                    United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT

                                    ___________

                                    No. 96-1838
                                    ___________

In re: Stanley Bargfrede;                *
Pamela Bargfrede,                        *
                                         *
              Debtors.                   *
                                         *
-------------------------                *
                                         *
Michael S. Dietz, Trustee of             *
the Bankruptcy Estate of                 *   Appeal from the United States
Stanley and Pamela Bargfrede,            *   District Court for the
                                         *   District of Minnesota.
              Appellant,                 *
                                         *
     v.                                  *
                                         *
St. Edward's Catholic Church;            *
Diocese of Dubuque,                      *
                                         *
              Appellees.                 *


                                    ___________

                     Submitted:     February 14, 1997

                           Filed:   June 27, 1997
                                    ___________

Before HANSEN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and
MELLOY,1 District Judge.
                               ___________

PER CURIAM.


     Bankruptcy Trustee Michael Dietz (Trustee) appeals the




     1
      The Honorable Michael J. Melloy, Chief Judge, United States
District Court for the District of Northern Iowa, sitting by
designation.
district court's affirmance of the bankruptcy court's entry of summary
judgment in favor of St. Edward's Catholic Church and the Diocese of
Dubuque (Church) in his proceeding to recover three pre-filing transfers.
We reverse in part and remand.


     In 1989, Pamela Bargfrede pleaded guilty to felony theft after she
embezzled over $200,000 from the Church at which she was employed as a
bookkeeper.   The Church was awarded a civil judgment, which was satisfied
by agreement after the three separate payments which are at issue in this
matter were received by the Church.       The first payment, made in 1991,
represented the proceeds from the sale of the Bargfredes’ homestead.    The
second payment, also made in 1991, represented the proceeds from an auction
sale of their personal property and household items.   The third payment was
made by Pamela's husband, Stanley Bargfrede, in July 1992, and represented
a lump sum withdrawal from his pension and profit sharing accounts.


     On April 19, 1993, less than one year after the last payment, the
Bargfredes filed a Chapter 7 bankruptcy petition.      As relevant to this
appeal, the Trustee commenced an adversary proceeding to recover the 1992
transfer of Stanley's pension funds as fraudulent under 11 U.S.C. §
548(a)(2)(A),(B)(i); alternatively, the Trustee claimed the transfer was
preferential because the Church was an insider pursuant to 11 U.S.C. § 547.
The trustee also sought to recover Stanley's one-half interest in the 1991
transfers of the proceeds from the sales of the homestead and personalty
as fraudulent under Iowa law pursuant to 11 U.S.C. § 544(b).
     The bankruptcy court granted the Church summary judgment with respect
to all three transfers, finding the release of a possible burden on the
marital relationship and the preservation of the family relationship
constituted reasonably equivalent value and




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consideration to Stanley.        The bankruptcy court alternatively concluded
that the homestead proceeds were exempt.               The bankruptcy court also
rejected    the   Trustee's    claim   that   the    pension   funds   transfer   was
preferential.     The district court affirmed.


     We review de novo a grant of summary judgment, determining whether
the record, when viewed in the light most favorable to the non-moving
party, shows that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law.           See Fed.
R. Civ. P. 56(c); In re Young, 82 F.3d 1407, 1413 (8th Cir. 1996).


     As to the transfer of Stanley's pension funds, the provision under
which the Trustee is proceeding allows him to void the transfer as
fraudulent if Stanley did not receive reasonably equivalent value for the
transfer and if he was insolvent at the time of, or made insolvent by, the
transfer.   See 11 U.S.C. § 548(a)(2)(A), (B)(i).
     We conclude the bankruptcy court erred in holding that Stanley
received reasonably equivalent value for the transfer of his pension funds.
The transfer directly benefitted Stanley's wife, not him, by discharging
her debt to the Church.       See In re Jolly's, Inc., 188 B.R. 832, 842 (Bankr.
D. Minn. 1995) (transfers made solely for benefit of third party do not
furnish reasonably equivalent value); Biggs v. United States Nat'l Bank,
11 B.R. 524, 527 (D. Neb. 1980) (same).             To the extent Stanley received
indirect, non-economic benefits in the form of a release of a possible
burden on the marital relationship and the preservation of the family
relationship, we find these sufficiently analogous to other intangible,
psychological benefits to conclude that they do not constitute reasonably
equivalent value.      See In re Young, 152 B.R. 939, 948 (D. Minn. 1993)
(moral obligations not reasonably




                                        -3-
equivalent value), rev'd on other grounds, 82 F.3d 1407 (8th Cir. 1996);
see also In re Treadwell, 699 F.2d 1050, 1051 (11th Cir. 1983) (love and
affection not reasonably equivalent value); Zahra Spiritual Trust v. United
States, 910 F.2d 240, 249 (5th Cir. 1990) (spiritual fulfillment not
reasonably equivalent value).


     The transfers of Stanley's one-half interest in the homestead and
personalty proceeds are not voidable under section 548(a), as they were
made more than a year before the Chapter 7 filing.   See 11 U.S.C. § 548(a).
However, the Trustee may still void these transfers if they are voidable
under Iowa law.   See 11 U.S.C. § 544(b); Iowa Code Ann. § 614.1(4) (West
Supp. 1996) (five year statute of limitations).   Under Iowa law applicable
                                  2
at the time this action was filed, the Trustee may set aside the transfers
in question if they were fraudulent; the transfers are presumed to be
fraudulent if Stanley did not receive consideration, unless the Church
proves that Stanley remained solvent after the transfers.    See Regal Ins.
Co. v. Summit Guar. Corp., 324 N.W.2d 697, 703 (Iowa 1982).
     The bankruptcy court concluded that the release of a possible burden
on the marital relationship and the preservation of the family relationship
also constituted consideration for the transfers of the homestead and
personalty sale proceeds.   As the Supreme Court of Iowa has not addressed
this precise issue, we must attempt to predict what that Court would decide
if faced with the issue, considering "relevant state precedent, analogous
decisions, considered dicta, . . . and any other reliable data".        See
Ventura v. Titan Sports, Inc., 65 F.3d 725, 729 (8th Cir. 1995), cert.




     2
      Iowa's Uniform Fraudulent Transfer Act does not apply to this
matter, as the Act, which was effective January 1, 1995, is not
retroactive. See Iowa Code Ann. §§ 684.1-684.12 (West Supp. 1996).


                                      -4-
denied, 116 S. Ct. 1268 (1996).   We believe that the Supreme Court of Iowa
would conclude    that the benefits Stanley received to his marital and
family relationships do not constitute consideration.   Cf. First Nat'l Bank
v. Frescoln Farms, Ltd., 430 N.W.2d 432, 435 (Iowa 1988) (transfer of stock
"in consideration of love and affection" is not consideration for purposes
of Iowa fraudulent transfer law).


     Because the bankruptcy court erroneously concluded that Stanley
received reasonably equivalent value and consideration for the disputed
transfers, it did not consider whether the Trustee also showed that Stanley
was insolvent at the time of, or rendered insolvent because of, the pension
funds transfer, see In re Hemphill, 18 B.R. 38, 48 (Bankr. S.D. Iowa 1982)
(burden on party seeking to void transfer to prove elements of § 548), nor
or whether    the Church proved that Stanley remained solvent after the
transfers of the homestead and personalty proceeds, see Regal Ins. Co., 324
N.W.2d at 703 (burden on transferee to prove transferor remained solvent).
Thus, we remand for the bankruptcy court to consider those issues.


     As to the homestead proceeds, we also disagree with the bankruptcy
court's alternative conclusion that such proceeds were exempt; we disagree
because the Bargfredes did not invest the proceeds in a new home; instead,
they intended to, and did, use the proceeds to satisfy Pamela's debt to the
Church.   See Iowa Code Ann. § 561.20 (West 1992) (new home acquired with
proceeds from old home exempt to value of old); Millsap v. Faulkes, 20
N.W.2d 40 (Iowa 1945) (proceeds of homestead exempt only for purpose of
reinvesting in new home).     As to the proceeds from the sale of the
Bargfredes' personalty, the bankruptcy court stated that the record was
insufficient to determine whether the personalty items, and




                                    -5-
thus the proceeds therefrom, were exempt.   On remand, should the bankruptcy
court conclude the transfer of the personalty proceeds was fraudulent, it
may need to further consider whether any of the personalty was exempt.


     A true copy.


           Attest:



                 CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




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