Murtaza v. Sigmund, et al. (In re Murtaza)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
9 years 11 months ago

Citation:

In re Murtaza, No. CC-15-1075-KuFTa (9th Cir. B.A.P. Feb. 4, 2016).

Tag(s):

Ruling:

A bankruptcy court may not grant summary judgment in a 727(a)(4)(A) action absent the debtor’s admission that she knowingly and fraudulently made errors and omissions in her schedules and statement of financial affairs. Not-for-publication memorandum.

Procedural context:

Three creditors filed complaints objecting to debtor’s discharge. The bankruptcy court granted summary judgment for the creditors under 727(a)(4)(A)—including on whether debtor’s errors and omissions in her schedules and statement of financial affairs were made knowingly and fraudulently. On appeal, the BAP reversed and remanded.

Facts:

Under 727(a)(4)(A), a chapter 7 discharge must be denied if the debtor knowingly and fraudulently, in or in connection with the case, made a false oath or account. To establish a 727(a)(4)(A) claim, a creditor must demonstrate by a preponderance of the evidence that (1) the debtor made a false oath in connection with the case; (2) the oath related to a material fact; (3) the oath was made knowingly; and (4) the oath was made fraudulently. Here, the only elements at issue were the fourth and fifth--whether debtor’s errors and omissions in her schedules and SoFA were made knowingly and fraudulently. Summary judgment must be denied unless no reasonable trier of fact could find in favor of the nonmoving party on any element that the moving party must prove. All justifiable inferences must be drawn in favor of the non-moving party. Here, the bankruptcy court relied on circumstantial evidence in the record and inferred debtor’s knowledge and intent based on her conduct. In so doing, the court impermissibly weighed the evidence, determined debtor’s credibility, and made inferences against her that reasonably could have been made in her favor.

Judge(s):

Frank L. Kurtz, Robert J. Faris, and Laura S. Taylor, Bankruptcy Appellate Panel Judges.

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