                          RECOMMENDED FOR FULL-TEXT PUBLICATION
                              Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                     File Name: 18a0001p.06

                    UNITED STATES COURT OF APPEALS
                                 FOR THE SIXTH CIRCUIT

 BEAU DARRELL HEIMER,                                    ┐
                                   Plaintiff-Appellee,   │
                                                         │
                                                         >      No. 16-2274
       v.                                                │
                                                         │
                                                         │
 COMPANION LIFE INSURANCE COMPANY,                       │
                            Defendant-Appellant.         │
                                                         ┘

                          Appeal from the United States District Court
                     for the Western District of Michigan at Grand Rapids.
                       No. 1:15-cv-00338—Janet T. Neff, District Judge.

                                 Argued: November 30, 2017

                             Decided and Filed: January 2, 2018

            Before: COLE, Chief Judge; McKEAGUE and STRANCH, Circuit Judges.
                                    _________________

                                         COUNSEL

ARGUED: Kimberly J. Ruppel, DICKINSON WRIGHT PLLC, Troy, Michigan, for Appellant.
Christopher P. Desmond, Detroit, Michigan, for Appellee. ON BRIEF: Kimberly J. Ruppel,
DICKINSON WRIGHT PLLC, Troy, Michigan, for Appellant. Christopher P. Desmond,
Detroit, Michigan, for Appellee.

        COLE, C.J., delivered the opinion of the court in which STRANCH, J., joined, and
McKEAGUE, J., joined in the result. McKEAGUE, J. (pp. 7–8), delivered a separate opinion
dissenting from Part II.A of the majority opinion and concurring in the judgment.
 No. 16-2274                      Heimer v. Companion Life Ins.                            Page 2

                                       _________________

                                            OPINION
                                       _________________

         COLE, Chief Judge. This matter is about whether a contract should mean what it says.
After Beau Darrell Heimer was injured in a motorbike accident, he filed an insurance claim with
Companion Life for the bill. Companion Life denied the claim, citing a plan exclusion that
disclaimed coverage for injuries resulting from the “illegal use of alcohol.” But the district court
read “illegal use of alcohol” to disclaim coverage only for the illegal consumption of alcohol,
and not for Heimer’s illegal post-consumption conduct of operating a motorbike while under the
influence of alcohol. The district court’s reading is consistent with the ordinary meaning of
“use” and best gives effect to the contract as a whole. We affirm.

                                       I. BACKGROUND

       Heimer was only a year over the legal drinking age on a fateful night in April 2013. That
night, he and his friends drank and, later, rode their motorbikes in a field in Michigan. While
riding their motorbikes, Heimer and one of his friends collided. Heimer suffered extensive
injuries and incurred more than $197,333.50 in medical bills. Medical records indicate that
Heimer’s blood alcohol level shortly after the crash was 0.152, nearly twice the limit to legally
use an off-road vehicle in Michigan.

       Heimer was insured by Companion Life. As required by his plan, he submitted a medical
claim form shortly after the accident, but the plan administrator denied coverage. The plan
administrator pointed to a plan exclusion that disclaimed coverage for “[s]ervices, supplies, care
or treatment of any injury or [s]ickness which occurred as a result of a Covered Person’s illegal
use of alcohol.” (Administrative Record, R. 34-1, Page ID 550, 605.)

       After exhausting his administrative appeals, Heimer filed suit, and the case eventually
found its way into federal court. Parting with the insurance administrator, the district court held
that the plan exclusion did not encompass Heimer’s injuries. It noted that there is a difference
between the illegal use of alcohol—such as drinking while under 21 or drinking in defiance of a
court order—and illegal post-consumption conduct, such as the illegal use of a motor vehicle.
 No. 16-2274                        Heimer v. Companion Life Ins.                        Page 3

What was illegal about Heimer’s behavior was his use of a motor vehicle, not of alcohol. And if
there were any doubts, the district court explained, the contract should be construed against the
insurance company as the drafter.

       Companion Life now appeals.

                                          II. ANALYSIS

       We review Companion Life’s plan, and the district court’s reading of it, without
deference. See Hoover v. Provident Life & Accident Ins. Co., 290 F.3d 801, 808–09 (6th Cir.
2002). We interpret plan provisions “according to their plain meaning, in an ordinary and
popular sense,” giving effect to the unambiguous terms of the plan. Perez v. Aetna Life Ins. Co.,
150 F.3d 550, 556 (6th Cir. 1998).

       A. The Ordinary Meaning of “Use of Alcohol” is the Act of Consuming Alcohol.

       We agree with the district court that “use of alcohol” most naturally refers to the act of
consuming alcohol, and not post-consumption conduct.

       The plan does not define “use,” so we give the term its ordinary meaning. In this context,
“use” means “[t]he action of consuming something as food, drink, a drug, etc.” Oxford English
Dictionary (3d ed. 2011); see also Merriam Webster’s Collegiate Dictionary (defining “to use”
as “to consume or take (as liquor or drugs) regularly”) (11th ed. 2004); American Heritage
Dictionary of the English Language (“To partake of, especially as a habit: She rarely uses
alcohol.”) (5th ed. 2017). In everyday English, an “illegal use of alcohol” thus means an illegal
act of consuming alcohol—such as drinking while under 21, on public streets, or in an
unlicensed restaurant. See, e.g., Mich. Const. Art. 4, § 40; Mich. Comp. Laws § 436.1915; Mich.
Comp. Laws § 436.1913. Read this way, Heimer’s conduct was not an “illegal use of alcohol”:
Heimer was over the legal age to drink, and Companion Life has not pointed to any law that
prohibited Heimer from consuming alcohol.

       Companion Life would have us read “use” to mean “under the influence” of alcohol, but
we have found no definitions of “use” that are so capacious. To be sure, “use” can also be
defined to mean “the act of putting something to work, or employing or applying a thing.”
 No. 16-2274                       Heimer v. Companion Life Ins.                            Page 4

Oxford English Dictionary (3d ed. 2011). But “[i]n law, as in life,” context matters. Yates v.
United States, 135 S. Ct. 1074, 1082 (2015) (Ginsburg, J., plurality op.). A natural English
speaker would say that one “consumes” alcohol, but no natural speaker would say that someone
“employs” or “applies” alcohol. The other definitions of “use” must give way to the context-
specific one. And though “use” sometimes means habitual consumption—for instance, “his drug
use lasted years”—even that usage is not so broad to mean “under the influence.”

       Other plan language also forecloses Companion Life’s reading. When the plan intended
to disclaim coverage for injuries sustained while under the influence of something, it used
specific language. In that vein, the plan disclaimed coverage for injuries “while under the
influence of any controlled substance . . . not administered on the advice of a Physician.”
(Administrative Record, R. 34-1, Page ID 550.)          This “difference in language demands a
difference in meaning.” Gallo v. Moen Inc., 813 F.3d 265, 270 (6th Cir. 2016). Under the plan,
“use” and “under the influence” are different.

       Nor has Companion Life argued that “illegal use of alcohol” is a term of art for driving
under the influence. Instead, it volunteered its belief that the “illegal use of alcohol” language
would exclude coverage for injuries from misdemeanor bar fights and, remarkably, for “simply
sustaining a fall while at home.” (Appellant’s Opening Br. 19.) Whatever the merits of that, it
does not argue that “illegal use of alcohol” is a specialized term for driving under the influence.

       And there is still more to support our reading: Heimer pleaded guilty to an offense that
proscribed the use of a motor vehicle, not the use of alcohol. Heimer operated an off-road
vehicle while intoxicated, a misdemeanor offense under Michigan law. That law provides that
“[a] person shall not operate an [off-road vehicle] if, due to the consumption of intoxicating
liquor . . . the person has visibly impaired his or her ability to operate the [off-road vehicle].”
Mich. Comp. Laws § 324.81135(1) (repealed 2015). True, Heimer’s conduct was illegal “due to
the consumption of intoxicating liquor,” but the illegal act proscribed by the statute is the use of
a vehicle. As the statute says, “[a] person shall not operate an [off-road vehicle].” The statute
does not say that a person “shall not consume alcohol,” the language used by the Michigan
legislature when it intended to make illegal the consumption of alcohol. See, e.g., Mich. Comp.
Laws § 436.1913 (“A person shall not consume alcoholic liquor . . . .”); Mich. Comp. Laws
 No. 16-2274                      Heimer v. Companion Life Ins.                            Page 5

§ 436.1915 (“Alcoholic liquor shall not be consumed . . . .”). Indeed, had Heimer’s night ended
with him going to bed instead of going for a drive, there would have been nothing illegal about
his conduct at all, even though his use of alcohol is the same in either scenario. The only
difference between this fiction and reality is Heimer’s post-use conduct. And only that is illegal.

       Finally, none of the hodgepodge of district court cases cited by Companion Life persuade
us to adopt a different reading. As Companion Life conceded at oral argument, many of those
cases considered different plan language. E.g., Tourdot v. Rockford Health Plans, Inc., 357 F.
Supp. 2d 1100, 1103 (W.D. Wis. 2005) (excluding coverage for injuries resulting from “illegal
acts”); Sutton v. Hearth & Home Distribs., Inc. Emp. Benefit Plan, 881 F. Supp. 210, 213 (D.
Md. 1995) (excluding coverage for injuries “due to the use or misuse of alcohol”). More
importantly, none of the cases analyzed the ordinary meaning of the word “use,” and all instead
deferred to the reading of the plan adopted by the insurance company’s administrator. By giving
short shrift to the ordinary meaning of “use,” those cases elided the distinction between “use of
alcohol” and post-use conduct.

       The worst one can say about our reading is that it does not give effect to the insurance
company’s understandable desire not to pay for injuries sustained during a drunken ride on a
motorbike. But if the insurance company wanted to exclude this type of injury, it should have
used specific language to that effect, as many other insurance companies have done. E.g.,
Cultrona v. Nationwide Life Ins. Co., 748 F.3d 698, 702 (6th Cir. 2014) (discussing exclusion
where the “Covered Person [is] deemed and presumed, under the law of the locale in which
the Injury is sustained, to be under the influence of alcohol or intoxicating liquors.” (emphasis
omitted)).

       B. The Plan is Construed Against Companion Life, the Drafter.

       Were there any doubts that the plan is unambiguous, the ordinary contract principle to
construe a contract against its drafter is the final nail in the coffin. When a court conducts de
novo review, as here, “any ambiguities in the language of the plan [must] be construed strictly
against the drafter of the plan.” Regents of Univ. of Mich. v. Emps. of Agency Rent-A-Car Hosp.
 No. 16-2274                     Heimer v. Companion Life Ins.                         Page 6

Ass’n, 122 F.3d 336, 340 (6th Cir. 1997). Because our reading of the contract is at least
reasonable, Heimer would still prevail even if we had concluded that the plan was ambiguous.

                                      III. CONCLUSION

       We affirm the judgment of the district court.
 No. 16-2274                             Heimer v. Companion Life Ins.                                       Page 7

                ________________________________________________________

                      CONCURRING IN PART AND DISSENTING IN PART
                ________________________________________________________

         McKEAGUE, Circuit Judge, dissenting in part and concurring in the judgment. I agree
with the result we reach today, but I cannot agree with the majority’s conclusion that the relevant
exclusion is unambiguous. The majority declares “context matters.” I agree. Let’s consider the
context. Beau Darrell Heimer and some friends decided to over-indulge in alcoholic beverages
to work up the nerve to hurtle themselves toward each other at high speed on dirt bikes—after
nightfall in a farm field—to see who might “chicken out” at the last second. No one plays this
game sober. The alcohol they deliberately ingested emboldened them to play a reckless game of
chicken, leading to predictably tragic results when neither Heimer nor his contestant “blinked”
and they collided head-on. Heimer’s health insurer, Companion Life, denied coverage, invoking
an “illegal use of alcohol” exclusion. We review de novo.

         The majority reasons that Heimer was not “using” alcohol when he crashed because he
had completed the “act of consuming alcohol” beforehand.1 I disagree with the majority’s
holding in Part II.A that the relevant exclusion unambiguously supports Heimer’s position. The
majority offers one valid reading.               However, other valid readings capture the unlawful
“employment of [alcohol]” under these circumstances. Black’s Law Dictionary (10th ed. 2014).

         In one sense, can we really doubt that a person who has a blood-alcohol level of over
twice the legal limit continues to “use” the alcohol in his bloodstream after he ingests it? Cf.
Aroma Wines & Equip., Inc. v. Columbian Distrib., 844 N.W.2d 727, 731 (Mich. Ct. App.
2013).2 Read this way, Heimer “used” (indeed abused) alcohol after he ingested it to play
chicken in the same way one “uses” (abuses) cocaine after he inhales it to get high.

         1
           Yet, inasmuch as Heimer’s blood-alcohol was 0.152 shortly after the collision, his body was in a sense
still “consuming” the alcohol in an inebriated state, as intended, at the time of collision.
         2
         “Contrary to the trial court’s conclusion that ‘to use a wine, one would have to drink it or perhaps sell it,’
we hold that the definition of ‘use’ encompasses a much broader meaning. The term ‘use’ requires only that a
person ‘employ for some purpose,’ and clearly, drinking or selling the wine are not the only ways that defendant
could have employed plaintiff’s wine to its own purposes.” Id. (citing Random House Webster’s College Dictionary
(1992)).
 No. 16-2274                           Heimer v. Companion Life Ins.                                    Page 8

        The majority cites the fact that the phrase “under the influence” appears elsewhere in the
contract, but “use” can reasonably be construed to encompass both the discrete “act of ingesting
alcohol” and the process of bringing oneself into a prolonged state of being “under the influence
of alcohol,” to embolden participation in a reckless game. See Black’s Law Dictionary (10th ed.
2014) (defining “use” as “[t]he application or employment of something . . . for [a] purpose”).

        Moreover, several district courts have upheld broader constructions of “illegal use of
alcohol” provisions under an arbitrary and capricious standard of review. See, e.g., Johnson v.
Prudential Ins. Co. of Am., 2012 WL 5378313, at *5 (S.D. Ohio Oct. 31, 2012) (“[T]he ‘use’ [of
alcohol] became illegal when Chapman began to drive.”); Jones v. Channel Shipyard & Co.,
Inc., 2001 WL 1490915, at *3 (E.D. La. Nov. 20, 2001) (“Jones illegally used alcohol—not
because the drinking in and of itself was illegal but, because combined with driving, it was.”).
These rulings substantiate the notion that a broader reading of “illegal use of alcohol” exclusions
is not unreasonable and support the conclusion that the language of the exclusion, viewed in
context, is not unambiguous.          The majority’s determination that the phrase “illegal use of
alcohol” is unambiguous says more than needs to be said and may establish bad precedent
unnecessarily.

        Companion Life surely did not intend its policy to cover injuries arising from drunken
participation in a reckless game of chicken. Reading “illegal use of alcohol” so narrowly leaves
one seeing double.3 But ultimately, in this case, the insurer must bear the consequences of its
sloppy drafting. See Regents of Univ. of Mich. v. Emps. of Agency Rent-A-Car-Hosp. Ass’n,
122 F.3d 336, 340 (6th Cir. 1997)) (noting on de novo review that “any ambiguities in the
language of the plan [must] be construed strictly against the drafter of the plan”). Thus, although
I disagree with the majority’s holding in Part II.A, above, I concur in the judgment.

        3
          For example, treatment for injuries resulting from operating a motor vehicle while intoxicated, third-
offense—a felony under Mich. Comp. Laws § 257.625(4) punishable by up to ten years in prison—would not trigger
the exclusion; but treatment for injuries resulting from consuming alcohol as a minor, first-offense—a misdemeanor
under Mich. Comp. Laws § 436.1703(1) punishable by a fine of no more than $100.00 and community service—
would trigger the exclusion.


COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 2-03-134-CV

KAREN
SUZANNE GREENE                                                     APPELLANT

V.

JAMES
GLENN GREENE                                                            APPELLEE

------------

FROM
COUNTY COURT AT LAW OF PARKER COUNTY

------------

MEMORANDUM OPINION1

------------
        Appellant
Karen Suzanne Greene (“Suzanne”) appeals from the property division ordered
in her divorce from Appellee James Glenn Greene.  Suzanne did not appear at
trial, but her attorney did.  He orally moved for a continuance on her
behalf, stating that she had told him the preceding day that she was visiting
with James and would be at the trial.  The trial court denied the
continuance.  Before the close of evidence, Suzanne’s lawyer stated on
the record that he had done very little discovery based on Suzanne’s
instructions to avoid the added expenses.  After the trial court signed the
decree, Suzanne moved for new trial, contending that her absence from the trial
was based on her trust in James and her reliance on alleged fraudulent
misrepresentations that he had made regarding the property division.
        At
the hearing on the motion for new trial, Suzanne testified that she did not
appear because James told her that she would be taken care of, that she would
retain her part of the community business, and that he would support her.
She also claimed that he led her to believe that her testimony could jeopardize
the business.  She testified that she relied on his representations.
She testified that he made these representations on the evening before trial at
her home.  She further testified that for thirty days after the trial, he
continued to financially support her and communicate with her, leading her to
believe in the possibility of reconciliation.  The phone calls and the
support stopped by March 7, about five weeks after the judgment was
signed.  Suzanne also testified that James had told her that he would pay
off the house and the truck.  James also testified, denying all of
Suzanne’s allegations.  The trial court took judicial notice of the file.
        Our
review of the clerk’s record shows that during the pendency of the divorce,
Suzanne sought and received two temporary restraining orders (“TROs”)
protecting the community property.  She also applied for a protective
order.  Her attached affidavit to the application for the protective order
provides, “I fear that unless restrained, that [James] will sell and dispose
of assets of the company, as well as personal assets, which are community in
nature, including the equipment at the concrete plant, trucks, mixers, loaders,
and all related equipment, and funds on deposit in banks and other financial
institutions.”
        After
noting on the record that Suzanne made a postanswer conscious affirmative choice
not to appear in court, the trial court denied Suzanne’s motion for new
trial.  Suzanne appeals from the denial of the motion for continuance and
the motion for new trial.  Because we hold that the trial court did not
abuse its discretion in denying the motions, we affirm the trial court’s
judgment.
        Due
to its potential dispositive effect on this appeal, we first address an argument
raised by James.  In his brief, James contends that Suzanne’s motion for
new trial was not timely filed and is a nullity.  If the motion for new
trial was untimely, then so was the notice of appeal in this case.2  If the notice of appeal was untimely, then we do not
have jurisdiction over this appeal.3
        The
judgment was signed on January 31, 2003.  An unsigned motion for new trial,
verified by Suzanne, was timely submitted on February 27, 2003.4
The attorney filed a corrected signature page on March 24, 2003, more than
thirty days after the judgment was signed.  The order denying the motion
for new trial was signed on April 28, 2003, less than 105 days after the
judgment was signed.5  The absence of the
attorney’s signature did not make the original motion a nullity.6  Instead, the motion was a conditional motion until
the signature was filed, and the filing of the conditional motion triggered the
appellate timetables.7  Consequently, the
signature was filed and the hearing was held within the trial court’s plenary
power.  We therefore conclude that Suzanne’s motion for new trial was
timely and we do have jurisdiction over this appeal.
        In
her first issue, Suzanne contends that the trial court abused its discretion by
denying her oral motion for continuance.  If a motion for continuance is
not made in writing and verified, it will generally be presumed that the trial
court did not abuse its discretion in denying the motion.8
We overrule Suzanne’s first issue.
        In
Suzanne’s second, third, fourth, and sixth issues, she complains that the
trial court abused its discretion in denying her motion for new trial based upon
James’s alleged fraud.  As this court has previously held,

A
party moving for a new trial has the burden of establishing by convincing
evidence the existence of newly discovered evidence by showing the following
elements:

1.
Admissible, competent evidence must be introduced on the hearing of the motion
for new trial showing the existence of the newly discovered evidence relied
upon.

2.
The moving party must show he or she had no notice of the existence of such
evidence prior to the time of trial.

3.
The moving party must show that due diligence had been used to procure the
evidence prior to trial.

4.
The moving party must show that the evidence is not merely cumulative to that
already given and does not tend only to impeach the testimony of the adversary.

5.
The moving party must show that the evidence would probably produce a different
result if a new trial were granted.9

        Suzanne
points out that no case has addressed standards for granting a motion for new
trial based on extrinsic fraud of a party.  Accordingly, we apply the
traditional newly-discovered-evidence standard recited above.  At the
hearing on the motion for new trial, Suzanne did not establish that the property
division, already in her favor, would have been any different had a new trial
been granted.  Suzanne has not satisfied the fifth prong of the
newly-discovered-evidence test.  Based on the above, we cannot say that the
trial court abused its discretion.  We overrule Suzanne’s second, third,
fourth, and sixth issues.
        In
her fifth issue, Suzanne requests that we create a new standard for motions for
new trial based on allegations of extrinsic fraud.  We decline to create
law, leaving that instead to the supreme court or the legislature.  We
overrule Suzanne’s fifth issue.
        Having
overruled all of Suzanne’s issues, we affirm the trial court’s judgment.

                                                                  LEE
ANN DAUPHINOT
                                                                  JUSTICE

PANEL
B:   LIVINGSTON, DAUPHINOT, and WALKER, JJ.
DELIVERED:
June 24, 2004

NOTES
1.
See Tex. R. App. P. 47.4.
2.
See Tex. R. Civ. P. 329b(a)
(providing that motion for new trial shall be filed within thirty days after
judgment is signed); Tex. R. App. P.
26.1 (providing general rule that notice of appeal must be filed within thirty
days after judgment is signed).
3.
See Tex. R. App. P. 2
(recognizing that appellate courts have no authority to alter the time for
perfecting an appeal in civil cases); Verburgt v. Dorner, 959 S.W.2d 615,
616 (Tex. 1997).
4.
See Tex. R. Civ. P. 320,
329b(a).
5.
See Tex. R. Civ. P.
329b(c), (e).
6.
See W.C. Turnbow Petroleum Corp. v. Fulton, 145 Tex. 56, 194 S.W.2d 256,
257 (Tex. 1946) (holding that absence of attorneys’ signatures from amended
motion for new trial did not make the motion a nullity and recognizing that
“the signature to a pleading is a formal requisite and that failure to comply
with the requirement is not fatal to the pleading”).
7.
See Garza v. Garcia, 47 Tex. Sup. Ct. J. 570 (Tex. May 14, 2004)
(holding conditional motion triggers appellate deadlines, invoking appellate
jurisdiction, even if required filing fee is never paid); Tate v. E.I. DuPont
de Nemours & Co., Inc., 934 S.W.2d 83, 84 (1996) (holding motion for new
trial was conditionally filed when presented to trial clerk without filing fee,
triggering appellate deadlines and invoking appellate jurisdiction).
8.
Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986); S.W. Country
Enters., Inc. v. Lucky Lady Oil Co., 991 S.W.2d 490, 493 (Tex.
App.—Fort Worth 1999, pet. denied).
9.
Dankowski v. Dankowski, 922 S.W.2d 298, 305 (Tex. App.—Fort Worth 1996,
writ denied).


                            UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                            No. 02-7670

UNITED STATES OF AMERICA,

                                               Plaintiff - Appellee,

          versus

MELVIN SANDERS,

                                              Defendant - Appellant.

Appeal from the United States District Court for the Middle
District of North Carolina, at Winston-Salem. N. Carlton Tilley,
Jr., Chief District Judge. (CR-93-281, CA-02-710-1)

Submitted:   January 30, 2003             Decided:   February 5, 2003

Before WIDENER, NIEMEYER, and TRAXLER, Circuit Judges.

Dismissed by unpublished per curiam opinion.

Melvin Sanders, Appellant Pro Se. Robert Michael Hamilton, OFFICE
OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for
Appellee.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:

      Melvin Sanders seeks to appeal the district court’s order

denying his motion for reconsideration of the denial of his motion

filed under 28 U.S.C. § 2255 (2000).      We have reviewed the record

and conclude on the reasoning of the district court that Sanders

has   not    made   a   substantial   showing   of   the   denial   of   a

constitutional right.      See United States v. Sanders, Nos. CR-93-

281; CA-02-710-1 (M.D.N.C. filed Oct. 17, 2002; entered Oct. 18,

2002).      Accordingly, we deny a certificate of appealability and

dismiss the appeal.      See 28 U.S.C. § 2253(c) (2000).     We dispense

with oral argument because the facts and legal contentions are

adequately presented in the materials before the court and argument

would not aid the decisional process.

                                                               DISMISSED

                                      2


476 U.S. 426 (1986)
FEDERAL DEPOSIT INSURANCE CORPORATION
v.
PHILADELPHIA GEAR CORP.
No. 84-1972.
Supreme Court of United States.
Argued March 4, 1986
Decided May 27, 1986
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
*427 Charles A. Rothfeld argued the cause for petitioner. With him on the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Wallace, and John C. Murphy, Jr.
Gerald F. Slattery, Jr., argued the cause and filed a brief for respondent.[*]
George W. Miller and Dennis J. Lehr filed a brief for William H. Allen et al. as amici curiae urging affirmance.
JUSTICE O'CONNOR delivered the opinion of the Court.
We granted certiorari to consider whether a standby letter of credit backed by a contingent promissory note is insured as a "deposit" under the federal deposit insurance program. We hold that, in light of the longstanding interpretation of petitioner Federal Deposit Insurance Corporation (FDIC) that such a letter does not create a deposit and, in light of the fact that such a letter does not entrust any noncontingent assets to the bank, a standby letter of credit backed by a contingent promissory note does not give rise to an insured deposit.

I
Orion Manufacturing Corporation (Orion) was, at the time of the relevant transactions, a customer of respondent Philadelphia *428 Gear Corporation (Philadelphia Gear). On Orion's application, the Penn Square Bank, N. A. (Penn Square) issued a letter of credit for the benefit of Philadelphia Gear in the amount of $145,200. The letter of credit provided that a draft drawn upon the letter of credit would be honored by Penn Square only if accompanied by Philadelphia Gear's "signed statement that [it had] invoiced Orion Manufacturing Corporation and that said invoices have remained unpaid for at least fifteen (15) days." App. 25. Because the letter of credit was intended to provide payment to the seller only if the buyer of the invoiced goods failed to make payment, the letter of credit was what is commonly referred to as a "standby" or "guaranty" letter of credit. See, e. g., 12 CFR § 337.2(a), and n. 1 (1985) (defining standby letters of credit and mentioning that they may " `guaranty' payment of a money obligation"). A conventional "commercial" letter of credit, in contrast, is one in which the seller obtains payment from the issuing bank without looking to the buyer for payment even in the first instance. See ibid. (distinguishing standby letters of credit from commercial letters of credit). See also Verkuil, Bank Solvency and Guaranty Letters of Credit, 25 Stan. L. Rev. 716, 717-724 (1973); Arnold & Bransilver, The Standby Letter of Credit  The Controversy Continues, 10 U.C.C.L.J. 272, 277-279 (Spring 1978).
On the same day that Penn Square issued the standby letter of credit, Orion executed an unsecured promissory note for $145,200 in favor of Penn Square. App. 27. The purpose of the note was listed as "Back up Letter of Credit." Ibid. Although the face of the note did not so indicate, both Orion and Penn Square understood that nothing would be considered due on the note, and no interest charged by Penn Square, unless Philadelphia Gear presented drafts on the standby letter of credit after nonpayment by Orion. 751 F. 2d 1131, 1134 (CA10 1984). See also Tr. of Oral Arg. 32.
On July 5, 1982, Penn Square was declared insolvent. Petitioner FDIC was appointed its receiver. Shortly thereafter, *429 Philadelphia Gear presented drafts on the standby letter of credit for payment of over $700,000 for goods delivered before Penn Square's insolvency. The FDIC returned the drafts unpaid. 751 F. 2d., at 1133-1134.
Philadelphia Gear sued the FDIC in the Western District of Oklahoma. Philadelphia Gear alleged that the standby letter of credit was an insured deposit under the definition of "deposit" set forth at 12 U. S. C. § 1813(l)(1), and that Philadelphia Gear was therefore entitled to $100,000 in deposit insurance from the FDIC. See 12 U. S. C. § 1821(a)(1) (setting forth $100,000 as the maximum amount generally insured by the FDIC for any single depositor at a given bank). In apparent hopes of obtaining additional funds from the FDIC in the latter's capacity as receiver rather than as insurer, respondent also alleged that terms of the standby letter of credit allowing repeated reinstatements of the credit made the letter's total value more than $145,200.
The District Court held that the total value of the standby letter of credit was $145,200, App. B to Pet. for Cert. 20a, 28a-30a; that the letter was an insured deposit on which the FDIC was liable for $100,000 in deposit insurance, id., at 37a-43a; and that Philadelphia Gear was entitled to prejudgment interest on that $100,000, id., at 43a. The FDIC appealed from the District Court's ruling that the standby letter of credit backed by a contingent promissory note constituted a "deposit" for purposes of 12 U. S. C. § 1813(l)(1) and its ruling that Philadelphia Gear was entitled to an award of prejudgment interest. Philadelphia Gear cross-appealed from the District Court's ruling on the total value of the letter of credit.
The Court of Appeals for the Tenth Circuit reversed the District Court's award of prejudgment interest, 751 F. 2d, at 1138-1139, but otherwise affirmed the District Court's decision. As to the definition of "deposit," the Court of Appeals held that a standby letter of credit backed by a promissory note fell within the terms of 12 U. S. C. § 1813(l)(1)'s definition *430 of "deposit," and was therefore insured. Id., at 1134-1138. We granted the FDIC's petition for certiorari on this aspect of the Court of Appeals' ruling. 474 U. S. 918 (1985). We now reverse.

II
Title 12 U. S. C. § 1813(l)(1) provides:
"The term `deposit' means
"(1) the unpaid balance of money or its equivalent received or held by a bank in the usual course of business and for which it has given or is obligated to give credit, either conditionally or unconditionally, to a commercial. . . account, or which is evidenced by . . . a letter of credit or a traveler's check on which the bank is primarily liable: Provided, That, without limiting the generality of the term `money or its equivalent,' any such account or instrument must be regarded as evidencing the receipt of the equivalent of money when credited or issued in exchange for checks or drafts or for a promissory note upon which the person obtaining any such credit or instrument is primarily or secondarily liable. . . ."
Philadelphia Gear successfully argued before the Court of Appeals that the standby letter of credit backed by a contingent promissory note constituted a "deposit" under 12 U. S. C. § 1813(l)(1) because that letter was one on which the bank was primarily liable, and evidenced the receipt by the bank of "money or its equivalent" in the form of a promissory note upon which the person obtaining the credit was primarily or secondarily liable. The FDIC does not here dispute that the bank was primarily liable on the letter of credit. Brief for Petitioner 7, n. 7. Nor does the FDIC contest the fact that the backup note executed by Orion is, at least in some sense, a "promissory note." See Tr. of Oral Arg. 7 (remarks of Mr. Rothfeld, representing the FDIC) ("It was labeled a note. It can be termed a note"). The FDIC argues rather that it has consistently interpreted § 1813(l)(1) not to *431 include standby letters of credit backed only by a contingent promissory note because such a note represents no hard assets and thus does not constitute "money or its equivalent." Because the alleged "deposit" consists only of a contingent liability, asserts the FDIC, a standby letter of credit backed by a contingent promissory note does not give rise to a "deposit" that Congress intended the FDIC to insure. Under this theory, while the note here may have been labeled a promissory note on its face and may have been a promissory note under state law, it was not a promissory note for purposes of the federal law set forth in 12 U. S. C. § 1813(l)(1). See D'Oench, Duhme & Co. v. FDIC, 315 U. S. 447, 456 (1942) (holding that liability on a promissory note acquired by the FDIC is a federal question); First National Bank v. Dickinson, 396 U. S. 122, 133-134 (1969) (holding that federal law governs the definition of branch banking under the McFadden Act).
The Court of Appeals quite properly looked first to the language of the statute. See Florida Power & Light Co. v. Lorion, 470 U. S. 729, 735 (1985); United States v. Yermian, 468 U. S. 63, 68 (1984). Finding the language of the proviso in § 1813(l)(1) sufficiently plain, the Court of Appeals looked no further. But as the FDIC points out, the terms "letter of credit" and "promissory note" as used in the statute have a federal definition, and the FDIC has developed and interpreted those definitions for many years within the framework of the complex statutory scheme that the FDIC administers. The FDIC's interpretation of whether a standby letter of credit backed by a contingent promissory note constitutes a "deposit" is consistent with Congress' desire to protect the hard earnings of individuals by providing for federal deposit insurance. Since the creation of the FDIC, Congress has expressed no dissatisfaction with the FDIC's interpretation of "deposit"; indeed, Congress in 1960 adopted the FDIC's regulatory definition as the statutory language. When we weigh all these factors together, we are *432 constrained to conclude that the term "deposit" does not include a standby letter of credit backed by a contingent promissory note.

A
Justice Holmes stated that, as to discerning the constitutionality of a federal estate tax, "a page of history is worth a volume of logic." New York Trust Co. v. Eisner, 256 U. S. 345, 349 (1921). Although the genesis of the Federal Deposit Insurance Act may not be quite so powerful a substitute for legal analysis, that history is worthy of at least a page of recounting for the light it sheds on Congress' purpose in passing the Act. Cf. Watt v. Alaska, 451 U. S. 259, 266 (1981) ("The circumstances of the enactment of particular legislation may persuade a court that Congress did not intend words of common meaning to have their literal effect").
When Congress created the FDIC, the Nation was in the throes of an extraordinary financial crisis. See generally F. Allen, Since Yesterday: The Nineteen-Thirties in America 98-121 (1940); A. Schlesinger, The Crisis of the Old Order 474-482 (1957). More than one-third of the banks in the United States open in 1929 had shut their doors just four years later. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970, pt. 2, pp. 1019, 1038 (1976). In response to this financial crisis, President Roosevelt declared a national banking holiday effective the first business day after he took office. 48 Stat. 1689. Congress in turn responded with extensive legislation on banking, including the laws that gave the FDIC its existence.
Congress' purpose in creating the FDIC was clear. Faced with virtual panic, Congress attempted to safeguard the hard earnings of individuals against the possibility that bank failures would deprive them of their savings. Congress passed the 1933 provisions "[i]n order to provide against a repetition of the present painful experience in which a vast sum of assets and purchasing power is `tied up.' " S. Rep. No. 77, 73d Cong., 1st Sess., 12 (1933) (emphasis added). The *433 focus of Congress was therefore upon ensuring that a deposit of "hard earnings" entrusted by individuals to a bank would not lead to a tangible loss in the event of a bank failure. As the chairman of the relevant Committee in the House of Representatives explained on the floor:
"[T]he purpose of this legislation is to protect the people of the United States in the right to have banks in which their deposits will be safe. They have a right to expect of Congress the establishment and maintenance of a system of banks in the United States where citizens may place their hard earnings with reasonable expectation of being able to get them out again upon demand. . . .
.....
"[The purpose of the bill is to ensure that] the community is saved from the shock of a bank failure, and every citizen has been given an opportunity to withdraw his deposits. . . .
.....
"The public . . . demand of you and me that we provide a banking system worthy of this great Nation and banks in which citizens may place the fruits of their toil and know that a deposit slip in return for their hard earnings will be as safe as a Government bond." 77 Cong. Rec. 3837, 3838, 3840 (1933) (remarks of Rep. Steagall).
See also id., at 3913 (remarks of Rep. Keller) ("[We must make] it absolutely certain that . . . any and every man, woman, or child who puts a dollar in any bank can absolutely know that he will under no circumstances lose a single penny of it"); id., at 3924 (remarks of Rep. Green) ("It is time that we pass a law so secure that when a man puts his money in a bank he will know for sure that when he comes back it will be there"). To prevent bank failure that resulted in the tangible loss of hard assets was therefore the focus of Congress' effort in creating deposit insurance.
Despite the fact Congress revisited the deposit insurance statute in 1935, 1950, and 1960, these comments remain the *434 best indication of Congress' underlying purpose in creating deposit insurance. The Reports on the 1935 amendments presented the definition of "deposit" without any specific comment. See H. R. Rep. No. 742, 74th Cong., 1st Sess., 2 (1935); S. Rep. No. 1007, 74th Cong., 1st Sess., 2-4 (1935); H. R. Conf. Rep. No. 1822, 74th Cong., 1st Sess., 44 (1935). The floor debates centered around changes in the Federal Reserve System made in the same bill, not on deposit insurance. See, e. g., 79 Cong. Rec. 6568-6577, 6651-6660 (1935). Indeed, in light of the fact that instruments denominated "promissory notes" seem at the time to have been considered exclusively uncontingent, see, e. g., 16 Fed. Res. Bull. 520 (1930) (Regulation A) (defining promissory note as an "unconditional promise . . . to pay [a sum certain in dollars] at a fixed or determinable future time") (emphasis added); Gilman v. Commissioner, 53 F. 2d 47, 50 (CA8 1931) ("The form of these [contingent] instruments referred to as `promissory notes' is very unusual"), it is unlikely that Congress would have had occasion to refer expressly to contingent notes such as the one before us here even if Congress had turned its attention to the definition of "deposit" when it first enacted the provision treating "money or its equivalent."
The legislative history of the 1950 amendments is similarly unhelpful, as one would expect given that the relevant provisions were reenacted but unchanged. See S. Rep. No. 1269, 81st Cong., 2d Sess., 2-3 (1950); H. R. Rep. No. 2564, 81st Cong., 2d Sess., 5-6 (1950). The Committee Reports on the 1960 amendments likewise give no indication that the amendments' phrasing was meant to effect any fundamental changes in the definition of deposit; those Reports state only that the changes are intended to bring into harmony the definitions of "deposit" used for purposes of deposit insurance with those used in reports of condition, and that the FDIC's rules and regulations are to be incorporated into the new definition. See H. R. Rep. No. 1827, 86th Cong., 2d Sess., 3, 5 (1960); S. Rep. No. 1821, 86th Cong., 2d Sess., 7, 10 (1960). *435 See also 106 Cong. Rec. 14794 (1960) (discussing pre-1960 scheme).
Congress' focus in providing for a system of deposit insurance  a system that has been continued to the present without modification to the basic definition of deposits that are "money or its equivalent"  was clearly a focus upon safeguarding the assets and "hard earnings" that businesses and individuals have entrusted to banks. Congress wanted to ensure that someone who put tangible assets into a bank could always get those assets back. The purpose behind the insurance of deposits in general, and especially in the section defining deposits as "money or its equivalent," therefore, is the protection of assets and hard earnings entrusted to a bank.
This purpose is not furthered by extending deposit insurance to cover a standby letter of credit backed by a contingent promissory note, which involves no such surrender of assets or hard earnings to the custody of the bank. Philadelphia Gear, which now seeks to collect deposit insurance, surrendered absolutely nothing to the bank. The letter of credit is for Philadelphia Gear's benefit, but the bank relied upon Orion to meet the obligations of the letter of credit and made no demands upon Philadelphia Gear. Nor, more importantly, did Orion surrender any assets unconditionally to the bank. The bank did not credit any account of Orion's in exchange for the promissory note, and did not treat its own assets as increased by its acceptance of the note. The bank could not have collected on the note from Orion unless Philadelphia Gear presented the unpaid invoices and a draft on the letter of credit. In the absence of a presentation by Philadelphia Gear of the unpaid invoices, the promissory note was a wholly contingent promise, and when Penn Square went into receivership, neither Orion nor Philadelphia Gear had lost anything except the ability to use Penn Square to reduce Philadelphia Gear's risk that Philadelphia Gear would go unpaid for a delivery of goods to Orion.

*436 B
Congress' actions with respect to the particular definition of "deposit" that it has chosen in order to effect its general purpose likewise lead us to believe that a standby letter of credit backed by a contingent promissory note is not an insurable "deposit." In 1933, Congress amended the Federal Reserve Act to authorize the creation of the FDIC and charged it "to insure . . . the deposits of all banks which are entitled to the benefits of [FDIC] insurance." § 8, Banking Act of 1933, ch. 89, 48 Stat. 168. Congress did not define the term "deposit," however, until the Banking Act of 1935, in which it stated:
"The term `deposit' means the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obligated to give credit to a commercial, checking, savings, time or thrift account, or which is evidenced by its certificate of deposit, and trust funds held by such bank whether retained or deposited in any department of such bank or deposited in another bank, together with such other obligations of a bank as the board of directors [of the FDIC] shall find and shall prescribe by its regulations to be deposit liabilities by general usage . . . ." § 101, Banking Act of 1935, ch. 614, 49 Stat. 684, 685-686.
Less than two months after this statute was enacted, the FDIC promulgated a definition of "deposit," which provided in part that "letters of credit must be regarded as issued for the equivalent of money when issued in exchange for . . . promissory notes upon which the person procuring [such] instruments is primarily or secondarily liable." See 12 CFR § 301.1(d) (1939) (codifying Regulation I, rule 1, Oct. 1, 1935), revoked after incorporation into statutory law, 12 CFR 234 (Supp. 1962).
In 1950, Congress revisited the provisions specifically governing the FDIC in order to remove them from the Federal *437 Reserve Act and place them into a separate Act. See Act of Sept. 21, 1950, ch. 967, 64 Stat. 874. The new provisions did not modify the definition of "deposit." In 1960, Congress expanded the statutory definition of "deposit" in several categories, and also incorporated the regulatory definition that the FDIC had employed since 1935 into the statute that remains in force today. See supra, at 430 (quoting current version of statute).
At no point did Congress disown its initial, clear desire to protect the hard assets of depositors. See supra, at 432-435. At no point did Congress criticize the FDIC's longstanding interpretation, see infra, at 438, that a standby letter of credit backed by a contingent promissory note is not a "deposit." In fact, Congress had reenacted the 1935 provisions in 1950 without changing the definition of "deposit" at all. Compare 49 Stat. 685-686 with 64 Stat. 874-875. When the statute giving rise to the longstanding interpretation has been reenacted without pertinent change, the "congressional failure to revise or repeal the agency's interpretation is persuasive evidence that the interpretation is the one intended by Congress." NLRB v. Bell Aerospace, 416 U. S. 267, 275 (1974). See Zenith Radio Corp. v. United States, 437 U. S. 443, 457 (1978). Indeed, the current statutory definition of "deposit," added by Congress in 1960, was expressly designed to incorporate the FDIC's rules and regulations on "deposits." As Committees of both Houses of Congress explained the amendments: "The amended definition would include the present statutory definition of deposits, and the definition of deposits in the rules and regulations of the Federal Deposit Insurance Corporation, [along] with . . . changes [in sections other than what is now § 1813(l)(1)]." H. R. Rep. No. 1827, 86th Cong., 2d Sess., 5 (1960) (emphasis added); S. Rep. No. 1821, 86th Cong., 2d Sess., 10 (1960) (same). Congress, therefore, has expressly incorporated into the statutory scheme the regulations that the FDIC devised to assist it in determining what constitutes a "deposit" *438 within the statutory scheme. Under these circumstances, we must obviously give a great deal of deference to the FDIC's interpretation of what these regulations do and do not include within their definition of "deposit."

C
Although the FDIC does not argue that it has an express regulation excluding a standby letter of credit backed by a contingent promissory note from the definition of "deposit" in 12 U. S. C. § 1813(l)(1), that exclusion by the FDIC is nonetheless longstanding and consistent. At a meeting of FDIC and bank officials shortly after the FDIC's creation, a bank official asked whether a letter of credit issued by a charge against a customer's account was a deposit. The FDIC official replied:
" `If your letter of credit is issued by a charge against a depositor's account or for cash and the letter of credit is reflected on your books as a liability, you do have a deposit liability. If, on the other hand, you merely extend a line of credit to your customer, you will only show a contingent liability on your books. In that event no deposit liability has been created.' " Transcript as quoted in FDIC v. Irving Trust Co., 137 F. Supp. 145, 161 (SDNY 1955).
Because Penn Square apparently never reflected the letter of credit here as a noncontingent liability, and because the interwoven financial instruments at issue here can be viewed most accurately as the extension of a line of credit by Penn Square to Orion, this transcript lends support to the FDIC's contention that its longstanding policy has been to exclude standby letters of credit backed by contingent promissory notes from 12 U. S. C. § 1813(l)(1)'s definition of "deposit."
The FDIC's contemporaneous understanding that standby letters of credit backed by contingent promissory notes do not generate a "deposit" for purposes of 12 U. S. C. § 1813(l)(1) has been fortified by its behavior over the following *439 decades. The FDIC has asserted repeatedly that it has never charged deposit insurance premiums on standby letters of credit backed by contingent promissory notes, and Philadelphia Gear does not contest that assertion. See Tr. of Oral Arg. 42. Congress requires the FDIC to assess contributions to its insurance fund at a fixed percentage of a bank's "deposits" under 12 U. S. C. § 1813(l)(1). See 12 U. S. C. §§ 1817(a)(4), (b)(1), (b)(4)(A). By the time that this suit  the first challenge to the FDIC's treatment of standby letters of credit backed by contingent promissory notes  was brought, almost $100 billion in standby letters of credit was outstanding. See Board of Governors of the Federal Reserve System, Annual Statistical Digest 71 (1983); FDIC, 1983 Statistics on Banking (Table 110F). The FDIC's failure to levy premiums on standby letters of credit backed by contingent promissory notes therefore clearly demonstrates that the FDIC has never considered such letters to reflect deposits.
Although the FDIC's interpretation of the relevant statute has not been reduced to a specific regulation, we conclude nevertheless that the FDIC's practice and belief that a standby letter of credit backed by a contingent promissory note does not create a "deposit" within the meaning of 12 U. S. C. § 1813(l)(1) are entitled in the circumstances of this case to the "considerable weight [that] should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer." Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 844 (1984). As we have stated above, the FDIC's interpretation here of a statutory definition adopted wholesale from the FDIC's own regulation is consistent with congressional purpose, and may certainly stand.

III
Philadelphia Gear essentially seeks to have the FDIC guarantee the contingent credit extended to Orion, not assets entrusted *440 to the bank by Philadelphia Gear or by Orion on Philadelphia Gear's behalf. With a standard "commercial" letter of credit, Orion would typically have unconditionally entrusted Penn Square with funds before Penn Square would have written the letter of credit, and thus Orion would have lost something if Penn Square became unable to honor its obligations. As the FDIC concedes, deposit insurance extends to such a letter of credit backed by an uncontingent promissory note. See Tr. of Oral Arg. 8 (statement of Mr. Rothfeld, representing the FDIC) ("If this note were a fully uncontingent negotiable note that were not limited by any side agreements, it would be a note backing a letter of credit within the meaning of the statute"). See also id., at 17-18. But here, with a standby letter of credit backed by a contingent promissory note, Penn Square was not in possession of any of Orion's or Philadelphia Gear's assets when it went into receivership. Nothing was ventured, and therefore no insurable deposit was lost. We believe that, whatever the relevant State's definition of "letter of credit" or "promissory note," Congress did not by using those phrases in 12 U. S. C. § 1813(l)(1) intend to protect with deposit insurance a standby letter of credit backed only by a contingent promissory note. We thus hold that such an arrangement does not give rise to a "deposit" under 12 U. S. C. § 1813(l)(1).
Accordingly, the judgment of the court below is reversed, and the case is remanded for further proceedings consistent with this opinion.
Reversed and remanded.
JUSTICE MARSHALL, with whom JUSTICE BLACKMUN and JUSTICE REHNQUIST join, dissenting.
There is considerable common sense backing the Court's opinion. The standby letter of credit in this case differs considerably from the savings and checking accounts that come most readily to mind when one speaks of an insured deposit. Nevertheless, to reach this common-sense result, the Court must read qualifications into the statute that do not appear *441 there. We recently recognized that even when the ingenuity of businessmen creates transactions and corporate forms that were perhaps not contemplated by Congress, the courts must enforce the statutes that Congress has enacted. See Board of Governors, FRS v. Dimension Financial Corp., 474 U. S. 361, 373-375 (1986). Congress unmistakably provided that letters of credit backed by promissory notes constitute "deposits" for purposes of the federal deposit insurance program, and the Court's attempt to draw distinctions between different types of letter of credit transactions forces it to ignore both the statute and some settled principles of commercial law. Here, as in Dimension, the inflexibility of the statute as applied to modern financial transactions is a matter for Congress, not the FDIC or this Court, to remedy.
It cannot be doubted that the standby letter of credit in this case meets the literal definition of a "deposit" contained in 12 U. S. C. § 1813(l)(1). It is "a letter of credit . . . on which the bank is primarily liable . . . issued in exchange for. . . a promissory note upon which [Orion] is primarily or secondarily liable." The Court, however, holds that the note in this case, whether or not it is a promissory note under the Uniform Commercial Code (UCC) and Oklahoma law, is not a promissory note for purposes of the Federal Deposit Insurance Act. We should assume, absent convincing evidence to the contrary, that Congress intended for the term "promissory note" to derive its meaning from the ordinary sources of commercial law. I believe that there is no such evidence in this case.
The Court justifies its restrictive reading of the term "promissory note" in large part by arguing that Congress would not have wanted to include in that term any obligation that was not the present equivalent of money. The keystone of the FDIC's arguments, and of the Court's decision, is that Orion did not entrust "money or its equivalent" to the bank. The note in this case, however, was the equivalent of money, *442 and the Court's reading of Congress' intent is therefore largely irrelevant.
FDIC concedes, as it must, that Congress has determined that a promissory note generally constitutes money or its equivalent. Moreover, that statutory definition comports with economic reality. Promissory notes typically are negotiable instruments and therefore readily convertible into cash. The FDIC argues, and the Court holds, that the promissory note in this case is "contingent" and therefore not the equivalent of money. However, while the FDIC argues strenuously that Orion's note is not a promissory note in the usual sense of the word, one could more plausibly state that it is not a "contingent" obligation in the usual sense of that word. On its face the note is an unconditional obligation of Orion to pay the holder $145,200 plus accrued interest on August 1, 1982. It sets out no conditions that would affect the negotiability of the note, and therefore is fully negotiable for purposes of the UCC, U.C.C. § 3-104(1) (1977); Okla. Stat., Tit. 12A, § 3-104(1) (1981).
The Court therefore misses the point when it states that at the time of the original banking Acts, the term "promissory note" was not understood to include a contingent obligation. Ante, at 434. The note at issue in this case is an unconditional promise to pay, and satisfies all the requisites of a negotiable promissory note, either under the UCC or the common law as it existed in the 1930's. The only contingencies attached to Orion's obligation arise out of a separate contract. As to such contingencies, the law was well settled long before 1930:
"[I]n order to make a note invalid as a promissory note, the contingency to avoid it must be apparent, either upon the face of the note, or upon some contemporaneous written memorandum on the same paper; for, if the memorandum is not contemporaneous, or if it be merely verbal in each case, whatever may be its effect as a matter of defence between the original parties, it is not deemed to be a part of the instrument, and does not affect, *443 much less invalidate, its original character." J. Thorndike, Story on Promissory Notes 34 (7th ed. 1878) (footnotes omitted).[1]
It is far from a matter of semantics to state that while Orion and the bank may have an oral understanding concerning the bank's treatment of Orion's note, that note itself is unconditional and equivalent to money. The Court correctly observes that the bank would have breached its oral contract had it attempted to sue on the note; nevertheless, Orion would have had separately to plead and prove a breach of contract in that case, because parol evidence that the contract between the parties differed from the written instrument would have been inadmissible in the bank's action to collect the debt. See American Perforating Co. v. Oklahoma State Bank, 463 P. 2d 958, 962-963 (Okla. 1970). Similarly, should the note have found its way into the hands of a third party, Orion would have had no choice but to honor it, again being left with only the right to sue the bank for breach of the oral contract. Orion's entrustment of the note to the bank was not, therefore, completely risk free.
The risk taken on by Orion may not differ substantially from the risk assumed by one who hands over money to the bank to guarantee repayment of funds paid out on a letter of credit. The bank typically undertakes to put such cash collateral into a special account, where it never enters into the general assets of the bank. See U.C.C. § 5-117, comment (1977). Should the bank cease operations, the customer will enjoy a preference in bankruptcy, entitling it to receive its money back before general unsecured creditors of the bank *444 are paid. U.C.C. § 5-117; Okla. Stat., Tit. 12A, § 5-117 (1981). Like Orion, then, that hypothetical customer has little to fear absent misconduct by the bank or a third party. If the federal deposit insurance program should not protect Philadelphia Gear, therefore, it probably should not protect any holder of a letter of credit, whether commercial, standby, funded, or unfunded.[2] That, however, is clearly a matter for Congress to determine.
While the Court purports to examine what Congress meant when it said "promissory note," in fact the Court's opinion does not rest on any special attributes of Orion's note. Rather, the Court rules that when an individual entrusts a negotiable instrument to a bank, that instrument is not "money or its equivalent" for purposes of § 1813(l)(1) so long as the bank promises not to negotiate it or collect on it until certain conditions are met. That is a proviso that Congress might have been well advised to include in the Act, but did not. I therefore dissent.
NOTES
[*]  Briefs of amici curiae urging reversal were filed for the American Bankers Association et al. by John L. Warden and Stanley F. Farrar; for the Council on International Banking, Inc., by Bud G. Holman; for the National Association of Bond Lawyers by Daniel O. Mahoney; and for the U. S. Conference of Mayors et al. by Benna Ruth Solomon and Joyce Holmes Benjamin.
[1]  We would have a very different case if the conditions put upon Orion's obligation to the bank were reflected on the face of the note, as they were in Allen v. FDIC, 599 F. Supp. 104 (ED Tenn. 1984), appeal pending, No. 85-5003 (CA6), a case raising the same issue as the present one. Because such a note is not negotiable, it is much more plausible to argue that Congress would not have considered it "money or its equivalent." The note in this case, however, is in no sense a contingent note.
[2]  It seems odd that Philadelphia Gear's status as an insured depositor should depend on the terms of the repayment agreement between Orion and the bank. Ordinarily, Philadelphia Gear would be indifferent to the agreement between Orion and the bank, and might not even be aware of the terms of that agreement. The Court, therefore, is not necessarily bringing greater rationality to this area of the law by creating distinctions between types of letters of credit for purposes of federal deposit insurance coverage.


758 N.W.2d 91 (2008)
STATE
v.
GUMAN.
No. 2007AP1205.
Supreme Court of Wisconsin.
August 18, 2008.
Petition for review denied.


355 B.R. 287 (2006)
In Re: Marc W. HERRMAN, ebtor.
Douglas J. Compton, Plaintiff,
v.
Marc W. Herrman, Defendant.
Bankruptcy No. 05-15429-7, Adversary No. 05-5834.
United States Bankruptcy Court, D. Kansas.
November 28, 2006.
*288 Jeffrey L. Willis, Wichita, KS, for Debtor, Defendant.

*289 OPINION DENYING PLAINTIFF'S SUMMARY JUDGMENT MOTION
DALE L. SOMERS, Bankruptcy Judge.
This proceeding is before the Court for resolution of the Plaintiffs motion for summary judgment. The Plaintiff appears by counsel Shon D. Qualseth of Thompson Ramsdell & Qualseth, P.A., of Lawrence, Kansas. The Defendant-Debtor appears by counsel Jeffrey L. Willis of Johnson, Kennedy, Dahl & Willis of Wichita, Kansas. The Court has reviewed the relevant materials and is now ready to rule.
The Plaintiff contends the Debtor should be denied a discharge pursuant to 11 U.S.C.A. § 727(a)(2)(A) because, within one year before filing for bankruptcy, he transferred property with the intent to hinder, delay, or defraud the Plaintiff. The Debtor concedes he made the transfers the Plaintiff is complaining about, but denies he made them with the requisite intent. The Court concludes a trial will be necessary in order to resolve the question of the Debtor's intent.
FACTS
In October 2000, the Plaintiff loaned the Debtor $25,000 for a down payment on a house in or near Lawrence, Kansas ("the House"). In return, the Debtor agreed the Plaintiff "shall be entitled to one-half the proceeds from the eventual sale of the House. The Debtor, his wife, and children lived in the House. In March 2002, the Debtor gave the Plaintiff a promissory note for $80,000 in return for a 50% interest in a company called Civil Development, LLC. From that time until March 2004, the Debtor worked for that company. He made payments on the note for about a year and a half, and then stopped. In November 2004, the Plaintiffs lawyer sent the Debtor a letter about both debts he owed the Plaintiff. Among other things, the attorney said the balance due on the note was about $33,600.
A month after receiving the attorney's letter, the Debtor formed a limited liability company called Gauge, LLC[1]; he was its sole member. The day after that, he and his wife signed a quit claim deed transferring their interest in the House to Gauge. Gauge gave them nothing at that time in exchange for the House. The deed was filed with the Douglas County Register of Deeds a few days later, but the Debtor did not otherwise notify the Plaintiff of the transfer. The Debtor testified that the purpose of the transfer to Gauge was to protect his homestead. He and his family continued to live in the House, and he testified he did not pay rent to Gauge, but has also asserted that after the transfer, he continued to pay $1,250 per month on a mortgage on the House.
In February 2005, two months after receiving the deed, Gauge sold the House to Belvedere, LC,[2] for $300,000. The sale price was based on an appraisal of the House. The Debtor's father is the sole owner of Belvedere. The sale contract included a provision that Belvedere "shall not sell, assign or transfer this Agreement or any interest under it or any interest in or to said property, without first obtaining the written consent of Gauge.[3] The *290 Debtor alleges that at some unspecified earlier time, he had an agreement to sell the House for $285,000 to a realty company whose owner is not related to him, and that the company failed to close on the transaction. After the sale to Belvedere, the Debtor and his family continued to live in the House for some months, and he paid $1,000 per month rent during that time.
Gauge used the sale proceeds to pay off the mortgage on the House, and the $95,000 balance was used for the Debtor's benefit. The Debtor used $15,000 of the money to pay off a car loan and paid almost $24,000 to reduce the balance owed on a truck loan. He paid $2,250 toward the purchase of a house in Lenexa, Kansas (probably as earnest money), and later used about 833,300 of the money to make a down payment on that house. He reported he used about $14,600 to pay various other bills between March and July 2005, but the materials presented do not indicate what he did with the other $5,800. The Debtor has never given the Plaintiff any of the proceeds from the sale of the House.
After the Debtor stopped working for Civil Development, he was unemployed for about 7 or 8 months. Then he got a job in Edwardsville, Kansas, in the Kansas City area. In March 2005, he apparently decided to move his family to the Kansas City area, so he paid some money toward the purchase of the Lenexa house. Then, in August 2005, he got a job with another Kansas City company. During that month, he made the down payment on the Lenexa house and moved his family there.
On February 8, 2005, the Plaintiff sued the Debtor in state court for breaching his payment obligations on the promissory note. The Debtor hired an attorney and filed an answer. He claims he made a settlement offer that the Plaintiff rejected. The Plaintiff has not responded to that assertion.
In August 2005, the Debtor sold a 1949 truck, several guns, and two saws to his father for $15,000. The Plaintiff has offered no evidence to show the items were worth more than the Debtor's father paid. The Debtor used some of that money to pay his attorneys. He also used some of it (perhaps the rest of it) to pay for homeimprovement projects at the Lenexa house.
After his offer to settle the Plaintiff's state court suit was allegedly rejected, near the end of August 2005, the Debtor filed a Chapter 7 bankruptcy petition. In the Statement of Financial Affairs he filed with his petition, the Debtor reported that he had transferred the House to Belvedere in January 2005 for $300,000, and that he had sold the truck, some guns, and "25 acres" to his father in August 2005 for $15,000. Near the end of March 2005, the Debtor amended his Statement to change the "25 acres" to "2 saws," stating the change was because of a scrivener's error. At the same time, he reported that he had transferred the House to Gauge in January 2005, identifying Gauge's relationship to him as "self," and received $0 in return. He left the transfer to Belvedere in his report of transfers of his property.
The Plaintiff filed a timely complaint objecting to the Debtor's discharge. He later obtained permission and filed an amended complaint. The Plaintiff contends that with the intent to hinder, delay, and defraud him, the Debtor transferred (1) the House to Gauge and (2) the truck, guns, and saws to his father, all in violation of § 727(a)(2)(A) of the Bankruptcy Code. The Debtor admits he made the transfers, but denies that he acted with the requisite intent.
The Plaintiff has now moved for summary judgment. In response to the motion, the Debtor submitted a declaration in *291 which he asserted various facts. In his brief, he contends the declaration indicates that after he incurred the two debts to the Plaintiff, events occurred that gave him defenses to the debts. The brief does not describe the events or specify how they would excuse his obligation to pay the Plaintiff on the debts. The Court has reviewed the declaration and cannot find anything in it describing events that might give the Debtor defenses on the debts.
DISCUSSION
1. Summary judgment standards
Under the applicable rules of procedure, the Court is to grant summary judgment if the moving party demonstrates that there is "no genuine issue of material fact" and that the party "is entitled to a judgment as a matter of law."[4] The substantive law identifies which facts are material.[5] A dispute over a material fact is genuine when the evidence is such that a reasonable fact finder could resolve the dispute in favor of the party opposing the motion.[6] In adjudicating disputes, bankruptcy courts usually fulfill both the judicial function and the fact-finding function. In deciding a summary judgment motion, though, the Court is limited to its judicial role, not weighing the evidence and resolving factual disputes, but merely determining whether the evidence favorable to the non-moving party about a material fact is sufficient to require a trial[7] at which the Court would act in its fact-finding role. Summary judgment is inappropriate if an inference can be drawn from the uncontroverted facts that would allow the non-moving party to prevail at trial.[8]
As a general rule, questions involving a person's intent or other state of mind cannot be resolved by summary judgment.[9] But in an exceptional case, a person's "denial of knowledge may be so utterly implausible in light of conceded or irrefutable evidence that no rational person could believe it," making a trial on the question of the person's state of mind unnecessary.[10]
2. Fraudulent transfer or concealment of property under § 727(a)(2)(A)
The plaintiff contends that summary judgment is proper under § 727(a)(2)(A) of the Bankruptcy Code, which provides:
(a) The court shall grant the debtor a discharge, unless
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred . . . or concealed, or has permitted to be transferred . . . or concealed
(A) property of the debtor, within one year before the date of the filing of the petition. . . . *292 The Plaintiff must establish by a preponderance of the evidence that the Debtor violated this provision.[11] Since the Debtor concedes he made the questioned transfers, his discharge must be denied under this provision if the factfinder is persuaded, either by direct evidence or by inference from the facts and circumstances of the Debtor's conduct, that he made the transfers with the actual intent to hinder, delay, or defraud the Plaintiff.[12] To grant the Plaintiffs summary judgment motion, though, the Court must be convinced that no reasonable factfinder could fail to be persuaded that the Debtor made the transfers with that intent.
The Plaintiff has presented no direct evidence of the Debtor's intent, so he asks the Court to consider inferences that can be drawn from the uncontroverted circumstances. Courts have identified various types of debtor conduct, referred to as "badges of fraud," that can suggest actions intended to hinder, delay, or defraud a creditor. In Marine Midland Business Loans, Inc. v. Carey (In re Carey),[13] the Tenth Circuit identified a variety of indicia of fraud, including: (1) concealment of prebankruptcy conversions; (2) conversion of assets immediately before the filing of the bankruptcy petition; (3) gratuitous transfers of property; (4) continued use by the debtor of transferred property; (5) transfers to family members; (6) obtaining credit to purchase exempt property; (7) conversion of property after entry of a large judgment against the debtor; (8) a pattern of sharp dealing by the debtor prior to bankruptcy; (9) insolvency of the debtor resulting from the conversion of the assets; and (10) the monetary value of the assets converted.
The Plaintiff cites a number of cases where intent to hinder, delay, or defraud was found, but most of them involved conclusions reached after a trial, not a ruling on a summary judgment motion, so they provide little guidance on the question when summary judgment should be granted under § 727(a)(2)(A) on a disputed issue of intent.[14] In one case the Plaintiff cites, the court denied summary judgment under § 727(a)(2)(A) because, although many indicia of fraud existed, the transactions involved were small and the debtors had offered testimony tending to negate any fraudulent intent.[15] The Plaintiff has also cited a few cases where summary judgment was granted against a debtor on the question of the debtor's intent to hinder, *293 delay, or defraud creditors, but they were all unusual or exceptional cases, for one reason or another.[16] For example, in In re Chavin, the Seventh Circuit explained that: "A denial of knowledge may be so implausible in light of conceded or irrefutable evidence that no rational person could believe it; and if so, there is no occasion to submit the issue of knowledge to determination at a trial."[17] The circuit went on to say that opinions suggesting testimony cannot be rejected in a summary judgment ruling based on implausibility "are at most warnings that credibility issues are to be left to the trier of fact to resolve on the basis of oral testimony except in extreme cases. The exceptional category is  exceptional. For the case to be classified as extreme, the testimony sought to be withheld from the trier of fact must be not just implausible, but utterly implausible in light of all relevant circumstances."[18] The Court does not believe this case falls in the exceptional category described in Chavin.
3. Transfer of the House to Gauge
The Plaintiff contends he has established that the Debtor transferred the House to Gauge with the intent to hinder, delay, or defraud the Plaintiff. Some of the badges of fraud the Tenth Circuit identified in Carey have been shown to exist with respect to the House, although other circumstances reduce the tendency of some of them to show fraudulent intent. The Debtor did not tell the Plaintiff when he transferred the House to Gauge, and he initially failed to report the transfer in his bankruptcy schedules. On the other hand, the Plaintiff has not shown the Debtor had any legal obligation to inform him that the transfer had been made, and the deed was filed in the public records shortly after the transfer, making it possible (though unlikely) for the Plaintiff to discover it. In addition, the Debtor did report in his schedules the transfer of the House to Belvedere, although it was mistakenly listed as a transfer from him, instead of from Gauge. The transfer to Gauge was made between 8 and 9 months before the Debtor filed for bankruptcy, long enough that the factfinder might not consider it to have been immediately before the filing. Gauge did not give the Debtor anything for the House at the time the transfer was made, *294 but the proceeds of Gauge's later sale of the House were paid largely, if not completely, for the Debtor's benefit. The Debtor and his family continued to live in the House after the transfer without paying rent to Gauge, although the Debtor claims he made mortgage payments during that time.[19] The transfer was made, in effect, to himself, the closest possible transferee. The Plaintiff has not alleged the Debtor obtained credit to buy exempt property. The Debtor made the transfer to Gauge after the Plaintiff's attorney contacted him about his debts to the Plaintiff, so the Debtor was aware that the Plaintiff might soon commence forcible collection efforts. The Plaintiff contends the Debtor engaged in a pattern of sharp dealing by forming Gauge, transferring the House to Gauge, causing Gauge to sell the House to Belvedere, and including the provision in the sale that requires Belvedere to obtain Gauge's consent before transferring the House or the sale agreement. While a factfinder might conclude these actions constitute a pattern of sharp dealing, the Court is not convinced that is the only conclusion a reasonable factfinder could reach. Because the Debtor was the sole owner of Gauge, the transfer of the House to Gauge would not have affected his net worth and could not have caused him to move from solvent to insolvent. Finally, the transfer of the House to Gauge could not have enabled the Debtor to claim the House as exempt, so the transfer could not have changed the House from non-exempt to exempt property. Under the circumstances, the Court believes the Plaintiff s evidence of badges of fraud falls short of establishing as a matter of law that the Debtor's transfer of the House to Gauge was made with the intent to hinder, delay, or defraud the Plaintiff.
Because the Debtor ultimately used some of the proceeds from Gauge's sale of the House to Belvedere to buy a new home and to reduce debts he and his wife owed on two vehicles  property that may be exempted under Kansas and bankruptcy law  the badges-of-fraud analysis of his actions must also be tempered by the law affecting exempt property. It is well-established under Kansas law, as well as bankruptcy law, that a debtor will be permitted to convert nonexempt property into exempt property before filing bankruptcy in order to take full advantage of the exemptions permitted. "The right to convert non-exempt assets into exempt assets is well settled in Kansas."[20] The Tenth Circuit Court of Appeals, when applying federal bankruptcy law, has stated that "the conversion of nonexempt to exempt property for the purpose of placing property out of the reach of creditors, without more, will not deprive the debtor of the exemption to which he otherwise would be entitled."[21] The legislative history *295 accompanying the Bankruptcy Reform Act of 1978 indicates Congress intended to retain this facet of exemption law:
As under current law, the debtor will be permitted to convert nonexempt property into exempt property before filing a bankruptcy petition. The practice is not fraudulent as to creditors, and permits the debtor to make full use of the exemptions to which he is entitled under the law.[22]
This consideration cements the Court's view that the Plaintiffs summary judgment motion cannot be granted to the extent it relies on the Debtor's transfer of the House to Gauge.
4. Transfer of the truck, guns, and saws to the Debtor's father
The Plaintiff contends the Debtor's sale of the truck, guns, and saws to his father was also made with the intent to hinder, delay, or defraud the Plaintiff. This sale also involves some badges of fraud: (1) it occurred less than one month before the Debtor filed for bankruptcy; (2) the Plaintiffs lawsuit against the Debtor was pending when the sale occurred; and (3) the transfer was to a family member. On the other hand, the Plaintiff has not shown that the Debtor concealed the sale, that the property transferred was worth more than the Debtor's father paid for it, that the Debtor continued to control or use the property, or that the transfer made the Debtor insolvent. In the portions of its briefs discussing this sale, the Plaintiffs assertion that the Debtor engaged in a pattern of sharp dealing before filing for bankruptcy seems to boil down to a complaint that the Debtor used some of the proceeds from the sale of the House to buy a new homestead, that, he used some of the proceeds from the sale to his father to pay for some work on that house and the rest to pay his attorneys, and that he paid a number of other creditors rather than the Plaintiff. These circumstances are simply not sufficient to convince the Court that a reasonable factfinder can only conclude the Debtor sold these items to his father with the intent to hinder, delay, or defraud the Plaintiff.
CONCLUSION
For these reasons, the Court concludes the Plaintiffs motion for summary judgment must be denied. The parties are advised not to read this opinion to indicate how the Court is inclined to rule at trial on the question of the Debtor's intent in making the challenged transfers.
NOTES
[1]  This company's name is also spelled "Guage" in some of the documents submitted in connection with the summary judgment motion.
[2]  This company's name is spelled "Belvidere" in some of the documents submitted in connection with the summary judgment motion.
[3]  In the quoted language, the words "said property" almost certainly refer to the House, although the contract does not make this as clear as it might have.
[4]  Fed. R. Civil P. 56(c), made applicable by Fed. R. Bankr.P. 7056.
[5]  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
[6]  Id.
[7]  Id. at 249-52, 106 S.Ct. 2505.
[8]  Id. at 248, 106 S.Ct. 2505.
[9]  Prochaska v. Marcoux, 632 F.2d 848, 851 (10th Cir.1980), cert. denied 451 U.S. 984, 101 S.Ct. 2316, 68 L.Ed.2d 841 (1981); see also 10B Wright, Miller & Kane, Fed. Prac. & Pro. Civil 3d, § 2730 (1998) (indicating actions involving state of mind can rarely be determined by summary judgment, except when the opposing party does not present sufficient circumstantial evidence to support a potential finding contrary to the person's professed state of mind).
[10]  In re Chavin, 150 F.3d 726, 728-29 (7th Cir.1998).
[11]  First National Bank v. Serafini (In re Serafini), 938 F.2d 1156 (10th Cir.1991) (standard of proof under 727(a)(2) is preponderance of evidence, not clear and convincing).
[12]  First Beverly Bank v. Adeeb (In re Adeeb), 787 F.2d 1339, 1342-43 (9th Cir.1986); Korte v. United States (In re Korte), 262 B.R. 464, 472-73 (8th Cir.BAP2001); Reese v. Kulwin (In re Kulwin), 187 B.R. 341, 346 (Bankr. D.Kan.1995), vacated pursuant to parties' settlement 208 B.R. 229 (Bankr.D.Kan.1997) (citing Fox v. Schmit (In re Schmit), 71 B.R. 587, 590 (Bankr.D.Minn.1987)).
[13]  938 F.2d 1073, 1077 & n. 4 (10th Cir. 1991).
[14]  See Carey, 938 F.2d at 1077 (reviewing ruling published at 96 B.R. 336 (Bankr. D.Okla.1989)); Norwest Bank Nebraska v. Tveten (In re Tveten), 70 B.R. 529 (Bankr. D.Minn.), aff'd 82 B.R. 95 (D.Minn.1987), aff'd 848 F.2d 871 (8th Cir.1988); Pavy v. Chastant (In re Chastant), 873 F.2d 89 (5th Cir.1989); Teilhaber Manufacturing Corp. v. Hodge (In re Hodge), 92 B.R. 919 (Bankr. D.Kan.1988); National Bank of Pittsburg v. Butler (In re Butler), 38 B.R. 884 (Bankr. D.Kan.1984); Bank of Hemingford v. Armstrong (In re Armstrong), 97 B.R. 565 (Bankr. D.Neb.1989); Oberst v. Oberst (In re Oberst), 91 B.R. 97 (Bankr.C.D.Cal.1988).
[15]  First Nat'l Bank v. Davison (In re Davison), 296 B.R. 841 (Bankr.D.Kan.2003) (court did grant summary judgment under § 727(a)(4)(A) on ground debtors had made false oaths).
[16]  See In re Chavin, 150 F.3d 726 (7th Cir. 1998) (experienced businessman's explanations for failure to disclose various transactions and income were too far-fetched to be believed); Meeks v. Trammell (In re Trammell), 197 B.R. 309 (Bankr.W.D.Ark.1996) (debtor conceded he transferred cars to his daughter and concealed wages or accounts that were owed to him in effort to keep them from his creditors; court seems to have relied in part on conclusions it had reached in a prior trial); Najjar v. Kablaoui (In re Kablaoui), 196 B.R. 705 (Bankr.S.D.N.Y.1996) (debtor made gratuitous transfers of real property to family members while in financial difficulty but admitted he retained right to share in profits from sale or development of property; summary judgment granted because during evidentiary hearing on motion, held pursuant to Civil Rule 43(e), debtor failed to rebut presumption of fraudulent intent arising from gratuitous transfers to relatives). The Plaintiff also cites one case where summary judgment was granted against the debtor under § 727(a)(3), (4), and (5), Nisselson v. Wolfson (In re Wolfson), 139 B.R. 279, 285-89 (B ankr.S.D.N.Y.1992). The Court does not find that decision helpful here.
[17]  150 F.3d at 728 (citations omitted).
[18]  Id. (emphasis in original). See also Garrett v. Vaughan (In re Vaughan), 2006 WL 751388 (10th Cir.BAP Mar.22, 2006) (in decision designated as nonbinding precedent, citing Chavin, among other cases, 10th Circuit BAP ruled debtors failed to negate inference of fraudulent intent arising from admitted failure to list material assets in schedules, so summary judgment against them was proper under § 727(a)(4)(a)).
[19]  When he was being questioned under oath, the Debtor was asked if he paid any rent to Gauge after the transfer and before Gauge sold the House to Belvedere, and he answered, "No." The Plaintiff argues this answer precludes the Debtor from alleging he made mortgage payments during that time. However, the Debtor's negative answer to the rent question might have been correct even if he made mortgage payments because he either (1) did not consider the mortgage payments to be "rent," or (2) made the payments directly to the mortgage holder, and not to Gauge.
[20]  In re Hodes, 287 B.R. at 568, quoting Douglas County Bank v. Fine (In re Fine), 89 B.R. 167, 174 (Bankr.D.Kan.1988) (citing Metz v. Williams, 149 Kan. 647, 88 P.2d 1093 (1939)); see also McConnell v. Wolcott, 70 Kan. 375, 78 P. 848 (1904).
[21]  Marine Midland Business Loans, Inc. v. Carey (In re Carey), 938 F.2d 1073, 1076 (10th Cir.1991), quoting Norwest Bank Neb., N.A. v. Tveten, 848 F.2d 871, 873-74 (8th Cir.1988). The Plaintiff also cites Marrama v. Citizens Bank (In re Marrama), 445 F.3d 518 (1st Cir.2006). The Court notes that to the extent the decision might be read to allow an inference of fraudulent intent to be made when a debtor testifies he converted property to an exempt form in order to protect it from creditors, the Tenth Circuit's contrary rule precludes this Court from following Manama. Because the debtor in Manama transferred property into a spendthrift trust he created for his own benefit, however, rather than into a form the state legislature had declared to be exempt, the Court believes the decision is better read to hold such testimony supports an inference of fraudulent intent only when non-exempt property is involved.
[22]  H.R.Rep. No. 90-595 at 361 (1977); S.Rep. No. 90-989 at 76 (1978), U.S. Code Cong. & Admin. News 1978, pp. 5787, 5861-5862, 6316-6317.