Gronlund v. Anderson (In re Gronlund)

Citation:
9th Cir. BAP No. CC-13-1566-KiTaPa (August 19, 2014)
Tag(s):
Ruling:
In the unpublished decisions, the 9th Cir. BAP held that its review of the bankruptcy court's ruling was limited to determining whether the bankruptcy court's finding's were illogical, implausible, or without support in the record. Despite the Debtor volunteering information regarding the note and real property at the Meeting of Creditors; the bankruptcy court was permitted to consider all evidence and conclude that Debtor's omission of the note was not inadvertent. Therefore, the evidence supports the bankruptcy court's finding the Debtor concealed the note before and after the filing. The record supported the bankruptcy court's finding that the Debtor acted with reckless indifference to the truth, thus establishing the discharge could be denied. The BAP further affirmed the bankruptcy court's ruling that the Debtor made a false oath by failing to disclose the note; the oath related to a material fact regarding the existence of the note; and the Debtor knowingly made the false oath by executing the schedules prior to their filing.
Procedural context:
The Debtor appealed the bankruptcy court's decision denying the Debtor's discharge. The bankruptcy court held a 3-day trail, and found that the Debtor's testimony was not credible based on the inconsistencies. The bankruptcy court denied the Debtor's discharge based on intentionally concealing the note before and after filing bankruptcy; and, knowingly and fraudulently making false oath by omitting the note from the schedules.
Facts:
Steven and Gina Gronlund ("Debtor") voluntarily filed for relief under Chapter 7 of Title 11 of the United States Code in February 2012. The Debtors' Schedule B was detailed even going so far as to listing the number of pots and pans and where they were located in the Debtors' residence. However, the Debtors did not list a note related to Mexican real property ("Property"). Pursuant to the terms of the note, the Debtors were receiving monthly interest only payments in the amount of $2,500 since May 2008. The Debtors did not list the monthly interest payment on schedule I either. The Debtor testified at the Meeting of Creditors that (i) the information contained in the schedules was accurate (ii) the $2,500 may be included within the $9,000 gross monthly income on schedule I (iii) sometimes the purchaser does not pay and (iv) and the note regarding the Property was not schedule because he had sold the Property years before. The Chapter 7 Trustee continued the Meeting of Creditors to allow time for Debtors to amend their schedules; however, no amendments were filed during the course of the following six weeks. The Chapter 7 Trustee commenced an adversary proceeding against the Debtors based on the Debtors continued concealment of the beneficial interest in the note. One week after the adversary was commenced, the Debtors amended their schedules and now assert that the note was over-encumbered by the Debtor's mother, his in-laws, and the federal government of Mexico for Maritime Zone taxes. The Trustee presented evidence that the Debor had in fact received 48 monthly interest payment; the checks received from the purchaser were from an address in California (contrary to Debtor's representations that buyer lived in Mexico); and, testimony of Special Mexican REal Estate Counsel regarding the status of the Property. Debtor asserted that he did not have the requisite intent based on the "chaotic" personal life and business dealings.
Judge(s):
Hon. Kirscher, Taylor, and Pappas

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