                                                                                                                           Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


4-29-2005

In Re: Melvin Shaw
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-3575




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Recommended Citation
"In Re: Melvin Shaw " (2005). 2005 Decisions. Paper 1290.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1290


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                                                   NOT PRECEDENTIAL


           IN THE UNITED STATES COURT
                    OF APPEALS
               FOR THE THIRD CIRCUIT


                       NO. 04-3575


             IN RE: MELVIN SHAW, Debtor

                      Melvin Shaw,
                       Appellant




            On Appeal From the United States
                        District Court
               For the District of New Jersey
           (D.C. Civil Action No. 04-cv-02473)
           District Judge: Hon. Robert B. Kugler


      Submitted Pursuant to Third Circuit LAR 34.1(a)
                      April 22, 2005

BEFORE: ROTH, FUENTES and STAPLETON, Circuit Judges

              (Opinion Filed: April 29, 2005)




               OPINION OF THE COURT
STAPLETON, Circuit Judge:

       Appellant/Debtor Melvin Shaw appeals from a District Court order affirming the

dismissal of his Chapter 7 petition in bankruptcy for lack of “good faith” pursuant to 11

U.S.C. § 707(a). We will affirm.

       Shaw filed his voluntary Chapter 7 petition on June 5, 2003. It listed five

unsecured creditors, including one Janine Hamilton, whose claim was described as

involving “guarantor liability for loan to Philly Motor Sport, Inc.,” in the amount of

$180,000.

       Shaw pled guilty to Count Fourteen of a federal indictment which charged him

with using a wire communication in interstate commerce to execute a scheme to defraud.

Specifically, his plea constituted an admission that he devised and executed a scheme

from October 2001 to August 2002 to defraud business associates of Shaw Auto Sport

and Philly Motor Sport. “It was part of the scheme that [inter alia]:”

              3. Defendant MELVIN D. SHAW borrowed money from third
       parties and pledged as collateral certain cars, fraudulently misrepresenting
       that he owned such cars and that no other person had any interest in or
       claim against such cars.

              4. Defendant MELVIN D. SHAW borrowed money from a third
       party and agreed to share with that party profits earned from the purchase
       and re-sale of a particular car, fraudulently misrepresenting the condition
       and history of that car.

App. at Pa-3.

       Hamilton successfully moved to dismiss Shaw’s petition for cause under 11 U.S.C.



                                             2
§ 707(a). In support of her motion, Hamilton filed a sworn certification which advised

the Court as follows:

              Beginning on October 11, 2001, I made loans to debtor and his
       corporations (Shaw Auto Sport, Inc., a New Jersey corporation [SAS] and
       Philly Motor Sport, Inc. a Pennsylvania corporation [PMS] totaling
       $150,000.00 to be used only for the purchase of automobile inventory.
       Debtor and his corporations gave plaintiff promissory notes and securing
       agreements evidencing and securing the loans. Debtor was personally
       obligated as well as the corporations.

App. at Pa-23. The certification went on to aver that Shaw’s representations with respect

to the condition of the pledged vehicles was material and knowingly false and that Shaw

falsely represented that he owned the vehicles and that no other person had any interest in

them. Based on these fraudulent misrepresentations, Hamilton secured a judgment

against Shaw and Philly Motor Sport in the amount of $180,000.

       Hamilton also supplied the Bankruptcy Court with a Victim Notification Letter she

had received from the United States Attorney’s Office referencing Shaw and his

indictment.

       Following a hearing, the Bankruptcy Court concluded, not surprisingly, that

Hamilton was a victim of the fraudulent scheme to which Shaw had confessed. It also

concluded on the basis of a defaulted adversarial complaint of the Trustee that Shaw had

failed to list many of his creditors.1 The Court ultimately concluded that “[t]his

individual is not an honest debtor seeking to discharge creditors.”

   1
    The Court also noted that Shaw had obstructed the bankruptcy proceedings by failing
to cooperate with his attorney.

                                             3
       We reject Shaw’s arguments for essentially the reasons given in the District

Court’s opinion. Shaw pled guilty to having conducted the fraudulent scheme described

in Count Fourteen, not just to sending the wire communication noted in paragraph 6 of

that Count. Given that fact, the record provides ample support for the Bankruptcy Court’s

conclusion that Shaw’s petition sought discharge of a $180,000 debt which he knew to be

non-dischargeable.

       Judd v. Wolfe, 78 F.3d 110 (3d Cir. 1996), does not stand for the proposition that

there can be no finding of a lack of good faith in a no-asset case.

       The judgment of the District Court will be affirmed.




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