|In re RAEJEAN BONHAM, aka Jean Bonham, aka Jeannie Bonham, dba World Plus; WORLD PLUS, INC., an Alaska corporation; and ATLANTIC PACIFIC FUNDING CORP., a Nevada corporation,
LARRY D. COMPTON, Trustee,
RANDY N. MAAG and ALENE MAAG-WOODS, aka Alene Woods,
|Case No. F95-00897-HAR
In Chapter 7
ADV PROC NO F95-00897-099-HAR
MEMORANDUM DECISION REGARDING TRUSTEES
MOTION FOR FINAL JUDGMENT AND VARIOUS PENDING MOTIONS
2.1. Procedural History
2.2. Summers v Hagen and the Transferees Intent
2.3. AS 34.40.010
2.4. Ponzi Scheme
2.5. Miscellaneous Motions Joined in by Defendants are Denied
2.6. Calculation of Judgment
1. INTRODUCTION- The court has already entered a final judgment in this case and the Maags have appealed to the U.S. District Court. The parties have agreed, however, that: (a) the Maags will withdraw their appeal; (b) the court will vacate its final judgment so it can enter this Memorandum more fully explaining its rulings; and, (c) then reenter a final judgment.
2.1. Procedural History- Plaintiff Larry Compton, the trustee, moved for entry of final judgment against defendants Randy Maag and Alene Maag for the amounts they individually received from the debtors which exceed their respective investments ("net gain") as fraudulent conveyances under Alaska law. Based upon the trustees motion for summary judgment, filed in this proceeding, and the companion global motion filed in the Bonham Recovery Actions adversary proceeding (the BRA), the court entered a final judgment in favor of the trustee and against defendants for their net gain.
2.2. Summers v Hagen and the Transferees Intent- At oral argument, the court expressed its opinion that it was not necessary for the trustee to plead or prove under Alaska law that a recipient of an actual fraudulent transfer participated in the fraudulent transfer with the actual intent to hinder, delay or defraud the transferors creditors. The court adopts those statements made at oral argument, including its finding that Summers v Hagen does not add any additional elements to a claim of fraudulent conveyance, but is limited to a common law for conspiracy to participate in a fraudulent conveyance. Under Alaska law it is the actual intent of the transferor, the debtors in this matter, that alone determines whether the transfer was fraudulent.
2.3. AS 34.40.010- Defendants have also joined in motions challenging the application of AS 34.40.010 to a fraudulent transfer of money. I have previously stated my intention to deny these motions, have done so in individual BRA adversaries, and now do so specifically in this adversary proceeding.
In reference to the conveyance of property in fraud of creditors, 12 R. C. L. 505, § 35, states the rule as follows, relative to exempt property: "In the past, there has been some confusion as to what the phrase 'goods and chattels' as used in the statute of 13 Elizabeth includes. It may be stated as a general rule, however, that the statute applies to all property which may be subjected to the payment of debts, and to no other; . . . .
Where the legislative history of Alaska is scant or absent, and the interpretation of the law in the state from which the Alaska statute was copied is itself not informative, a federal court must look elsewhere.
When interpreting state law, federal courts are bound by decisions of the state's highest court. In the absence of such a decision, a federal court must predict how the highest state court would decide the issue using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance.
The comment in the Oregon case of Stewart v Black on the expansive breadth of the property covered by fraudulent transfer laws is confirmed by the leading commentators on the subject of fraudulent conveyances. For example, Orlando Bump stated:
Kind of Property In respect to the kind of property which may be the subject of a fraudulent transfer, the statute [13 Elizabeth, ch 5] extends to lands, tenements, hereditaments, goods and chattels, and any lease, rent, common or other profits or charge out of land, tenements, hereditaments, goods or chattels. It is important, however, to bear in mind that the common law has not been repealed, and consequently will reach every species of property not included in this enumeration. The source from which the debtor derived the property is wholly immaterial. If the transfer is fraudulent, the grantee can not retain the property on the ground that it has no value.
And, the comments of renowned Garrard Glenn lead to the inference that judicial activism is not just a modern phenomenon:
§ 138. The Universal Rule of To-day, That Creditors Can Attack the Fraudulent Conveyance of Every Asset, Tangible or Intangible.
The variations above mentioned [discussing the ancient distinction between law and equity] are of historical interest only, because, through judge-made laws, or by aid of statute, the creditor is relieved of subtle distinctions as to the nature of property.
2.4. Ponzi Scheme- In other adversary proceedings in which I have entered final judgments against BRA adversary defendants, the court has granted the trustees motion for partial summary judgment that the debtors operated a Ponzi scheme as an adjunct to proving his case. The court has concluded (and, defendants in this case do not contest) that there is no genuine disputed issue of material fact that debtors operated a Ponzi scheme for the years relevant to the trustees claims against the defendants.
2.6. Calculation of Judgment- The parties agree that Randy Maag invested a total of $30,000 and received a total of $50,000, for a net gain of $20,000. The parties also agree that Alene Maag received $63,500 from Bonham. There is no overlap between the monies received by Randy Maag and Alene Maag. Defendants contend that Alene Maag invested $20,000 with RaeJean Bonham, but there is no evidence of such investment. Ms. Maag was under an affirmative obligation on summary judgment to submit admissible evidence demonstrating a genuine issue of material fact as to the amounts invested. Having failed to provide any admissible evidence of the amounts invested by Ms. Maag, summary judgment is appropriate that Randy Maag had a net gain of $20,000 and Alene Maag had a net gain of $63,500.
3. CONCLUSION- A separate order will be entered that the judgment will be vacated, provided that the defendants stipulate to vacate their pending appeal. If they do, the court will enter a new judgment, based on this Memorandum, giving the defendants thirty days to file a new appeal.
DATED: March 10, 2000
/s/HERBERT A. ROSS
U.S. Bankruptcy Judge
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 Motion for Partial Summary Judgment that Debtor Operated a Ponzi Scheme; and on Fraudulent Conveyance Causes of Action; and for Rule 54(b) Final Judgment for Preference Recipients and Against "Net Gainers" to the Extent of Their Net Gains, filed in the Bonham Recovery Actions, Adv. No. F95-00897-168-HAR (BANCAP 96-4281), at Docket Entry 318 on January 9, 1998.
 Opposition to Motion for Summary Judgment on Net Gain; Defendants Motion for Summary Judgment on State Court Fraudulent Conveyance and Common Law Fraud Claim and Defendants Motion to Dismiss for Failure to State a Claim for Fraud, Docket Entry 31, filed November 19, 1999.
 See, footnote 3.
 Motion for Partial Judgment on the Pleadings and Memorandum of Law, BRA Docket Entry 42, filed January 13, 1997 [Original motion filed at Docket Entry 4, in Compton v. Gayle Garrigues, Adv-026 (Bancap 96-4134)]; Defendants' Motion to Dismiss Complaint for Failure to State a Claim, BRA Docket Entry 94, filed March 21, 1997 [Original duplicate of motion filed at Docket Entry 7 in Compton v. Gerard Uphues, et al, Adv-161 (Bancap 96-4274)].
 Carters Code (1900), § 130, et seq: Compiled Laws of Alaska (1913), § 556, et seq; Compiled Laws of Alaska (1933), § 2872, et seq; Compiled Laws of Alaska - Annotated (1947), Vol 1, § 22-4-1, et seq.
 See, footnote 3.
 Hayes v Palm Seedlings Partners-A (In re Agricultural Research and Technology Group, Inc.), 916 F2d 528, 534 (9th Cir 1990); Jobin v Ripley (In re M&L Business Machines Co., Inc.), 198 BR 800, 806 (D Colo 1996); Martino v Edison Worldwide Capital (In re Randy), 189 BR 425, 438 (Bankr ND Ill 1995); Merrill v Abbott (Independent Clearing House Co.), 77 BR 843, 860 (D Utah 1987); Plotkin v Pomona Valley Imports, Inc. (In re Cohen), 199 BR 709, 717 (9th Cir BAP 1996); In re Taubman, 160 BR 964, 983 (Bankr SD Ohio 1993).
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