Bencomo v. Avery (In re Bencomo)

Citation:
9th Circuit Bankruptcy Appellate Panel Case No. CC-14-1361-TaPaKi (June 1, 2015)
Tag(s):
Ruling:
The Ninth Circuit Bankruptcy Appellate Panel ("BAP") addressed two issues in the unpublished opinion. First, whether Chapter 7 Trustee's ("Trustee") realtor was required to file a written report related to his testimony. The bankruptcy court did not specifically rule on Debtor's objection to the realtor's testimony; rather, in its findings the realtor was referred to as a qualified expert. Therefore, the BAP determined that the bankruptcy court abused its discretion. The judgment was vacated and remanded to the bankruptcy court with instructions to enter appropriate findings concerning Debtor's objection to the realtor's testimony. Second, whether the bankruptcy court erred in "widening" the scope of trial to include false oath Debtor made in prior bankruptcy case. The joint pretrial conference order specifically refers to exhibits that would be used for impeachment purposes only. Therefore. the bankruptcy court did not improperly expand the scope of the trial by permitting the impeachment evidence.
Procedural context:
The Debtor appeals the bankruptcy court's entry of a judgment denying his discharge pursuant to 11 U.S.C. Sec. 727(a)(4)(A).
Facts:
Debtor filed Chpater 7 in 2013, this was the Debtor's second bankruptcy. Previously the Debtor filed Chapter 7 in 1998 and received a discharge. In the present case, the Debtor scheduled real property in California ("Property") valued in the amount of $175,000, encumbered by a lien in the amount of $145,879, and asserted an exemption in the amount of $29,121. The Trustee retained a realtor to market and sell the Property. The Trustee's realtor valued the Property in the amount of $305,000 to $333,000. Shortly after the meeting of creditors, the Debtor amended his schedules increasing the value of the Property to $245,000, increase the secured claim to $214,929.27, and increasing his asserted exemption to $100,000. The Debtor acknowledged that he did not disclose the Property in his prior bankruptcy despite being the owner during that time period. Additionally, Debtor contested the employment of the proposed realtor. The Trustee also commenced an adversary proceeding against the Debtor seeking to deny his discharge pursuant to 11 U.S.C. Sec. 727. The joint pretrial conference order disclosed the Trustee's realtor and the Debtor as the intended witnesses. The Trustee's realtor's direct testimony was presented through declaration. The Debtor objected to the declaration challenging the realtor's qualifications and failure to file an written report. The BAP noted that the Debtor's profession as a "long time realtor" as well. The Debtor (over his counsel's objections) responded to questions regarding 3 transfers of the Property during the 2 weeks prior to his 1998 bankruptcy. The bankruptcy court found that the value of the Property was "significantly higher" than what the Debtor originally scheduled, the Debtor knew he undervalued the Property, and it found credible the realtor's tesitmony as Trustee's "qualified expert". The bankruptcy court further found Debtor's prior actions constituted inappropriate manipulation of the system and supported its determinations related to the Debtor's credibility. On appeal Debtor asserted the bankruptcy court erred based (i) not excluding the realtor's testimony because no written report was filed and (ii) expanding scope of trial related to false oaths made in 1998 bankruptcy. Trustee asserted that a report was not required based on the realtor being employed to market and sell the real property, not testify as an expert.
Judge(s):
TAYLOR, PAPPAS, and KIRSCHER, Bankruptcy Judges.

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