United States District Court, D. Nebraska
DANIEL H. DUNKER, and RICHARD W. HILL, Plaintiffs/Appellees,
JAMES E. BACHMAN, Defendant/Appellant. ADV No. 15-08043
MEMORANDUM AND ORDER
F. BATAILLON, SENIOR UNITED STATES DISTRICT JUDGE
matter is before the court on Appellant James E.
Bachman's (hereinafter, “Bachman” or
“the debtor”) appeal of an order of the United
States Bankruptcy Court in the matter of Dunker and Hill
v. Bachman, 15 BK-80069, 15AP8043 (Bankr. D. Neb.)
(hereinafter, “Adv. P.”). Bachman appeals the
bankruptcy court's order denying a discharge of his debts
under 11 U.S.C. § § 727(a)(2)(A) and
subsequent denials of motions to reconsider that
order. Adv. P. Filing Nos. 102, 104, 108. The
bankruptcy court found that certain judgment debt owed to the
appellees Dunker and Hill was excepted from discharge in
Bachman's bankruptcy. For the reasons set forth below,
the court affirms the decision of the bankruptcy court.
record shows that Appellees Daniel H. Dunker and Richard W.
Hill (“the creditors”) each received judgments
against Bachman and his company Eran Industries, Inc.,
(“Eran”) in State Court Litigation in 2014 for
amounts due on certain promissory notes and loan guarantees.
Hill obtained a judgment in the amount of $175, 589.04 and
Dunker obtained a judgment in the amount of $213, 354.79,
plus post-judgment interest. Those judgments were final and
unappealable at the time Bachman filed his petition in
bankruptcy on January 19, 2015.
and Hill filed an adversary complaint against Bachman in
bankruptcy court seeking a determination of dischargeability
of debt and objecting to a discharge. In the parties'
Joint Pretrial Statement, Bachman admitted to making the
following transfers during the months leading up to his
bankruptcy filing: (1) on August 21, 2014, Mr. Bachman deeded
his interest in his residence, located at 1138 South 185th
Circle, Omaha, Nebraska, to his wife Adella Bachman; (2) in
August, 2014, he transferred his interest in a 2002 Chevrolet
Trailblazer; his 50 percent interest in a 2003 Chevrolet
Suburban; and his 50 percent interest in a 2005 Cobalt Boat
to his wife Adella Bachman; (3) in August or September, 2014,
the Defendant removed his name from the First Westroads Bank
Checking Account held with his wife Adella Bachman thereby
relinquishing any ownership interest in that account; and (4)
in October, 2014, the Defendant transferred Berkshire B stock
or the proceeds from sale of such stock that he owned to his
wife Adella Bachman. See Adv. P., Filing No. 49.
There is no dispute that all of these transfers were made
just a couple of months before he filed bankruptcy and that
all were transfers of property that was owned or controlled
solely by Bachman prior to the transfers.
bankruptcy court found Dunker and Hill had established by a
preponderance of the evidence that Bachman transferred his
interests in property to his wife within one year before
filing his bankruptcy petition, with the intent to hinder,
delay, or defraud creditors, and was thus not entitled to
discharge the debt. The bankruptcy court's decision was
based on stipulated facts and on evidence from a hearing held
on December 18, 2014, in Douglas County, Nebraska, District
Court. In that hearing, a proceeding to determine garnishee
liability, Bachman testified as follows:
Q. I'll rephrase my question. Did you intend to thwart
the plaintiffs' efforts to recover assets by transferring
them out of your immediate name?
P., Filing No. 83-5, Declaration of Lauren R. Goodman, Ex. C
at 23. Finding an explicit statement of intent to defraud
creditors, supported by the weight of circumstantial
evidence, the bankruptcy court stated that “[t]he
evidence before the court overwhelmingly indicates
[Bachman's] actions were intended to benefit and protect
himself and his family's lifestyle at the expense of Dr.
Dunker and Dr. Hill.” Adv. P., Filing No. 102, Order at
6. In denying Bachman's motion for reconsideration of
that order, the bankruptcy court stated:
The motion to reconsider/motion for new trial (Fil. #105) is
denied. Defendant's argument that he did not have
fraudulent intent in making the transfers because he was
purportedly trying to protect other creditors rings quite
hollow. Defendant clearly and unequivocably on several
occasions admitted to making the transfers to prevent the
plaintiffs from executing on the assets. Having fraudulent
intent as to some creditors but not others is simply not a
defense. It is difficult to imagine a more clear case for
denial of discharge.
Adv. P., Filing No. 108 (text order).
appeal, Bachman, who is an attorney and is representing
himself, argues that the transfers were made in good faith
without the intent to defraud creditors. He also argues that
Dunker and Hill suffered no injury by his conduct, because
there was little value in the assets he allegedly
fraudulently conveyed. He states that his intent was not
fraudulent because he had a “subjective belief”
that a bank had a security interest on all of his personal
property and that the transferred property was fully
encumbered and of no value to the creditors. He argues that
his underlying motive for the transfers “was not to
preserve the assets for himself or his wife, but to prevent a
voracious creditor from causing immediate and severe harm to
other creditors.” Filing No. 14, Reply Brief