Court and (2) Judgment in favor of Defendants-
Appellees Frank Lewis Maurizio (Maurizio) and Frank Gaetano
Maurizio (Gaetano), both filed and entered on August 7, 2019, by
the Circuit Court of the Second Circuit (Circuit Court),1
1 The Honorable Peter T. Cahill presided.
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following a jury-waived trial on fraudulent transfer claims,
under Hawaii Revised Statutes (HRS) § 651C-4.2
On appeal, the Bevills contend that the Circuit Court
erred in concluding that: (1) the two separate transfers of
real property owned by Maurizio, both by separate deeds to his
son, Gaetano, were "part of a pre-existing estate plan and not
made with the intent to defraud the Bevills from collecting on a
judgment against [Maurizio]" challenging FOF 21 and COLs 3, 4,
7, and 8; and (2) the applicable statute of limitations under
HRS § 651C-93 was violated, challenging FOFs 22-23 and COLs 5-6.
2 The Bevills' complaint alleged that Maurizio transferred his
interests in the subject property "without proper consideration and/or for
the purpose of hindering creditors."
HRS § 651C-4 (2016) provides in relevant part:
[§ 651C-4]. Transfers fraudulent as to present and
future creditors
(a) A transfer made or obligation incurred by a
debtor is fraudulent as to a creditor, whether the
creditor's claim arose before or after the transfer was
made or the obligation was incurred, if the debtor made
the transfer or incurred the obligation:
(1) With actual intent to hinder, delay, or
defraud any creditor of the debtor[.]
3 HRS § 651C-9 (2016) provides in relevant part:
[§ 651C-9]. Extinguishment of cause of action
A cause of action with respect to a fraudulent
transfer or obligation under this chapter is
extinguished unless action is brought:
(1) Under section 651C-4(a)(1), within four years
after the transfer was made or the obligation was
incurred or, if later, within one year after the
transfer or obligation was or could reasonably have been
discovered by the claimant[.]
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Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised, we resolve the
Bevills' contentions of error as follows, and affirm.
On May 5, 2002, Maurizio's father, Frank Harold
Maurizio, passed away intestate while owning a fifty percent
interest in Tax Map Key No. (2)5-1-4-27 (Property). FOFs 5 and
7.4 Maurizio's father had stated that the Property was to be
inherited by Gaetano. FOF 10. Maurizio retained an attorney to
assist in probating his father's estate and transferring the
Property. FOF 8. After receiving the attorney's advice on the
tax implications of transferring the Property directly from
Maurizio's father's estate to Gaetano, Maurizio decided to first
transfer the Property to his mother, Jean Maurizio (Jean),
through the probate estate. FOF 11. On April 10, 2008, Jean
conveyed title to the Property to Maurizio "as part of the
continued estate plan[,] with the understanding that [Maurizio]
would then convey the Property to Gaetano soon thereafter."
FOFs 13 and 14.
On May 30, 2008, the Bevills filed a Complaint against
Maurizio and other defendants in Bevill v. Maurizio et al.,
Civil No. 08-1-0293(1), for multiple tort claims (Initial
Lawsuit).5 FOF 19.
On June 8, 2009, Maurizio transferred the Property to
Gaetano by filing a deed with a reserved life estate (First
Conveyance) with the Office of the Assistant Registrar of the
Land Court, State of Hawai‘i (Land Court). FOFs 16 and 17. On
4 FOFs not challenged on appeal are binding. Kaho‘ohanohano v.
Dep't of Hum. Servs., State of Haw., 117 Hawai‘i 262, 267, 178 P.3d 538, 543
(2008).
5 The Honorable Rhonda I.L. Loo presided.
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January 31, 2011, Maurizio filed a Quitclaim of Life Estate
Interest (Second Conveyance) with the Land Court. FOF 18.
On January 23, 2012, a jury trial commenced in the
Initial Lawsuit, and on March 21, 2012, a jury entered a verdict
against all defendants. FOF 20. On February 5, 2015, a Final
Judgment in the Initial Lawsuit was entered in favor of the
Bevills and against Maurizio for $290,000.00.
On June 26, 2015, Maurizio filed for Chapter 7
bankruptcy. On October 4, 2016, the Bankruptcy Court entered a
Final Judgment that $270,000.00 of the Bevills' Final Judgment
was non-dischargeable debt.
On July 25, 2017, the Bevills filed the complaint
underlying this appeal, seeking to set aside the First and
Second Conveyances of the Property from Maurizio to Gaetano
based on fraudulent transfer (Current Lawsuit).
At the June 12, 2019 trial in the Current Lawsuit, the
Bevills were not present and did not testify. The Bevills
relied on the following exhibits to prove "intent" from a
timeline of events: the Complaint and Final Judgment filed in
the Initial Lawsuit; the records of the First and Second
Conveyance; the Chapter 7 Petition and Final Judgment entered in
Maurizio's bankruptcy case; and interrogatories of Maurizio and
Gaetano stating that the First and Second Conveyances were for
nominal consideration. On the other hand, Maurizio testified
that he did not intend to fraudulently transfer the Property;
that Maurizio contacted an estate attorney in 2005-2006, well
before the Initial Lawsuit; and the estate attorney advised
Maurizio to reserve a life estate interest despite his plan to
give the entire Property to Gaetano. Maurizio argued that the
Current Lawsuit was untimely, and that the Bevills knew that
Maurizio was not the homeowner of the Property as early as March
of 2013. The Bevills countered that HRS § 651C-9 should not
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have accrued until they definitively learned of the transfers,
and that no other explanation existed for the Second Conveyance
other than to defraud the Bevills.
On August 7, 2019, the Circuit Court made the
following relevant FOFs and COLs at issue in this appeal:
FINDINGS OF FACT
. . . .
21. The Court finds that the Maurizio family's plan to
have the Property transfer to Gaetano was in place
prior to the filing of the complaint in the 2008
Action.
. . . .
CONCLUSIONS OF LAW
. . . .
3. [The Bevills] failed to produce evidence that
Defendants fraudulently transferred the Property.
4. Defendants proved that the initial transfer of the
Property and the transfer of the life estate interest
from [Maurizio] to Gaetano were in furtherance of a
long-standing plan for the Property to be transferred
from [Maurizio's] father to Gaetano.
. . . .
7. [The Bevills] bore the burdens of proof and
persuasion. [The Bevills] failed to carry these
burdens regarding the allegations in their Complaint.
The Court concludes that the evidence adduced at trial
does not demonstrate a fraudulent transfer on the part
of Defendants.
8. Defendants did not fraudulently transfer the Property.
. . . .
The Bevills first contend that the Circuit Court erred
in finding and concluding in FOF 21 and COLs 3, 4, 7, and 8,
that the transfers from Maurizio to Gaetano were part of a pre-
existing plan and not fraudulent under HRS § 651C-4. The
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Bevills argue that Maurizio's father's intent to give the
Property to Gaetano was accomplished by the First Conveyance to
Gaetano, and that the Second Conveyance, which transferred the
life estate interest to Gaetano, was used to shield the Property
from collection. The Bevills claim that the Circuit Court
failed to consider whether Maurizio had the "intent" to defraud
under HRS § 651C-4(b)(1), (2), (4), and (5),6 as Maurizio
transferred the Property to an "insider,"7 continued to reside on
the Property, and litigation was pending during the transfers.
Additionally, the Bevills argue that the transfers were for
substantially all of Maurizio's primary assets as demonstrated
by Maurizio's bankruptcy petition.
In a fraudulent transfer case, the plaintiff bears the
burden of proving, by clear and convincing evidence, that a
fraudulent transfer occurred. Kekona v. Abastillas, 113 Hawai‘i
174, 180-82, 150 P.2d 823, 829-31 (2006). "It is that degree of
proof which will produce in the mind of the trier of fact a firm
belief or conviction as to the allegations sought to be
established, and requires the existence of a fact be highly
6 HRS § 651C-4(b) states in pertinent part:
(b) In determining actual intent under subsection (a)
(1), consideration may be given, among other factors, to
whether:
(1) The transfer or obligation was to an insider;
(2) The debtor had retained possession or control
of the property transferred after the transfer;
. . . .
(4) Before the transfer was made or obligation was
incurred, the debtor was sued or threatened with suit;
(5) The transfer was of substantially all the
debtor's assets[.]
7 HRS § 651C-1 (2016) defines "insider" as a "relative of the
debtor or of a general partner of the debtor."
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probable." Id. at 180, 150 P.2d at 829 (internal quotation
marks and citations omitted). FOF 21, in which the Circuit
Court found that Maurizio's family's "plan to have the Property
transfer to Gaetano was in place prior to the filing" of the
Initial Lawsuit was supported by Maurizio's testimony and
exhibits. Although there was evidence of some of the HRS §
651(b) factors that may be considered in determining fraudulent
intent, we conclude that substantial evidence supports FOF 21,
and we are not left with a definite and firm conviction that a
mistake has been made. See Schmidt v. HSC, Inc., 145 Hawai‘i
351, 360, 452 P.3d 348, 357 (2019) (internal quotation marks and
citations omitted) (A FOF is clearly erroneous if the record
"lacks substantial evidence to support the finding," or despite
evidence supporting the finding, "the appellate court is left
with the definite and firm conviction in reviewing the entire
evidence that a mistake has been committed."). For the same
reasons, COLs 3, 4, 7, and 8, which appear to be mixed FOFs and
COLs, where the Circuit Court concluded that the evidence did
not establish that the transfers were fraudulent, are supported
by substantial evidence and not clearly erroneous; nor are we
convinced that a mistake has been made. See Uyeda v. Schermer,
144 Hawai‘i 163, 170, 439 P.3d 115, 122 (2019) (quoting Narayan
v. Ass'n of Apartment Owners of Kapalua Bay Condo., 140 Hawai‘i
75, 83, 398 P.3d 664, 672 (2017)) ("'Where a conclusion of law
presents a mixed question of law and fact, we review this
conclusion under the clearly erroneous standard.'"); Schmidt,
145 Hawai‘i at 360, 452 P.3d at 357.
In light of our resolution of the Bevills' first
contention, it is not necessary for us to address the Bevills'
remaining contention regarding the statute of limitations.
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For the foregoing reasons, we affirm the (1) Findings
of Fact and Conclusions of Law and Order by the Court and (2)
Judgment in favor of Defendants-Appellees Frank Lewis Maurizio
and Frank Gaetano Maurizio, both filed and entered on August 7,
2019 by the Circuit Court of the Second Circuit.
DATED: Honolulu, Hawai‘i, September 30, 2022.
On the briefs:
/s/ Katherine G. Leonard
Paul V.K. Smith, Presiding Judge
(Revere & Associates),
for Plaintiffs-Appellants. /s/ Karen T. Nakasone
Associate Judge
Shauna L. Silva Bell,
(Durrett Lang, LLLP), /s/ Sonja M.P. McCullen
for Defendants-Appellees. Associate Judge
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