IN RE: Angelo R. Peluso v. ANGELO R. PELUSO On Appeal From the United States District Court For the District…

* The Honorable Richard D. Cudahy, Circuit Court Judge for the United States Court
of Appeals for the Seventh Circuit, sitting by designation.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 03-1805
________________
IN RE:
Angelo R. Peluso,
Debtor
EILEEN K. PELUSO,
Appellant
v.
ANGELO R. PELUSO
____________________________________
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civ. No. 02-cv-3524)
District Judge: Honorable Garrett E. Brown, Jr.
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Argued December 18, 2003
Before: ROTH, MCKEE AND CUDAHY,* Circuit Judges.
(Filed: April 6, 2004)

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Matthew A. Peluso, Esquire (Argued)
Stryker, Tams & Dill
Two Penn Plaza East
Newark, NJ 07105
Counsel for Appellant
Linda J. Schwimmer, Esquire (Argued)
Markowtiz, Gravelle & Schwimmer
3131 Princeton Pike
Lawrenceville, NJ 08648
Counsel for Appellee
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OPINION
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ROTH, Circuit Judge:
Eileen Peluso appeals the District Court’s order affirming the Bankruptcy Court’s
order denying her motion to avoid the sale of property. The procedural history of this
case and the details of appellant’s claims are well-known to the parties, set forth in the
District Court’s thorough opinion, and need not be discussed at length. Briefly,
appellant’s ex-husband filed for divorce and later filed for bankruptcy. Appellant filed a
motion in the Bankruptcy Court to avoid the sale of a flea market which was owned by a
corporation in which her husband had a forty-nine percent share. The Bankruptcy Court
denied the motion. Appellant appealed to the District Court which affirmed the order.
Appellant filed a timely notice of appeal and we have jurisdiction under 28 U.S.C. §
158(d).

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Our review of the District Court’s and the Bankruptcy Court’s legal conclusions is
plenary, and we review the Bankruptcy Court’s factual findings under the clearly
erroneous standard. In re Indian Palms Associates, Ltd.,61 F.3d 197, 203 (3d Cir. 1995).
We need not reach the issue of whether the challenge to the sale is more properly brought
in an adversary complaint rather than a motion because we agree with the District Court
that the motion fails on the merits.
The majority of appellant’s argument relies on her assertion that the state court in
the divorce action found that she and her ex-husband had a joint marital interest in the
flea market. However, we agree with the District Court that the Family Court never
found that Mr. Peluso had an individual ownership interest in the flea market. Rather, the
state court found that appellant was entitled to a fifty-percent share of her husband’s
forty-nine percent interest in the corporation which owned the flea market. “Under all of
these circumstances, Mrs. Peluso is entitled to a share of plaintiff’s interest in P&H
Enterprises.” App. at 70a. Thus, the flea market was not a part of M r. Peluso’s
bankruptcy estate, see In re Cassis, 220 B.R. 979, 983 (Bankr. N.D. Iowa 1998), and the
Bankruptcy Court lacked jurisdiction to void the sale. We also agree with the District
Court that the Bankruptcy Court did not have jurisdiction over the liquidation of the non-
debtor corporation’s assets.
For the above reasons, as well as those set forth by the District Court, we will
affirm the District Court’s March 6, 2003, order.

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