Rosen v. Dahan et al

Filing 22

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 11/29/12. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
IN RE: MINH VU HOANG and
THANH HOANG
______________________________
GARY A. ROSEN, Trustee
Appellant
v.

:
:
:
:

DAVID DAHAN, et al.
Appellees

Civil Action No. DKC 11-2320

:
:
MEMORANDUM OPINION

Presently

pending

and

ready

for

resolution

in

this

bankruptcy appeal is a motion to alter or amend judgment filed
by Appellant Gary A. Rosen (ECF No. 13); a motion to strike
filed by Appellees David Dahan, Sarit Dahan, Karin Dahan, Maia,
LLC,

Rakoma,

LLC,

and

Raymonde,

LLC

(ECF

No.

16);

and

Appellant’s motion for retroactive extension of time in which to
file a motion for rehearing (ECF No. 19).

The relevant issues

have been briefed, and the court now rules pursuant to Local
Rule 105.6, no hearing being deemed necessary.
that

follow,

Appellant’s

Appellees’
motion

for

motion

to

extension

strike
will

For the reasons
will

be

be

denied;

granted;

and

Appellant’s motion for rehearing will be denied.
I.

Background
On March 10, 2011, Appellant Gary A. Rosen, the chapter 7

trustee for the jointly administered bankruptcy estates of Minh

Vu Hoang and Thanh Hoang, commenced the adversary proceeding
from which this appeal arises against Appellees David Dahan,
Sarit Dahan, Karin Dahan, Maia, LLC, Rokama, LLC, and Raymonde,
LLC.1

As relevant here, the complaint relates to six parcels of

real

property

that

were

purchased,

post-petition,

by

sham

business entities under the control of Minh Vu Hoang (“Debtor”)
with assets fraudulently concealed from the bankruptcy estate.2
The properties were then either sold or refinanced – in some
cases, with the assistance of Appellees – and the proceeds were
distributed

to

Appellees,

among

others.

Appellant’s

amended

complaint sought, inter alia, turnover pursuant to 11 U.S.C. §
542

and,

in

the

alternative,

avoidance

of

post-petition

transfers pursuant to 11 U.S.C. § 549.3
Appellees filed a motion to dismiss all claims with respect
to

the

six

properties,

arguing

that

“Section

542

is

only

available [to] obtain turnover of assets that were in the hands

1

The corporate appellees are allegedly controlled by David
Dahan.
Sarit Dahan is David’s wife; her liability is premised
upon the deposit of proceeds into one or more bank accounts she
shared with her husband.
Karin Dahan is the daughter of David
and Sarit. With respect to the six properties at issue in this
appeal, the complaint contains no allegations relating to Karin.
2

The complaint contains allegations with respect to nine
properties; only six are at issue in the instant appeal.
3

All further references to the bankruptcy code will be by
section number only.
These sections are all found in Title 11
of the United States Code.
2

of a defendant pre-petition . . . [and] does not apply to assets
that came into the hands of [Appellees] post-petition.”
No. 6-2, at 2 (emphasis removed)).4

(ECF

Appellees relied principally

on Deckelbaum v. Cooter, Mangold, Tompert & Chapman, PLLC, 275
B.R. 737 (D.Md. 2001).

In that case, Judge Nickerson held, in

relevant part, that § 542 was “an inappropriate means” for a
bankruptcy

trustee

to

recover

post-petition

transfers,

which

could only be avoided pursuant to § 549, reasoning that “if both
section

542

and

549

were

available

to

avoid

post-petition

transfers, the statute of limitations contained within § 549(d)
would be rendered meaningless[.]”
Appellees

argued

transferred

that

because

post-petition,

Deckelbaum, 275 B.R. at 741.

the
the

property
turnover

in

question

provision

was
was

unavailable to the trustee, and because the two-year statute of
limitations

under

§

549(d)

had

expired,

Appellant

could

not

state a claim for relief.
4

At a hearing on the motion to dismiss, Appellees clarified
their position:
If the Dahan[s] had possession of the
property on the date of filing [of the
bankruptcy petition], then 549 would not
apply because there is not a post-petition
transaction. . . . If, on the other hand,
there has been a transfer during the case of
property that was the Debtor’s property to a
third party and it is a post-petition
transfer, that is where 549 comes into play
and 542 does not.
(ECF No. 6-13, at 26).
3

In opposing the motion, Appellant conceded that his § 549
claims were time-barred, but urged that the plain language and
legislative history of § 542 supported that “any entity, other
than a custodian, is required to deliver property of the estate
to the trustee or debtor in possession whenever such property is
acquired by the entity during the case.”

(ECF No. 6-5, at 13).

Arguing that Appellees were in possession of estate property
during the case, Appellant maintained that he had a right to
turnover of the proceeds in question and that, to the extent it
held otherwise, Deckelbaum was wrongly decided.

Notably, for

present purposes, Appellant asserted an alternative theory in a
footnote

within

his

opposition

papers:

“the

Dahan

Defendants

obtained possession of estate property as conduits. . . . By
definition, therefore, they are not transferees . . . [and]
there

are

no

postpetition

transfers

that

would

need

to

be

avoided under § 549 as a prerequisite of imposing liability
under § 542(a).”

(Id. at 14, n. 25).

A hearing was held before United States Bankruptcy Judge
Thomas J. Catliota on June 15, 2011.
by

the

court

regarding

the

In response to a question

interplay

between

§

542

and

the

statute of limitations of § 549(d), Appellant’s counsel stated:
If one is merely a conduit, meaning
that one is holding [property] for the
benefit of the debtor and is just a straw
party or nominee or, you know, in the
extreme case, the Federal Express messenger
4

or merely the bank account into which money
is deposited, you know, in that case the
bank.
The . . . bank typically is not a
transferee.
. . . .
So, 542 covers the case where an
intermediar[y] or conduit has possession of
the property and that is the case that would
not come within 549.
Judge [Easterbrook]
made that distinction in the Seventh Circuit
case. I believe it is the one we cited . .
. in our brief in [f]ootnote 25, [Bonded
Financial
Services,
Inc.
v.
European
American Bank, 838 F.2d 890 (7th Cir. 1988)],
if I am not mistaken.
. . . .
We have alleged in the complaint that
the Dahan Defendants were conduits and
intermediaries, [and] the sufficiency of
that allegation has not been challenged[,]
so . . . on that theory, that is why we do
not need to go under 549 and that is why
this is property that the Trustee is
entitled to use, sell or lease.
(ECF No. 6-13, at 33-34).
At the conclusion of the hearing, Judge Catliota granted
Appellees’

motion

to

dismiss,

indicating

separately issue a memorandum and order.

that

he

would

In his subsequent

opinion, he expressed reservations with regard to the outcome:
This Court will follow Deckelbaum and
dismiss Plaintiff’s § 542 claims. However,
if the Court were writing on a clean slate,
it might well reach a different result. The
Deckelbaum court focused on the structure of
the Bankruptcy Code, and in particular, the
interplay between § 542 and § 549. But the
plain language of § 542 does not limit its
5

application to recovery of property that is
in a defendant’s possession only as of the
petition date. See United States v. Ron Pair
Enters., 489 U.S. 235, 109 S.Ct. 1026, 103
L.Ed.2d 290 (1989) (courts should interpret
a statute in accordance with its plain
meaning). To the contrary, § 542 recovery
can be sought from “an entity . . . in
possession, custody, or control during the
case of property. . . .” 11 U.S.C. § 542
(emphasis added). The specific application
of the section to property that is in the
possession,
custody
or
control
of
a
defendant “during the case” would seem
contrary to a determination that it only
applies to pre-petition transfers.
In re Minh Vu Hoang, 452 B.R. 902, 906-07 (Bankr.D.Md. 2011)
(internal
factual

footnote

omitted;

recitation

of

the

emphasis

in

decision,

original).

the

In

bankruptcy

the

court

appeared to accept that Appellees were Debtor’s “conduits or
intermediaries” with respect to the proceeds from the sale or
refinancing of the properties at issue, id. at 905, but it did
not specifically address the implications of this finding with
respect

to

whether

the

money

could

be

subject

to

turnover

pursuant to § 542(a).
Appellant filed a timely motion for leave to appeal and
concomitantly moved to stay the proceedings in the adversary
case pending resolution of the prospective appeal.
did

not

oppose

those

motions,

granted.

6

and

both

were

Appellees
subsequently

In

his

appellate

brief,

Appellant

argued

(1)

that

“Deckelbaum was wrongly decided because § 542(a) is not limited
to estate property in the defendants’ possession, custody, or
control when the petition was filed,” and (2) that “[e]ven if
Deckelbaum’s

holding

were

correct,

it

would

not

apply

here

because the counts at issue allege that the Dahan defendants
acquired property of the estate as conduits, not transferees.”
(ECF No. 4, at 7, 17).

With respect to the second argument,

Appellant asserted:
[P]ersons who receive estate property as
conduits or intermediaries acting on behalf
of the debtor are not recipients of a
transfer, and therefore cannot be sued under
§ 549.
And as we have also noted, the
amended complaint alleges (in the cou[n]ts
at issue) that the Dahan Defendants acted as
conduits.
Thus, even if Deckelbaum were
correct, it should not be read to require
the dismissal of claims, such as those at
issue here, in which the defendants are
alleged to have acted as conduits rather
than transferees.
(Id. at 22).
In response, Appellees argued that the conduit/intermediary
argument was “never raised . . . in the Bankruptcy Court,” and
that, even if it had been, Appellant’s turnover claims “properly
should

have

been

[Appellees][.]”

brought

against

the

(ECF No. 9, at 13, 14).

Debtors,

rather

than

In reply, Appellant

cited numerous instances in which the issue was raised in his
amended complaint, opposition to the motion to dismiss, and at
7

the motions hearing, but did not address Appellees’ contention
that they were not a proper party.

(ECF No. 10, at 11-15).

On March 9, 2012, this court issued a memorandum opinion
and order affirming the decision of the bankruptcy court.
In re Minh Vu Hoang, 469 B.R. 606 (D.Md. 2012).

See

The court

determined (1) that the turnover provision, § 542(a), entitles
the trustee to possession of “property of the estate,” as that
term is defined in § 541(a); (2) that property transferred postpetition may lose its status as property of the estate unless or
until such transfer is avoided by the trustee pursuant to § 549,
in

which

case

pursuant

to

property

at

§§

the

property

541(a)(3)

issue

in

and

this

is

drawn

550;
case

back

into
that

the

and

(3)

was

transferred,

estate

because
and

the
the

transfers were not avoided, it was not property of the estate
and, therefore, could not be recovered pursuant to the turnover
provision.
In addressing Appellant’s second issue on appeal, the court
explained:
It is clear . . . based on the allegations
in the complaint that the property Appellant
seeks to recover was transferred on multiple
occasions. Even assuming, arguendo, that the
vast majority of the purchase funds for the
properties at issue constituted “property of
the estate” under an alter ego theory, three
of the properties themselves . . . were
actually titled in the name of Appellees
Rokama and Maia. Appellant observes in
passing that the Fourth Circuit has adopted
8

the “dominion and control” test established
by the Seventh Circuit in Bonded Financial
Services, Inc. v. European American Bank,
838 F.2d 890, 893 (7th Cir. 1988), to
determine whether a transfer has occurred,
holding that “the minimum requirement of
status as a ‘transferee’ is dominion over
the money or other asset, the right to put
the money to one’s own purposes.” See In re
Southeast Hotel Properties Ltd. Partnership,
99 F.3d 151, 154–55 (4th Cir. 1996). It
strains credulity to suggest that an entity
holding title to property does not exercise
“dominion
and
control”
over
it,
and
Appellant does not bother to explain how
this could be the case.
As to the other amounts allegedly
received by Appellees as distributions of
proceeds
from
the
sale
of
properties,
$150,000 from the sale of the Bay property
was used to pay down a line of credit from
which the Dahans had made payments to
Debtor. There is no allegation that the
Dahans actually possessed these funds and,
even if they did, the complaint actually
alleges that this was re-payment of a prior
loan to Debtor. (ECF No. 6–1 ¶ 255).[5]
Appellant further alleges in the complaint
that $56,000 from the sale of [the Sundown
property] was distributed to Maia. There is
no indication that Maia was not free to do
with this money as it wished, nor does
Appellant make clear exactly how it was a
“conduit,”
rather
than
a
“transferee.”
Similarly, it is unclear how the $15,000
distribution from the sale of [the Milbern
property] to Rokama was not a transfer. In
each case, Debtor appears to have “part[ed]
with property or with an interest in
property,” which is the definition of a
“transfer” pursuant to § 101(54).

5

Appellant does not challenge the decision with respect to
the Bay property in his motion for rehearing.
9

Because
the
allegations
in
the
complaint demonstrate that the property in
question
was
transferred,
Appellant’s
characterization of Appellees as “conduits”
is at best a factual allegation devoid of
reference to actual events, and is not
controlling.
Rather,
as
transferred
property, it cannot have been obtained by
the
trustee
pursuant
to
the
turnover
provision of § 542(a).
In re Minh Vu Hoang, 469 B.R. at 622-23.
On April 6, 2012, Appellant filed the pending motion to
alter or amend judgment pursuant to Fed.R.Civ.P. 59(e).
No. 13).

(ECF

Appellant asks the court to reconsider its ruling with

respect to five of the six properties at issue based on “two
points that the decision turned on, neither of which was ever
raised by [Appellees in the bankruptcy court]”:
First, the Court held that § 542(a) of
the
Bankruptcy
Code
(the
“turnover”
provision) did not apply to the property at
issue
here
because
that
property
was
transferred after Minh Vu Hoang filed for
bankruptcy and therefore was no longer
property of the estate.
But the relevant
question is not simply whether there was a
transfer of something by somebody, but
whether there was a transfer of the estate’s
interest by someone with power to transfer
that interest. On the facts alleged in the
amended complaint, there was no transfer of
the
estate’s
interest:
the
purported
transferors did not represent the estate and
they had no power to alienate the estate’s
interest in the property.
Second,
the
Court
held
that
the
defendants received the property at issue as
transferees rather than conduits.
That
decision was based on an error in applying
10

the “dominion and control” test, which
governs the determination whether a party
who has received property of the estate did
so as a transferee. In addition, the Court
did not take account of the extent of and
detail of the amended complaint’s factual
allegations supporting the conclusion that
the defendants acted as conduits.
(ECF No. 13-1, at 1 (emphasis in original)).
In response, Appellees moved to strike, arguing that the
motion to alter or amend is only cognizable as a motion for
rehearing pursuant to Federal Rule of Bankruptcy Procedure 8015,
which must be “filed within 14 days after entry of the judgment
of the district court or the bankruptcy appellate panel.”

(ECF

No.

that

16

¶

7

(quoting

Fed.R.Bankr.P.

8015)).

Observing

Appellant filed his motion twenty-eight days after the appeal
was decided, Appellees contend that it “may not be considered by
the [c]ourt.”

(Id. at ¶ 16).

On the same date, Appellees

separately filed a “limited response to motion to alter or amend
judgment,” asserting that Appellant’s claim that the property
was

never

transferred

“ignores

the

fact

and

reality

that

Maryland is a title state”; thus, “unlike the cases cited by
Appellant which involve personal property and not real estate,
there were actually transfers as evidenced in the land records –
and

those

transfers

were

arguably

11

subject

to

the

trustee’s

powers to avoid each such transfer.”

(ECF No. 17 ¶ 3 (emphasis

in original)).6
On

April

30,

Appellant

filed

a

“cross-motion

to

retroactively extend the deadline for rehearing motions and to
accept his motion to alter or amend judgment as a late-filed
motion for rehearing” and supporting memorandum.

(ECF No. 19).7

In that motion, Appellant concedes that the governing rule is
Fed.R.Bankr.P. 8015 and that his prior motion was untimely under
that rule, but argues that the court has discretion to consider
the motion and that it should do so in this case.

Appellees

have opposed the motion for retroactive extension of time (ECF
No. 20), and Appellant has filed papers in reply (ECF No. 21).
II.

Analysis
A.

Motion to Strike

Appellees do not indicate the legal basis of their motion
to

strike,

but

the

only

candidate

is

Federal

Rule

of

Civil

Procedure 12(f), which applies to adversary proceedings pursuant
to Federal Rule of Bankruptcy Procedure 7012(b).

Rule 12(f)

allows the court to strike certain matters “from a pleading.”

6

In both their motion to strike and limited response,
Appellees purportedly “reserve the right to file a detailed
substantive response” to Appellant’s motion to alter or amend
“at a later time,” if necessary. (ECF No. 16 ¶ 23; ECF No. 17 ¶
4).
7

An identical memorandum was separately docketed as
response in opposition to the motion to strike. (ECF No. 18).
12

a

Appellees’

motion

does

not

seek

to

strike

any

portion

of

a

pleading; rather, it aims to strike Appellant’s motion to alter
or amend judgment in its entirety.

Because there is “no basis

in the Federal Rules” for doing so, Tepeyac v. Montgomery Cnty.,
779 F.Supp.2d 456, 460 (D.Md. 2011), Appellees’ motion to strike
will be denied.
B.
As

Motion for Retroactive Extension of Time
noted,

the

parties

now

agree

that

Federal

Rule

of

Bankruptcy Procedure 8015, rather than Federal Rule of Civil
Procedure 59(e), governs reconsideration in this context.

That

rule provides:
Unless the district court or the bankruptcy
appellate panel by local rule or by court
order otherwise provides, a motion for
rehearing may be filed within 14 days after
entry of the judgment of the district court
or the bankruptcy appellate panel.
If a
timely motion for rehearing is filed, the
time for appeal to the court of appeals for
all parties shall run from the entry of the
order denying rehearing or the entry of the
subsequent judgment.
Fed.R.Bankr.P. 8015; see also In re Zegeye, Civ. No. DKC 041387, 2005 WL 544763, at *1 (D.Md. Mar. 4, 2005) (“When the
district court is acting as an appellate court in a bankruptcy
case, Rule 8015 provides the sole mechanism for filing a motion
for rehearing” (citing English-Speaking Union v. Johnson, 353
F.3d 1013, 1019 (D.C. Cir. 2004)).

13

Appellant concedes that he failed to file his motion within
fourteen days, but argues that “the [c]ourt has the power to
extend the deadline for rehearing motions under rule 8015 and to
accept the Trustee’s motion to alter or amend as a late-filed
motion for rehearing.”

(ECF No. 19-1, at 1).

Appellant points

to the fact that Rule 8015 itself states that the fourteen-day
time

limit

applies

unless

a

“local

rule

or

[]

court

order

otherwise provides,” and that Fed.R.Bankr.P. 8019 permits the
court, “[i]n the interest of expediting decision or for other
cause,” to “suspend the requirements or provisions of the rules
in

Part

VIII.”

According

to

Appellant,

the

court

should

exercise its discretion to consider the motion because (1) the
decision below “was based on issues that had never been raised
by the appellees in the bankruptcy court or in this court, and
that therefore had never been addressed by any of the parties”;
(2) the court “departed from appropriate bankruptcy procedure”
by “decid[ing] the appeal without hearing oral argument”; (3)
“it

would

be

helpful

for

the

court

of

appeals

to

have

the

benefit of this [c]ourt’s views on the arguments raised in [the]
motion to alter or amend”; and (4) “the appellees will suffer no
prejudice.”

(ECF No. 19-1, at 3-5).8

8

Appellant’s argument that the decision on appeal was based
on issues not raised below is curious. The court was asked to
resolve a dispute regarding the interplay between the turnover
provision of § 542(a) and the post-petition avoidance provision
14

Extensions

of

time

in

Fed.R.Bankr.P. 9006(b)(1).

this

context

are

governed

by

See Matter of Eichelberger, 943 F.2d

536, 538-39 (5th Cir. 1991); In re Solis, No. 95 Civ. 0356 (JSM),
1995

WL

311781,

at

*1

(S.D.N.Y.

May

19,

1995).

That

rule

provides, absent exceptions not relevant here, that “when an act
is required or allowed to be done at or within a specified
period by these rules . . . the court may at any time in its
discretion . . . on motion made after the expiration of the
specified period permit the act to be done where the failure to
act

was

the

9006(b)(1).

result

of

excusable

neglect.”

Fed.R.Bankr.P.

As the Supreme Court explained in

Pioneer Inv.

Servs. Co. v. Brunswick Associates Ltd. Partnership, 507 U.S.
380,

395

equitable

(1993),
one,

surrounding

the

the

taking

excusable
account

party’s

neglect
of

omission,”

all

determination
relevant

including

is

“an

circumstances

“the

danger

of

of § 549, and, more specifically, the propriety of Deckelbaum’s
holding that property transferred post-petition could not be
subject to turnover. The provisions in question are loaded with
concepts drawn from the broader scheme of the bankruptcy code
such that they cannot be properly read in isolation.
Having
asked the court to engage in statutory construction, Appellant
should not be heard to complain that it did so.
Equally unmoving is his argument that the court “departed
from appropriate bankruptcy procedure” by declining to hold oral
argument.
Pursuant to Bankruptcy Rule 8012, “[o]ral argument
will not be allowed if . . . the facts and legal arguments are
adequately presented in the briefs and record and the decisional
process would not be significantly aided by oral argument.” The
court expressly found that was the case here. See In re Minh Vu
Hoang, 469 B.R. at 608.
15

prejudice

to

the

debtor,

the

length

of

the

delay

and

its

potential impact on judicial proceedings, the reason for the
delay, including whether it was within the reasonable control of
the movant, and whether the movant acted in good faith.”
Application of these factors here militates in favor of
finding excusable neglect.
the

motion,

After

Appellant

Appellees

Believing that Rule 59(e) governed

timely

observed

filed

that

it

under

Bankruptcy

that

Rule

provision.

8015

was

the

proper vehicle, Appellant’s counsel promptly acknowledged his
error and requested appropriate relief.
in good faith.
Appellees

He unquestionably acted

Moreover, there is no discernible prejudice to

attributable

to

the

two-week

delay

in

filing.

Appellees’ argument that the late filing resulted in undue delay
in the adversary proceeding is undermined by the fact that they
consented to a stay in the bankruptcy court pending resolution
of the case on appeal.

Accordingly, the court finds excusable

neglect for the late filing and will consider Appellant’s motion
as a motion for rehearing pursuant to Fed.R.Bankr.P. 8015.
C.

Motion for Rehearing

The United States District Court for the District of South
Carolina identified the proper standard in considering a motion
for rehearing in Baumhaft v. McGuffin, C/A No. 4:06-CV-3617-RBH,
2007 WL 3119611, at *1 (D.S.C. Oct. 22, 2007):

16

Fed. R. Bankr.P. 8015 provides that “a
motion for rehearing may be filed within
1[4] days after entry of the judgment of the
district court . . . ” “The purpose of Rule
8015 is to provide recourse to a party . . .
after a district court . . . has overlooked
or misapprehended some point of law or
fact.” 10 Collier on Bankr.P. 8015.01 (15th
ed. rev. 2004). Although Rule 8015 does not
specify the standard for ruling on a
petition for rehearing, it appears that most
courts have looked by analogy to Fed. R.
App. P. 40. See 9 Collier on Bankr.P.
8015.04
at
8015-4
(collecting
cases).
Appellate Rule 40 provides that petitions
for rehearing must include points which the
court
allegedly
overlooked
or
misapprehended.
Petitions
for
rehearing
should not simply reargue the plaintiff’s
case or assert new grounds. See Sierra Club
v. Hodel, 848 F.2d 1068, 1100-01 (10th Cir.
1988).
At base, motions for rehearing are “designed to ensure that the
appellate court properly considered all relevant information in
rendering its decision.”

In re Zegeye, 2005 WL 544763, at *1

(citing In re Hessco Industries, Inc., 295 B.R. 372, 375 (B.A.P.
9th Cir. 2003)).
As noted previously, Appellant argues that the court took
wrong turns at two points.
determination

that

the

He initially complains that the

property

in

question

was

transferred

failed to account for the fact that, under common law property
principles, Debtor had no authority to effect the transfers in
the first place.

Thus, according to Appellant, the purported

transfers were void, the property never left the estate, and it

17

was subject to turnover.
court’s

finding

transferees,

that

rather

Appellant further contends that the

Appellees

than

conduits,

received
was

the

property

“mistaken”

due

misapplication of “the dominion-and-control test.”

as

to

a

(ECF No. 13-

1, at 9).
The first argument was not raised in the bankruptcy court
or on appeal.

While Appellant did assert that the conveyances

at issue were not transfers, he reasoned that this was because
Appellees took possession as “conduits” or “intermediaries” of
Debtor,
Moreover,

not
his

that

the

argument

purported
in

the

transfers

instant

motion

were

nullities.

relies

on

the

common law principle that “one cannot transfer more than one
actually has” (Id. at 6), but the bankruptcy cases he cites in
support are based on application of the automatic stay provision
of § 362(a).

See In re Kemp, 52 F.3d 546, 553 & n. 22 (5th Cir.

1995) (citing § 362(a)(3) and (6) as the basis of its finding
that the debtor “had no legal power to transfer the funds” at
issue); In re DonPedro, No. 03-46671 TK, 04-4120 AT, 2004 WL
3187072, at *1 (Bankr.N.D.Cal. Nov. 30, 2004) (“the execution of
the Deeds of Trust violated 11 U.S.C. § 362(a)(3) and thus were
void”).9

Many courts have held that “violations of the automatic

9

A third case, In re Grotjohn, 376 B.R. 496, 499 (N.D.Tex.
2007), relied upon § 323(a) (establishing the role of the
trustee as “the representative of the estate”) and § 363(b)(1)
(creating the trustee’s power to “use, sell, or lease . . .
18

stay are void, not voidable,” In re Schwartz, 954 F.2d 569, 571
(9th Cir. 1992), and the relationship between §§ 362 and 549 is
the

subject

of

considerable

debate,

see

David

Gray

Carlson,

Bankruptcy’s Acephalous Moment: Postpetition Transfers Under the
Bankruptcy

Code,

21

Emory

Bankr.

Dev.

J.

113

(2004).

The

instant record, however, contains no reference whatsoever to the
automatic stay or § 362.

Indeed, the provision potentially in

conflict with § 549 in this case was § 542, not § 362.

Because

the argument Appellant now seeks to raise was not presented on
appeal or in the bankruptcy court, it may not be considered in
the context of the instant motion.

See In re Zegeye, 2005 WL

544763, at *2 (a motion for rehearing “is not a means . . . to
assert new grounds for relief”).
With regard to Appellant’s second claim – i.e., that the
court erred in rejecting his argument that no transfers occurred
because Appellees were “conduits,” rather than “tranferees” – it
is unclear what it is the court is alleged to have overlooked.
Regarding

the

“dominion

and

control”

test

for

determining

whether a transfer has occurred, the court explained that “the
minimum requirement of status as a ‘transferee’ is . . . the
right to put the [property] to one’s own purposes.”

In re Minh

Vu Hoang, 469 B.R. at 622 (quoting Bonded Financial, 838 F.2d at
property of the estate) in holding, “[o]nly the Trustee . . .
had the power to sell property of the estate” and “[a] debtor
has no power to transfer estate property.”
19

893).
that

It then found that it “strain[ed] credulity to suggest
an

entity

holding

title

to

property

‘dominion and control’ over it[.]”
B.R. at 622.

does

not

exercise

In re Minh Vu Hoang, 469

Appellant now argues that “merely having title to

the property is not dispositive” because “one may hold title to
property as an agent, trustee, or nominee for someone else.”
(ECF

No.

13-1,

at

indistinguishable

from

10).
the

While
argument

this
that

appears

was

to

be

considered

and

rejected on appeal, it also misses the point.

The relevant

question was whether the transactions at issue were “transfers,”
as that term is defined in the bankruptcy context.

As explained

in the prior opinion, “[t]he term ‘transfer’” is defined by §
101(54)

as

“mean[ing]

.

.

.

each

mode,

direct

or

indirect,

absolute or conditional, voluntary or involuntary, of disposing
of or parting with . . . property[] or . . . an interest in
property.”

The transactions at issue in this case clearly fell

within that definition, just as they satisfy the “dominion and
control” test because the holder of title to real property has
the ability to put the property to his own use.
not address these points in his motion.
restates

the

prevously.

same

argument

that

*2.

Rather, he essentially
considered

and

rejected

A motion for rehearing, however, “is not a means by

which to reargue a party’s case.”
at

was

Appellant does

To

the

extent

In re Zegeye, 2005 WL 544763,

that
20

Appellant’s

argument

is

distinguishable, the court is not persuaded that it “overlooked
or misapprehended” any significant point in the prior opinion.
Accordingly, Appellant’s motion for rehearing will be denied.10
III. Conclusion
For the foregoing reasons, Appellees’ motion to strike will
be denied, Appellant’s motion for extension will be granted, and
Appellant’s motion for rehearing will be denied.

A separate

order will follow.

________/s/_________________
DEBORAH K. CHASANOW
United States District Judge

10

Appellant also asks the court to grant leave to file a
second amended complaint, arguing that because “the grounds on
which this [c]ourt based its decision were not raised in the
bankruptcy court,” he “was never put on notice as to any
potential insufficiency” in his amended complaint; therefore,
“[i]t is only fair that he be allowed an opportunity to cure
whatever deficiencies the [c]ourt has found.” (ECF No. 13-1, at
18). The deficiencies in the complaint are not amenable to cure
by amendment, however.
Typically, leave to amend should be
freely given “when justice so requires,” Fed.R.Civ.P. 15(a)(2);
Fed.R.Bankr.P. 7015, and should be denied “only when the
amendment would be prejudicial to the opposing party, there has
been bad faith on the part of the moving party, or amendment
would be futile,” Matrix Capital Mgmt. Fund, LP v. BearingPoint,
Inc., 576 F.3d 172, 193 (4th Cir. 2009).
Because amendment in
this case would be futile, Appellant’s request will be denied.
21