                                                                    F I L E D
                                                            United States Court of Appeals
                                                                    Tenth Circuit
                                          PUBLISH
                                                                    JUN 14 2001
                     UNITED STATES COURT OF APPEALS
                                                                  PATRICK FISHER
                                                                        Clerk
                                   TENTH CIRCUIT



In re: GRANDOTE COUNTRY CLUB
COMPANY, LTD., debtor in a foreign
proceeding,

               Debtor.
---------------------------------------

HIDEKI KOJIMA, foreign
representative for the estate of
Grandote Country Club Company,
Ltd.; MOUNTAIN INVESTMENT
CORPORATION,

               Plaintiffs - Appellants,
                                                    No. 99-1127
   v.

GRANDOTE INTERNATIONAL
LIMITED LIABILITY COMPANY;
SHIRLEY ZUBAL, in her official
capacity as the Treasurer for Huerfano
County, Colorado; RTV LLC, a
Colorado Limited Liability Company;
DWIGHT A. HARRISON; PAUL D.
HARRISON; RESOLUTION TRUST
CORPORATION, as Receiver for First
Federal Savings and Loan Association
of Estherville and Emmetsburg;
SHIRLEY ZUBAL, in her official
capacity as the Public Trustee of
 Huerfano County, Colorado;
 TSUKASA YOSHII, also known as
 Duke Yoshii; KOICHI HASHIMOTO;
 INTERNAL REVENUE SERVICE;
 WAHATOYAS, LLC,

              Defendants - Appellees.




                 Appeal from the United States District Court
                         for the District of Colorado
                             (D.C. No. 95-B-1863)


Submitted on the briefs.

Brian P. Halloran, Connolly, Halloran & Lofstedt, PC, Louisville, Colorado, for
Plaintiffs-Appellants.

Laura B. Redstone, Ballard, Spahr, Andrews & Ingersoll, LLP, Fredric J. Lewis,
Senn, Lewis & Visciano, PC, and Harry L. Simon, Denver, Colorado, for
Defendants-Appellees.

Dwight A. Harrison and Paul D. Harrison, pro se.


Before SEYMOUR, McKAY, and LUCERO, Circuit Judges.


LUCERO, Circuit Judge.



      Plaintiff-appellant Hideki Kojima, trustee for a Japanese entity involved in

bankruptcy proceedings in Japan, seeks to gain title to a golf course located in La




                                        -2-
Veta, Colorado, referred to by the parties as “the property.” 1 To do so, Kojima

attacks the validity of a transfer of ownership of the golf course, claiming it

should be set aside under Japanese bankruptcy law and was fraudulent, as well as

a subsequent tax sale—arguing it was invalid under the Colorado Uniform

Fraudulent Transfer Act, Colo. Rev. Stat. §§ 38-8-101 to 38-8-112 (“CUFTA”).

We affirm the district court’s grant of summary judgment.

                                          I

      This case has a tortuous procedural history. For the sake of brevity, we

need not discuss in great detail all of the hearings, motions, and proceedings in

state, bankruptcy, and federal district courts relating to the golf course. Plaintiff-

appellant Kojima is the trustee in a Japanese bankruptcy proceeding concerning

Grandote Country Club, Ltd. (“Grandote Japan”). 2 Originally the property was

owned by Grandote International L.L.C., Dwight Harrison, and Paul Harrison

(collectively “Grandote Colorado”). Grandote Colorado failed to pay Colorado

taxes on the property; in November 1990, the Huerfano County Treasurer offered

for sale tax liens encumbering the property. Because no one bought the tax liens,

tax certificates encumbering the property were “struck off” to the county.

      1
        This golf course spawned a great deal of litigation, including related
appeals in this Court. Harrison v. Wahatoyas, L.L.C., Nos. 99-1319, 99-1390
(10th Cir. 2001).
      2
        Kojima has agreed to sell whatever interest he gains in this litigation to
appellant Mountain Investment Corp.

                                          -3-
      In March–June 1991, Dwight Harrison sold most of the property to a

Japanese citizen, Koichi Hashimoto, but retained some interests for himself. That

sale included an acknowledgment that taxes on the property were delinquent. In

February 1993, Hashimoto conveyed the property to Grandote Japan, still subject

to the unpaid tax liens.

      Dwight Harrison filed for bankruptcy in December 1993 in an apparent

effort to forestall foreclosure on a loan currently held by defendant-appellee

Wahatoyas LLC. That proceeding was dismissed on May 31, 1994. On May 2,

1994, just before the bankruptcy action was dismissed, Grandote Japan conveyed

the property back to Grandote Colorado (“the Japan to Colorado transfer”).

Kojima contends the Japan to Colorado transfer was fraudulent.

      On July 8, 1994, Wahatoyas purchased the tax certificates for the property

pursuant to a tax sale. Wahatoyas then paid all outstanding taxes, interest, and

costs and, in October 1994, transferred the tax certificates to defendant-appellee

RTV LLC. That same month, RTV applied for issuance of treasurer’s deeds (“the

Tax Deeds”) to the property. (The three-year statutory period for issuance of the

Tax Deeds had just expired.) The county treasurer then issued initial notice of

RTV’s application for the Tax Deeds pursuant to Colorado statutes and, after

much litigation, issued the Tax Deeds to RTV in May 1995. Armed with the Tax

Deeds, in June 1995 RTV brought a forcible entry and detainer action in Colorado


                                        -4-
state court to gain possession of the property. RTV prevailed in that action, with

the state court finding that the Tax Deeds were valid and awarding RTV

possession, a ruling affirmed by the Colorado Court of Appeals. RTV, L.L.C. v.

Grandote Int’l L.L.C., 937 P.2d 768, 770 (Colo. Ct. App. 1996).

      Meanwhile, Grandote Japan declared bankruptcy in Japan in July 1994.

Kojima, as trustee for Grandote Japan, filed various legal actions seeking to

prevent the issuance of the Tax Deeds to RTV, which were obviously

unsuccessful. See id. Notably, Kojima filed an ancillary proceeding in

bankruptcy court under 11 U.S.C. § 304. The outcome of that proceeding was an

order authorizing Kojima to pursue whatever litigation he wished to establish his

rights and claims in the property. In re Kojima, 177 B.R. 696, 704 (Bankr. D.

Colo. 1995).

      As a result of that order, Kojima brought this suit, seeking to avoid the

Japan to Colorado transfer and the issuance of the Tax Deeds to RTV. The

district court granted summary judgment in favor of defendants, concluding that

Japanese law did not apply to this case, that the Tax Deeds were properly issued,

and that there was no evidence of fraudulent transfer.

                                         II

      At the time this appeal was filed, we questioned whether the district court’s

judgment was a final, appealable order because it dismissed some of Kojima’s


                                        -5-
claims without prejudice. See Heimann v. Snead , 133 F.3d 767 (10th Cir. 1998).

The district court subsequently amended its judgment to dismiss all claims with

prejudice, and thus there is no longer any doubt that the judgment is appealable

and that we have jurisdiction under 28 U.S.C. § 1291.

                                         III

      “We review the grant or denial of summary judgment de novo, applying the

same legal standard used by the district court . . . .” Kaul v. Stephan, 83 F.3d

1208, 1212 (10th Cir. 1996) (citation omitted). Summary judgment is appropriate

“if the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of

law.” Fed. R. Civ. P. 56(c). In reviewing a summary judgment motion, the court

is to view the record “in the light most favorable to the nonmoving party.”

Thournir v. Meyer, 909 F.2d 408, 409 (10th Cir. 1990) (citation omitted). The

purpose of a summary judgment motion, unlike that of a motion to dismiss, is to

determine whether there is evidence to support a party’s factual claims.

Unsupported conclusory allegations thus do not create a genuine issue of fact.

See United States v. Simons, 129 F.3d 1386, 1388–89 (10th Cir. 1997) (citing

Allen v. Muskogee, Okla., 119 F.3d 837, 843–44 (10th Cir. 1997)). To withstand

summary judgment, the nonmoving party “must come forward with ‘specific facts


                                         -6-
showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e)).

                                 A. Choice of Law

      Kojima brought this action as an ancillary proceeding under 11 U.S.C.

§ 304 3 pursuant to an order of the bankruptcy court granting Kojima permission to

pursue its claims in federal court. See Kojima, 177 B.R. at 704. The bankruptcy

judge’s opinion discussed, but did not determine, whether Japanese law should be

applied to Kojima’s claims. Id. at 699–703. At summary judgment, the district

court rejected use of Japanese law. Kojima argues that Japanese law should apply

and that under Japanese law the Japan to Colorado transfer is avoidable.

      Section 304 allows proceedings to be brought in the United States “to

function in aid of a [bankruptcy] proceeding pending in a foreign court.” Id. at

700 (citation omitted). Applying principles of “comity,” such proceedings may

utilize foreign law to recover property located in the United States when

application of foreign law will “best assure an economical and expeditious

administration” of the bankruptcy estate. 11 U.S.C. § 304(c).

      In determining whether to apply Japanese law, we discern two competing

values. On one hand are principles of comity, which favor application of



      3
        Judge Brooks discussed the nature and purposes of § 304 ancillary
proceedings in his thorough opinion. See Kojima, 177 B.R. at 699–701.

                                         -7-
Japanese law. On the other are the interests of the locality where the property is

located, which favor application of United States/Colorado law. In support of

comity and applying Japanese law, Kojima cites Philadelphia Gear Corp. v.

Philadelphia Gear de Mexico, S.A., 44 F.3d 187 (3d Cir. 1994). In that case, the

Third Circuit announced a policy favoring application of a foreign state’s laws:

      In general, “[u]nder the principle of international comity, a domestic
      court normally will give effect to executive, legislative, and judicial
      acts of a foreign nation.” More specifically, we have stated that
      “[c]omity should be withheld only when its acceptance would be
      contrary or prejudicial to the interest of the nation called upon to
      give it effect.”

Id. at 191 (citations omitted); see also In re Hourani, 180 B.R. 58, 64 (Bankr.

S.D.N.Y. 1995) (“[T]his nation’s preparedness to grant deference to the laws and

proceedings of other nations is considerable.”). The bankruptcy judge’s analysis

in the earlier ancillary proceeding in this case also lends support to Kojima’s

argument. He concluded that Japanese bankruptcy law is “consonant with and

complementary to the principal features which govern the United States’

Bankruptcy Code.” Kojima, 177 B.R. at 702.

      Despite these arguments for applying Japanese law, we agree with the

district court that under the facts of this case, Colorado law is the appropriate law

to apply in resolving Kojima’s claims. Most importantly, the fact that the only

asset at issue is real property favors application of local law. A Second Circuit



                                          -8-
opinion explains why local law should be applied to resolve disputes involving

real property.

      Property interests have an independent legal source, antecedent to the
      distributive rules of bankruptcy administration, that determines in the
      first instance the interests of claimant parties in particular property.
      It logically follows that before a particular property may be turned
      over pursuant to § 304(b)(2), a bankruptcy court should apply local
      law to determine whether the debtor has a valid ownership interest in
      that property when the issue is properly posed by an adverse
      claimant.

In Re Koreag, Controle et Revision S.A., 961 F.2d 341, 349 (2d Cir. 1992); see

also In re Spanish Cay Co., 161 B.R. 715, 725 (Bankr. S.D. Fla. 1993) (“[A] basic

tenet of international law [is that] real property should be governed by the laws of

the country in which the property is located.”).

      Moreover, both federal and state choice of law principles favor application

of the “law of the jurisdiction having the greatest interest in the litigation,” In Re

Koreag, 961 F.2d at 350, or the law of the jurisdiction with the “most significant

relationship” to the transaction at issue, Wood Bros. Homes, Inc. v. Walker

Adjustment Bureau, 601 P.2d 1369, 1372 (Colo. 1979). Without question,

Colorado has the greatest interest in the litigation: the property is located in

Colorado, the tax sale was conducted for failure to pay Colorado taxes, most of

the agreements related to the property were executed in Colorado, and there has

been extensive litigation in Colorado courts to determine the owner of the

property. See, e.g., RTV, 937 P.2d at 768.

                                          -9-
       B. The Colorado Uniform Fraudulent Transfer Act (“CUFTA”)

      Kojima seeks to avoid the transfer of the property pursuant to the Tax

Deeds, claiming that their issuance to RTV violates CUFTA. Kojima’s brief on

this point is, to put it delicately, opaque; Kojima seems to argue that the transfer

by Tax Deeds violates CUFTA merely because it constitutes a transfer made by a

“debtor” (i.e., Grandote Colorado) at a time a “creditor” (i.e., Kojima) had a

claim to the property. (Appellants’ Br. at 17 (citing Colo. Rev. Stat. §§ 38-8-105,

38-8-106).) To run afoul of CUFTA, a transfer must involve “actual intent to

hinder, delay, or defraud any creditor” or must have been made for less than

“reasonably equivalent value.” Colo. Rev. Stat. § 38-8-105(1)(a), (b). Although

never directly stating this, Kojima appears to rely on both grounds.

      No matter its exact form, Kojima’s argument is premised on the theory that

the transfer of the property by the Tax Deeds was made from Grandote Colorado

to RTV. We rejected that theory in Weinman v. Simons (In re Slack-Horner

Foundries Co.), 971 F.2d 577, 580 (10th Cir. 1992). Weinman held that “[t]he

failure to pay taxes due results in a forfeiture of the original owner’s interest in

the property, by operation of law, to the state, which then grants title to the

property to the holder of the lien free and clear of any other claims.” Id. at 581

(emphasis added). Indeed, Colorado law is settled, acquisition of real property by

tax deeds provides


                                         -10-
      virgin title to the property, erasing all former interest in the land
      . . . . [A] tax title from its very nature has nothing to do with the
      previous chain of title and does not in any way connect itself with it.
      It breaks up all previous titles. . . . By whatever means [Grandote
      Japan and Kojima] claimed to have acquired the land, they lost it
      when a treasurer’s deed issued in accordance with the law.

Hartley v. Ruybal, 414 P.2d 114, 117 (Colo. 1966); 4 see also Harrison v. Everett,

308 P.2d 216, 219 (Colo. 1957) (“The issuance of a valid treasurer’s deed created

a virgin title erasing all former interests in the land.”). Under Weinman and

Hartley, the Tax Deeds transfer was made by the state of Colorado (free of all

prior interests), not by Grandote Colorado, and thus there was no transfer by a

“debtor,” which is required to violate CUFTA.

      Kojima seeks to distinguish Weinman on the ground that the case was

decided under a federal bankruptcy statute, 11 U.S.C. § 548, rather than CUFTA.

However, the language of § 548 and the relevant portions of CUFTA are quite

similar. Compare 11 U.S.C. § 548(a)(1)(A), (B) (stating that a trustee may avoid

transfers made “with actual intent to hinder, delay, or defraud” or for which the

debtor “received less than a reasonably equivalent value”), with Colo. Rev. Stat.

§ 38-8-105(1)(a), (b) (stating that a transfer is fraudulent if it was made “[w]ith

actual intent to hinder, delay, or defraud any creditor” or if the debtor received



      4
         Hartley’s holding is premised on the validity of the tax deeds themselves.
In prior litigation, the Colorado Court of Appeals upheld the validity of the Tax
Deeds, concluding that RTV held proper title. See RTV, 937 P.2d at 770.

                                         -11-
less than “reasonably equivalent value”). Because this language is nearly

identical, the holding of Weinman logically applies to the situation in this case.

      Kojima’s CUFTA claim fails for another reason. A transfer is not

fraudulent under CUFTA where an asset is acquired for “a reasonably equivalent

value” through a “regularly conducted, non-collusive sale, foreclosing on assets

subject to a lien.” Colo. Rev. Stat. § 38-8-104(2). In BFP v. Resolution Trust

Corp., 511 U.S. 531, 545 (1994), the Supreme Court held that a mortgage

foreclosure sale constitutes a transfer for “reasonably equivalent value,” even if

the purchase price was below market value, as long as there is no evidence of

collusion. Although BFP did not address a tax sale, see id. at 537 n.3, which is

how the property in this case was transferred, BFP has been extended to the tax

sale context. See, e.g., T.F. Stone Co. v. Harper (In re T.F. Stone Co.), 72 F.3d

466, 468–69 (5th Cir. 1995); Russell-Polk v. Bradley (In re Russell-Polk), 200

B.R. 218, 220–22 (Bankr. E.D. Mo. 1996); Golden v. Mercer County Tax Claim

Bureau (In re Golden), 190 B.R. 52, 58 (Bankr. W.D. Pa. 1995); Hollar v. Myers

(In re Hollar), 184 B.R. 243, 252 (Bankr. M.D.N.C. 1995); Lord v. Neumann (In

re Lord), 179 B.R. 429, 432–35 (Bankr. E.D. Pa. 1995); McGrath v. Simon (In re

McGrath), 170 B.R. 78, 82 (Bankr. D.N.J. 1994).

      We are aware that courts have not been unanimous in extending BFP to the

tax sale context, with this circuit’s Bankruptcy Appellate Panel among those


                                         -12-
refusing to apply BFP to a transfer made by a tax sale. See Sherman v. Rose (In

re Sherman), 223 B.R. 555, 558–59 (B.A.P. 10th Cir. 1998). Nevertheless, the

decisive factor in determining whether a transfer pursuant to a tax sale constitutes

“reasonably equivalent value” is a state’s procedure for tax sales, in particular,

statutes requiring that tax sales take place publicly under a competitive bidding

procedure. See id. at 559 (refusing to extend BFP to a tax sale conducted under

Wyoming statutes that “do not permit a public sale with competitive bidding”).

RTV acquired the property through a regularly conducted tax sale under Colorado

law subject to a competitive bidding procedure. See Colo. Rev. Stat. §§ 39-11-

101, 39-11-108. Kojima has not alleged that the tax sale in this case was

conducted in violation of Colorado law. We thus conclude that the tax sale at

issue constitutes transfer for “reasonably equivalent value” under CUFTA.

                                      C. Fraud

      Kojima argues that the Japan to Colorado transfer was fraudulent because

the only person with authority to execute the conveyance, Noriyuki Hoshi, did not

do so. In response to this claim, Grandote Colorado submitted an affidavit from

Dwight Harrison in which he recited the events surrounding the conveyance:

      10. After considerable communication between Hashimoto and me I
      met Hashimoto in Japan and we entered into [a] memorandum on
      May 2, 1994. The memorandum correctly states the purpose of the
      conveyance of the property to Grandote [Colorado]. Also present
      during the meeting were Defendant Duke Yoshii (the interpreter) and
      Noriyuki Hoshi who was introduced to me as the person with

                                         -13-
      authority to execute the deed referred to in the memorandum.

      11. Immediately after signing the memorandum, Hashimoto, Yoshii,
      Hoshi and I traveled to the U.S. Consulate in Fukuoka, Japan to
      accomplish the execution of the deed conveying the property to
      Grandote [Colorado].

      12. At the Consulate we were ushered into a large conference room
      where we were introduced to Donald Y. Yamamoto Counsel for the
      United States. Mr. Yamamoto was known to Yoshii who introduced
      us and explained the purpose of our meeting to Mr. Yamamoto. Mr.
      Yamamoto asked for identification. I saw Hoshi give Mr. Yamamoto
      his passport and recognized it as a Japanese passport but did not
      personally compare the passport picture with Hoshi’s face. Mr.
      Yamamoto examined Hoshi’s passport. We then proceeded to a table
      to sign the deeds. Hoshi said that his first name had been misspelled
      on the prepared deed and asked Mr. Yamamoto to correct it, which
      Mr. Yamamoto himself did on a typewriter. The deeds were signed
      and notarized by Mr. Yamamoto.

(Appellant’s App. at 36–37.)

      The district court concluded that in light of this affidavit there was no

genuine dispute of material fact because Kojima presented no evidence other than

the allegations in his complaint. Kojima argues that his complaint is verified, and

“[v]erification of a complaint converts [it] . . . to an affidavit suitable for use in

opposing a motion for summary judgment.” (Appellant’s Reply Br. at 10.)

Although a verified complaint may have evidentiary value, this is only true “if the

facts asserted are within the pleader’s personal knowledge.” Jaxon v. Circle K

Corp., 773 F.2d 1138, 1139 n.1 (10th Cir. 1985). Kojima’s complaint, which is

verified only by Kojima himself, contains only a hearsay allegation regarding


                                           -14-
Hoshi’s identity: “Mr. Hoshi confirms that he did not execute the General

Warranty Deed.” (Appellant’s App. at 251 ¶ 110.) Because Kojima never

submitted any non-hearsay evidence controverting Harrison’s affidavit, the

district court was correct to rule that Kojima failed to support his allegation with

“competent Rule 56 evidence.” (Id. at 37.)

                                          IV

      The judgment of the district court is AFFIRMED.




                                         -15-
