Documente Academic
Documente Profesional
Documente Cultură
Before
Thompson and Barron, Circuit Judges,
and McConnell, District Judge.
While Crawford
Background
Crawford, a financially
obtained
judgment
against
- 2 -
Crawford
in
the
amount
of
assets,
financial
Crawford
impasse
petitioned
with
for
liabilities
bankruptcy.
far
He
start
in
sight,
Premier
thwarted
With
Crawford's
Two
"401(k)
Plan
and
Cash
Balance
Plan."
On
this
for
statement, the two accounts are listed separately and with separate
balances, but the statement also contains a cumulative amount
reported under the label "Total Retirement Accounts."
Schedule B, item 12, requires an individual filing for
bankruptcy to disclose "[i]nterests in IRA, ERISA, Keough, or other
pension or profit sharing plans" and to "[g]ive particulars."
In
of his CBP.
Premier's complaint made a general allegation of a false
oath in Crawford's Schedules and Statement of Financial Affairs.
The CBP, though not mentioned in the complaint as the basis for a
false oath claim, became a topic of the trial on the second day of
the three day trial.
The bankruptcy
- 4 -
Evasive at first,
Crawford
with
Exhibit
847-1
and
asked
whether
he
Crawford
Specifically, Premier
fraudulent intent.
while the CBP wasn't separately listed on his schedules, the amount
in it was included in the 401K amount that was reflected on Mr.
Crawford's schedule . . . ."
The bankruptcy court found Crawford "less than credible"
based on numerous misrepresentations and evasive answers.
The
Finding Crawford's
veracity suspect, the court reasoned that the CBP and 401(k) are
separate accounts and that Crawford believed the accounts were
separate when he filed his Schedule B.
- 6 -
Standard of Review
not
set
aside
the
trier's
findings
absent
We
"strong,
In contrast, we review
82,
and
discretion.
review
issues
of
implied
consent
for
abuse
of
(1st Cir. 2012). "Notwithstanding the fact that we are the secondin-time reviewers, we cede no special deference to the district
court's determinations."
Analysis
Before this Court may reach the merits of the false oath
claim, we must first consider two threshold issues -- implied
consent and improper burden shifting.
A. Implied Consent
Premier's
complaint
and
pre-trial
filings
never
"When an issue
trial,
Premier
introduced
Crawford's
quarterly
391, 40001 (1st Cir. 1994) ("One sign of implied consent is that
issues not raised by the pleadings are presented and argued without
proper objection by opposing counsel." (internal quotation marks
omitted) (quoting In re Prescott, 805 F.2d 719, 725 (7th Cir.
1986))).
without
counsel
objection.
attempted
In
to
fact,
rebut
on
Crawford
cross-examination,
Premier's
questions
by
Both
Once
that party puts forth a prima facie case, the burden shifts to the
- 9 -
debtor who must then come forth with evidence rebutting the
offense.
Id.
The bankruptcy court recited the correct burden-shifting
framework.
The
Id. at 307.
Moreover,
Id. at 306.
addition,
Crawford
reasons
that
improper
burden
the
CBP
omission.
Namely,
Premier
introduced
Crawford's
Crawford fails to
therefore,
we
do
not
find
that
the
bankruptcy
court
Bankruptcy
unencumbered
unfortunate debtor.'"
Code
new
"limits
the
beginning
opportunity
to
the
for
'honest
but
(1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)).
In
considering
competing
denial
considerations
of
discharge
are
at
for
play.
false
On
the
oath,
one
two
hand,
Id.
denying discharge, the Court must find that the debtor "(i)
knowingly and fraudulently
material fact."
On appeal, Crawford
A debtor
Crawford does not raise error with the intent component -"knowingly and fraudulently." 727(a)(4)(A).
- 12 4
Donarumo v. Furlong
No. NH 11-026, 2011 WL 6737074, at *11 (B.A.P. 1st Cir. Dec. 20,
2011) ("[W]hen a debtor omits a transaction from his Statement of
Financial of Affairs, he has made a false oath.").
Schedule B,
with Wells Fargo and included the combined value of his 401(k) and
CBP, Crawford failed to list the existence of his CBP on the form,
as required by Schedule B, item 12.
A false oath is material if its subject matter "bears a
relationship to the bankrupt's business transactions or estate, or
concerns
the
discovery
of
assets,
- 13 -
business
dealings,
or
the
"[T]he
re Sullivan), 455 B.R. 829, 839 (B.A.P. 1st Cir. 2011) (quoting
Cepelak v. Sears (In re Sears), 246 B.R. 341, 347 (B.A.P. 8th Cir.
2000)) (internal quotation marks omitted). Like many of our sister
courts, we have rejected the notion that valuation determines
materiality. 5
disclosure
an
of
asset's
value
does
not
Therefore, the
dispense
with
the
materiality question.
Regardless of whether a creditor may reach an asset, the
debtor still must disclose that asset's existence.
Agin, 736 F.3d 70, 84 (1st Cir. 2013).
Daniels v.
As articulated in In re Mascolo,
"[T]he materiality of the false oath will not depend upon whether
in fact the falsehood has been detrimental to the creditors."
505
F.2d 274, 278 (1st Cir. 1974) (quoting In re Slocum, 22 F.2d 282,
285 (2d Cir. 1927)) (internal quotation marks omitted).
Thus, we
we
for
our
distinguish
purposes,
an
asset
when
from
an
it
comes
asset's
to
value.
Our decision
Id. at 74.
- 15 -
Id.
at 83.
Bankruptcy disclosures are not meant to create a trap
for the unwary,6 and we see no perverse result in affirming the
denial of Crawford's bankruptcy.
affirm
the
Conclusion
district
court's
ruling
on
the