Trainor v. Evans (In re Evans)

Case Type:
Case Status:
CC-16-1356-KuFTa (9th Circuit, Aug 09,2017) Not Published
The evidentiary record did not support a finding that the bankruptcy court had committed reversible error by entering judgment in favor of the debtor in nondischargeability litigation. The BAP will not reverse where the bankruptcy court's determination that the debtor did not have the required intent to deceive or motive to defraud.
Procedural context:
The case was appealed by the creditor to the BAP after the bankruptcy court entered judgment in favor of the debtor in litigation under 11 U.S.C. §§ 727(a)(4)(A), (a)(6) and (a)(7) challenging her right to a discharge.
The debtor, Evans, had owned a company that became a Chapter 18 debtor (the case was filed as an 11, but converted to a 7). Evans filed her own, personal Chapter 7 case at about the same time that the company case was converted. The creditor, Trainor, filed his action objecting to her discharge for numerous errors and omissions in the company's and in Evan's own bankruptcy schedules. The bankruptcy judge found that Evans had indeed made many errors and omissions -- "false statements under oath" -- and that her credibility raised "significant issues." The misstatements related to the business' income, IRS tax levies on the company's property, the amount of the IRS's claims, and insider transfers to Evans and her mother. The bankruptcy court found that Evans knowingly made at least some of the errors and omissions. Nonetheless, the bankruptcy court found that the errors and omissions (false statements) did not further an attempt to defraud the court or the creditor. The bankruptcy court thus concluded that Trainor failed to establish, by a preponderance of the evidence, that Evans made the false statements with fraudulent intent. The bankruptcy court based this holding in part on the observation that Evans' errors and omissions did not provide any "advantage or benefit to Ms. Evans."
KURTZ, FARIS , TAYLOR (Bankruptcy Judges)

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