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In re Nguyen

United States Court of Appeals, Tenth Circuit

April 13, 2015

In re: TUNG THANH NGUYEN; PAMELA S. NGUYEN, Debtors.
v.
HOA THI PHAM; NOEL ESPLUND; LISA STIRRAT, formerly Lisa Dang, Defendants - Appellees CARL B. DAVIS, Trustee, Plaintiff - Appellant,

Page 770

Appeal from the Bankruptcy Appellate Panel. (BAP No. 13-002-KS).

Kenneth H. Jack of Davis & Jack, LLC, Wichita, Kansas, for Plaintiff-Appellant.

Alec Nguyen of Nguyen Law Offices, LLC, Wichita, Kansas, for Defendants-Appellees.

Before BRISCOE, Chief Judge, EBEL and TYMKOVICH, Circuit Judges.

OPINION

Page 771

BRISCOE, Chief Judge.

Chapter 7 bankruptcy trustee Carl Davis appeals from a decision by the U.S. Bankruptcy Court for the District of Kansas (Bankruptcy Court), which was affirmed by the U.S. Bankruptcy Appellate Panel of the Tenth Circuit (BAP). Davis sought to avoid, as a fraudulent conveyance, debtor Tung Nguyen's transfer to his sister of his interest in a piece of real property. Both the Bankruptcy Court and the BAP concluded that Nguyen possessed only bare legal title to the property and that such an interest is not one that may be avoided under the Bankruptcy Code, 11 U.S.C. § 548(a)(1)(B). Exercising jurisdiction pursuant to 28 U.S.C. § 158(d)(1), we affirm the Bankruptcy Court's decision.

I

This case stems from several transactions related to a single piece of real property in Reno County, Kansas. On September 26, 2007, Hoa Thi Pham purchased the property in joint tenancy with her friend (now common-law husband) Noel Esplund, with Pham contributing two-thirds of the approximately $170,000 purchase price and Esplund contributing one-third. Two days after purchasing the land, Pham and Esplund conveyed the property to Esplund and to Pham's children, Tung Nguyen and Lisa Dang (now Lisa Stirrat), as joint tenants with rights of survivorship.

On May 29, 2008, Nguyen transferred his interest in the land to Dang and Esplund via a quitclaim deed for no compensation.[1] Almost one year later, on May 27, 2009, Nguyen and his wife Pamela filed for Chapter 7 bankruptcy protection. The trustee for Tung Nguyen's bankruptcy estate, Carl Davis, filed a complaint against Pham, Esplund, and Dang in Bankruptcy Court on January 26, 2011. The complaint sought to avoid the transfer of Nguyen's interest in the property to the defendants Dang and Esplund under 11 U.S.C. § 548(a)(1)(B),[2] alleging that Nguyen

Page 772

transferred his interest in the Reno County property less than two years before filing for bankruptcy, that he was insolvent at the time of the transfer, and that he received less than reasonably equivalent value for the property.

After an evidentiary hearing, the Bankruptcy Court concluded that Nguyen possessed only bare legal title to the property and that his mother possessed equitable ownership of his one-third share. The court concluded that Pham's transfer to her children fell under a provision of Kansas law that allows a resulting trust to form when one party (the payor) provides the consideration for a piece of property, but enters into an agreement with another non-paying party " without fraudulent intent" for the non-paying party to hold the property in trust for the payor. Kan. Stat. Ann. § 58-2408. Specifically, the court determined that Pham and Nguyen had such an agreement based on the testimony provided by Pham and Nguyen about the circumstances of the transfer. After subsequent briefing, the Bankruptcy Court concluded that bare legal title, when transferred for no consideration, is not an " interest in property" that may be avoided under § 548(a)(1)(B) and denied Davis's requested relief. In ...


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