Memorandum Opinion (related document(s):1 Complaint). (dxj)

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF WYOMING

In re:

BILLY DEE PETERSON

Debtor

DAVID MILLER, Trustee of the Chapter 7
Bankruptcy Estate of Billy Dee Peterson

Plaintiff,

BILLY DEE PETERSON; JULIE BARNES;
DIAMOND LAND TRUST; DIAMOND
LAND TRUST – 19; BILLY DEE PETERSON, as the
purported trustee of the Diamond Land Trust – 19; EARL
LAWRENCE; EARL LAWRENCE, as the purported
trustee of the Diamond Land Trust – 19; CITI TRUSTEE
SERVICES, LLC, as the purported trustee of the Diamond
Land Trust – 19; MOUNTAIN MEADOW LOG HOMES,
LLC; MW DESIGN AND CONSTRUCTION, LLC;
COWBOY STATE PROPERTIES, LLC; WILLOW
SPRINGS, LLC; and DOES 1-10,

Defendants.

Case No. 19-20027
Chapter 7

Adversary No. 20-02009

MEMORANDUM OPINION
At its core, this proceeding presents the intersection of state law and federal bankruptcy law,
requiring the court to determine whether Montana real estate, allegedly held in a Montana land
trust, and construction equipment are property of Debtor’s bankruptcy estate under Section 541(a)(1)
of the Bankruptcy Code
1
and therefore subject to turnover for the Chapter 7 trustee to administer.
The issues entail examination of Montana trust law and Wyoming alter ego law to determine
whether Debtor Billy Dee Peterson had an interest in the subject property on the date he filed
bankruptcy. If so, it is estate property and the Trustee may recover the property or its value for
distribution to unsecured creditors.
2
As with most cases like this one, the facts are complicated and

1
All references to the Bankruptcy Code, Code, or to Sections thereof, are to 11 U.S.C. §§ 101 et seq.
2
This adversary proceeding is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (E) and (O) over which the
court has subject matter jurisdiction. 28 U.S.C. §§ 1334 and 157(b)(1). The parties consent to this court
entering final judgment in this matter. ECF No. 119, at ¶ 1.
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contested and require the court to evaluate the witnesses’ credibility. Following four days of trial, the
court issues this final order on the “estate property” claims asserted in this adversary proceeding.
I. Procedural History
Debtor filed this Chapter 7 bankruptcy on January 23, 2019. On August 30, 2019, the duly-
appointed Chapter 7 trustee David Miller commenced an adversary proceeding against Debtor, his
construction companies Mountain Meadow Log Homes, LLC (MMLH) and MW Design and
Construction, LLC (MW Design), purported land trusts named Diamond Land Trust and Diamond
Land Trust-19 (DLT-19) and several purported trustees thereof, and other parties. The Trustee’s
Complaint sought, in part, declaratory relief and recovery of a tract of real estate in Roberts,
Montana with a home Debtor built thereon, certain items of construction equipment, and real estate
in Etna, Wyoming as property of the bankruptcy estate; the balance of the claims asserted a general
objection to Debtor’s discharge on various grounds under Section 727.
3

On or about March 28, 2020, the Trustee bifurcated the “estate property” claims from the
Section 727 claims, filing the current adversary proceeding to first hear and decide the overarching
issue of whether the Roberts and Etna properties and construction equipment are property of the
bankruptcy estate subject to the Trustee’s administration. As relevant to this opinion, the Trustee
seeks a determination that: 1) MMLH and MW Design are Debtor’s alter egos and have no separate
legal existence; 2) the named trusts—Diamond Land Trust and/or DLT-19—are not legally created
trusts and have no interest in the Roberts property, or alternatively, the trust(s) are Debtor’s alter
ego(s); and 3) on the Petition Date, Debtor had an interest in the Roberts property, the Etna
property, and construction equipment making them property of his bankruptcy estate. To recover the
property, the Trustee seeks: 1) imposition of a resulting trust or constructive trust in the Roberts and
Etna properties in the Trustee’s favor; 2) a determination Debtor is the sole owner of the Roberts
property and quieting title in Debtor pursuant to state law; 3) entry of a judgment vesting title to the
Roberts property in the Trustee pursuant to Fed. R. Bankr. P. 7070 incorporating Fed. R. Civ. P. 70;
4) avoidance of Debtor’s transfer of his interest in the Roberts property as an actual or constructively
fraudulent transfer under Section 544(b) and the Montana Uniform Fraudulent Transfer Act and
preserving and recovering the avoided transfer for the estate’s benefit under Sections 550 and 551;
and/or 5) an unjust enrichment finding for Debtor’s contributions to the Etna property.
4

Following more than a year of discovery, Mr. Peterson, individually and as the purported
director of DLT-19, and his construction entities MMLH and MW Design (collectively the Peterson

3
Miller v. Peterson, et al., Adv. No. 19-2012 (Bankr. D. Wyo.) (dismissed September 28, 2022).
4
ECF No. 119.
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Defendants), moved for summary judgment and/or to dismiss the Trustee’s claims.
5
Defendant Julie
Barnes, individually and as the purported trustee of DLT-19, and her entities Cowboy State
Properties, LLC and Willow Springs, LLC (collectively the Barnes Defendants) joined, in part, in
the summary judgment motion.
6
The court issued its Order on Summary Judgment denying the
motions to dismiss and for summary judgment, concluding the Trustee pled sufficient plausible facts
for each claim and there were material facts in dispute with respect to all claims.
7

The case proceeded to trial on March 15, 2022. At the close of the Trustee’s case-in-chief, the
Peterson and Barnes Defendants moved to dismiss. The court treated the motion as one for
judgment on partial findings under Fed. R. Civ. P. 52(c), made applicable to this proceeding by Fed.
R. Bankr. P. 7052.
8
For the reasons stated on the record, the court granted and denied the motion in
part. The court dismissed defendant Earl Lawrence, individually and as purported trustee of DLT-
19. The court granted the Barnes Defendants judgment on all claims related to the Etna property,
including the unjust enrichment claim. The court deferred ruling on the alter ego, construction
equipment claims, the DLT-19 and Roberts property claims, and on the imposition of resulting or
constructive trusts, and the Trustee’s claims to quiet and vest title. To summarize, the following
parties remained defendants at the close of trial: Peterson, individually and as purported trustee of
DLT-19; Diamond Land Trust; DLT-19; MMLH; MW Design; Citi Trustee Services, LLC as
purported trustee of DLT-19; and Julie Barnes, individually and as purported trustee of DLT-19.
II. Findings of Fact
9

A. The Parties
1. Debtor Peterson and Peterson entities MMLH and MW Design
On the Petition Date, Debtor lived in Etna, Wyoming. He is a long-time self-employed
general building contractor who conducts his residential construction business as a sole proprietor or
through limited liability companies, MMLH and MW Design, of which he is the sole member and

5
ECF Nos. 47 and 48.
6
ECF No. 49. Defendant Earl Lawrence and Citi Trustee Services, LLC moved for judgment on the
pleadings on Barnes’ crossclaims for lack of subject matter jurisdiction, or alternatively, to abstain. ECF
Nos. 69 and 70. The court dismissed the Barnes crossclaims. ECF No. 75.
7
ECF No. 77.
8
In evaluating a Rule 52(c) motion, the nonmovant is not entitled to any special inference and the evidence is
not considered in a light most favorable to the nonmovant. Rather, the trial court determines whether the
nonmovant failed to make a prima facie case, or after weighing the evidence and assessing the credibility of
the witnesses, determines that a preponderance of the evidence cuts against the plaintiff’s claim. In re
Renewable Energy Dev. Corp., No. 2:12-CV-00771, 2014 WL 527229, at *4 (Bankr. D. Utah Feb. 10, 2014).
9
The court’s factual findings include those stipulated facts set forth in the final Pretrial Order, ECF No. 119,
the undisputed material facts in the court’s Summary Judgment Order treated as established under Fed. R.
Bankr. P. 7056 and Fed. R. Civ. P. 56(g), and those findings of fact based on the evidence presented at trial.
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owner. Debtor organized both entities under Wyoming law and has operated MMLH since 1995
10

and MW Design since 2016.
11

On May 28, 2007, the state of Wyoming administratively dissolved MMLH and showed it
as inactive on Wyoming’s corporation records.
12
Debtor claimed MMLH was “idle” between 2016-
2018 and generated no income during this period. Shortly before filing bankruptcy, Debtor “created
another iteration of MMLH” on January 4, 2019, claiming he intended to resume building under
this entity.
13
While MMLH was idle between 2016-2018, Debtor was apparently operating MW
Design during this period, developing the Etna property with Ms. Barnes. MW Design maintained
checking and savings accounts with First Interstate Bank.
14
Debtor and Ms. Barnes, for an unknown
period, were signatories on the checking account. Debtor provided no evidence of personal banking
accounts—only business accounts.
Prior to filing bankruptcy, Debtor contemplated forming a construction financing business
called RM Funding, but it never came to fruition and there was no evidence RM Funding held any
assets or funds or made any loans. As explained later, Debtor used this fictitious entity to create a
fabricated lien against the Roberts property.
2. Heidi Christensen (a non-party)
Ms. Christensen is not a party to this proceeding. She is Debtor’s former girlfriend. They
were engaged in the spring of 2010 and purchased a 14-acre tract of land in Roberts, Montana
(Roberts Property) with $49,000 seller financing.
15
They each funded one-half of the $22,000 cash
down payment. At Debtor’s direction, the Roberts Property was titled solely in Christensen’s name
to protect the property from creditors.
In or around February 2013, after Christensen’s and Debtor’s relationship ended, they
entered into a Contract for Deed Agreement (2013 Agreement) under which “Diamond Land Trust”
would purchase Ms. Christensen’s interest in the Roberts Property.
16
Debtor executed the 2013
Agreement as “Buyer Trustee,” despite acknowledging no such trust existed.
Creating additional confusion, Ms. Christensen signed another agreement over a year later,
on September 29, 2014 (2014 Agreement), to sell the Roberts Property to “Diamond Land Trust-19”

10
Ex. Y-BP at p. 1 (formed as a Wyoming limited liability company on February 1, 1995 with Debtor as the
member/manager); at p. 2 (last annual report filed in 2005).
11
Exs. 44, 45 and 46.
12
Ex. Y-BP at p. 3.
13
Ex. Y-BP at pp. 4-5; Ex. I-BP (Articles of Organization filed January 4, 2019 showing Debtor as organizer,
registered agent, and managing member of MMLH with an email address for MW Design); ECF No. 119,
Uncontroverted Fact ¶ 4.j.
14
Exs. 48 and 49.
15
Exs. 5 and 6; ECF No. 119, ¶ 4.k.
16
Ex. 8.
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(DLT-19) the day before she conveyed the property.
17
Debtor personally paid Ms. Christensen and
on September 30, 2014, she conveyed the Roberts Property at Debtor’s request to DLT-19.
18
Ms.
Barnes signed the 2014 Agreement as Trustee of DLT-19, despite all parties acknowledging the first
document attempting to create DLT-19 was the same day as the conveyance, a day after the 2014
Agreement.
19

3. Diamond Land Trust and DLT-19
Per the 2013 Agreement, Debtor purportedly purchased Christensen’s interest in the Roberts
Property on behalf of “Diamond Land Trust” as “Buyer Trustee.” However, no “Diamond Land
Trust” existed in 2013, or ever existed. When asked at trial about the difference between Diamond
Land Trust and DLT-19, Debtor conceded there never was a Diamond Land Trust.
DLT-19 is the purported land trust Debtor sought to create to hold title to the Roberts
Property. Several different versions of the purported DLT-19 trust document were offered into
evidence at trial: Exhibits 13, 21, 24
20
, and Debtor’s claimed version, Exhibit S-BP, a combination of
Exhibits 13 and 24. The earliest version of the purported DLT-19 trust agreement is dated September
30, 2014 and consists of a single page, Exhibit 13. Debtor initially asserted Ms. Christensen’s
execution of the warranty deed he drafted, along with the one-page “Trust Agreement” dated
September 30, 2014, created DLT–19. The one-page document identifies Julie Barnes as the Trustee
of a trust that is not named anywhere in the document, who “is about to take legal and equitable
title” to the Roberts Property.
21
Ms. Barnes signed the Trust Agreement as trustee but her signature
was not notarized. The September 30, 2014 “Trust Agreement” does not identify any grantor,
director, or beneficiary of the un-named trust, and leaves blank the successor in interest provision.
Nor was this document ever filed in any public records. Debtor claims this “Trust Agreement” was
subject to Montana law. Nothing in the Christensen deed connects the conveyance of the Roberts
Property with the September 30, 2014 “Trust Agreement.”

17
Ex. 11.
18
Exs. 10 and 12.
19
Id.
20
Debtor introduced Trial Exhibit 24, titled a Land Trust Agreement governed by Montana law (the Montana
Trust), in his summary judgment motion as part of Exhibit 2. See ECF No. 47, at pp. 16-44. Though all
counsel referred to Exhibit 24 numerous times during examination of witnesses at trial, it was never formally
admitted into evidence. Counsel agreed to use Debtor’s Exhibit S-BP, which was admitted into evidence and
consists of two trust instruments—the Land Trust Agreement (Exhibit 24), the schedule of Trust Property,
and the one-page Trust Agreement dated September 30, 2014 (Exhibit 13). The court has endeavored to cite
to Exhibit S-BP when referencing the purported Montana Trust or its provisions.
21
Ex. 13.
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4. Julie Barnes
Ms. Barnes is a licensed real estate agent, involved in the purchase and development of
commercial and residential property in Wyoming. At the time of trial, Ms. Barnes lived in the Star
Valley Ranch area of Wyoming at the Etna property. Ms. Barnes has known Debtor for many years
as they lived in the same area of Wyoming. She reconnected with Debtor through an online dating
site and they began dating in July 2013. At the time, Debtor was building homes in North Dakota
through BP Construction, LLC, Debtor’s jointly owned business with David Bishop. Ms. Barnes
marketed some of the North Dakota homes as an independent contractor, but she has no ownership
or membership interest in the BP business.
Debtor and Ms. Barnes were in a relationship for several years, and were engaged at some
point, before their relationship ended. During part of that period, Barnes lived with Debtor at the
Roberts Property. Barnes was closely involved in helping Debtor attempt to set up a trust to hold
title to the Roberts Property. Under one attempt, Barnes was named as trustee of the purported
DLT-19 trust, Exhibits 13 and S-BP (Montana Trust). Under another attempt, she was named the
100% beneficiary of the purported DLT-19 trust Mr. Lawrence drafted, Exhibit 21 (Virginia Trust).
Ms. Barnes testified DLT-19 was formed to take title to the Roberts Property. She prepared
and signed the one-page Trust Agreement dated September 30, 2014, represented by Exhibit 13.
Despite claiming at trial the Virginia Trust never “went into effect,” Ms. Barnes acted as though it
was in effect. Ms. Barnes testified in her deposition she believed herself to be the current DLT-19
beneficiary assuming the Virginia Trust was effective.
22
On August 20, 2018, Ms. Barnes terminated
Debtor as director of DLT-19 by letter accepted by Citi Trustee Services, LLC as Trustee.
23
In her
Answer to the Complaint, she admitted emailing Mr. Lawrence declaring:
[Debtor] and I are very close to a Settlement Agreement. Once that is in place, I will
then instruct you to deed the [Robert’s Property] over to [Debtor] and will relinquish
my position as beneficiary. The attorney in Red Lodge – Heidi – will prepare the
deed and realty transfer certificate for your signature. . . . I will take no action until
Billy has signed the Settlement Agreement.
24

Ms. Barnes, along with Debtor, prepared the Montana Trust identified as Exhibit S-BP from
materials and resources they claim came off the internet. Ms. Barnes was the DLT-19 trustee under
the Montana Trust version but she was the beneficiary under the Virginia Trust version. She also
executed the fictitious RM Funding promissory note and Trust Indenture as trustee of DLT-19 but
did not know the purpose of the purported $295,000 loan that was never made.
25

22
ECF No. 61. Brief Barnes Reply to MSJ. Ex. A, p. 42.
23
Ex. 37.
24
ECF No. 28, ¶ 93. The email itself was not admitted into evidence.
25
Exs. 14 and 15.
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Ms. Barnes held developed properties in her single member LLCs, Cowboy State Properties
and Willow Springs. Ms. Barnes and Debtor did not share ownership of their respective LLC
entities, but the LLCs shared commonalities including email addresses. They both had separate bank
accounts and one joint account. Ms. Barnes was on Debtor’s MW Design account for an unspecified
period. At MW Design’s inception in January of 2016, Barnes was appointed as a manager, along
with Debtor, of MW Design.
26
She was also appointed registered agent of MW Design in 2017 and
she resigned that appointment in 2018, apparently when her relationship with Debtor ended.
27

5. Earl Lawrence and Citi Trustee Services, LLC
Mr. Lawrence is retired and lives in Virginia. He is the sole owner and member/manager of
Citi Trustee Services, LLC, through which he provides trust services and assistance with trust
documents for investors. He is not a licensed lawyer but has “set up” about 200 “land trusts” in the
past ten years, with his company Citi named as the trustee of those land trusts. Per the application,
Ms. Barnes initially contacted Mr. Lawrence in October 2014 regarding setting up a land trust.
28
Mr.
Lawrence prepared the DLT-19 Virginia Trust version represented by Exhibit 21, under which Citi
was the trustee of DLT-19. According to Mr. Lawrence, he was asked to amend the one-page
September 30, 2014 “Trust Agreement”, Exhibit 13. He asserts he was not provided with Exhibit S-
BP by Ms. Barnes or Debtor, in preparing the Virginia Trust.
6. Patricia McDonald
Ms. McDonald became acquainted with Debtor in September 2007, and they dated off and
on until 2011. While they were dating, she visited the Roberts Property. Debtor told Ms. McDonald
he bought it and put it in a trust in his children’s names to protect it from creditors. He never
mentioned DLT-19’s specifics to her.
Debtor asked Ms. McDonald to invest in various real estate ventures, but they were not
involved in business deals together. She bought one property in southern Utah that Debtor
renovated and sold. She declined to buy one of Debtor’s properties in Wyoming that was in
foreclosure and to finance construction of a home Debtor was building for his nephew. Ms.
McDonald knew Debtor was in financial trouble and involved in lawsuits during 2008-2011.
In September 2011, Debtor approached McDonald to borrow $25,000 for an alleged
revolving bank loan Debtor represented the existing creditor was not going to renew; she agreed to

26
Ex. 44, at p. 3.
27
Exs. 45 and 46.
28
Ex. 16. Ms. Barnes says the date is wrong, and does not know where it came from, though she filled out all
the information on the data sheet. She contended at trial that she contacted Lawrence in October 2015.
However, in her affidavit, Ex. SS-JB, she contends she contacted Mr. Lawrence in early October 2014.
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loan him $10,000.
29
Debtor was to repay the loan in one year and secured the loan with a JCB
forklift Debtor said was his and provided her the serial number. Debtor did not repay any portion of
the loan over the next eight years. In January 2019, Debtor told Ms. McDonald he was getting ready
to file bankruptcy and paid her $2,000 in cash on the loan. At that time, Debtor represented to Ms.
McDonald he still had the forklift. At trial, Debtor testified he sold that forklift in January 2019.
After Debtor filed bankruptcy, Ms. McDonald testified he proposed to transfer construction
equipment (another forklift, a truck, and two trailers) to her that the Trustee was pursuing and lease
it back from her. Ms. McDonald rejected this proposal.
7. David Bishop and BP Construction, LLC
Mr. Bishop lives in Wyoming and met Debtor sometime in 2009 through Patricia
McDonald. Debtor repaired broken pipes in Mr. Bishop’s home and built an addition thereto. In the
spring of 2011, Mr. Bishop loaned Debtor $18,000 to help construct the home on the Roberts
Property. Later, in early 2012, Mr. Bishop’s single-member LLC (Bishop Property Management,
LLC) and Debtor went into business together, forming BP Construction, LLC (BP) to build spec
homes in North Dakota. Mr. Bishop was the managing member and Debtor was a member.
30
Mr.
Bishop’s LLC was to provide construction financing and Debtor’s role was to manage the
construction and conduct the daily construction activities. Debtor, individually, was responsible for
providing equipment used in construction, including tools.
31
As construction manager, Debtor was
to be paid $4,000 per month. Mr. Bishop, through Bishop Property Management, LLC, initially
funded the business checking account. Approximately five homes were eventually built and sold
under this arrangement. Debtor’s entity, MMLH, leased construction equipment to BP, but Bishop
was unaware of the equipment leases until March of 2022.
32

By the fall of 2014, the business relationship between Mr. Bishop and Debtor had soured
when construction costs on the spec homes allegedly went unpaid and some of the homes were not
completed. At that time, Debtor had yet to repay the $18,000 loan and Mr. Bishop had his lawyer
draw up a Trust Indenture and Collateral Assignment to secure the loan, under which Debtor,
individually and on behalf of the “Diamond Land Trust,” conveyed in trust his interest in the
Roberts Property to Mr. Bishop.
33
Debtor did not repay the $18,000 loan, and Mr. Bishop filed a
proof of claim for this loan in Debtor’s bankruptcy case.
34

29
Ex. 7.
30
Ex. 41
31
Exs. 41; K-BP.
32
Exs. L-BP and M-BP.
33
Ex. 9 (The Trust Indenture, effective March 25, 2013, was filed of record in Montana with the county clerk
on August 7, 2014).
34
Proof of Claim 10-1.
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On December 17, 2015, Mr. Bishop and his management company sued Debtor for damages
in Wyoming state court, alleging breach of contract, fraud, and other claims. During this ongoing
dispute over the BP construction venture, the Virginia Trust version of the DLT-19 trust agreement
was finalized. Debtor’s bankruptcy stayed the scheduled trial of that ongoing litigation. Mr. Bishop
filed a second proof of claim in excess of $500,000 related to this litigation.
35

8. Rebecca Wait
Ms. Wait is Debtor’s adult daughter and lives in Washington state. She was named the sole
beneficiary under the purported Montana Trust version of DLT-19,
36
and was named a successor
beneficiary in the purported Virginia Trust version of DLT-19. Ms. Wait was initially named a party
defendant in the Trustee’s adversary proceeding (Adv. No. 19-2012), but pursuant to a Joint
Stipulation and Notice of Dismissal with Prejudice and Waiver of Interest in Property filed October 10, 2019,
the Trustee dismissed Ms. Wait from the proceeding upon her stipulating “she had no knowledge of
or part in the creation of the purported trust that named her as the sole beneficiary” of the Roberts
Property and “waives any interest” in it.
37
Ms. Wait did not testify at trial. Even without the
stipulation and Ms. Wait’s testimony, there was no evidence from the myriad of documents relating
to DLT-19 suggesting Ms. Wait ever exercised any powers over the Roberts Property or the trustee
under any version of the DLT-19 trust between 2014 and 2019.
B. The Roberts Property
In 2010, Debtor, with his then-girlfriend, Heidi Christensen, purchased the Roberts Property,
each contributing $11,000 in cash for the down payment to purchase the land and financing the
balance through the seller.
38
At Debtor’s direction, they placed title to the Roberts Property solely in
Ms. Christensen’s name.
39
Debtor claimed that was because Ms. Christensen had “better credit.”
Ms. Christensen testified it was to protect the property from creditors. Debtor thereafter commenced
constructing a home on the Roberts Property.
In or around February 2013, after Ms. Christensen’s and Debtor’s relationship ended, they
entered into the 2013 Agreement by which the admittedly non-existent “Diamond Land Trust”
would purchase the Roberts Property from Christensen, agreeing to pay $1,500 per month until the
“mortgage” was paid in full.
40
The agreement also gave the buyer immediate possession of the

35
Proof of Claim 11-1 and Part 5 (Complaint).
36
Any reference in this decision to “the Trust” or similar is not to be considered any finding as to the validity
or existence of a trust as further explained in the decision memorandum.
37
See ECF No. 14.
38
Ex. 5.
39
Ex. 6 (warranty deed conveying Roberts Property from seller to Christensen); ECF No. 119, ¶ 4.k.
40
Ex. 8 (Contract for Deed dated February 18, 2013 with Ms. Christensen as seller and Diamond Land Trust
as buyer); ECF No. 119 ¶ 4.l.
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Roberts Property and required the buyer to maintain it. Only Debtor made the payments called for
by the 2013 Agreement; Debtor personally purchased the Roberts Property from Ms. Christensen,
despite having prepared and signed the Agreement as “Buyer Trustee” for the “Diamond Land
Trust.” No such trust ever existed, and Debtor was never a named trustee of any trust.
The subsequent 2014 Agreement entered into on September 29, 2014 between Ms.
Christensen and DLT-19 was signed by Ms. Barnes as trustee, although no document existed at that
point to identify Ms. Barnes as a trustee of DLT-19.
41
According to the 2014 Agreement, the buyer
was supposed to pay $8,500 by continuing to make: “monthly payments of $954.00 to Joseph Ricci
totalling [sic] approximately $7,500 until paid in full. . . .” However, Ms. Christensen conveyed the
Roberts Property at Debtor’s request, by warranty deed (supplied by Debtor) the next day,
September 30, 2014, to DLT-19.
42
The conveyance was made to DLT-19 directly, not to a named
DLT-19 trustee. The deed was recorded on December 19, 2014, the same date Debtor and Ms.
Barnes falsified the RM Funding transaction described below.
At the time of the 2013 Agreement and at all relevant times thereafter, Debtor had not repaid
any amount on the Bishop loan, nor on the McDonald loan. Mr. Bishop insisted Debtor execute a
trust indenture and collateral assignment on the Roberts Property to secure the loan. Debtor did so,
signing the agreement both individually and as “Trustee” to the nonexistent entity, “Diamond Land
Trust.”
43
Debtor later scratched “Trustee” out, since he recognized there was no such trust. Debtor
executed the Indenture in favor of Mr. Bishop despite the Roberts Property still being titled in Ms.
Christensen’s name, who did not owe any money to Mr. Bishop, and despite his knowledge
Diamond Land Trust did not exist. The Trust Indenture was recorded on August 7, 2014.
44

Less than a month later, Debtor and Ms. Barnes filed a false lien against the Roberts
Property using the fictitious, non-existent business RM Funding. Debtor and Ms. Barnes prepared a
$295,000 fictitious promissory note dated October 6, 2014, payable to RM Funding; RM Funding
did not fund such a loan and DLT-19 did not receive $295,000.
45
On December 19, 2014, Ms.
Barnes signed the note as the purported trustee of DLT-19. The note was secured by a Trust
Indenture dated October 6, 2014, also signed by Ms. Barnes as purported trustee of DLT-19.
46
Both
the note and trust indenture were filed in the Montana property records against the Roberts Property
on December 19, 2014, the same date the Christensen deed to DLT-19 was filed of record.

41
Ex. 11.
42
Ex. 10; Ex. 12.
43
Ex. 9.
44
Id.
45
Ex. 14.
46
Ex. 15.
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When attempting to gain additional construction financing for the Roberts Property, Debtor
represented to the title company RM Funding was a sole proprietorship of which he was the 100%
owner.
47
However, Debtor admitted the idea for RM Funding never came to fruition. Following
difficulty getting financing on the Roberts Property, Debtor executed a “full reconveyance” and
release on behalf of RM Funding, stating the note had been fully paid and satisfied and requesting
cancellation of the note and trust indenture.
48
That, of course, was untrue, as there was no entity
known as RM Funding and RM Funding never made a loan. Debtor admitted as much at trial, and
never provided a legitimate explanation of the purpose of the RM Funding transaction.
For her part, Julie Barnes testified RM Funding was a business Debtor owned. She admitted
to assisting Debtor in preparing the promissory note and trust indenture, and she signed those
documents as trustee of DLT-19, at Debtor’s request. However, Ms. Barnes claimed no knowledge
of the documents’ purpose and admitted RM Funding did not actually loan any money to anyone.
C. Debtor’s Efforts to Obtain Financing, Create the DLT-19 Trusts, and Sell the Property.
1. Debtor’s attempt to finance the Roberts Property
After Debtor’s source of financing from individuals to complete the home improvements on
the Roberts Property apparently dried up, the purported DLT-19 trust, through Debtor and Barnes,
then turned to conventional borrowing. They encountered difficulty procuring a loan, and ultimately
failed to secure a loan on behalf of DLT-19 because title insurance could not be obtained on the
Roberts Property. Debtor initially presented the title company with only the one-page, unnamed
“Trust Agreement” dated September 30, 2014. In a November 2, 2015 e-mail from Ms. Kroll at the
title company, she states “Here is the Trust Agreement that Billy brought into my office today. It
does not state the name of the Trust it affects nor the duties of the Trustee.”
49
This statement is
consistent with Exhibit 13 but not Exhibit S-BP. This created concerns because the title company
lacked information regarding the trust’s name, and the trustee’s duties and authority under the
trust.
50
In response, Debtor agreed, as purported director, to amend the trust agreement—an action
he had no authority to do under any of the versions of trust agreement.
51
Debtor agreed to provide
additional trust documentation, which never happened. Instead, he informed the title company he
would hire a professional trustee service and would provide a “new/amended Trust Agreement.”
52

47
Ex. 20, at pp. 2-3.
48
Ex. 18.
49
Ex. 20, at p. 3.
50
Id. at p. 2.
51
Id. at p. 3.
52
Id. at p. 1. Debtor and Ms. Barnes had been in contact with Earl Lawrence of Citi Trustee Services, LLC in
late October-early November before authorizing him to proceed with the amended “Diamond Land Trust”
on November 3, 2015. See Ex. 19 e-mail thread.
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Ms. Barnes testified her and Debtor’s attempts to obtain a DLT-19 construction loan to
finish constructing the home were ultimately unsuccessful due to an inability to provide clear title,
obtain title insurance, or otherwise resolve the issues noted by the title insurers. A November 18,
2015 title insurance commitment issued by Old Republic National Title Insurance Company never
became effective because the identity of the “Proposed Insured” was never listed in Schedule A.
53
It
further imposed certain requirements under Schedule B with respect to the “Diamon [sic] Land
Trust-19,” including “the power of the trustee to act in the pending transaction and capabale [sic] of
holding title”, together with any other information that may be required.
54
The Commitment
itemized policy exceptions for the Trust Indenture and Collateral Assignment securing Bishop’s
$18,000 loan and the RM Funding Note and Trust Indenture by DLT-19, notwithstanding the
previously recorded release and full reconveyance.
55

When it appeared they would be unable to obtain financing given the title issues and failed
attempts at a legitimate trust structure, Debtor and Ms. Barnes asked Mr. Lawrence, as manager of
Citi, the trustee of DLT-19 under the purported Virginia Trust, to execute and return a warranty
deed to transfer the Roberts Property out of trust and place it in Ms. Barnes’ individual name until
they obtained financing.
56
Mr. Lawrence indicated he could not do so unless they first recorded a
deed conveying the Roberts Property to Citi as trustee of DLT-19, as such had never been completed
and therefore Citi did not have legal title to the Roberts Property. Despite being informed of the
need to transfer the Roberts Property to Citi as trustee, that never occurred and the trust problems
continued to hamper Debtor’s and Ms. Barnes’ ability to convey clear title to the Roberts Property.
2. Attempted creation of new trusts
Because title insurance could not be obtained, Ms. Barnes completed and provided an
application to Mr. Lawrence, the managing member of Citi, to create the Virginia Trust version of
DLT-19 to hold title to the Roberts Property in trust.
57
According to this application, the trust’s
creation date is October 6, 2014. Much debate occurred about this date; Ms. Barnes asserts the
correct date was October 2015,
58
while the Trustee counters the date ties to the date of the false RM
Funding promissory note, Exhibit 14. In any event, the application identifies Ms. Barnes as the

53
Ex. 22, at pp. 1, 3. Schedule A of the commitment provided that the proposed insured was “to be
determined and agreed to by the Company.” Id. at p. 3.
54
Id. at p. 4 (requirement f).
55
Id. at p. 6 (exceptions 17, 18, and 19).
56
Ex. 23.
57
Ex. 16 (the land trust data sheet completed by Ms. Barnes).
58
The court notes that in an email exchange between Mr. Lawrence and Debtor on November 4, 2015, Debtor
refers to a “revised” data sheet that he attached to the e-mail. See Ex. 19, at p. 2. The only property trust data
sheet admitted into evidence was Ex. 16.
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Virginia Trust grantor/creator, although she held no title to the Roberts Property in her name, and it
identifies Citi as the trustee. Ms. Barnes is the primary beneficiary and Rebecca Wait the successor
beneficiary. The application identifies Debtor as the director.
Using information from Ms. Barnes’ application, Mr. Lawrence drafted a November 4, 2015
agreement titled “Amendment to Trust Agreement Dated September 30, 2014”, naming the trust
“Diamond Land Trust 19,” and Ms. Barnes executed it on November 11, 2015 as the
creator/grantor and 100 percent beneficiary.
59
Citi, with Mr. Lawrence as manager thereof, is named
the trustee of the purported Virginia Trust. The document also recites Ms. Barnes is presently the
trustee of the “Diamond Land Trust” under the Trust Agreement dated September 30, 2014 (Exhibit
13).
60
However, as Debtor conceded, there never was a Diamond Land Trust created, and the trust is
not even named in the September 30, 2014 document. The purported Virginia Trust also erroneously
recites Ms. Barnes is the 100% beneficiary of DLT-19. Recall the initial Trust Agreement did not
name any beneficiaries. As discussed later, the Roberts Property was never deeded to Ms. Barnes
individually in any form, so she could not have been the creator/grantor of the Virginia Trust.
61

Under Articles 1.5 and 1.6, Virginia law governs the purported Virginia Trust and is intended solely
to be an “Illinois type Land Trust.”
62
It is revocable.
63

Debtor is listed as the director of the purported Virginia Trust. Ms. Barnes’ written
appointment of Debtor as director contains more inaccuracies.
64
Like the beneficiary recitals at the
beginning of the Virginia Trust, Ms. Barnes erroneously represents in the director appointment
appended to the Agreement she is the 100% beneficiary “to that certain Declaration of Trust and
Land Trust agreement, dated on the 20th day of September, 2014, and which is known as Diamond
Land Trust.”
65
There was no “Declaration of Trust and Land Trust agreement” dated September 20,
2014 admitted into evidence, and in the September 30, 2014 “Trust Agreement,” no beneficiaries
were named and no trust was named; “Diamond Land Trust” was never created. Debtor’s purported
acceptance of the director position “as of September 20, 2014” references the same September 20,
2014 Declaration, not the Trust Agreement dated September 30, 2014 that the Virginia Trust
purportedly amended.
66

59
Ex. 21 (the Virginia Trust).
60
Id. at p. 1.
61
Even if such action was done as trustee, no version of any trust document allowed the trustee authority to
unilaterally transfer property.
62
Ex. 21 at ¶¶ 1.5 and 1.6.
63
Id. at ¶ 1.2.
64
Id. at ¶ 6.4(d)-1 and p. 19.
65
Exhibit 21, p. 19.
66
Id. at p. 20.
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An Exhibit A – Schedule of Trust Property attached to the Virginia Trust document provides
the Roberts Property’s legal description.
67
However, Ms. Barnes signed this Exhibit A as “Accepted
by Trustee” on November 11, 2015, although she was no longer the trustee of DLT-19 per the new
purported Virginia Trust; Citi replaced Ms. Barnes as trustee. Citi accepted its service as trustee of
DLT-19 under the purported Virginia Trust but was never provided title to the Roberts Property.
68

There was no evidence of a conveyance of the Roberts Property to Citi or Mr. Lawrence to effect
transfer of legal title of the Roberts Property to the trustee of the purported Virginia Trust.
Although Debtor and Ms. Barnes claimed at trial the Virginia Trust never “went into effect,”
their actions belie that claim. In her discovery responses, Ms. Barnes states she “believes that she is
the beneficiary of the Diamond Land Trust – 19 pursuant to the Amendment to Trust Agreement
created in Virginia.”
69
Debtor and Ms. Barnes attempted to create and use the Virginia Trust to
convince the title company to insure title to the Roberts Property for a DLT-19 loan request. By an
e-mail dated November 20, 2015 and operating under an assumption Citi was the current trustee,
Debtor and Ms. Barnes contacted Mr. Lawrence explaining: “We are having difficulty getting the
home equity loan done, with the property being in a Trust.”
70

When the November 20, 2015 request of Citi to convey the Roberts Property to Ms. Barnes
individually proved unsuccessful, Debtor and Ms. Barnes came up with a third version of a trust
document for DLT-19, this one titled “Land Trust Agreement” made by “Diamond Land Trust 19”
and “Julie Barnes as [t]rustee” (Montana Trust) (Exhibit S-BP).
71
This third iteration of trust
agreement states it is governed by Montana law and is intended to be a “title holding or land trust.”
72

It is revocable.
73
Ms. Barnes testified she and Debtor drafted this trust document using land trust
information and resources off the internet. As Mr. Lawrence noted, many of the provisions in the
purported Montana Trust document are suspiciously similar to his Virginia Trust version.
The Montana Trust document lists Rebecca Wait as beneficiary with a 100-percent interest
and Sarah Styles as successor beneficiary. The power of direction rests with the beneficiary, who has
authority to appoint a director. Debtor is named as director, but the document contains no written
beneficiary appointment nor acceptance by Debtor, such as those in the purported Virginia Trust.
74

67
Id. at p. 21.
68
Id. at p. 17.
69
Ex. RR-JB, p. 8.
70
Ex. 23.
71
Ex. S-BP, pp. 1-28 only were admitted at trial.
72
Id. at ¶¶ 1.4 and 9.5.
73
Id. at ¶ 1.1.
74
Cf. Ex. S-BP at ¶ 3.1 with Ex. 21, ¶¶ 6.4(a) and (d) and pp. 19-20.
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Ms. Barnes contends she executed the Montana Trust document as trustee on September 30,
2014. Her signature appears on a separate page from the body of the trust provisions. According to
Ms. Barnes, because she did not acknowledge her original execution of the September 30, 2014
“Trust Agreement” before a notary, she “re-signed” the Montana Trust in the presence of a notary
on November 24, 2015 to provide the title insurance company proof of the signature’s validity. The
notary certifies on November 24, 2015, Ms. Barnes appeared before her and proved to the notary by
satisfactory evidence to be the person whose signature appears on the document.
75
No notary
witnessed, attested, nor verified on oath or affirmation Ms. Barnes appeared before such official and
executed the Montana Trust on September 30, 2014, however.
76
At trial, Debtor and Ms. Barnes
contended Exhibit S-BP is the governing trust instrument for DLT-19. As previously explained, that
exhibit is a combination of Exhibit 13-the one-page September 30, 2014 Trust Agreement and
Exhibit 2 to Debtor’s Motion For Summary Judgment (the Montana Trust Agreement).
77

3. Debtor’s attempts to sell the Roberts Property
Three years later, in the spring of 2018, Debtor’s attempts to sell the Roberts Property also
proved unsuccessful. A March 28, 2018 title commitment, also issued by Old Republic, for a sale of
the Roberts Property to Stephen and Julie Timmons (the proposed insured), contained similar
requirements and exceptions as the commitment for the failed DLT-19 loan, and further required a
quiet title action or an action to reform DLT-19 in order to insure a warranty deed to the proposed
insured.
78
Two weeks later, an April 18, 2018 title insurance commitment issued for a sale to
Shawmarie Hanson was virtually the same as the Timmons title insurance commitment.
79
Neither
sale occurred because the title insurance company refused to insure title to the Roberts Property and
the prospective purchasers were unable to get clear title. Debtor and Ms. Barnes again reached out to
Mr. Lawrence, as manager of Citi, the named trustee under the purported Virginia Trust, to assist.
80

Mr. Lawrence again reminded them of the need for an executed deed.
81
For reasons unknown,
Debtor and Ms. Barnes were unable or unwilling to satisfy the title insurer’s requirements or Mr.
Lawrence’s request.

75
Ex. S-BP, p. 27.
76
See Mont. Code Ann. §§ 1-5-602(1) (defining “acknowledgment” as an individual’s declaration before a
notarial officer that the individual has willingly signed a record for the purposes stated therein and signed the
record as the act of the individual identified in the record) and (13) (defining “notarial acts”); 1-5-603(1)
(requirements for taking an acknowledgment); 1-5-610(1) and (2) (short form notary’s certificate of
acknowledgment in individual or representative capacity); and 1-5-610(3) (short form notary’s certificate of
verification on oath or affirmation); and 1-5-610(4) (short form certificate of witnessing a signature).
77
See note 18, supra.
78
Ex. 28, at p. 5 (requirements f, g, and i), and p. 7 (exception no. 19).
79
Ex. 30 at p. 6 (requirements f, g, and i).
80
Ex. 29, pp. 1-2.
81
Id. at p. 1.
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After the failed sales, Ms. Barnes and Debtor turned to leasing the Roberts Property.
82
In
July 2018, Debtor reached out to Mr. Lawrence, requesting he grant Debtor a limited power of
attorney authorizing him as director under DLT-19 to lease the Roberts Property to Amy Hathaway.
Mr. Lawrence, on behalf of Citi as trustee, did not grant or execute Debtor’s requested power of
attorney; he had no authority to do so. Yet Debtor, without the requested authority, and as
purported director of the Virginia Trust, leased the Roberts Property to Ms. Hathaway with a three-
month lease agreement dated July 14, 2018, with an option to purchase.
83
Tellingly, paragraph 18 of
the lease provides upon its execution, the “Landlord intends to transfer ownership of the Premises to
Billy Peterson.”
84
During the lease, Ms. Hathaway was to remit $1,200 monthly rent payments to
Debtor.
85
Debtor admitted he collected and endorsed the rent checks to his LLC and used the
proceeds to continue improving the Property. Simultaneously with the lease agreement, Debtor,
individually, as intended seller, and Ms. Hathaway, as intended buyer, entered into a “Purchase
Price Agreement” on the Roberts Property for $249,900.
86
No sale to Ms. Hathaway occurred.
Ms. Barnes apparently discovered Debtor’s dealings with Ms. Hathaway and communicated
to Mr. Lawrence in August of 2018 her relationship with Debtor was coming to an end.
87
She asked
Mr. Lawrence not to include Debtor on their future email correspondence and inquired whether he
had signed the power of attorney, requesting that he not do so. In those email communications, Mr.
Lawrence confirmed he had not signed the power of attorney and Ms. Barnes was the 100%
beneficiary under the Virginia Trust. On August 20, 2018, Ms. Barnes, acting as the Virginia Trust
beneficiary, terminated Debtor as director of DLT-19; Mr. Lawrence, as manager of trustee Citi,
accepted and acknowledged Debtor’s removal as director.
88

D. Summary
The court includes the following timeline to summarize the transactions at issue involving
the Roberts Property, with supporting and corresponding exhibits where applicable:

Apr 20, 2010
Debtor and Heidi Christensen purchase the Roberts Property
and begin construction, each paying $11,000 for down
payment, with Christensen financing balance of $49,000
through seller Ricci.

Ex. 5

82
Ms. Barnes testified that prior to the attempted sales in 2018, DLT-19 leased the Roberts Property to Zac
Johnston. She collected the lease payments from Johnston but did not know what she did with them.
83
Ex. 34.
84
Id.
85
Id. at ¶ 3.
86
Ex. 35.
87
Ex. 36.
88
Ex. 37.
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Apr 23, 2010 The Roberts Property is conveyed by warranty deed to
Christensen only, at Debtor’s direction.
Ex. 6

Apr 29, 2010 The purchase deed in Ms. Christensen’s name recorded. Ex. 6
Mar-Apr 2011 David Bishop loans Debtor $18,000 to construct on the Roberts
Property.

Sept 16, 2011 Patricia McDonald loans Debtor $10,000, secured by a JCB
Forklift.
Ex. 7
unknown but
“effective
Mar 25, 2013”
Debtor executes the Trust Indenture and Collateral Assignment
of Purchaser’s Interest, individually and as trustee of “Diamond
Land Trust” to secure the Bishop loan.
Ex. 9
Apr 8, 2013 Debtor executes the 2013 Agreement (Contract for Deed dated
Feb. 18, 2013) as “Buyer Trustee” of “Diamond Land Trust” to
purchase Ms. Christensen’s interest in Roberts Property.

Ex. 8
Aug 7, 2014 Bishop Trust Indenture encumbering the Roberts Property is
recorded.
Ex. 9
Sept 29, 2014 Ms. Christensen enters into the 2014 Agreement (real estate
sales contract to sell the Roberts Property to DLT-19 for $8,500
and assumption of financing); Julie Barnes signs as trustee of
DLT-19; Debtor witnesses Christensen’s signature.
Ex. 11
Sept 30, 2014 Debtor personally finishes paying $27,000 to Ms. Christensen
for her interest in the Roberts Property.
Ex. 10

Sept 30, 2014 Ms. Christensen conveys the Roberts Property by warranty
deed to DLT-19, at Debtor’s direction.
Ex. 12
Sept 30, 2014 Ms. Barnes, as trustee, signs the “Trust Agreement” dated
September 30, 2014, stating she is “about to take title” to the
Roberts Property. The trust is unnamed and contains no
identity of grantor, beneficiary or director.

Ex. 13
Oct 6, 2014 Ms. Barnes completes an application (trust data sheet) to create
a Virginia Trust called “Diamond Land Trust – 19.” The
application identifies Ms. Barnes as the grantor/creator of the
Trust, Debtor as director, Ms. Barnes as primary beneficiary,
and Citi as the trustee. Ms. Barnes says the creation date should
be 2015.

Ex. 16
Oct 13, 2014 Ms. Barnes, as trustee of DLT-19, executes a Trust Indenture
dated Oct. 6, 2014 on the Roberts Property in favor of RM
Funding to secure a $295,000 promissory note of the same date.

Ex. 15
Dec 19, 2014 Ms. Barnes, as trustee of DLT-19, executes a $295,000
promissory note dated Oct. 6, 2014 in favor of RM Funding.
Ex. 14

Dec 19, 2014

RM Funding promissory note and Trust Indenture are filed of
record in the county records, although Debtor and Ms. Barnes
admit the RM Funding loan never occurred.
Ex. 14, 15
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Dec 19, 2014 The Christensen warranty deed to DLT-19 is recorded. Ex. 12
Aug 31, 2015 Debtor, on behalf of RM Funding, executes and files of record,
a full reconveyance and release of the RM Funding note,
stating the note was fully paid and satisfied and requesting
cancellation of the note and trust indenture.

Ex. 18
Nov 11, 2015 DLT-19 (Virginia Trust) document dated Nov. 4, 2015
(Amendment to Trust Agreement dated Sept. 30, 2014)
executed by Ms. Barnes as purported grantor/creator and
naming Citi as trustee, Debtor as director, Ms. Barnes as sole
beneficiary, and Rebecca Wait as successor beneficiary.

Ex. 21
Nov 18, 2015 Title Insurance Commitment for the Roberts Property with
undetermined “proposed insured”, requirements and
exceptions, in connection with unsuccessful DLT-19 loan.

Ex. 22
Nov 20, 2015 Debtor and Ms. Barnes request Citi to transfer the Roberts
Property out of trust to Ms. Barnes individually to assist them
to clear title and obtain financing. Citi informs them it cannot
do so because they never transferred the Roberts Property to
Citi as Trustee of the Virginia Trust.

Ex. 23
Nov 23, 2015 Debtor and Ms. Barnes reach out to Randy Hughes asking for
two land trust forms. Mr. Hughes responds with attached
documents.

CTS Ex. E
Nov 24, 2015 Ms. Barnes executes a new Trust Agreement named DLT-19
(Montana Trust) designating herself as purported trustee,
Debtor the director, and Rebecca Wait the beneficiary. Ms.
Barnes claims she executed the Montana Trust on Sept. 30,
2014, but her signature was not notarized. On Nov. 24, 2015, a
notary acknowledged Ms. Barnes’ signature on the Montana
Trust. Neither Ms. Wait nor Debtor executed the Trust
Agreement.
Ex. 24
or
Ex. S-BP,
at pp. 1-27
Dec 17, 2015 Mr. Bishop sues Debtor in Wyoming state court over BP
Construction, LLC contract.
POC 11-1
July 15, 2017 DLT-19 one-year lease of Roberts Property to Zac Johnston by
Ms. Barnes as purported trustee (the lease is unsigned but Ms.
Barnes testified the Roberts Property was in fact leased to
Johnston).
Ex. H-JB
Mar 28, 2018 Title Insurance Commitment issued for attempted sale of the
Roberts Property by DLT-19 to Stephen and Julie Timmons.

Ex. 28
Apr 18, 2018 Title Insurance Commitment issued for attempted sale of the
Roberts Property by DLT-19 to Shawmarie Hanson.

Ex. 30
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July 2018 Debtor, as purported director of DLT-19, requests trustee Citi
to grant him a power of attorney to lease the Roberts Property
to Amy Hathaway; Citi declines to grant.

Ex. 36
July 14, 2018 Debtor, as purported director of DLT-19, executes a lease of
the Roberts Property to Ms. Hathaway (with an option to
purchase), which identifies Citi as the trustee; Debtor collects
and uses the rent for his own purposes.

Ex. 34
July 14, 2018 Debtor, individually, executes a Purchase Price Agreement
with Amy Hathaway regarding the Roberts Property.
Ex. 35
Aug 20, 2018 Ms. Barnes, as sole beneficiary of DLT-19 Virginia Trust,
terminates Debtor as director; trustee Citi accepts Debtor’s
removal as director.
Ex. 37
Jan 23, 2019

Petition Date (Debtor files Chapter 7 Bankruptcy). 19-20027,
Doc No. 1

E. Construction Equipment
The evidence regarding the construction equipment and its ownership is sparse. Debtor
testified he used the following construction equipment in his business: a 9-ton boom truck
(purchased in the 1990’s), a skid steer/Bobcat (purchased new in 1995), and a forklift (purchased in
the late 1990’s or early 2000’s). As developed at trial, there were apparently two JCB “forklifts,” one
of which was specifically identified and used to secure Ms. McDonald’s 2011 loan to Debtor.
89

Though unclear, the other JCB forklift may refer to a Loadall used in the BP Construction venture in
early 2012.
90
Debtor acknowledged he sold a forklift for cash in January 2019; it is unclear if this is
the forklift securing the McDonald loan, and he did not explain what he did with the money. It is
unclear whether this sale occurred before or after the Petition Date. In addition, Exhibit 50 shows
two vehicle registrations issued in the name of MMLH: a 2018 registration on a 1997 WW flatbed
trailer purchased in 2015, and a 2017 registration on a Ford 1985 Truck purchased in 2012. Given its
weight of 22,000 pounds, the Ford appears to be the boom truck. The purchase date coincides with a
lease of the boom truck by MMLH to BP Construction.
The record was unclear which of these items of construction equipment existed on the
Petition Date, which Debtor owned, and which the Trustee seeks to be part of the estate. It is also
unclear which equipment was used in the construction of the home on the Roberts Property and/or
the Etna property. Even if one of Debtor’s LLC entities holds legal title, the Trustee asserts the
equipment is Debtor’s, applying the alter ego doctrine.

89
Ex. 7. Nothing in the record demonstrates Ms. McDonald perfected her security interest in the forklift.
90
See Ex. 41.
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III. Analysis and Conclusions of Law
A. Property of the Estate
The Bankruptcy Code expansively defines what constitutes property of the bankruptcy
estate.
91
Section 541(a)(1) provides:
Such estate is comprised of all the following property, wherever located and by
whomever held:
(1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable
interests of the debtor in property . . .
92

State law, however, determines the nature and extent of a debtor’s interest in property.
93
Here,
Montana law governs whether Debtor had an interest in the real estate and improvements known as
the Roberts Property situated in Montana. Montana law also governs the validity of the DLT-19 trust
allegedly holding title to the Roberts Property. Wyoming law governs whether Debtor had a property
interest in the construction equipment and the alter ego doctrine and its application to this case.
Though there is a shifting burden on whether property is property of the estate, the Trustee
has the final burden of persuasion by a preponderance of the evidence that the property in question is
property of the bankruptcy estate.
94

The Code enumerates certain property interests excluded from estate property. With respect
to the Roberts Property, Debtor asserts two such statutory exclusions apply here: Section 541(b)(1)’s
exclusion of powers a debtor may exercise solely for the another’s benefit, and Section 541(c)(2)’s
exclusion of a beneficial interest in a trust subject to restrictions on transfer that are enforceable under
applicable nonbankruptcy law, such as spendthrift trusts. Debtor highlights he never took legal title to
the Roberts Property, though he purchased the real estate, built a house on the Property, and possessed
and controlled the Property. In other words, he had all the other indicia of ownership.
Assuming a valid trust exists, Section 541(b)(1) is generally understood to exclude a debtor’s
interest in a trust as the trustee holding bare legal title to the trust property and administering the trust’s
terms solely for the beneficiaries’ benefit.
95
Debtor was not the trustee under any version of DLT-19,
but he was named the director under both the Virginia Trust and the Montana Trust versions.

91
In re Dittmar, 618 F.3d 1199, 1204 (10th Cir. 2010).
92
11 U.S.C. § 541(a)(1).
93
Butner v. United States, 440 U.S. 48, 55 (1979).
94
See In re Mehlhaff, 491 B.R. 898, 901 (B.A.P. 8th Cir. 2013) (once trustee makes prima facie showing property
is included in estate property, burden shifts to the debtor to show it is excluded, though final burden rests on
trustee); In re Purcell, 573 B.R. 859, 862 (Bankr. D. Kan. 2017) (preponderance of the evidence standard).
95
See In re Veatch, 232 B.R. 346 (Bankr. E.D. Va. 1999) (a debtor’s beneficial interest as trustee of land trust did
not bring real property itself into bankruptcy estate; Section 541(b)(1) exclusion applied).
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Section 541(c)(2) has been interpreted to mean a debtor’s beneficial interest in a spendthrift
trust is excluded entirely from the bankruptcy estate.
96
This exclusion is inapplicable here as Debtor
did not have a beneficial interest under any of the trust versions, and even if he did, the beneficial
interest was assignable and there were no restrictions or restraints on assignment or alienation that
would make any version of the trust a spendthrift trust.
B. Land Trusts Generally
Debtor maintains he intended to create a “land trust” to hold title to the Roberts Property for
his children’s benefit. Exhibit S-BP is the DLT-19 trust instrument he contends was created on
September 30, 2014. Debtor cited no legal authority that Montana expressly recognizes land trusts
but asserts a land trust may be formed in any state that has adopted the Uniform Trust Code.
97
The
court’s independent research reveals land trusts are a creature of state statutory law and may be
separate from a state’s general law of trusts.
98
The following states have enacted specific statutory
acts for their creation: Florida,
99
Virginia,
100
Hawaii,
101
and Illinois.
102
These statutory land trusts are
a type of express trust but differ from an express trust under a state’s trust code or common law trusts
in several ways.
One of the key distinctions between an express trust and a land trust is that under a land
trust, the trustee holds legal and equitable title to the trust property, while under an express trust, the
trustee holds legal title to trust property and the beneficiaries hold an equitable interest in the
property.
103
Under a land trust, the beneficiaries have no interest in the trust property itself; the

96
In re Hilgers, 371 B.R. 465, 468 (B.A.P. 10th Cir. 2007).
97
Most states have enacted the Uniform Trust Code, or some modified version thereof governing other express
trusts. For example, Montana enacted a modified version of the Uniform Trust Code, effective October 1,
2013, applicable to express trusts. See M
ONT. CODE ANN. § 72-38-101, et seq.
98
The court notes some states recognize various public statutory land trusts, but these type of public land trusts
are excluded from the court’s discussion and analysis herein.
99
Florida Land Trust Act, FLA. STAT. ANN. §§ 689.071, 689.073 (West 2013).
100
VA. CODE ANN. § 55.1-117 (West 2019).
101
Hawaii Land Trust Act, HAW. REV. STAT. § 558-1 to § 558-8 (West).
102
Illinois’ statutes dealing with land trusts are found in the Property chapter 765, but are dispersed among
numerous acts and sections thereunder, enacted in various years. See 765 I
LL. COMP. STAT. ANN. 405/0.01 et
seq. (Land Trust Beneficial Interest Disclosure Act); 407/1 et seq. (Land Trust Beneficiary Rights Act);
410.0.01 et seq. (Land Trust Successor Trustee Act); 415/0.01 et seq. (Land Trustee as Creditor Act); 420/1 et
seq. (Land Trust Recordation and Transfer Tax Act); 430/0.01 et seq. (Sale of Residential Property Subject to
Land Trust Act); and 435/1 et seq. (Land Trust Fiduciary Duties Act).
103
See, e.g., HAW. REV. STAT. § 558-4 (any recorded instrument transferring any interest in real property to any
person qualified to act as a land trust trustee shall be effective to vest in the trustee legal and equitable title
over the real property); F
LA. STAT. ANN. § 689.071(3) (every recorded instrument transferring interest in real
property to the trustee of a land trust, whether or not reference is made to the beneficiaries or the trust
agreement, vests both legal and equitable title, and full rights of ownership, over the trust property);
FirstMerit Bank, N.A. v. Soltys, 29 N.E.3d 568, 575 (Ill. App. 2015) (describing a land trust as an arrangement
under which legal and equitable title to real property is placed in the trustee).
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beneficiary’s interest is generally considered a personal property interest as the beneficiary is entitled
to income, rents, and profits, and the interest is transferable.
104
In addition, as Mr. Lawrence
testified, the beneficiary under a land trust exercises control and power over the trust property and
generally directs the trustee’s actions, unless the beneficiary transfers direction to a third-party
director.
105
The trustee’s express powers and authority are actually quite limited in a land trust.
106
In
an express trust, the trust document generally grants the trustee broad powers and authority over the
trust property, and may commonly include the power to sell, lease, or mortgage the trust property
and exercise discretion in distributing trust income.
Other differences exist between a land trust and an express trust. For all practical purposes, a
land trust is a secret trust keeping the beneficiaries’ identities undisclosed.
107
However, in this case,
the owner of the trust property, as opposed to the beneficiaries, is hidden because Debtor, upon
acquiring the Roberts Property, directed Ms. Christensen to convey it to a trust, keeping his name
out of the chain of title. Debtor’s only documented connection to the trust is his position as
purported director and that connection is known only if the trust agreement and necessary
documents are recorded. The beneficiaries need not be named in the recorded instrument conveying
the land to the trustee and the beneficiaries may remain anonymous, with some trust agreements, as
in this case, affirmatively prohibiting disclosure of the beneficiaries’ identity.
C. Montana Trust Law
In general, the law of the situs of the real property determines the validity of a trust as to real
property.
108
The Roberts Property is located in Montana. Montana does not have a specific land trust
statute, but other statutory trust law and common law are applicable to an express trust such as the
purported DLT-19 trust.

104
See, e.g., 765 ILL. COMP. STAT. ANN. 420/2 (stating the interest of the beneficiary is personal property only,
though beneficiaries have the exclusive right to manage, control, and possess the real estate and to receive
the net proceeds from rental, sale, or other disposition); V
A. CODE ANN § 55.1-117 (beneficiaries’ interest
shall be deemed to be personal property); H
AW. REV. STAT. ANN. § 558-7 (recorded instrument declaring the
interest of beneficiaries to be personal property is controlling).
105
IMM Accept. Corp. v. First nat. Bank and Trust Co. of Evanston, 499 N.E. 2d 1012, 1014-15 (Ill. 1986)
(beneficiary exercises all rights of ownership, including possession, other than holding legal title).
106
See e.g. FLA. STAT. ANN. § 689.071(c) (listing only three trustee duties: (1) to convey, sell, lease, mortgage,
or deal with the trust property or exercise other powers provided in the recorded instrument, as directed by
the beneficiaries or the holder of the power of direction; (2) to sell or dispose of the trust property at the
termination of the trust; and (3) to perform ministerial and administrative functions delegated to trustee in
the trust agreement or by beneficiaries or the holder of the power of direction).
107
See Redfield v. Cont'l Cas. Corp., 818 F.2d 596, 607 (7th Cir. 1987) (“A land trust allows the beneficiary to
retain most of the usual attributes of real property ownership while affording him the advantages of secrecy
of ownership and ease of transfer.”).
108
See United States v. Crosby, 11 U.S. 115, 116, 3 L. Ed. 287 (1812) (“title to land can be acquired and lost only
in the manner prescribed by the law of the place where such land is situate”); 15A C.J.S. Conflict of Laws §
94 (“[t]he validity of an express trust of real estate is tested by the law of its situs”).
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1. The Montana Uniform Trust Code
Montana adopted a modified version of the Uniform Trust Code in 2013 (MUTC).
109
It
applies to express trusts and trusts created pursuant to statute.
110
Except as provided in Section 72-
38-105(2), the terms of a trust govern over the provisions of the MUTC; where the trust is silent, the
MUTC controls.
111

Section 72-38-401 of the MUTC provides three methods of creating a trust. The method
applicable in this case provides a trust may be created by “transfer of property to a person as trustee
during the settlor’s lifetime.”
112
Under this method, the settlor conveys the property to be held in
trust to the trustee and establishes the trust corpus. The other requirements for a trust are
enumerated in Section 72-38-402(1), and include those requirements recognized by common law:
(a) the settlor has capacity to create a trust;
(b) the settlor indicates an intention to create the trust;
(c) the trust has a definite beneficiary;
(d) the trustee has duties to perform; and
(e) the same person is not the sole trustee and sole beneficiary.
Where the trust pertains to real property, Section 72-38-1111 supplements, but does not
modify the MUTC relating to the creation or validity of trusts. That statute makes clear that a
conveyance of real property to a trustee, designated as such in the conveyance, vests the whole estate
conveyed in the trustee (subject to the trustee’s duties), and the beneficiaries of the trust take no
estate or interest in the real property.
113
If the real property’s recorded conveyance is to the name of a
trust, the conveyance vests the estate in the trustee of the trust. The trustee’s identity may be
established by a recorded affidavit of the party serving as trustee or by another recorded instrument
specifying the trustee’s name and address, and confirming the party is currently serving as the
trustee.
114
The Official Comments to Section 72-38-1111 state: “the simple designation of a grantee
in a conveyance, as a trustee, with nothing more, is sufficient for conveyancing purposes and title
standards, but may not be sufficient alone to create a valid trust” under the MUTC.
Unlike the Uniform Trust Code, Montana does not permit oral trusts.
115
The court has also

109
See MONT. CODE ANN. § 72-38-101 et seq.
110
Id. at § 72-38-102. The MUTC is supplemented by the common law of trusts and principles of equity where
not modified by the MUTC. § 72-38-106.
111
MUTC, § 72-38-105(1).
112
Id. at § 72-38-401(1).
113
MUTC, § 72-38-1111(2).
114
Id. at § 72-38-1111(8).
115
Section 407 of the UTC permits the creation of an oral trust when established by clear and convincing
evidence. The Official Comment to Section 72-38-407 notes that Section § 407 of the Uniform Trust Code
was not adopted by the MUTC.
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considered the Uniform Directed Trust Act enacted by the Montana Legislature in 2021,
116
but
concludes even if DLT-19 meets the definition of a “directed trust,” the UDTA does not apply in
this case because all of the conduct and actions at issue regarding DLT-19 predate October 1,
2021.
117
The court now turns its attention to the creation and validity of DLT-19 under the MUTC
and common law.
D. Validity of alleged DLT-19 Trust
1. Creation of DLT-19
Exhibit 12, the warranty deed, is the only conveyance document purporting to transfer the
Roberts Property to DLT-19. Ms. Christensen executed this deed on September 30, 2014, which she
acknowledged in the presence of a notary, but it was not recorded until December 19, 2014.
Recall that when Ms. Christensen and Debtor initially acquired the Roberts Property
together, Debtor instructed property title be placed solely in her name, despite his having made half
the down payment. Thereafter, pursuant to the undisputed testimony, Debtor personally paid Ms.
Christensen for her interest in the Roberts Property, effectively acquiring full ownership, and
directed her to convey the Roberts Property to DLT-19.
118
Debtor’s contribution of the Roberts
Property to DLT-19 makes him the “settlor” of the purported trust under the MUTC.
119

Under the MUTC and common law, a valid express trust is created only if: (1) the settlor has
capacity to create a trust; (2) the settlor indicates an intent to create the trust; (3) the trust has a
definite beneficiary; (4) the trustee has duties to perform; (5) the same person is not the sole trustee
and sole beneficiary; and (6) a transfer of property to the trust occurs.
120

2. Transfer of Property to the Trust
The court first considers whether there has been a transfer of the Roberts Property, to make
DLT-19 legally effective.
121
The MUTC codifies this common law requirement in Section 72-38-

116
MONT. CODE ANN. § 72-40-101 et seq. (West’s 2021).
117
See UDTA, § 72-40-103(1).
118
Though “Diamond Land Trust” was the purported buyer of Christensen’s interest in the Roberts Property,
and Debtor signed the contract as “Buyer Trustee,” no such trust existed. See Ex. 8. Debtor’s role, if any,
under any version of DLT-19 admitted into evidence was that of a director, with the power of direction over
the trustee. The court therefore concludes Debtor personally acquired the Roberts Property before he
directed Christensen to convey it to DLT-19.
119
See MUTC, § 72-38-103(18) defining “settlor.”
120
MUTC, §§ 72-38-401(1) and 402(1).
121
See McCormick v. Brevig, 980 P.2d 603, 612-13 (Mont. 1999) (noting an effective property transfer is required
under common law to make the trust legally effective (citing § 32 of Restatement (Second) of Trusts (1959)
requiring the owner of property to make a conveyance inter vivos of the property “to another person to be
held by him in trust for a third person. . . .”)); Cate-Schweyen v. Cate, 15 P.3d 467, 473 (Mont. 2000) (finding
absent an actual conveyance or transfer of property, the trust remains a “phantom” or “dry” trust and
unenforceable; the undisputed facts revealed the trust property was never delivered, or conveyed, or
transferred to the named trustee).
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401(1), which provides: “A trust may be created by: (1) transfer of property to a person as trustee
during the settlor’s lifetime. . . .”
122
This is consistent with the general rule requiring a transfer be to a
person designated as trustee.
123
Here, Ms. Christensen conveyed the Roberts Property to “Diamond
Land Trust-19” as Debtor directed, and not to Ms. Barnes as a trustee. The Roberts Property was
not conveyed to a person as trustee.
However, the MUTC contains the following language:
The designation of the name of a trust in a recorded conveyance vests the estate in
the trustee of the trust. A subsequent conveyance may be made by the trustee. The
identity of a party serving as trustee may be established by a recorded affidavit of the
party or by another recorded instrument specifying the trustee’s name and address
and confirming that the party is currently serving as the trustee.
124

Debtor argues the warranty deed transferring the Roberts Property to DLT-19 directly was sufficient.
However, he ignores the second part of the above provision, which also involves the trustee of the
grantee trust to be identified through a recorded affidavit or other recorded document identifying the
trustee. No such recording ever occurred.
125

Though Debtor may view this as a technicality, the requirement is clear under the MUTC
and is logical. A trust does not hold title to trust property; the trustee holds legal title to the trust
property in trust (and will therefore be in the chain of title to the trust property) and is authorized to
exercise the trustee’s duties under the trust instrument. Because a trust agreement is normally not
required to be recorded, only by a conveyance to the trustee can third parties dealing with the trust
know they are dealing with the person authorized to administer the trust and rely upon that person’s
authority to deal with the trust property. The confusion over the identity of the trustee and the
person authorized to deal with the trust property, is precisely the marketable title problem identified
by the underwriters for title insurance when Debtor was trying to procure a loan for DLT-19 and
later when he was trying to sell the Roberts Property.
In addition, the various trust instruments themselves dictate title to the Roberts Property
must be placed in the trustee. The September 30, 2014 one-page “Trust Agreement” states: “When

122
Emphasis added.
123
See, e.g., FLA. STAT. ANN. § 689.071(3) (“Every recorded instrument transferring any interest in real
property to the trustee of a land trust and conferring upon the trustee the power. . . .” (Emphasis added). In
addition, Florida defines “trust property” as “any interest in real property . . . conveyed by a recorded
instrument to a trustee of a land trust or other trust.” § 689.071(2)(g) (Emphasis added). See also Haw. Rev.
Stat. Ann § 558-4 (“Any recorded instrument transferring any interest in real property in this State . . . to any person . .
. qualified to act as a trustee in this State . . . shall be effective to vest in the trustee legal and equitable title over
the real property. . . .) (Emphasis added).
124
MUTC, § 72-38-1111(8).
125
There does not appear to be any similar exception for deeds to trusts in Virginia law. Regardless, Debtor
does not contend the Virginia Trust version is the applicable trust.
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the trustee has taken title to the real estate or has accepted in writing title to any other property
conveyed to it as trustee hereunder, the trustee will hold it. . . .”
126
The so-called Virginia Trust
provides the titling of any deed to real property “in the name of the Trustee, as Trustee of this trust,
or any successor Trustee of this trust” is deemed to be a transfer to such trust.
127
The so-called
Montana Trust contains an identical provision.
128

More problematic is no valid trust document existed at the time Ms. Christensen conveyed
the Roberts Property or the conveyance recording that created and/or identified the DLT-19 trust.
The September 30, 2014 “Trust Agreement” identifies Ms. Barnes as “about to take legal and
equitable title” to the Roberts Property but makes no references to DLT-19. The Agreement
identifies the trust purposes as those “herein stated” but none are included; there is no trust named
within the instrument, nor any beneficiary identified, and portions of the document are incomplete.
The court understands Debtor argues Exhibit S-BP, the Montana Trust Agreement, must be
read in conjunction with the one-page September 30, 2014 Trust Agreement. However, the court
finds the evidence contradicts the existence of this Montana Trust prior to November 2015. First,
when Debtor and Ms. Barnes requested Mr. Lawrence to draft the Virginia Trust, they only
provided him with the one-page September 30, 2014 Trust Agreement.
129
Debtor and Ms. Barnes
sought Mr. Lawrence’s assistance because they encountered difficulty with the title company and
procuring the DLT-19 loan with only the one-page Trust Agreement. This is consistent with Mr.
Lawrence’s testimony that he only saw the one-page Trust Agreement and had he possessed the full
Montana Trust Agreement, he would have understood Ms. Barnes, as the named trustee therein, did
not have authority to amend the trust. Mr. Lawrence also testified the Montana Trust document
uncannily mirrors the Virginia Trust version he drafted. The email correspondence with the title
companies during the refinance attempts show Debtor and Ms. Barnes only had the one-page Trust
Agreement until they were provided the Virginia Trust.
130

The court concludes that because the September 30, 2014 warranty deed conveying the
Roberts Property was not conveyed “to a person as trustee” or to a valid trust with a recorded
instrument identifying the trustee of DLT-19, the warranty deed was ineffective to transfer the
Roberts Property to DLT-19, nor did such conveyance create a trust. Nothing in the various versions

126
Ex. 13. No reference to DLT-19 is made in this Agreement, rendering it unclear whether this instrument
even pertains to that trust.
127
Ex. 21, ¶ 1.4.
128
Ex. S-BP, ¶ 1.3. This trust instrument further provides the trustee shall take title to property under the laws
of Montana. ¶ 9.5.
129
Mr. Lawrence did receive a copy of the Montana Trust at some point, but it was long after he drafted the
Virginia Trust. Consistent with his testimony, the Virginia Trust on its face only amended the one-page
Trust Agreement, Exhibit 13.
130
Ex. 20.
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of the written trust instruments saves this defect in the conveyance. Because no other deeds
conveying the Roberts Property to a trust were entered in evidence, whatever version of the DLT-19
trust instrument the court considers, those purported trusts suffer the same defect.
The court concludes the conveyance by warranty deed to the trust was ineffective to transfer
the Roberts Property to a trust and did not create DLT-19. Notwithstanding this conclusion, the
court will address whether other requirements for a valid trust are lacking.
3. Other Requirements to Create a Valid Trust
There is no contention Debtor lacked the capacity to create DLT-19. None of the trust
instrument versions designate the same person as the sole trustee and sole beneficiary. To satisfy the
statute of frauds, the trust must be evidenced by a written instrument signed by the trustee or the
settlor.
131
Each version of the trust instrument is signed by the named trustee. That leaves the
remaining requirements for a valid trust: the settlor indicates an intent to create the trust; the trust
has a definite beneficiary; and the trustee has duties to perform. These requirements are typically
established by the trust instrument.
a) The One-Page Trust Agreement dated September 30, 2014 (Exhibit 13)
Ms. Barnes signed this trust instrument as trustee. Although there is no requirement per se to
“name” the trust, the failure to identify the trust as DLT-19 makes it impossible to link the
conveyance of trust property to this trust, absent attachment or reference to the deed of conveyance.
Debtor’s intent, as settlor, to create a trust to hold legal title to the Roberts Property would
have been easily established had he executed this trust instrument as settlor. Generally, courts look
to the trust instrument to determine intent. “[W]e continue to cite to the general rule that in the
construction of trusts it is the trustor’s intent that controls and that to determine that intent we look
to the language of the trust agreement.”
132
“[E]xpress trusts depend for their creation upon a clear
and direct expression of intent by the trustor.”
133
The one-page document itself is insufficient to find
any intent to create a trust as it lacks a definite beneficiary and trust duties.
Debtor testified he intended to create a trust to hold the Roberts Property for the benefit of
his children. Again, the evidence contradicts this intention. First, no child is listed as a beneficiary
until the Montana Trust Agreement, and the court has rejected Debtor’s contention such Agreement
existed prior to November 2015. Naming Ms. Barnes as beneficiary in the Virginia Trust version
also directly contradicts this intention. When he could not obtain financing, Debtor’s preferred
solution was to terminate the trust and transfer the Roberts Property to Ms. Barnes individually. Ms.

131
MUTC, § 72-38-407.
132
Matter of Est. of Bolinger, 943 P.2d 981, 985 (Mont. 1997).
133
Eckart v. Hubbard, 602 P.2d 988, 991 (Mont. 1979).
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Barnes, who worked with Debtor to create the trust documents, explained to Mr. Lawrence her
intent and attempt to deed the Property to Debtor.
134
Had the children been the intended
beneficiaries, the proper course of action would have been to deed the property to them.
Most importantly, Debtor treated the Roberts Property as his own—he never intended to
give his children a beneficial interest. Instead, Debtor remained in control of the Property, improved
the Property, attempted to obtain financing, attempted to sell the Roberts Property, and placed the
rent proceeds in his solely owned LLC. It is apparent Debtor sought to conceal his ownership of the
Roberts Property by keeping his name out of the chain of title. In a genuine land trust, Ms. Wait, as
the primary beneficiary, would have had complete control over the Property and its proceeds.
However, she stipulated she had no knowledge of any purported trust that named her as beneficiary
of the Roberts Property.
135
Without knowledge, she never could have authorized any transactions
related to the Roberts Property.
The initial one-page trust instrument, apart from holding title to the trust property “for
[unspecified] uses and purposes” and “executing deeds, mortgages or other instruments” does not
specify the trustee’s duties and purports to incorporate by reference unknown, future trust terms and
provisions. Lastly, this trust instrument does not name a definite beneficiary or the “power of
direction.” The failure to name a beneficiary of this trust is fatal to its creation under Section 72-38-
402(1)(c) of the MUTC. Since the one-page Trust Agreement is not a valid trust, equitable title to the
Robert’s Property remained with Debtor.
b) “Amendment” to Trust Agreement (Exhibit 21 – Virginia Trust)
Debtor was the identified director of the purported Virginia Trust, and Citi was the trustee
under the trust instrument executed in November of 2015. Julie Barnes was listed as the sole
beneficiary, despite Debtor’s argument he intended to create a land trust for the benefit of his
children. As noted above, the Roberts Property was never conveyed to this trust because no deed
was ever executed to Citi as trustee of the Virginia Trust. Nor could Ms. Barnes have conveyed title
to the trust.
The only other requirement in question with respect to the purported Virginia Trust is
Debtor’s intent to create it. Again, Debtor’s intent to create this trust would have been established by
him executing it as settlor in 2015. He did, however, sign the trust instrument, accepting his
appointment as director of the trust “with the power of direction over the aforesaid trust together
with my fiduciary [sic] to each and all of you [beneficiaries].”
136

134
Barnes Exs. CCC and DDD.
135
See ECF No. 14.
136
Ex. 21 at p. 20. Debtor acknowledged his execution of the instrument in the presence of a notary.
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At trial, Debtor denied the Virginia Trust was the governing DLT-19 trust instrument.
However, his contemporaneous actions and communications with the trustee’s manager, Mr.
Lawrence, suggest Debtor treated the Virginia Trust as the operative DLT-19 trust instrument
between the period 2015-2018. It was this trust instrument Debtor and Ms. Barnes eventually
presented to the title insurance company and the underwriters to establish marketable title to the
Roberts Property in their attempts to obtain a loan and to sell the trust property.
Ultimately, all affected parties, Debtor, Ms. Barnes, and Mr. Lawrence, acknowledge the
Virginia Trust was never valid.
c) Land Trust Agreement (Exhibit S-BP, pp. 1-27 also identified as Exhibit 24 –
Montana Land Trust)
Debtor was the named director of the purported Montana Trust. Ms. Barnes was the named
trustee under this version of the trust instrument. Rebecca Wait was the named beneficiary. Again,
though this trust is identified as DLT-19, the Roberts Property was never conveyed to Ms. Barnes as
trustee of this trust, nor was any document recorded identifying her as the trustee.
As noted with respect to Exhibit 13, Debtor’s intent to create this trust would have been
easily established had he executed this trust instrument as settlor. Debtor’s signature appears
nowhere on Exhibit S-BP that would signify his intent to create this trust; his only disclosed
relationship to the trust was his identification as trust director, having the power of direction over the
trustee, instead of the beneficiary.
Though the named beneficiary is Debtor’s daughter, Rebecca Wait, that designation is
illusory. Ms. Wait was unaware of “the purported trust” naming her as sole beneficiary, had no part
in its creation, and therefore had no part in approving Debtor as director. She also waived any
interest in any alleged trust. At no time did Ms. Wait recognize her purported beneficial interest in
this trust, receive the rent or income from the trust property, or exercise any power or rights as
beneficiary with respect to this trust or the trust property. She did not sign this trust instrument.
d) Composition and Validity of DLT-19 claimed by Debtor (Exhibit S-BP)
Exhibit S-BP is the trust instrument Debtor (and Ms. Barnes) contend is the validly created
and effective DLT-19 trust document. As noted at the beginning of this opinion, this 29-page trust
instrument consists of a 27-page Land Trust Agreement (previously referenced as the Montana
Trust),
137
a one-page Schedule of Trust Property attached to and made a part of the Land Trust
Agreement, describing the Roberts Property,
138
and Exhibit 13—the one-page Trust Agreement
dated September 30, 2014 (this last page of the document was not admitted into evidence at trial as a

137
Id. at pp. 1-27.
138
Id. at p. 28.
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part of Exhibit S-BP, however).
139
Ms. Barnes allegedly signed each of these components as trustee
on the same date – September 30, 2014. However, Ms. Barnes did not acknowledge her signature or
execute any of these components in the presence of a notary on September 30, 2014.
What is not attached to this trust instrument is the Christensen warranty deed conveying the
Roberts Property to DLT-19. We know the warranty deed existed on September 30, 2014, because
that is the date Ms. Christensen signed the deed and acknowledged her execution of the deed in the
presence of a notary, though the deed was not recorded until three months later.
140

The court’s previous analysis of the legal requirements under Montana law to create a valid
trust with respect to the individual components (Exhibits 13 and S-BP, pp. 1-27) will not be repeated
here, other than to note two points. There is no evidence before the court to establish Debtor
intended to create this trust on September 30, 2014, because he did not sign the trust instrument as
settlor. The trust agreement itself states that it “shall be effective immediately on execution by all the
parties.”
141
The agreement was signed only by Ms. Barnes as “trustee.” It was not signed by the
beneficiary Rebecca Wait, whom we now know had no knowledge of the creation of DLT-19 or her
being named the sole beneficiary. It was not signed by Debtor as director, who purportedly had full
authority over the trustee and management and control over the Roberts Property. An effective
transfer of property to the trustee is still lacking. The inclusion of a Schedule of Trust Property,
“accepted” by Barnes as trustee does not cure that legal requirement.
The court is also troubled by other aspects of Exhibit S-BP. Debtor’s and Ms. Barnes’ claim
at trial that Exhibit S-BP is the applicable version of DLT-19 hinges on their contention this trust
was created when Ms. Barnes allegedly signed the Land Trust Agreement on September 30, 2014.
That testimony was neither persuasive nor credible, given their conduct and actions after September
30, 2014—some of which is inexplicable, and other evidence in this case, summarized above and
below:
 Exhibit 13, the one-page Trust Agreement, suggests the conveyance of the Roberts
Property is about to occur, and unidentified additional trust terms are incorporated as
part of Exhibit 13. Exhibit 13 makes no reference to the Land Trust Agreement, though
allegedly executed the same day, and the Land Trust Agreement makes no reference to
Exhibit 13, nor does it indicate it amends or modifies Exhibit 13. Exhibit 13 would
appear to be superfluous if it and the Land Trust Agreement were executed on the same
day. The Christensen deed to DLT-19 was also executed on September 30, 2014.

 The court is not persuaded Ms. Barnes, as trustee, executed the Land Trust Agreement
on September 30, 2014. Because the signature page of the Land Trust Agreement
appears on an undated, separate page from the body of the Agreement and was not

139
Ex. S-BP at p. 29.
140
Ex. 12.
141
Ex. S-BP at p. 1.
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acknowledged in the presence of a notary on September 30, 2014, the date of its
execution could easily be manipulated by simply adding a blank signature page to the
Agreement, which Debtor and Ms. Barnes prepared.

 Ms. Barnes’ subsequent acknowledgment before a notary on November 24, 2015 of her
signature and execution of the Land Trust Agreement, does not establish she executed it on
September 30, 2014.
142
That could have been proven by acknowledging her execution of
the Agreement in the presence of a notary on September 30, 2014, which did not occur.
In fact, no version of the Land Trust Agreement executed before the 2015
acknowledgment was ever introduced into evidence.

 If Exhibit S-BP was the valid trust instrument in place on September 30, 2014, as Debtor
and Ms. Barnes contend, that begs the question: What was the purpose of amending
Exhibit 13 and drafting the Virginia Trust (Exhibit 21) in November of 2015, a very
similar document? Ms. Barnes signed and acknowledged her execution of Exhibit 21 as
“Creator/Grantor” and as the 100% Beneficiary on November 11, 2015, and Debtor
signed and acknowledged his acceptance of the appointment as director with the power
of direction over the trust on the same date. Ms. Barnes also “accepted” the Schedule of
Trust Property as trustee on November 11, 2015, though she was not the trustee under
the Virginia Trust, Citi was.

 The undisputed evidence established that when Mr. Lawrence was asked to amend the
DLT-19 Trust Agreement dated September 30, 2014 with the Virginia Trust (Exhibit 21),
Ms. Barnes provided him the data sheet (Exhibit 16). There was no evidence Exhibit S-
BP (the alleged governing trust instrument) was ever provided to Mr. Lawrence; his
uncontroverted testimony was he had not seen Exhibit S-BP until this litigation began.
143

In short, Mr. Lawrence believed he was amending Exhibit 13, the one-page Trust
Agreement dated September 30, 2014.

 The existence of DLT-19 purportedly created on September 30, 2014 (Exhibit S-BP) was
never disclosed to Rebecca Wait, the named beneficiary thereunder. Though her power
of direction over the trustee was transferred to her Debtor father at the inception of the
trust, she retained the beneficial interest—her right to the rents and income from the trust
property, payable upon her written request.
144
No rent collected by Debtor or the trustee
from leasing the Roberts Property was ever transferred to the trust and/or distributed to
the beneficiary. Debtor instead endorsed it to his own wholly owned LLC.

 Neither Debtor nor trustee Barnes acted as though Exhibit S-BP was the controlling trust
document. As detailed previously, when they attempted to obtain construction financing
in 2015 and the title company sought the complete trust document to ascertain the
trustee’s authority to deal with the trust property, there was no evidence presented they
produced Exhibit S-BP to the title company. Nor was any evidence presented that
Debtor or Barnes provided Exhibit S-BP to the title company in 2018 to prove
marketable title to sell the Roberts Property. Yet according to them, DLT-19 was created
and had been in place since 2014.

142
See notes 75 and 76, supra.
143
In an email dated August 18, 2018, it appears Ms. Barnes provided a copy of the Montana Agreement to
Mr. Lawrence. He does not dispute receiving the email but does not recall seeing the Montana Agreement.
144
Ex. S-BP, ¶¶ 2.4(b) and 3.1.
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Based on the foregoing circumstances, coupled with the ineffective transfer of the Roberts
Property to the DLT-19 trustee, the court remains unconvinced DLT-19 was validly created on
September 30, 2014, by Exhibit S-BP or otherwise. In the absence of a legally created trust, the
Roberts Property is not held in trust. Debtor holds all the indicia of ownership save legal title, and
the court concludes Debtor became the owner of the Roberts Property on September 30, 2014 and
such property is property of the bankruptcy estate.
E. Alter Ego Doctrine/Reverse Piercing the Corporate Veil
Alternatively, even if DLT-19 were legally created and effective on September 30, 2014, the
court considers whether its existence should be disregarded as Debtor’s alter ego to permit creditors
to “reverse pierce” the veil and reach the trust assets to satisfy Debtor’s debts.
145
Here, the court
concludes DLT-19 was not legitimately established as an estate planning tool but was established to
hide the Roberts Property from Debtor’s creditors and prevent them from reaching his most valuable
asset.
146

1. Wyoming Law
147

The alter ego doctrine is an equitable doctrine under which an entity’s separate legal
existence may by disregarded and deemed the alter ego of the person owning and controlling it.
148

The doctrine is usually applied to corporate entities and their owners, but may be applied to trusts.
149

This court previously explained the Wyoming Supreme Court recognized reverse piercing for
corporations and would likely extend the theory to LLCs.
150
The court is not aware of any Wyoming
law limiting a party’s ability to pierce a trust whether in the traditional sense or through reverse
piercing.

145
See generally Acceptance and Application of Reverse Veil-Piercing—Third-Party Claimant, 2 A.L.R. 6th 195
(2005) (explaining distinction between traditional veil piercing and reverse veil piercing and their
application); Towe Antique Ford Foundation v. I.R.S., 999 F.2d 1387 (9th Cir. 1993) (applying reverse piercing
under Montana law).
146
See Debtor’s Official Form 106 – Summary of Your Assets and Liabilities.
147
Montana law regarding the alter ego doctrine is substantially the same. See Berlin v. Boedecker, 887 P.2d
1180, 1188 (Mont. 1994); Businger v. Storer (In re Storer), 380 B.R. 223, 233-34 (Bankr. D. Mont. 2007).
148
State ex rel. Christensen v. Nugget Coal Co., 144 P.2d 944, 948-49 (Wyo. 1944) (recognizing general rule of law
that a corporation is a separate entity distinct from its owners).
149
See United States v. Badger, 818 F.3d 563, 572 (10th Cir. 2016) (stating that alter-ego theory does not except
trusts from its application and does not depend on the manner of entity); United States v. Krause (In re Krause),
637 F.3d 1160, 1164-65 (10th Cir. 2011) (discussing subtle difference between a trust as a nominee and trust
as debtor’s alter ego under reverse veil piercing). See also M.J. v. Wisan, 371 P.3d 21, 35-36 (Utah 2016).
(recognizing reverse veil piercing in the trust context but declining to apply under the facts of the case); In re
Felice, 494 B.R. 160, 175 (Bankr. D. Mass. 2013) (recognizing under Massachusetts law creditors’ ability to
reach trust assets where debtor has such pervasive control over the trust as to treat the property as his or her
own); In re Maghazeh, 310 B.R. 5 (Bankr. E.D.N.Y 2004) (applying New York alter ego theory to pierce trust
and enable chapter 7 trustee to bring trust assets into bankruptcy estate).
150
Whitmire v. Wolf (In re Wolf) Doc. 89, No. 19-2008 (Wyo. Bankr. July 28, 2020).
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The determination is a fact-specific inquiry and its application is appropriate to prevent
fraud, evasion of a statute, injustice, or an inequitable result, or its application furthers public
policy.
151
The courts consider and weigh an array of factors in determining whether to disregard an
entity, including those applicable here in the trust context: (1) the individual’s control over the entity
[trust]; (2) observance of trust formalities; (3) whether the trust is truly a separate entity; (4) failure to
segregate funds of the trust; (5) use of the trust as a mere shell, instrumentality or conduit of an
individual; and (6) disregard of legal formalities.
152

2. Application to Facts
Standing alone there is nothing improper about transferring property to a trust to be
administered according to a trust instrument, even if the goal is to lawfully shield assets from
creditors. As with any legally recognized entity, those that use them are required to observe their
formalities and rules to receive the favorable treatment or protection sought. Based on the evidence,
Debtor and Ms. Barnes spent a lot of time trying to set up a valid express trust to hide Debtor’s
ownership and control of the Roberts Property and to protect it from the reach of his creditors. But
once “established,” Debtor largely ignored the trust to suit his needs.
The timing of DLT-19’s alleged creation is telling. Debtor’s business relationship with Mr.
Bishop in the BP Construction venture had ended unceremoniously and Mr. Bishop was set on
suing Debtor. Debtor had executed a Trust Indenture and Collateral Assignment of his interest in
the Roberts Property in favor of Mr. Bishop to secure Mr. Bishop’s personal loan for construction of
the Roberts home, but within two months of recording the Bishop Indenture, Debtor and Ms.
Barnes recorded and filed the false RM Funding loan documents and indenture. In short, Debtor’s
financial troubles were coming to a head, and the Roberts Property was his only asset of any
significance.
Debtor never disclosed the existence of DLT-19 to his daughter—the sole beneficiary. The
beneficiary had the right “to receive the net proceeds from rental or other income, mortgages, net
gain from sales or other dispositions of the real property”, payable only upon the beneficiary’s
written request.
153
Not knowing the existence of the trust or that she had been named a beneficiary, it
was impossible for Ms. Wait to exercise any rights she had as a beneficiary. If DLT-19 was truly an

151
Nugget Coal Co., 144 P.2d 944, 950 (1944) (noting proof of an intent to defraud is unnecessary).
152
See Kloefkorn-Ballard Const. and Development, Inc. v. North Big Horn Hosp. Dist., 683 P.2d 656, 661
(Wyo. 1984) (citing Amfac Mechanical Supply Co. v. Federer, 645 P.2d 73, 77 (Wyo. 1982), abrogated on
other grounds by Texas West Oil and Gas Corp. v. First Interstate Bank of Casper, 743 P.2d 857 (Wyo.
1987)). See also Daniels v. Kerr McGee Corp., 841 F. Supp. 1133, 1136 (D. Wyo. 1993); Towe Antique
Ford Foundation, supra at 1391 (identifying six factors relevant to the alter ego inquiry).
153
Ex. S-BP, ¶ 2.4(b).
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estate planning device, Debtor would have disclosed to his daughter her beneficial interest under the
trust and her rights as a beneficiary, and DLT-19 would have distributed all income to her.
In analyzing land trusts, courts “look through the form [of an Illinois land trust] to the
substance of a transaction.”
154
Similarly, the Seventh Circuit explained substance should prevail over
form in Illinois-type land trusts.
155
However, those cases generally find the beneficiary is the true
owner despite the trustee holding legal title.
Disregarding the form of an Illinois land trust has led those courts to conclude that for
various purposes it is the beneficiary who is the owner of the real estate. That
conclusion is derived from the fact that it is the beneficiary who has the right to control
and manage the property and receive all the proceeds of the property. The land trustee
acts only at the direction of the beneficiary. It is these attributes of control that determine
who is the true owner of property and not legal fictions created to facilitate land transfers.
156

Such is usually the result because the beneficiary exercises true control over the property. “While
title may be a factor in determining ownership it is not decisive. Of far greater importance is control
of the property and the right to its benefits.”
157
Here, the beneficiaries never exercised control over
the Roberts Property—at least one had no idea of her role as beneficiary. In contrast, Debtor has
consistently exercised control over the Roberts Property, including attempting to finance, sell, and
lease it and exercising control over the rental income.
As director, Debtor had the sole power of direction and control over the trustee of DLT-19,
and effectively the Roberts Property itself. That power of direction was required to be exercised in
writing and in some circumstances approved in writing. The evidence is nonexistent that any party
at any time provided written direction authorizing a sale, lease, borrowing, mortgage, or any other
action with respect to the Roberts Property.
158
Only the trustee had authority, if directed in writing,
to execute notes and mortgages, and leases and sales of the trust property. Debtor had no authority
to execute contracts individually or as director on behalf of DLT-19.
159
Debtor simply acted in
whatever way benefitted him personally.
In his dealings with third parties to attempt to obtain a loan or to sell and convey title to the
Roberts Property, Debtor never submitted Exhibit S-BP as the controlling trust document
(supposedly in effect from 2014 on) to satisfy title requirements and clear exceptions noted by the

154
In re Langley, 30 B.R. 595, 599 (Bankr. N.D. Ind. 1983).
155
In the Matter of Pentell, 777 F.2d 1281, 1284 n. 2 (7th Cir.1985).
156
In re Ainslie & Belle Plaine Ltd. P'ship, 145 B.R. 950, 955 (Bankr. N.D. Ill. 1992) (emphasis added).
157
People v. Chicago Title & Tr. Co., 389 N.E.2d 540, 545 (Ill. 1979).
158
Ex. S-BP, ¶ 4.1(a)-(c), ¶ 4.2.
159
See e.g. Ex. 34 (July 14, 2018 Hathaway lease of Roberts Property executed by Debtor as Director of DLT-
19, the landlord); Ex. 35 (July 14, 2018 Purchase Price Agreement between Debtor as intended seller of
Roberts Property and Hathaway as intended buyer).
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title insurance company to convey marketable title. As late as July 2018, Ms. Barnes and Debtor
proceeded as though the Virginia Trust instrument was the governing trust agreement, not Exhibit S-
BP. Under the Virginia Trust instrument, Ms. Barnes was the sole beneficiary, Citi was the trustee,
and Debtor the director. Although only needing written authority from the beneficiary, Debtor,
instead, sought a limited power of attorney from the trustee Citi to enter into the Hathaway lease on
the Roberts Property.
160

Debtor collected rents from leasing the Roberts Property but did not turn over those funds to
the trustee to hold for distribution to the sole beneficiary. A separate bank account for DLT-19 was
never established, nor were rents segregated from Debtor’s personal or LLC accounts.
Debtor lived in the Roberts Property rent-free, sometimes with the trustee Ms. Barnes,
without written direction. No lease was executed by the DLT-19 trustee with Debtor. DLT-19 is
revocable.
161
But ¶ 9.2 (b) of the purported Montana Trust instrument specifies a 20-year trust term.
The trust agreement provides that only the beneficiary, not the trustee, may terminate the trust at
any time.
162
That power is illusory where the beneficiary is unaware of the trust and her designation
as the sole beneficiary and has disclaimed any interest in DLT-19. It is further illusory when Debtor
seeks to remove the Roberts Property from the trust into his name so he can sell it, and the purported
trustee Ms. Barnes wishes to deed the property to Debtor to resolve their relationship dispute.
In substance, Debtor treated and dealt with the Roberts Property as his own and without
regard to any DLT-19 trust terms, which Debtor intended to be kept secret.
163
DLT-19 should be
disregarded as Debtor’s alter ego to further the Bankruptcy Code’s policy to reserve bankruptcy relief
for the honest but unfortunate debtor. To recognize DLT-19 as a separate trust entity and exclude
the Roberts Property from the bankruptcy estate would work an injustice and inequitable result on
Debtor’s creditors, some of whom relied on his portrayal as owner of the Roberts Property.
F. Revocability of DLT-19
In any event, even if DLT-19 were legally created and effective on September 30, 2014, the
court finds DLT-19 was revocable by Debtor as the settlor. Under Montana law, “unless the terms of
a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust.”
164

160
See Ex. 34 (Hathaway lease agreement with DLT-19, “c/o Citi Trustee Services.”) and Ex. 36.
161
Ex. S-BP, ¶ 1.1.
162
Id. at ¶¶ 9.2(a) and (c).
163
See Exhibit S-BP, ¶ 4.6 (trustee is duty-bound never to reveal the name of the beneficiary nor allow anyone
to view the trust agreement without unanimous written consent of the beneficiaries or a written court order);
¶ 6.1 (trustee is prohibited from releasing information regarding the trust or its beneficiaries); ¶ 6.2 (third
parties dealing with the trustee are not permitted to make inquiry into the trustee’s authority to act nor
inquire into any of the terms of the trust); ¶ 9.1 (the trust agreement shall not be placed of record in the
recorder’s office in the county in which the trust property is situated or elsewhere).
164
MUTC, § 72-38-602(1).
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The one-page Trust Instrument dated September 30, 2014 did not so provide, and the two other
versions of the trust document introduced at trial, the Virginia Trust and the Montana Trust (Exhibit
S-BP), both state the trust is revocable. Both trust versions prevent the trustee from revoking or
terminating and grants the beneficiaries the right to do so. However, both are also silent as to the
settlor’s (Debtor’s) right to revoke. Given the presumption and lack of language stating otherwise,
Debtor continued to have the power to revoke. That power to revoke became the Trustee’s to
exercise upon the Petition Date, under Section 541 of the Bankruptcy Code.
G. Construction Equipment
What little detail was provided to identify the construction equipment used in Debtor’s
business ventures is set forth in the court’s findings of fact. The record did not establish which
construction equipment existed on the Petition Date, nor specifically what entity held title.
Debtor disclosed in his Bankruptcy Schedules his ownership interests in the three limited
liability companies he was involved in: MMLH, MW Design, and BP Construction. Debtor was not
required to disclose those LLCs’ assets. Thus, if the construction equipment was in fact owned by
one of the LLCs, it is not property of the individual Debtor’s bankruptcy estate and the court would
not expect it to be listed in Debtor’s bankruptcy forms.
It appears none of the construction equipment previously described was acquired in 2016 or
later. That eliminates MW Design (formed in 2016) as the owner of the construction equipment,
absent a transfer of the equipment to MW Design. There was no evidence of any transfers of
construction equipment. Based on the agreement between Mr. Bishop and Debtor when BP
Construction was formed in 2012, BP owned no construction equipment; as part of their deal,
Debtor was to provide the construction equipment for building the North Dakota homes.
165
This
eliminates BP as the owner of the construction equipment.
MMLH leased the following equipment to BP for $3,000 per home built pursuant to an
equipment lease agreement dated February 1, 2012: a skid steer, a JCB forklift, and the following
“tools”—table saw, chop saw, tile saw, nail guns, and miscellaneous construction tools.
166
However,
the court notes Debtor scheduled the “tools” on his Bankruptcy Schedule A/B and claimed them
exempt as tools of the trade on Schedule C. Four months later, Debtor executed a second equipment
lease agreement between MMLH, as lessor, and BP, as lessee, for a 9-ton boom truck that provided
for a monthly lease payment of $2,200 plus costs to deliver the truck to North Dakota, insurance,
maintenance, and damage.
167
Notwithstanding that Mr. Bishop asserts he was unaware of the

165
See Ex. 41 specifically referencing a Bobcat and Loadal [sic].
166
Ex. 43. Debtor signed the equipment lease both as manager of MMLH and as member of BP.
167
Ex. 42 (June 19, 2012, Equipment Lease Agreement).
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equipment leases and BP was not responsible for these construction equipment costs under the terms
of the BP Agreement, the leases suggest Debtor considered MMLH to own the itemized equipment.
In short, the documentary evidence presented at trial indicates MMLH is the owner of the
skid steer/Bobcat, a JCB forklift, a 9-ton boom truck, a loadall, and a flatbed trailer to the extent
they existed on the Petition Date. The fact MMLH had been administratively dissolved according to
state records does not negate MMLH’s ownership of the equipment. As this court previously held,
an LLC does not cease to exist upon administrative dissolution and the LLC’s assets do not
automatically become the members’ assets.
168

That does not end the inquiry, however. As with DLT-19, the Trustee asks this court to
invoke the alter ego doctrine and reverse pierce MMLH and recover the construction equipment as
property of the estate. That request appears to be based on Debtor’s control and use of the
construction equipment to build the home on the Roberts Property. Under circumstances where the
Debtor is engaged in the construction business and is building a home on his property, the court
does not find this inappropriate or surprising.
Case law emphasizes the alter ego doctrine and piercing and reverse piercing of corporate
entities are to be exercised sparingly.
169
Even if the Trustee demonstrates Debtor is the alter ego of
MMLH, the second prong to disregard the corporate entity requires proof that reverse piercing
should be applied to prevent inequitable conduct, fraud, or an injustice. The court’s review of the
entire trial record leads it to conclude the Trustee has simply not met his burden of proof on this
claim.
IV. Relief to be Granted to the Trustee
Having concluded DLT-19 was never validly created because the conveyance of the Roberts
Property by Christensen’s warranty deed was ineffective to transfer the property to DLT-19, the
court evaluates the parties’ positions on the Petition Date. Debtor was the sole equitable owner of
the Roberts Property by virtue of having acquired Ms. Christensen’s interest prepetition, and by
having all other indicia of ownership. Ms. Christensen still held bare legal title to the Roberts
Property (as Debtor had directed when they acquired it). Absent a valid trust, none of the other
defendants sued in their capacity as trustee or beneficiary in this proceeding had an interest in the
Roberts Property on the Petition Date. And there was no evidence any of the other defendants had

168
See Hager Industries, Inc. v. Aylesworth (In re Aylesworth), Adv. No. 20-2005, 2021 WL 261382, at *3 (Bankr. D.
Wyo. Jan. 22, 2021) (citing In re Jorgensen, No. 11-20046, 2011 WL 6000871 (Bankr. D. Wyo. Nov. 30,
2011)).
169
See GreenHunter Energy, Inc. v. Western Ecosystems Technology, Inc., 337 P.3d 454 (Wyo. 2014) (piercing the
veil of a limited liability company is “the rare exception” to be applied only in “exceptional circumstances”).
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an interest in the Roberts Property in their individual or corporate capacity on the Petition Date. The
Christensen warranty deed to DLT-19 constitutes a cloud on the Roberts Property title.
In his seventh cause of action, the Trustee sought a declaration Debtor was the sole owner of
the Roberts Property under Montana law and quieting title in him; the court has now concluded
Debtor was the sole equitable owner of the Roberts Property under Montana law and the Trustee,
standing in Debtor’s shoes, can quiet title in the Roberts Property.
170

Under Montana law, a person in possession of, and person claiming an equitable interest in
real property, are both entitled to pursue a quiet title action.
171
Moreover, incidental and necessary to
the purpose of quieting title, the court has authority to remove clouds on title and to cancel
instruments of title in the quiet title framework.
172
The court therefore concludes the Christensen
warranty deed to DLT-19 recorded on December 19, 2014, Exhibit 12, is hereby canceled and
removed as a cloud on title to the Roberts Property. As to the named defendants in this proceeding,
title to the Roberts Property is quieted in the Trustee. However, the court questions its jurisdiction to
quiet title in the Roberts Property in Trustee as to the current title holder Heidi Christensen, even
though it is undisputed Debtor acquired any and all interest Ms. Christensen had in the Roberts
Property no later than September 30, 2014.
Having granted this relief under the Trustee’s complaint, the court need not address the
alternative theories and remedies asserted in the complaint.
V. Summary of Conclusions of Law
DLT-19 is not a legally created express trust under Montana law due to the failure to
properly convey the Roberts Property to Ms. Barnes as trustee of DLT-19. As a result, no transfer of
trust property to DLT-19 occurred, and the Roberts Property is not held in trust. Debtor was the sole
equitable owner of the Roberts Property on the Petition Date. He had all indicia of ownership, save
for legal title. He purchased Ms. Christensen’s one-half interest in the Roberts Property prepetition,
no later than September 30, 2014, becoming the full owner, attempted to convey the property to
DLT-19, possessed the Roberts Property, built the home on the property, periodically lived on the
Property, and he leased and attempted to sell the property. Without a valid trust, neither exclusion
from property of the estate, § 541(b)(1) nor § 541(c)(2), is applicable under the facts of this case.
In the alternative, even if Exhibit S-BP and the Christensen warranty deed were legally
sufficient to create a valid trust, the separate legal existence of DLT-19 should be disregarded under

170
See In re Endeavour Highrise, L.P., 432 B.R. 583 (Bankr. S.D. Tex. 2010) (identifying, quieting title to, and
obtaining possession of property of the estate is a critical part of administering the estate).
171
In re Turville, 363 B.R. 167 (Bankr. D. Mont. 2007).
172
See MONT. CODE ANN. §§ 70-28-104 and 70-28-107. See also Schumacher v. Cole, 309 P.2d 311 (Mont. 1957)
(following Sanborn v. Lewis and Clark County, 120 P.2d 567 (Mont. 1941)).
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the alter ego doctrine and reverse piercing as a matter of equity to prevent injustice to Debtor’s
creditors. At all times since the trust’s alleged inception on September 30, 2014, Debtor failed to
follow the terms of the trust and provide or receive written direction to the trustee or from the
beneficiary to deal with the trust property, failed to disclose the trust to the sole beneficiary,
exercised control over and possession of the Roberts Property, and acted inconsistently with Exhibit
S-BP, which he claims is the controlling trust instrument. The Roberts Property is therefore property
of the estate under Section 541(a)(1) on this alternative basis. In any event, if DLT-19 were a valid
trust, it was revocable by Debtor as settlor and on the Petition Date, such power of revocation is
exercisable by the Trustee.
The Roberts Property is and remains property of the bankruptcy estate subject to
administration by the Trustee. Title is quieted in the Roberts Property in the Trustee as to the named
defendants to this adversary proceeding, as Debtor acquired the whole of the Property when he
acquired Christensen’s interest which was no later than September 30, 2014. The Christensen
warranty deed to DLT-19 (Exhibit 12) is canceled and is removed as a cloud on title to the Roberts
Property. As to non-party Heidi Christensen, the Trustee is entitled to turnover of legal title to the
Roberts Property under Section 542(a).
With respect to the construction equipment claims, the court concludes the Trustee has
failed to meet his burden of proving Debtor had a property interest in the construction equipment on
the Petition Date. Nor has the Trustee established a basis for applying reverse piercing to reach the
construction equipment assets owned by Debtor’s entity MMLH.
The court addressed the evidence involving Ms. Wait during the trial rendering Debtor’s
Motion in Limine moot.
Judgment shall be entered in this proceeding consistent with this Opinion.

BY THE COURT

________________________________
Honorable Cathleen D. Parker
United States Bankruptcy Court
District of Wyoming

12/28/2022
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Miller et al v. Peterson et al

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