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The Security National Bank of Sioux City, IA v. Vera T. Welte Testamentary Trust

Summarizing by Amir Shachmurove


Case Type:
Case Status:
BAP No. CC-23-1012-LSF (9th Circuit, Jun 28,2023) Not Published
A debtor who did not assume a lease in his chapter 13 plan and who did not disclose ownership of any business-related property in his Schedules and Statement of Financial Affairs was estopped from claiming that the lessor had wrongfully terminated the lease and had wrongful possession of the debtor's property, A debtor is responsible for the accuracy of his Schedules and Statement of Financial Affairs, and will not be allowed to take a position in an adversary proceeding that is inconsistent with the statements in his schedules and Statement of Financial Affairs.
Procedural context:
The bankruptcy court granted the defendant's Rule 52(c) motion and granted the defendant judgment in the debtor's adversary proceeding. The debtor appealed.
The debtor, Christian Gadbois, formed SRT Helicopters, LLC in 2013. Gadbois was SRT's sole manager. SRT reported to the California Secretary of State that its principal place of business was 5215 Minter Field, Shafter, California. SRT had a website that claimed it was based in Bakersfield, California. In 2018 "SRT Helicopters" and the Minter Field Airport District ("District") entered into a written month-to-month lease. Gadbois signed the agreement on behalf of "SRT Helicopters." Gadbois filed a chapter 13 petition on January 9, 2019. Gadbois amended his petition, schedules, and statement of financial affairs four times before his plan was confirmed. In the last set of amendments, Gadbois stated under penalty of perjury that he owned SRT, that he was not the sole proprietor of any full or part-time business, and that he did not personally own any business-related property. Gadbois included the lease on Schedule G, but did not identify the District as a creditor. The lease with Minter airport was not assumed. About the same time as Gadbois' plan was confirmed, the District filed an unlawful detainer action against SRT. Gadbois' attorney notified the District of Gadbois' bankruptcy case in January 2021. The District obtained a default judgment against SRT in February 2021 for possession and about $12,000 in damages. The District filed a second suit and obtained another default judgment for about $7,500. Gadbois subsequently amended his schedules and claimed that he owned $49,685 of "inventory and equipment" at the Minter airfield. Gadbois then filed an adversary proceeding against the District, alleging violation of the automatic stay and for recovery of property. After Gadbois rested his case at trial, the District made a Rule 52(c)/Fed. R. Bankr. P. 7052 motion and argued that Gadbois should be estopped from taking inconsistent positions to gain an advantage.
LAFFERTY, SPRAKER, and FARIS, Bankruptcy Judges

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