United States Bankruptcy Appellate Panel of the Eighth Circuit
In re: Aaron James McCann, as surety for Switching Gears, LLC, as surety for 7 Flags Promotions, LLC, as surety for 7 F Food & Beverage, LLC, as surety for 2100 Club, LLC Debtor.
Aaron James McCann Defendant - Appellant SMC Holdings, LLC Plaintiff - Appellee,
Submitted: June 27, 2019
from United States Bankruptcy Court for the District of
Minnesota - Duluth
SALADINO, Chief Judge, NAIL and SHODEEN, Bankruptcy Judges.
SHODEEN, Bankruptcy Judge.
Debtor, Aaron McCann, appeals the bankruptcy
court's February 11, 2019 judgment determining SMC
Holdings, LLC's claim against him was nondischargeable.
Holdings, LLC filed an adversary proceeding to except its
debt from McCann's discharge under 11 U.S.C.
§523(a)(2)(A). At the end of the trial, after presenting
no defense, McCann's counsel made an oral motion for
judgment on partial findings on the basis that SMC was not
the real party-in-interest. Fed.R.Civ.P. 17(a);
Fed.R.Bankr.P. 7017; Curtis Lumber Co. v. La. Pac.
Corp., 618 F.3d 762, 771 (8th Cir. 2010); Samuel J.
Temperato Revocable Tr. v. Unterreiner (In re
Unterreiner), 459 B.R. 725, 730 (B.A.P. 8th Cir. 2011).
The bankruptcy court denied McCann's request and entered
judgment in favor of SMC for $2, 500, 000. McCann appeals the
jurisdiction extends to "the events and rulings leading
to a final order." Zahn v. Fink (In re Zahn),
526 F.3d 1140, 1143 (8th Cir. 2008). We review the bankruptcy
court's findings of fact for clear error and legal
conclusions related to the entry of judgment pursuant to Rule
52(c) de novo. Minn. Laborers Health &
Welfare Fund v. Scanlan, 360 F.3d 925, 927 (8th Cir.
2004); Clark v. Runyon, 218 F.3d 915, 918 (8th Cir.
and his business Switching Gears, LLC (collectively McCann)
began discussions with Renewtech, LLC to manufacture and
install wind turbines on tribal lands. To move the project
forward the parties agreed that contributions in exchange for
an ownership interest in Switching Gears were required. SMC
operated as an investment vehicle for Vinco, Inc. and
Renewtech. Total contributions of $2.7 million were completed
under this arrangement before it became clear that the
project could not proceed. The focus of McCann's argument
is that Vinco was the entity that wired funds and issued him
a check making it the proper party to assert this claim
answer McCann admits that SMC provided the funds. The
testimony reflects that on the date of the transfer time was
of the essence for the funds to be paid. Because SMC did not
have immediate access to the amount necessary to fund the
request Vinco made the transfer to McCaan as an entity under
common ownership. This transfer was reflected on the
companies' books as a loan from Vinco to SMC. The
parties' term sheet specifically stated that should the
agreement not be executed the money would be returned to SMC,
bankruptcy court viewed the evidence as demonstrating Vinco
was only acting on SMC's behalf and that SMC was the real
party in interest; Debtor views the evidence as demonstrating
the funds came from Vinco and that Vinco was the real party
in interest. The bankruptcy court's view is certainly
permissible in light of the evidence. For that reason alone,
even assuming Debtor's view is also permissible, we
cannot say the bankruptcy court's finding was clearly
erroneous. Anderson v. City of Bessemer City, North
Carolina,470 U.S. 564, 574 ...