United States District Court, W.D. Texas, San Antonio Division
BRIAN K. ALFARO, ALFARO OIL & GAS, LLC, and ALFARO ENERGY, LLC, Appellants,
RICK REILEY, BETTY REILEY, VINCENT GILLETTE, SHARON WALLS, RICK GRIFFEY, THOMAS GILLETTE, DC OIL COMPANY, JAMES BUFORD SALMON, and DAVID DAVALOS, Appellees.
K. PULLIAM UNITED STATES DISTRICT JUDGE.
Brian K. Alfaro, Alfaro Oil and Gas, LLC, and Alfaro Energy,
LLC appeal the bankruptcy court's final judgment. The
Court AFFIRMS the bankruptcy court's judgment.
action was commenced in the 288th District Court for Bexar
County on April 24, 2015. On April 28, 2015, the Plaintiffs
sought and obtained a temporary restraining order against
Brian Alfaro, Primera Energy, LLC, Alfaro Oil and Gas, LLC,
and Alfaro Energy, LLC. On June 2, 2015, the state court
judge entered a temporary injunction against Defendants
Alfaro, Primera, Alfaro O&G, and Alfaro Energy. On June
3, 2015, Primera filed for relief under Title 11 of the U.S.
Code commencing Bankruptcy No. 15-51396. On June 19, 2015,
Alfaro, Primera, Alfaro O&G, Alfaro Energy, King
Minerals, LLC, and Silver Star Resources, LLC removed the
state court action to the federal bankruptcy court,
commencing Adversary Proceeding No. 15-05047.
bankruptcy court conducted a six-day trial, which concluded
on April 18, 2017. After presentation of their evidence,
Plaintiffs rested and Defendants asked for a directed
verdict, asserting that Plaintiffs had not met their burden
of proof. The court denied Defendants' oral request for a
directed verdict. Thereafter, Defendants rested without
offering any controverting evidence or argument. The parties
were allowed to submit post-trial briefs.
December 29, 2017, the bankruptcy court issued its Memorandum
Opinion and Judgment. No. 15-05047-CAG, Dkt. Nos. 369, 370.
The court found in favor of the Plaintiffs on five of the ten
claims presented at trial, to wit: common law fraud, fraud in
the inducement, fraud in the real estate transaction,
negligent misrepresentation, Texas Uniform Fraudulent
Transfer Act (“TUFTA”). The bankruptcy
court's judgment holds Defendants liable for $7, 989,
526.75 in actual damages; awards attorneys' fees, expert
witness fees, costs for copies of depositions, and costs of
court; and imposes a constructive trust.
Jurisdiction and Standard of Review
Court has jurisdiction to hear this appeal pursuant to 28
U.S.C. § 158(a), which provides district courts with the
authority to hear appeals from final judgments and orders of
bankruptcy judges. When a district court reviews the decision
of a bankruptcy court, the district court “functions as
a[n] appellate court, and applies the standard of review
generally applied in federal court appeals.” In re
Webb, 954 F.2d 1102, 1103-04 (5th Cir. 1992).
Standard of Review
bankruptcy court's findings of fact are subject to review
for clear error, and its conclusions of law are reviewed
de novo.” Saenz v. Gomez (In re
Saenz), 899 F.3d 384, 390 (5th Cir. 2018) (citing
Gen. Elec. Capital Corp. v. Acosta (In re Acosta),
406 F.3d 367, 372 (5th Cir. 2005); see also In re
Morrison, 555 F.3d 473, 480 (5th Cir. 2009)
(“Under a clear error standard, this court will reverse
‘only if, on the entire evidence, we are left with the
definite and firm conviction that a mistake has been
made.'”) (quoting Otto Candies, L.L.C. v.
Nippon Kaiji Kyokai Corp., 346 F.3d 530, 533 (5th Cir.
success of Appellants' appeal turns on whether there was
sufficient evidence before the bankruptcy court to (1)
support judgments for fraud, fraud in the inducement, fraud
in a real estate transaction, and negligent
misrepresentation; (2) find that Primera paid its employees
using a commission-based compensation; (3) find justified
reliance in support of fraud findings; (4) find that the
representations made by the Appellants to the Appellees were
material; and (5) to make fraudulent transfer findings.
See Appellant's Brief, ECF No. 6 at 8-9.
failure to comply with the Federal Rules of Appellate
Procedure and the Bankruptcy Appellate Panel Rules prevents
this Court from reviewing this case. ...