Zizza v. Harrington

Case Type:
Case Status:
17-1463 (1st Circuit, Nov 15,2017) Published
The Court of Appeals affirms the bankruptcy court's determination to deny Debtor a chapter 7 discharge on grounds that she made material knowing, and fraudulent false oaths in the course of her bankruptcy proceedings.
Procedural context:
The chapter 13 trustee moved the court to convert the case to chapter 7 after the Debtor failed to disclose the existence of two ongoing lawsuits and failed to seek approval of the bankruptcy court in a settlement reached in one of them. Debtor's counsel claimed he didn't know about the lawsuits.. The bankruptcy court granted the motion to convert after concluding Zizza's failure to disclose the lawsuits indicated that she had not filed her bankruptcy case in good faith. The Bankruptcy Appellate Panel affirmed the bankruptcy courts decision. In addition, the chapter 7 trustee seek to deny debtor's discharge on the grounds that she made false oaths within the meaning of section 727 (a) (4) . or in the alternative she had concealed property of the estate under 727(a)(2)(B) by failing to disclose two lawsuits. After trial the judge denied debtor's discharge under section 727(a)(4)cloncluding that she acted with reckless indifference to the truth by failing to disclose the lawsuits in a timely manner. The denial of discharge was appealed to the district court which also affirmed.
Before filing her bankruptcy petition Debtor Zizza had two car accidents and filed different lawsuits against both drivers but failed to disclose such actions on the statement of financial affairs and to disclose them at the meeting of creditors in her initial Chapter 13 case. At the meeting, her attorney added for the record that there were lawsuits and he was going to add them in an amended filing. Debtor disclosed a $20,000 payment in her plan and when she was asked about it stated that she has judgments and anticipates to collect one of them by the end of her plan. Her attorney made the amendments to her her schedules, included the money judgments but didn't include the two car accident complaints. Afterwards, Debtor settled one of the lawsuits in $20,000 but didn't seek the bankruptcy court's approval of the settlement. Without knowing of the lawsuits, the chapter 13 trustee requested the dismissal of the case, because of debtor's failure to make plan payments. Zizza again amended her schedules, included the lawsuits and the settlement obtained in one of them.. .
Lynch, Stahl and Barron

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