Thunberg v. Wallick

Filing

OPINION issued by Juan R. Torruella, Appellate Judge; Michael Boudin, Appellate Judge and Kermit V. Lipez, Appellate Judge. Published. [10-1705]

Case: 10-1705 Document: 00116199662 Page: 1

Date Filed: 04/21/2011

Entry ID: 5544845

United States Court of Appeals
For the First Circuit
No. 10-1705
IN RE: BRUCE E. THUNBERG,
Debtor.
__________
BRUCE E. THUNBERG,
Appellant,
v.
MARC D. WALLICK,
Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]
Before
Torruella, Boudin and Lipez,
Circuit Judges.
Christopher M. Lefebvre
Lefebvre, P.C. was on brief
Andrew S. Richardson
Richardson was on brief for

with whom Claude Lefebvre, Christopher
for appellant.
with whom Boyajian, Harrington &
appellee.

April 21, 2011

Case: 10-1705 Document: 00116199662 Page: 2

Per Curiam.

Date Filed: 04/21/2011

Entry ID: 5544845

Bruce Thunberg filed a Chapter 7 bankruptcy

petition in August 2000, 11 U.S.C. §§ 701-784 (2006), and Marc
Wallick was appointed trustee.

An order by the bankruptcy court

discharging Thunberg issued in December 2000, but in April 2002,
the trustee sought to revoke the discharge on the ground that it
had been procured by Thunberg's fraud.

Id. § 727(d)(2).

In August

2009, the bankruptcy court revoked the discharge, and the district
court affirmed.1

Thunberg now appeals from the revocation.

At issue is Thunberg's interest derived from a 1997
settlement agreement with his ex-wife incident to their divorce.
The settlement agreement specified that, each December for the next
15 years, his former wife would pay Thunberg $30,000--$16,666.66
being designated in the agreement as alimony and $13,333.33 being
designated as a property settlement payment. Thunberg's bankruptcy
petition listed the $160,000 over the remaining 12 years as a
property settlement, asserting that it was subject to two liens,
and listed the $1,333 per month in alimony as income.
Nevertheless, according to testimony accepted by the
bankruptcy judge, Thunberg (or his lawyer with Thunberg remaining
silent) represented to the trustee that all the payments including
the alimony were subject to the liens; he accelerated by private
agreement with his ex-wife two of the payments without advising the

1

Thunberg v. Wallick, CA. No. 09-419 S, 2010 WL 1838003
(D.R.I. May 5, 2010); Wallick v. Thunberg (In re Thunberg), 413
B.R. 20 (Bankr. D.R.I. 2009).
-2-

Case: 10-1705 Document: 00116199662 Page: 3

Date Filed: 04/21/2011

Entry ID: 5544845

trustee or the court; he used funds from two sets of payments in
part for private purposes; and--it turned out--the liens on which
he relied had not properly been perfected. The details are spelled
out in the decisions of the bankruptcy and district courts and need
not be repeated.
Ultimately,
discharge,

agreeing

the
with

bankruptcy
the

trustee

court
that

revoked

Thunberg's

Thunberg

"acquired

property that is property of the estate . . . and knowingly and
fraudulently failed to report the acquisition of or entitlement to
such property, or to deliver or surrender such property to the
trustee," 11 U.S.C. § 727(d)(2); cf. Boroff v. Tully (In re Tully),
818 F.2d 106, 110-12 (1st Cir. 1987).

The district court wrote a

cogent decision upholding the revocation.
On appeal, Thunberg argues that his actions were at worst
honest mistakes.

We agree that Thunberg largely avoided explicit

false statements and that the finding of fraudulent intent depends
in part on seeing a pattern of evasion and silence in the face of
culpable knowledge and in part on inferences drawn from Thunberg's
conduct. But the perception and inferences are rational, and there
is nothing close to clear error, which is the test on review of
factual findings, Gannett v. Carp (In re Carp), 340 F.3d 15, 21
(1st Cir. 2003).
Thunberg says that the bankruptcy court's understanding
was flawed by a mistaken belief that no security interests covered

-3-

Case: 10-1705 Document: 00116199662 Page: 4

Date Filed: 04/21/2011

Entry ID: 5544845

the payments; this is doubtful, but in any event Thunberg allowed
the trustee and the court to believe that he was turning over
whatever he received to secured creditors, which was not true, and
he

withheld

knowledge

of

the

accelerated

payments.

Further

payments to the estate shortly before the trial did not undo
Thunberg's earlier conduct and omissions.

Olsen v. Reese (In re

Reese), 203 B.R. 425, 431-32 (Bankr. N.D. Ill. 1997).
Thunberg also suggests (1) that the bankruptcy judge
conflated the standard for denying a discharge with that for
revoking a discharge and (2) that the factual inferences drawn do
not support a holding of deliberate misconduct.

There is no

indication of the former; and, as to the latter, the ultimate
findings met the statutory standard for revoking a discharge, and
the factual inferences drawn were reasonable.
Affirmed.

-4-