In re Frank Joseph Jakubaitis

Case Type:
Case Status:
BAP No. CC-20-1009-GFS (9th Circuit, Apr 07,2021) Not Published
The 9th Circuit BAP affirmed the bankruptcy court's orders striking the debtor's answer as a sanction for failure to comply with the court's order to show cause and entry of a default judgment revoking the debtor's discharge under section 727(d).
Procedural context:
After the debtor's case was reopened on motion by a creditor, the creditor, the debtor's trustee, and the trustee for the debtor's wife filed a complaint seeking to revoke the discharge of the debtor and his spouse and for turnover of various assets. After striking the debtor's answer, the bankruptcy court entered a default judgment revoking the debtor's discharge but dismissed the turnover claim without prejudice.
Plaintiffs brought an adversary proceeding to revoke the debtor's discharge based on allegations that he had failed to disclose ownership of various assets and intentionally underreported his income to qualify for chapter 7. The court granted Plaintiffs' motion to compel production of documents, to attend his deposition and then to answer questions at his deposition. The court awarded monetary sanctions against debtor for his repeated discovery failures and warned that the court could enter more severe sanctions, including terminating sanctions. After debtor's failure to comply with the order to show cause, the court struck his answer and denied the debtor's motion for reconsideration. The court subsequently granted plaintiffs' motion for default judgment as to the revocation of the debtor's discharge but denied the motion as to the turnover claim, and denied the debtor's Rule 60(b) motion to vacate the judgment. The BAP affirmed the court's rulings, finding that the debtor's conduct was the result of willfulness, bad faith, or fault and that case terminating sanctions were appropriate.
Gan, Faris, Spraker

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