Opinion
CIV. NO. 3:99-CV-2843-G
April 11, 2000.
MEMORANDUM ORDER
This case is before the court on the appeal of Wayne Parsons ("Parsons") and Executive Motors ("Executive") from the judgment entered by the bankruptcy court awarding Robert Milbank, Jr. ("Milbank"), the Chapter 7 Trustee, $32,299.93 plus attorneys fees of $3,000.00 for trial of the case and $2,500 for any appeal. Milbank has cross-appealed, asserting that he was entitled to recover $64,599.86 on behalf of the bankruptcy estate. Both the appeal and the cross-appeal present essentially the same issue: whether the bankruptcy court clearly erred in finding that Milbank was entitled to recover fifty per cent of the net amount sued upon. For the reasons discussed below, the bankruptcy court's order is affirmed.
I. BACKGROUND
The Allied Funding Company, L.L.C. ("Allied") bankruptcy was commenced as an involuntary bankruptcy proceeding. Brief of Appellee Robert Milbank, Jr., Trustee ("Appellee Brief") at 7. Allied consented to an order for relief under Chapter 7 of the Bankruptcy Code on July 17, 1997. Thereafter, Milbank was appointed Trustee. See Brief of Appellants Wayne Parsons and Executive Motors ("Brief") at 7; Appellee Brief at 7.
On or about November 12, 1998, Milbank brought suit against Parsons and Executive, seeking to recover monies he claimed were owed under various retail installment contracts ("Contracts") entered into between Executive and Allied's predecessor, Village Funding, Inc. ("Village"). Brief at 7; Appellee Brief at 7. Executive was in the business of selling used automobiles to individuals. The individuals would generally sign Contracts for all or part of the purchase price. The debtor, Allied, was in the business of purchasing these Contracts from auto dealers. Village contacted with Executive to purchase and service three series of Contracts under certain sale and purchase agreements ("Agreements"). These Agreements covered three pools of Contracts purchased by Village from Executive. Under the terms of the Agreements, Executive was liable to Village, and subsequently Allied, in the event any of the individual contractors failed to complete their payments to Allied. Brief at 7-8; Appellee Brief at 7.
Parsons and Executive timely answered Milbank's complaint by denying that any amounts were owed under the Contracts. Brief at 7. The bankruptcy court conducted a trial of the case on September 29, 1999. Id. Over the objection of Executive and Parsons, the bankruptcy court admitted into evidence summaries of accounts for each of the Agreements purporting to show amounts owed to Allied by Executive and Parsons. Id. at 8. After the hearing testimony of witnesses and considering the documentary exhibits, the bankruptcy court found that fifty per cent of the amount proven to be due by the estate was the amount for which Executive and Parsons were jointly and severally liable. Appellee Brief at 7; also Transcript of Proceedings ("Transcript") at 3, located as Exhibit 4 in Index.
Parsons and Executive timely appealed the judgment on the ground that the bankruptcy court erred by admitting summaries of records into evidence when there was no showing that the underlying records were admissible. Brief at 9. Milbank has cross-appealed on the ground that the evidence at trial showed that he was entitled to recover one hundred per cent of the amount sought, or $64,599.86, on behalf of the bankruptcy estate. Appellee Brief at 8.
II. ANALYSIS A. Standard of Review
In reviewing a decision of the bankruptcy court, this court functions as an appellate court and applies the standards of review generally applied in federal court appeals. See Matter of Webb, 954 F.2d 1102, 1103-04 (5th Cir. 1992); Matter of Coston, 991 F.2d 257, 261 n. 3 (5th Cir. 1993) (en banc) (citing Matter of Hipp. Inc., 895 F.2d 1503, 1517 (5th Cir. 1990)). Conclusions of law are reviewed de novo. See Matter of Herby's Foods, Inc., 2 F.3d 128, 131 (5th Cir. 1993). Findings of fact, on the other hand, whether based on oral or documentary evidence, are not to be set aside unless clearly erroneous, and due regard must be given to the opportunity of the bankruptcy court to judge the credibility of the witnesses. See Bankruptcy Rule 8013; see also Herby's Foods, Inc., 2 F.3d at 130-31. A finding is dearly erroneous "when although there is evidence to support it, the reviewing court on the entire evidence is left with a firm and definite conviction that a mistake has been committed." Matter of Missionary Baptist Foundation of America, 712 F.2d 206, 209 (5th Cir. 1983) (quoting United States v. United States Gypsum Company, 333 U.S. 364, 395 (1948)).
The bankruptcy court admitted into evidence, over the objection of Parsons and Executive, summaries of the Contracts alleged to be contained in the Agreements. Brief at 9. Parsons and Executive argue that there was evidence produced at the trial of discrepancies between these summaries and the Agreements, and they conclude that the evidence before the bankruptcy court failed to show with any particularity what amount, if any, was owed by them to Milbank. Brief at 10-12.
As a preliminary matter, this court notes that "[t]he contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in court may be presented in the form of chart, summary, or calculation." United States v. Tannehill, 49 F.3d 1049, 1056 (5th Cir.) (quoting FED. R. EVID. 1006), cert. denied, 516 U.S. 859 (1995). The use of summaries by witnesses such as accountants and appraisers is frequently permitted in bankruptcy courts to aid the trier of fact in understanding the evidence. See In re Snider Farms, Inc., 83 B.R. 977, 983 (Bankr. N.D. Ind. 1988). Moreover, "[a] trial judge sitting without a jury is entitled to greater latitude in the admission or exclusion of evidence." Gabriel v. City of Plano, 202 F.3d 741, 745 (5th Cir. 2000) (quoting Southern Pacific Transportation Company v. Chabert, 973 F.2d 441, 448 (5th Cir. 1992)).
The bankruptcy court here found that:
[Milbank] presented evidence of a situation where there were various parties who had bought automobiles that are apparently older automobiles and they were paying so much periodically on their notes. [Milbank] produced the accounting testimony . . . showing various automobile payments in full and partial payments. And, yet, it was difficult because from the source documents, there was not complete information as to the debtor's operations.
[Parsons] and his accountant testified. [Parsons] testified he paid everything due, but he had no records. They were apparently stolen. But I don't accept all of that. There should have been some proof of some payment some how. The accountant merely passes judgment and didn't seek to look at the source documents that Mr. Wolffarth had.
The problem is, both parties are deficient. Both parties are very deficient in showing detail. But [Milbank] is in hard shape, because he only has certain records. And [Parsons and Executive] ha[ve] nothing, except a vague recollection.
Transcript at 2-3. The court went on to award Milbank half of the amount he claimed was due. Thus, it seems the bankruptcy court has already addressed Parson and Executive's concerns regarding the accuracy of the summaries by crediting them at only one-half of their value.
Parsons and Executive go on to argue various points concerning the bankruptcy court's findings of fact with regard to the amount owed, as does Milbank in his cross-appeal. Brief at 10-12; Appellee Brief at 11-13. In fact, Milbank's main argument is that the court erred because he proved by a preponderance of the evidence that the balance due and owing by Executive and Parsons was $64,599.86. Appellee Brief at 11. However, even though the parties discuss the proceedings before the bankruptcy court in some detail, neither party has provided this court with a copy of the transcript of those proceedings.
"If the appellant intends to urge on appeal that a finding or conclusion is unsupported by the evidence or is contrary to the evidence, the appellant must include in the record a transcript of all evidence relevant to that finding or conclusion." FED. R APP. P. 10(b)(2). "The failure of an appellant to provide a transcript is a proper ground for dismissal of the appeal." Recover-Edge L.P. v. Pentecost, 44 F.3d 1284, 1289 (5th Cir. 1995) (quoting Richardson v. Henry, 902 F.2d 414, 416 (5th Cir.) (dismissing appeal based on sufficiency of the evidence because appellant failed to include a transcript), cert. denied, 498 U.S. 901 (1990)); also Alizadeh v. Safeway Stores, Inc., 910 F.2d 234, 237 (5th Cir. 1990) (where appellant contended that evidence did not support trial court's finding, she had the burden of including in the record a transcript of the evidence pertinent to the finding in question).
Parties complaining of the trial court's decision have the burden to show error. San Fratello v. United States, 340 F.2d 560, 566 (5th Cir. 1965); Murphy v. St. Paul Fire and Marine Insurance Company, 314 F.2d 30, 31 (5th Cir.), cert. denied, 375 U.S. 906 (1963). Without a transcript of the trial, neither party has carried his burden of showing that the factual findings of the bankruptcy court were clearly erroneous, see In re Grey, 902 F.2d 1479, 1482 (10th Cir. 1990), because "the presumption is that [the trial] court was not in error." Murphy, 314 F.2d at 31. Absent such a showing, the judgment of the bankruptcy must be affirmed.
III. CONCLUSION
For the above reasons, the judgment of the bankruptcy court is AFFIRMED.
SO ORDERED.