443 F.3d 767 | 11th Cir. | 2005
Joel L. Tabas (the “Trustee”), acting as bankruptcy trustee for the estate of International Pharmacy & Discount II, Inc. (the “Debtor”), appeals the district court’s reversal of a bankruptcy court order that set aside $14,103.83 in payments made to ap-pellees Westgate Vacation Villas, Ltd. and Westgate Lakes, Ltd. (collectively, “West-gate”). The bankruptcy court set aside the payments as fraudulent transfers of the Debtor’s property, pursuant to 11 U.S.C. § 544(b) and Florida Statutes § 726.105(l)(b).
The central issue in the appeal is whether there is sufficient evidence to conclude that the transfers involved the property of the Debtor, given that the transfers were made from an account held by an entity named Internacional Pharmacy Inc. II (“Internacional”), while the Debtor’s name is International Pharmacy & Discoimt II. While the bankruptcy court entered judgment for the Trustee, finding that the funds in question belonged to the Debtor, the district court reversed, holding that the record contained insufficiently clear evidence to conclude that International was a mere misnomer for Internacional.
On appeal, the Trustee argues that the district court improperly overturned the bankruptcy court’s reasonable finding of fact that the account at issue was owned by the Debtor, thus ignoring the latitude afforded the lower court’s findings under clear error review. We agree, and reverse the district court, reinstating the bankruptcy court’s order.
BACKGROUND
Tony Novoa and Drumnia MiquezANo-voa (the “Novoas”) were the principals of the named Debtor. Aside from the named Debtor (International Pharmacy & Discount II, Inc.), the Novoas controlled four other Florida corporations with similar names: (1) Internacional Pharmacy Inc. II; (2) International Pharmacy & Discount, Inc.; (3) International Pharmacy and Discount, Inc. Ill; and (4) International RX Plus, Inc. None of these four corporations have filed for bankruptcy protection.
Before the Debtor’s bankruptcy petition was filed, the Novoas made the two transfers at issue from a BankAtlantic account held by Internacional. As a result of these transfers, Westgate received a total of $14,103.83.
The Debtor filed a bankruptcy petition, listing its name as International Pharmacy & Discount II, Inc., even though no such corporation has ever existed or been incorporated in Florida. Nonetheless, the federal tax number which the named Debtor provided in its bankruptcy petition identically matches the tax number for Interna-cional. Furthermore, the Debtor listed the BankAtlantic account held by Interna-cional as one of its assets in the statement of financial affairs filed in its bankruptcy proceedings.
The district court reversed the bankruptcy court, finding that the record did not contain sufficient evidence to support a finding that Internacional was simply a misnomer for International. Comparing the record in this case to other decisions in which the petition erroneously misnamed the debtor, the district court found that there was insufficient evidence to conclude that “International” was dearly a misnomer for “Internacional.” Moreover, the district court held in the alternative that even if International was erroneously substituted for Internacional, the Trustee did not establish that Internacional controlled the funds in the account at issue. Specifically, while Internacional did have legal title, the district court held that the Trustee also would be required show that In-ternacional actually had control over those funds, as the record here only indicated that one of the Debtor’s principals had made transfers from the Internacional account for purposes unrelated to either the Debtor or Internacional.
The Trustee timely appeals.
STANDARD OF REVIEW
As the second court to review the bankruptcy court’s judgment, we examine the bankruptcy court’s order independently of the district court. In re Bilzerian, 153 F.3d 1278, 1281 (11th Cir.1998). Specifically, we review determinations of law made by either the district or bankruptcy court de novo, while reviewing the bankruptcy court’s findings of fact for clear error. In re Int'l Admin. Servs., 408 F.3d 689, 699 (11th Cir.2005); In re Fin. Federated Title & Trust, Inc., 309 F.3d 1325, 1328-29 (11th Cir.2002). The bankruptcy court’s findings of fact are not clearly erroneous unless, in light of all the evidence, we are left with the definite and firm conviction that a mistake has been made. In re Cox, 338 F.3d 1238, 1241 (11th Cir. 2003).
DISCUSSION
Under 11 U.S.C. § 544(b), a trustee in bankruptcy may “step into the shoes” of an unsecured creditor and void a transfer of an interest in the debtor’s property that the unsecured creditor would have the power to void under federal or state law. See In re Graham, 747 F.2d 1383, 1386-87 (11th Cir.1984). In addition, Florida law provides that a transfer made by a debtor is voidable as fraudulent where the debtor made the transfer: (i) -without receiving reasonably equivalent value in exchange; (ii) and reasonably should have believed it would incur debts beyond its ability to pay as they came due. See Fla. Stat. § 726.105(l)(b).
In this case, the district court reversed the bankruptcy court’s factual finding that the transfer involved the debtor’s property based what it termed a lack of “certainty” as to the relationship between International and Internacional. However, this lack of “certainty” does not render the bankruptcy court’s findings clearly erroneous. See In re Cox, 338 F.3d at 1241 (11th Cir.2003) (bankruptcy court’s factual findings are not clearly erroneous unless they leave the firm and definite impression that a mistake has been made). Furthermore, the Trustee was only required to prove that the transfer involved the Debt- or’s property by a preponderance of the evidence. In re Am. Way Serv. Corp., 229 B.R.. 496, 525 (Bankr.S.D.Fla.1999). The bankruptcy court found that standard satisfied based on evidence that the Debtor’s tax identification number matched the number for Internacional, and that one of the Novoas (who controlled the Debtor) authorized the transfers at issue. In light of this evidence, and given the limited nature of our clear error review, we cannot agree that the bankruptcy court’s factual finding concerning the misnomer of the Debtor was clearly erroneous.
In the alternative, the district court held that even if Internacional could be substituted for International, there was insufficient record evidence to show that Internacional controlled the funds at issue. However, as the district court recognized, funds in a debtor’s account are generally presumed to be the debtor’s property. See Nat’l Bank of Ga. v. Kennesaw Life & Accident Ins. Co., 800 F.2d 1542, 1545 (11th Cir.1986) (recognizing that in most states the name or title to a bank account creates a presumption of ownership in the titleholder); cf. Beal Bank, SSB v. Almand & Assocs., 780 So.2d 45, 58-59 (Fla. 2001) (holding that where bank account titled in the names of two married persons, a presumption arises that both hold the funds in the account as a tenancy by the entirety). While the district court was troubled by the lack of evidence that Internacional actually exercised control over the account, coupled with evidence that one of the Novoas did actually exercise control over the account, we found no cases which suggest that a principal’s exercise of control over a Debtor’s account negates the presumption that the account funds remain property of the Debtor. Given that Internacional held legal title to the account, and given the lack of evidence sufficient to rebut the presumption that Internacional controlled the account funds, the district court’s alternative holding regarding control of the funds proves insufficient to sustain its judgment.
As we conclude that sufficient record evidence supports the Debtor’s control over the funds, and also conclude that the bankruptcy court’s factual findings concerning misnomer of the Debtor are not
REVERSED.
. It is undisputed that Westgate received the transfers at issue in good faith, without knowledge of their voidability.