In Re Alan Bernard, Linda Bernard, Debtors. Alan Bernard, Linda Bernard v. Clement Sheaffer, Mary Sheaffer

96 F.3d 1279 65 USLW 2255 , 36 Collier Bankr.Cas.2d 1585 , 96 Cal. Daily Op. Serv. 7157 , 96 Daily Journal D.A.R. 11 ,749 In re Alan BERNARD, Linda Bernard, Debtors. Alan BERNARD, Linda Bernard, Appellants, v. Clement SHEAFFER, Mary Sheaffer, Appellees. No. 94-56504. United States Court of Appeals, Ninth Circuit. Argued and Submitted April 8, 1996. Decided Sept. 25, 1996. Richard M. Moneymaker, Moneymaker & Kelley, Los Angeles, CA, for debtors-appellants. Jamie R. Schloss, Los Angeles, CA, for appellees. Appeal from the United States District Court for the Central District of California, Audrey B. Collins, District Judge, Presiding. D.C. No. CV 94-01453 ABC. Before: O'SCANNLAIN and TROTT, Circuit Judges, and VAN SICKLE, District Judge. * Opinion by Judge TROTT; Dissent by Judge O'SCANNLAIN. TROTT, Circuit Judge: 1 Alan Bernard and his wife Linda argue that the district court erred when it affirmed the bankruptcy court's decision to deny discharge of the Bernards' debts under 11 U.S.C. § 727 (a)(2)(A), which provides that a bankruptcy court should not grant discharge where "... the debtor, with intent to hinder, delay, or defraud a creditor ... has transferred, removed,…

Opinion by Judge TROTT; Dissent by Judge O’SCANNLAIN.

Alan Bernard and his wife Linda argue that the district court erred when it affirmed the bankruptcy court’s decision to deny discharge of the Bernards’ debts under 11 U.S.C. § 727 (a)(2)(A), which provides that a bankruptcy court should not grant discharge where “... the debtor, with intent to hinder, delay, or defraud a creditor ... has transferred, removed, destroyed, mutilated, or concealed ... property of the debtor, within one year before the date of the filing of the petition....” We affirm the district court because the Bernards violated .this provision when they withdrew over $64,000 from money market and deposit accounts with the admitted intent to hinder the Sheaffers’ attempts to attach the Bernards’ accounts. We need not reach the other issues raised.

We have jurisdiction over the Bernards’ timely appeal under 28 U.S.C. § 158 (d). This appeal raises an issue of law which we review de novo.

Background

This case has followed a long and tortuous path and makes bankruptcy seem more like an ordeal than a fresh start. Fortunately, we need little case history to fully illuminate the dispositive issue.

*1281 Alan…

dissenting:

Because I am not persuaded that the Ber-nards “disposed of’ or “parted with” property, I respectfully dissent.

Section 727 is at the heart of the Bankruptcy Code’s provisions designed “to relieve the honest debtor from the weight of oppressive indebtedness and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.” Williams v. U.S. Fidelity Co., 236 U.S. 549, 554-55 , 35 S.Ct. 289, 290 , 59 L.Ed. 713 (1915), quoted in In re Devers, 759 F.2d 751 (9th Cir.1985). As such, it is “construed liberally in favor of the debtor and strictly against those objecting to discharge.” In re Adeeb, 787 F.2d 1339 , 1342 (9th Cir.1986).

The majority is correct to observe that the definition of “transfer” in the Bankruptcy Code is very broad; it would be a mistake, however, to read it even more broadly than it is written. “ ‘[Tjransfer’ means every mode ... of disposing of or parting with property or with an interest in property....” 11 U.S.C. § 101 (54). If there is no “disposing of’ or “parting with” property, then there is no transfer. The question in this case is whether the simple act, without more, of withdrawing money from…