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United States Court of Appeals
Fifth Circuit
F I L E D
In the
May 23, 2003
United States Court of Appeals
Charles R. Fulbruge III
for the Fifth Circuit
Clerk
_______________
m 02-30765
_______________
IN THE MATTER OF:
KELLY DENNIS,
Debtor.
SIDNEY ROBERTSON, III,
Appellant,
VERSUS
KELLY DENNIS
AND
GULF SOUTH TITLE CORPORATION,
Appellees.
_________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
_________________________

Before SMITH, DENNIS, and CLEMENT,
manded that Dennis pay him roughly $63,000
Circuit Judges.
to satisfy the judgment for her post-divorce
use of the house. Within days, Dennis filed a
JERRY E. SMITH, Circuit Judge:
petition for chapter 7 bankruptcy.
Sidney Robertson sued Kelly Dennis,1 his
Robertson filed two adversary proceedings
ex-wife and a chapter 7 debtor, in bankruptcy
in bankruptcy court. First, he requested that
court over a debt of about $6,000. After a
the court lift the automatic stay so he could
bench trial, the bankruptcy court entered judg-
obtain, from escrow, the proceeds from the
ment for Dennis and discharged her debts, in-
sale of the house. The court denied the re-
cluding the debt owed to Robertson. The dis-
quest, and the district court affirmed.2 Sec-
trict court affirmed. Finding no clear error, we
ond, and the subject of this appeal, Robertson
affirm.
sought to deny Dennis a discharge under 11
U.S.C. § 727(a) or t o make Dennis's debt to
I.
him non-dischargeable under 11 U.S.C. § 523-
Though the marriage of Robertson and
(a)(15). Against the approximately $63,000 in
Dennis lasted for barely six years, the litigious
accrued rent and interest, the court recognized
aftermath has lasted for over a decade. The
an offset of about $57,000 for Dennis's mort-
state court granted their divorce in 1992 and
gage payments, repairs, and improvements.
divided their personal property, with Dennis
Thus, the court concluded that Robertson had
receiving approximately $8,200 more in value
a valid claim against Dennis for about $6,000,
than did Robertson. The court also allowed
which estimate neither Robertson nor Dennis
Dennis to continue living in their marital home.
disputes.
In 1997, Dennis married Clinton Smith,
After a two-day trial, the bankruptcy court
who eventually moved in with Dennis at the
entered judgment for Dennis. First, the court
house she once had shared with Robertson.
found that she lacked actual intent to defraud
Shortly thereafter and perhaps not coinciden-
her creditors or the bankruptcy estate by trans-
tally, Robertson sought a revised property set-
ferring savings bonds to her son in the year
tlement in state court. Dennis did not appear,
preceding bankruptcy. The court therefore
and the court entered a default judgment re-
held that § 727(a)(2)(A) does not prevent her
quiring her to pay Robertson monthly rent for
from receiving a discharge. Second, the court
use of the house, including accrued rent and
found that Dennis kept and filed adequate fi-
interest from 1992.
Once they learned of this judgment, Dennis
2
and Smith sold the house and bought their
Robertson wanted not only his share of the
sale proceeds, but also Dennis's share to compen-
own. At about the same time, Robertson de-
sate for the earlier unequal distribution of the per-
sonal property. Coincidentally, Dennis's share al-
most exactly made up for the $8,200 difference in
1 Dennis has remarried and is now legally
the personal property distribution. Notwithstand-
known as Kelly Smith. For the sake of clarity, and
ing Robertson's vehement arguments to the con-
because she filed for bankruptcy under her maiden
trary, this adversary proceeding is not a subject of
name, we refer to her as "Dennis."
the instant appeal.
2

nancial records. The court therefore held that
1.
§ 727(a)(3) does not prevent a discharge.
Robertson reasons that the bankruptcy
Third, the court found that Dennis could not
court clearly erred by finding that Dennis
pay the debt to Robertson and that a discharge
lacked actual intent to defraud under § 727-
would benefit her more than it would harm
(a)(2)(A). He contends that her fraudulent
Robertson. The court therefore held that the
intent is shown by her purchase of savings
debt is dischargeable under § 523(a)(15). The
bonds for her son in the year preceding
district court affirmed.
bankruptcy.
II.
Section 727(a)(2)(A) entitles individual
Robertson does not argue that the bank-
debtors to a discharge unless "the debtor, with
ruptcy court misunderstood or misapplied the
intent to hinder, delay, or defraud a creditor
governing bankruptcy law, but only that the
. . . has transferred . . . property of the debtor,
court clearly erred in its factual findings. "We
within one year before the date of the filing of
review the bankruptcy court's findings of fact
the petition." 11 U.S.C. § 727(a)(2)(A). The
for clear error and its conclusions of law de
purpose of this section "is to deny a discharge
novo." Gamble v. Gamble (In re Gamble),
to those debtors who, intending to defraud,
143 F.3d 223, 225 (5th Cir. 1998). A finding
transfer property which would have become
of fact is clearly erroneous only if "on the en-
property of the bankrupt estate." Pavy v.
tire evidence, the court is left with the definite
Chastant (In re Chastant), 873 F.2d 89, 90
and firm conviction that a mistake has been
(5th Cir. 1989). Section 727(a)(2)(A) has four
committed." Hibernia Nat'l Bank v. Perez (In
elements: "(1) a transfer of property; (2) be-
re Perez), 954 F.2d 1026, 1027 (5th Cir.
longing to the debtor; (3) within one year of
1992) (quotation marks and citations omitted).
the filing of the petition; (4) with intent to
"[W]e must give `due regard . . . to the
hinder, delay, or defraud a creditor . . . ." Id.
opportunity of the [bankruptcy] court to judge
Dennis disputes only that she had actual intent
the credibility of the witnesses.'" Id. (quoting
to defraud.
FED. R. CIV. P. 52(a)). After a review of the
record, we conclude that the court did not
"The finding of intent to hinder, delay, or
clearly err in any of its factual findings.
defraud a creditor is a factual one which must
be reviewed under the clear error standard."
A.
Perez, 954 F.2d at 1029 (citing Thibodeaux v.
Robertson argues first that the bankruptcy
Olivier (In re Olivier), 819 F.2d 550, 552 (5th
court clearly erred by granting Dennis a dis-
Cir. 1987)). As plaintiff, Robertson bore the
charge at all. In particular, he contends that
burden to prove Dennis's intent to defraud.
the court should have denied Dennis a dis-
Chastant, 873 F.2d at 90-91. "Moreover,
charge under 11 U.S.C. § 727(a)(2)(A) for
evidence of actual intent to defraud creditors
fraudulently transferring or concealing assets
is required to suppo rt a finding sufficient to
and under 11 U.S.C. § 727(a)(3) for failure to
deny a discharge. Constructive intent is insuf-
keep and file adequate financial records.
ficient." Id. at 91 (quotation marks and inter-
nal citation omitted).
Given the obvious problems of proof,
3

though, "[a]ctual intent . . . may be inferred
Finally, the Chastant debtor transferred far
from the actions of the debtor and may be
more valuable property than did Dennis.
shown by circumstantial evidence." Id. We
Though Chastant, id. at 90, does not specify
have identified several factors that tend to
the value of the property transferred, the debt-
prove actual intent to defraud:
or created an income trust fund from which he
expected to live, so presumably the transfer
(1) the lack or inadequacy of consider-
was sizable. In contrast, the limited evidence
ation; (2) the family, friendship or close
in the record suggests that the bonds were
associate relationship between the par-
worth $300; at the very most, they could have
ties; (3) the retention of possession, ben-
been worth about $1,200. Had Dennis actu-
efit, or use of the property in question;
ally intended to defraud her creditors, she
(4) the financial condition of the party
surely would have transferred considerably
sought to be charged both before and
more assets to her son. This is doubly true
after the transaction in question; (5) the
because she believed her debt to be $63,000,
existence or cumulative effect of the
not $6,000, when she filed for bankruptcy
pattern or series of transactions or
course of conduct after the incurring of
Moreover, the fourth factor of Chastant al-
debt, onset of financial difficulties, or
lows the court to weigh the minimal value of
pendency or threat of suits by creditors;
the transfer against the fact of transfer to a
and (6) the general chronology of the
relative. A transfer of only a small amount of
events and transactions under inquiry.
property likely would not materially affect "the
financial condition of the [debtor] . . . before
Id.
and after the transaction." Although a transfer
to a relative might suggest intent, a minimal
Robertson leans heavily on the second fac-
transfer just as strongly suggests a lack of
tor, namely, Dennis's purchase of the bonds
intent. Other courts agree that "the low value
for her (and Robertson's) minor son. Rob-
of assets [is] one factor to be considered when
ertson also notes that "a presumption of actual
determining whether the debtor had an intent
fraudulent intent to bar a discharge arises
to defraud," Baker v. Mereshian (In re
when property . . . is transferred to relatives."
Mereshian), 200 B.R. 342, 346 (B.A.P. 9th
Id. (quoting In re Butler, 38 B.R. 884, 888
Cir. 1996), as does Collier on Bankruptcy.3
(Bankr. D. Kan. 1984)). He therefore con-
tends that the purchase of the bonds creates a
Given the low value of the bonds, we con-
presumption of Dennis's actual intent to de-
clude that the bankruptcy court did not clearly
fraud, which she has not rebutted.
err by finding that Dennis lacked actual intent
to defraud. Moreover, other factors from
Chastant, however, is distinguishable from
Chastant also support the court's finding: The
this case. Most important, the court in Chas-
record reveals no sinister or calculating pattern
tant reviewed a finding of actual intent to de-
fraud, whereas we review a finding that Dennis
lacked actual intent. Next, Dennis, unlike the
3 6 COLLIER ON BANKRUPTCY ¶ 727.02[3][b],
debtor in Chastant, offered evidence to rebut
at 727-19-20 (L. King ed., 15th ed. 2003) ("The
the presumption of actual intent. Id. at 91.
fact that the property transferred or concealed is of
small value . . . tends to negate fraudulent intent.").
4

of transactions to place assets outside her
495 F.2d 199, 201 (5th Cir. 1974).5 If
bankruptcy estate, and the general chronology
Robertson satisfied his burden, Dennis must
is similarly benign. Indeed, Dennis began to
prove that the inadequacy is "justified under all
purchase the bonds months before she consid-
the circumstances." Sadler, 282 B.R. at 263;
ered filing for bankruptcy, i.e., months before
Vitek, 271 B.R. at 558. The bankruptcy court
Robertson began to hector her for payment of
has "wide discretion" in both inquiries, Goff,
the greatly exaggerated debt. In short, Dennis
495 F.2d at 202, and its determination is a
effectively rebutted the Chastant presumption,
finding of fact reviewed for clear error, id. at
and Robertson did not prove that she intended
200.
to defraud her creditors by purchasing a few
savings bonds for their son.4
The court did not clearly err by finding that
Dennis kept and filed adequate records. Rob-
2.
ertson failed his burden of proof: He never
Robertson further contends that the bank-
specifies which records are missing or why
ruptcy court clearly erred by finding that Den-
their absence prevented him from understand-
nis kept and filed adequate financial records.
ing Dennis's financial condition. He claims
Section 727(a)(3) entitles individual debtors to
that Dennis filed no bank or payroll records,
a discharge unless "the debtor has . . . failed to
but the record contains numerous bank, pay-
keep or preserve any recorded information . . .
roll, and other records. Dennis also filed sev-
from which the debtor's financial condition . . .
eral income tax returns, the "quintessential
might be ascertained, unless such . . . failure
documents" in a personal bankruptcy. Nissel-
. . . was justified under all the circumstances."
son v. Wolfson (In re Wolfson), 152 B.R. 830,
11 U.S.C. § 727(a)(3). As plaintiff, Robertson
833 (S.D.N.Y. 1993); see also Lubman v. Hall
bore the initial burden to prove that Dennis
(In re Hall), 174 B.R. 210, 215 (Bankr. E.D.
failed to keep and preserve her financial
Va. 1994). Notably, the chapter 7 trustee did
records and that this failure prevented him
not object to these submissions. In sum, Den-
from ascertaining her financial condition.
nis is "an unsophisticated wage earner" who
Grant v. Sadler (In re Sadler), 282 B.R. 254,
kept and filed records appropriate to her com-
263 (Bankr. M.D. Fla. 2002); Spiezio v. Vitek
monplace assets and liabilities. Goff, 495 F.2d
(In re Vitek), 271 B.R. 551, 558 (Bankr. S.D.
at 201.
Ohio 2001). A debtor's financial records need
not contain "full detail," but "there should be
B.
written evidence" of the debtor's financial
Failing in his effort to deny Dennis a dis-
condition. Goff v. Russell Co. (In re Goff),
charge altogether, Robertson argues that the
bankruptcy court clearly erred by finding that
Dennis's debt to him was dischargeable. A
4
property settlement "incurred by the debtor in
In addition, Robertson argues that Dennis be-
the course of a divorce" is non-dischargeable
trayed her actual intent to defraud by omitting a
unless "the debtor does not have the ability to
small savings account and child support payments
from her bankruptcy court financial statements.
The bankruptcy court attributed this omission to a
clerical oversight, not actual fraudulent intent.
5 Goff, 495 F.2d at 201 n.4, interprets an older
Robertson does not cite, and the record does not
version of § 727(a)(3), but that version is materi-
contain, any evidence to contradict this finding.
ally identical to the current § 727(a)(3).
5

pay such debt," or "discharging such debt
pay the debt to Robertson.6
would result in a benefit to the debtor that
outweighs the detrimental consequences to . . .
III.
[the creditor] former spouse." 11 U.S.C.
Robertson also appeals the bankruptcy
§ 523(a)(15)(A)-(B).
court's decision to quash a deposition sub-
poena to Smith because the subpoena did not
Robertson and Dennis agree that the disput-
come with a reasonable mileage allowance.7
ed debt is a property settlement incurred in the
We review the decision to quash a subpoena
course of a divorce. They dispute only
for abuse of discretion, Theriot v. Parish of
whether Dennis qualifies for an exception to
Jefferson, 185 F.3d 477, 491 (5th Cir. 1999).
the general rule of non-dischargeability. Den-
nis bears the burden to prove one of the ex-
"Service of a subpoena upon a person
ceptions. Gamble, 143 F.3d at 226. Though
named therein shall be made by delivering a
either exception would suffice, the bankruptcy
copy . . . and, if the person's attendance is
court found that Dennis qualified for both.
commanded, by tendering to that person the
These determinations are findings of fact re-
fees for one day's attendance and the mileage
viewed for clear error. Id.
allowed by law." FED. R. CIV. P. 45(b)(1).8
"Although the correct reading of this portion
The bankruptcy court did not clearly err by
of Rule 45[(b)(1)] is an issue of first im-
finding that Dennis "does not have the ability
pression for this court, it requires little com-
to pay" the debt to Robertson, in either a lump
ment." CF&I Steel Corp. v. Mitsui & Co.
sum or periodic payments. 11 U.S.C. § 523-
(U.S.A.), 713 F.2d 494, 496 (9th Cir. 1983).
(a)(15)(A). Smith and Dennis had a combined
income of about $100,000, which would seem
The conjunctive form of the rule indicates
to put them comfortably in the middle class.
that proper service requires not only personal
Gamble, 143 F.3d at 226 (noting that the
delivery of the subpoena, but also tendering of
court should consider income and assets of
the witness fee and a reasonable mileage al-
debtor's new spouse). Yet, they also had
lowance. "[T]he plain meaning of Rule
primary custody of three dependent children,
45[(b)(1)] requires simultaneous tendering of
and the court found that this gave them high
witness fees and the reasonably estimated
but reasonable expenses. The court also found
that their monthly income exceeded their
monthly expenses by just a few dollars, based
6 Because we uphold the decision that the debt
on Dennis's financial records and her
was dischargeable under § 523(a)(15)(A), we need
testimony. Finally, the court found that
not address the alternative finding that it also was
Dennis would retain sizable debt,
dischargeable under § 523(a)(15)(B).
notwithstanding the discharge, because her
7
student loans were non-dischargeable, and she
Robertson sent two subpoenas to Smith, but
acknowledged the deficiency of the first and then
had to reaffirm several other debts, e.g.,
sent the second subpoena at issue here.
mortgages and a car loan. These findings are
not clearly erroneous, so neither is the court's
8 Rule 45(b)(1) applies to proceedings in the
conclusion that Dennis lacked the ability to
bankruptcy court. FED. R. BANKR. P. 9016. Until
1991, this part of the rule appeared in sub-
section (c).
6

mileage allowed by law with service of a sub-
subpoena through artful travel accounting.
poena." Id. The courts uniformly agree with
Rule 45(b)(1), however, does not require clair-
this interpretation of rule 45(b)(1), 9 as do the
voyance, but only "the reasonably estimated
leading treatises on civil procedure.10
mileage allowed by law." CF&I, 713 F.2d at
496 (emphasis added).
Accordingly, the subpoena was not prop-
erly served. A deposition witness is entitled to
Of course, even when a subpoena comes
a statutory fee of forty dollars and a reasonable
with an estimated mileage allowance, the wit-
mileage allowance based on his mode and
ness may persuade the court that the estimate
distance of transportation. 28 U.S.C.
is unreasonable and therefore have the sub-
§ 1821(b)-(c). Robertson tendered the forty-
poena quashed. In this situation, however, we
dollar fee with the subpoena but did not tender
can determine whether the court abused its
the mileage allowance. Yet, by tendering the
discretion based on factors such as the wit-
fee, he implicitly acknowledged his concomi-
ness's distance from the deposition site, his
tant duty to tender the mileage allowance. To
common mode of travel, his expected mode of
be sure, the allowance would have been less
travel, the common mode of travel in the com-
than five dollars, because Smith lived just a
munity, advance planning between the sub-
few miles from the deposition site, but rule
poenaing party and the witness, the expected
45(b)(1) contains no de minimis exception.
length of the deposition, and so forth.11 But
when the subpoenaing party makes no attempt
Robertson's strongest argument may seem
to calculate and tender at least a reasonably
intuitively appealing: How can one know the
estimated mileage allowance, he plainly vio-
mileage allowance in advance when one does
lates rule 45(b)(1) and leaves us with no fac-
not know the precise distance the witness must
tual basis from which to review the court's
travel or even the mode of transportation he
decision. Thus, a court does not abuse its
will use? In Robertson's view, CF&I might
discretion by quashing a subpoena where the
allow a recalcitrant witness to evade a
subpoenaing party tendered no mileage allow-
ance whatsoever with the subpoena.12
9 See, e.g., Tedder v. Odel, 890 F.2d 210 (9th
Cir. 1989); In re Stratosphere Corp. Secs. Litig.,
11 We do not suggest that this list is exclusive or
183 F.R.D. 684 (D. Nev. 1999); Alexander v. Je-
that the courts always must consider every factor
suits of Mo. Province, 175 F.R.D. 556 (D. Kan.
when ruling on a motion to quash. We merely
1997); Smith v. Midland Brake, Inc., 162 F.R.D.
observe that these factors could prove helpful in
683 (D. Kan. 1995); Coleman v. St. Vincent de
determining whether a subpoenaing party's esti-
Paul Soc'y, 144 F.R.D. 92 (E.D. Wis. 1992); Mey-
mate of the mileage allowance is reasonable.
er v. Foti, 720 F. Supp. 1234 (E.D. La. 1989);
Badman v. Stark, 139 F.R.D. 601 (M.D. Pa.
12 Though the dispute in this case involves just
1991).
a few dollars, consider the more instructive ex-
ample of a witness who travels by plane. The sub-
10 See, e.g., 9 JAMES W. MOORE ET AL.,
poenaing party may estimate the price of a ticket at
MOORE'S FEDERAL PRACTICE § 45.03[4][b][ii] (3d
$200, when the actual price turns out to be $400.
ed. 1997); 9A CHARLES A. WRIGHT & ARTHUR R.
In this example, the court is left with the factual
MILLER, FEDERAL PRACTICE AND PROCEDURE
questions of which amount is proper under
§ 2454, at 25-26 (2d ed. 1995).
(continued...)
7

The judgment of the district court, affirm-
ing the bankruptcy court, is AFFIRMED.13
(...continued)
§ 1821(c)(1) and, if the subpoenaing party's es-
timate is incorrect, whether it nevertheless rea-
sonably complies with rule 45(b)(1). These would
be discretionary rulings, but the reviewing court
could examine them easily enough for abuse of
discretion.
13 Robertson raises one final issue on appeal:
that the bankruptcy court committed reversible er-
ror by instructing Smith, at trial, that he did not
have to answer questions about his financial con-
dition. Robertson contends that the court violated
FED. R. EVID. 103(a)(2), which requires the pro-
ponent of excluded evidence to make an offer of
proof to preserve an evidentiary ruling for appeal.
We agree that Robertson's "position was adequate-
ly stated , and the record clearly is susceptible to
proper appellate review." Parliament Ins. Co. v.
Hanson, 676 F.2d 1069, 1074 (5th Cir. 1982).
Yet, Robertson devotes so much time to the
molehill, i.e., how he preserved the ruling for
appeal, that he completely neglects the mountain,
i.e., why the ruling was incorrect. We therefore
treat this issue as waived for failure to brief ade-
quately. FED. R. APP. P. 28(a)(9)(A).
8