OHI Asset (VA) Martinsville SNF, LLC v. Wagner (In re Wagner)
- Summarized by David Treacy , U.S. Bankruptcy Court, Eastern District of Kentucky
- 3 months 3 weeks ago
- Case Type:
- Consumer
- Case Status:
- Reversed
- Citation:
- No. 22-13642 (11th Circuit, Sep 11,2024) Published
- Tag(s):
-
- Ruling:
- The U.S. Court of Appeals for the Eleventh Circuit, reversing a district court, held a bankruptcy court correctly rejected a request to bar a debtor's discharge for making a knowing and fraudulent false oath under 11 U.S.C. § 727(a)(4)(A). The district court didn't properly defer to the bankruptcy court's factual findings and credibility determinations (supported by substantial evidence presented at a trial). Instead, it improperly "weighed the evidence anew" in finding the debtor had fraudulent intent when omitting an asset from his schedules: a show horse gifted to his daughter.
- Procedural context:
- The Eleventh Circuit, sua sponte, considered whether the district court’s order vacating the bankruptcy court’s final judgment and remanding for further proceedings was appealable. It also considered whether the debtor's motion for clarification in the district court rendered his notice of appeal ineffective. The circuit court concluded the district court's order was "a final or otherwise appealable order because, upon remand, the bankruptcy court was not required to exercise significant judicial activity, or discretion, in carrying out the district court’s order." It also determined the debtor's motion "did not suspend the finality of the district court’s [ ] order because it did not seek reconsideration of matters encompassed in the merits of the order, nor did it call into question the correctness of the order." The Eleventh Circuit thus found it had appellate jurisdiction over the case.
- Facts:
- Debtor George Wagner III filed a chapter 7 petition in December 2019 in the U.S. Bankruptcy Court for the Southern District of Florida. He did not include on his Schedules a show horse he'd purchased in 2016 for his then-minor daughter, a competitive horse rider. A group of creditors, who had obtained a large money judgment against Debtor prepetition related to a business venture, filed an adversary proceeding against Debtor objecting to his discharge. They contended Debtor "intentionally omitted from his bankruptcy case his ownership interest in the show horse and his financial interest in the February 2019 lease income" obtained from leasing that horse to another rider. Debtor, his daughter, and his ex-wife, all testified at a two-day trial in the bankruptcy court "that they each believed [the daughter] was the owner of the show horse from the moment it was purchased." They also testified about the family's financial arrangements relating to and insurance on the horse, how the divorce case had an effect on Debtor's bankruptcy case, and Debtor's efforts to properly value other scheduled assets. "After hearing witness testimony and weighing the evidence presented at trial, the bankruptcy court found that [Debtor] was entitled to discharge because he did not knowingly and fraudulently make a false oath in his bankruptcy case in omitting the horse from his schedules and SOFA." The creditors appealed to the U.S. District Court for the Southern District of Florida. It "concluded that the bankruptcy court committed clear error by ignoring evidence in the record that supported a finding that [Debtor] knowingly and fraudulently made a false oath in his bankruptcy case when he omitted the horse." The district court vacated the bankruptcy court’s final judgment in Debtor's favor and remanded to the bankruptcy court to enter a judgment denying Debtor a discharge. Debtor appealed the district court's order to the Eleventh Circuit.
- Judge(s):
- JORDAN, BRASHER, and ABUDU
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