Church Joint Venture, L.P. v. Blasingame

Summarized by Dean Langdon , DelCotto Law Group PLLC
9 years 3 months ago

Citation:

Sixth Circuit BAP Case Nos. 15-8008/8025; File No. 16b006p.06

Tag(s):

Ruling:

The BAP affirms the Bankruptcy Court order denying the debtors a discharge under 11 U.S.C. Sec. 727(a)(4); and affirms in part, and reverses in part bankruptcy court orders striking items designated by the debtors as part of the record on appeal.

Procedural context:

After granting, then setting aside partial summary judgment in favor of the trustee and a creditor, the bankruptcy court conducted a trial and entered a judgment denying the debtors a discharge under 11 U.S.C. Sec. 727 (a)(2) and (4). The debtors appealed, and after designating the record on appeal, the trustee and creditor moved to strike certain documents, which the bankruptcy court granted in part. The Debtors appealed that ruling also, which was consolidated with the appeal of the order denying their discharge.

Facts:

Debtors met with several attorneys before hiring Tommy Fullen to represent them. Their petition, schedules and statement of financial affairs (collectively, the "Schedules") failed to disclose several substantial assets. At their meeting of creditors the debtors also signed "341 affidavits" stating they were familiar with the information in the Schedules, had read them, and that they were true and correct. The gist of the debtors' appeal was that they relied upon advice of counsel and the bankruptcy court erred in finding they had the requisite intent to satisfy Sec. 727(a)(4). The BAP determined that the 341 affidavits themselves were a sufficient false oath to deny discharge, that advice of counsel was not an issue in regard to the affidavits, and that the basic obligation to be truthful was not dependent upon advice of counsel. The BAP declined to reach the 727(a)(2) ruling as unnecessary. Regarding documents stricken from the record, the BAP reversed and included additional bankruptcy court rulings related to sanctions imposed on debtors' initial counsel and denying approval of a settlement, but affirmed as to pleadings related to such orders. The BAP reasoned that court rulings which may contain findings of fact or conclusions of law which related to the case on appeal should be included, even if not relied upon by the trial court in rendering the judgment on appeal, and that a standard of inclusion, rather than exclusion of items for the record on appeal was preferable.

Judge(s):

Harrison, Humphrey and Preston; opinion by Preston.

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