United States District Court, S.D. Florida
ROBERT C. FURR, Trustee for the Bankruptcy Estate of Rollaguard Security, LLC et al., Appellant,
TD BANK, N.A, JPMORGAN CHASE BANK, N.A., and PNC BANK, N.A., Appellees.
OPINION AND ORDER
KENNETH A. MARRA, UNITED STATES DISTRICT JUDGE
cause is before the Court on the appeal by Robert C. Furr,
the Chapter 7 Trustee, (âAppellantâ âTrusteeâ) of the
bankruptcy courtâs October 1, 2018 Omnibus Order on
Plaintiffâs Request for Leave to File Amended Complaints. The
Court has carefully considered the appeal, the briefs of the
parties, the entire record on appeal, and is otherwise fully
advised in the premises.
facts, based upon Appellant and Appellee’s statement of
facts in their appellate briefs and the appellate record, are
December 29, 2016, the Trustee (“Appellant”
“Trustee”) sued Defendants TD Bank, N.A.,
JPMorgan Chase Bank N.A., PNC Bank, N.A.
(“Appellees” “Defendants”) alleging
they had knowingly facilitated the fraud of Anthony Simpson,
an individual who controlled, in whole or in part, the
debtors Rollaguard Security, LLC, Shamrock Jewelers, Inc.,
Shamrock Jewelers Loan & Guarantee, LLC. Count one and
two of the complaints sought to recover the Debtors’
deposits with the Defendant banks as fraudulent transfers
under the bankruptcy code and the Florida law. Counts three
and four asserted claims for aiding and abetting conversion.
Count five asserted a claim for negligence and wire transfer
March 16, 2017, Defendants moved under Rule 12(b)(6) to
dismiss the complaints, which the bankruptcy court dismissed
with prejudice on July 27, 2017. On August 10, 2017, the
Trustee filed an omnibus motion to reconsider and for leave
to file proposed amended complaints. The bankruptcy court
denied the Trustee’s motion on August 30, 2017.
Trustee appealed the bankruptcy court’s rulings to this
Court and the Court entered an Order reversing the bankruptcy
court, published as Furr v. TD Bank, N.A., 587 B.R.
743 (S.D. Fla. 2018), ruling that the bankruptcy court erred
by failing to apply the correct standard for leave to amend
and remanded the case for the bankruptcy court to consider
the proposed pleading under the proper standard.
remand, the bankruptcy court again denied the Trustee leave
to amend as futile. The bankruptcy court ruled that deposits
to the Debtors’ own restricted accounts are not
transfers, the allegations did not show that the alleged
transfers were made with the intent to defraud creditors, and
that the Trustee’s aiding and abetting claims did not
support a plausible inference of Defendants’ knowledge
or substantial assistance of Simpson’s fraud.
bankruptcy court denied the Trustee’s motion for leave
to amend upon determining that the proposed amended
complaints were futile. The Court reviews that determination
de novo. Chang v. JPMorgan Chase Bank,
N.A., 845 F.3d 1087, 1094 (11th Cir. 2017); Cockrell
v. Sparks, 510 F.3d 1307, 1310 (11th Cir. 2007). The
Court generally reviews a bankruptcy court’s decision
to grant or deny leave to amend a deficient pleading for an
abuse of discretion. In re Fundamental Long Term Care,
Inc., 873 F.3d 1325, 1335 (11th Cir. 2017), cert.
denied sub nom. Estate of Jackson v. Schron, 139 S.Ct.
bankruptcy court held that the Debtors’ deposits into
their own unrestricted bank accounts maintained at the
Defendants’ banks do not constitute transfers within
the meaning of that term under section 11 U.S.C.
§101(54) or Florida Statute § 726.102(14) and
therefore could not form the basis of the Trustee’s
fraudulent transfer claims. The Trustee argues that the
bankruptcy court erred in determining that the fraudulent
transfer claims were futile.
Court agrees with the bankruptcy court that a transfer into a
Debtor’s unrestricted bank account is not a transfer.
Section 101(54) defines “transfer” in pertinent
part, as any “mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of disposing or
parting with . . . property; or . . . an interest in
property. 11 U.S.C. §101(54)(D)(i)-(ii). Florida law
defines the term “transfer” as: “every
mode, direct or indirect, absolute or conditional, voluntary
or involuntary, of disposing of or parting with an asset or
an interest in an asset.” Florida Statute §
debtor endorses a check for deposit or directs a wire by a
third party into its own unrestricted bank account, the
debtor has not “disposed” or “parted
with” any interest in the right to payment or credit
represented by the check or wire, and, therefore, no
“transfer” has occurred. See Mayo v. Pioneer
Bank & Tr. Co., 270 F.2d 823, 837 n.21 (5th Cir.
1959) (“Ordinarily a deposit in a bank is not a
transfer”);Ivey v. First Citizens Bank & Tr.
Co. (In re Whitley), 848 F.3d 205, 210 (4th
Cir. 2017) (holding that “when a debtor deposits or
receives a wire transfer of funds into his own unrestricted
checking account in the regular course of business, he has
not transferred those funds to the bank that operates the
account [because] the debtor is still free to access those
funds at will”); Malloy, III v. Citizens Bank of
Sapulpa (In re First Sec. Mortg. Co.), 33 F.3d
42, 44 (10th Cir. 1994) (no transfer under bankruptcy law
because “the bank held the funds it received
‘only for the purpose of fulfilling an instruction to
make the funds available to someone else’”);
In re Prescott, 805 F.2d 719, 729 (7th Cir. 1986)
(holding that “to the extent a deposit is made into an
unrestricted checking account, in the regular course of
business and withdrawable at ...