Brian Shapiro v. Barbara Henson
739 F.3d 1198
9th Cir.2014Background
- Bankruptcy petition filed August 7, 2009; Henson had a checking account with $6,955.19 at petition time.
- Henson wrote checks pre-petition; those checks were honored after filing.
- October 2, 2009, Shapiro demanded turnover of $6,155.19; November 3 Henson denied possession.
- November 11, 2009, Shapiro filed turnover motion under §542(a).
- Bankruptcy court denied turnover for lack of possession at filing; district court affirmed; NACBA filed amicus brief.
- Precedent in opinion holds turnover may reach property or value from entities possessing estate property during the case, not only at filing; final amount subject to adjustments (e.g., exempt amounts, transfers to counsel).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of §542(a): can turnover reach value from non-possessing entities? | Shapiro: can seek value if entity possessed during case. | Henson: requires current possession at filing. | Yes; may seek value from entity that possessed during the case. |
| Role of pre-Code practice in interpreting §542(a) | Pre-Code practice supports no current-possession requirement. | No clear guidance from pre-Code practice. | Pre-Code practice corroborates trustee may pursue turnover even if not in possession at filing. |
Key Cases Cited
- United States v. Buckland, 289 F.3d 558 (9th Cir. 2002) (statutory language guiding interpretation of turnover statute)
- Hallstrom v. Tillamook Cnty., 493 U.S. 20 (1989) (statutory interpretation principles)
- Beaman v. Vandeventer Black, LLP (In re Shearin), 224 F.3d 353 (4th Cir. 2000) ('during the case' refers to the entire bankruptcy case)
- Newman v. Schwartzer (In re Newman), 487 B.R. 193 (9th Cir. B.A.P. 2013) (possession, custody, or control during the case)
- Jubber v. Ruiz (In re Ruiz), 455 B.R. 745 (10th Cir. B.A.P. 2011) (discussion of 'or the value of such property')
- In re U.S.A. Diversified Prods., Inc., 193 B.R. 868 (Bankr. N.D. Ind. 1995) (pre-Code turnover methods and possession concepts)
- In re Pyatt, 486 F.3d 423 (8th Cir. 2007) (discussion of possession and turnover scope)
- In re Luma Camera Serv., Inc., 333 U.S. 56 (1948) (pre-Code possession requirements by proceeding type)