Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-04120/USCOURTS-ca10-89-04120-0/pdf.json

Parties Involved:
J. Richard Calder
Appellant
Dennis Job
Appellee
Reta Job
Appellee

Document Text:

I :I 

11 I 

FILED 1s 

U . ed States Co1,1rt of Appea: <Ut , · 1'enth C1rcu1t 

PUBLISH JUN 2 9 1990 

UNITED STATES COURT OF APPEALS :ROBERT L. HOECKER 

Clerk 

TENTH CIRCUIT 

In re: JOHN RICHARD CALDER, ) 

) 

Debtor. ) 

) 

) 

) 

RETA JOB and DENNIS JOB, ) 

) 

Appellees, ) 

) 

v. ) 

) 

J. RICHARD CALDER, ) 

) 

Appellant. ) 

In re: JOHN RICHARD CALDER,· ') 

) 

Debtor. ) 

) 

) 

) 

J. RICHARD CALDER, ) 

) 

Appellant, ) 

) 

v. ) 

) 

RETA JOB, Individually and as Personal ) 

Representative for the Estate of ·) 

Dennis Job, ) 

) 

Appellee. ) 

No. 89-4120 

No. 89-4121 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF UTAH 

(D.C. Nos. 88-C-941S & 88-C-978S) 

Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 1 
John T. Anderson of Parsons, Behle & Latimer, Salt Lake City, 

Utah, for Appellant. 

Douglas J. Payne (Peter W. Billings, Jr., Sheldon A. Smith with 

him on the brief) of Fabian & Clendenin, Salt Lake City, Utah, for 

Appellees. 

Before TACHA, SETH, Circuit Judges, and BROWN,* District Judge. 

*Honorable Wesley E. Brown, District Judge, United States District 

Court for the District of Kansas, sitting by designation. 

PER CURIAM. 

Debtor J. Richard Calder has appealed from the district 

court's affirmance of two orders of the bankruptcy court. First, 

Calder objects to the bankruptcy court's denial of a discharge of 

his debts, see In re Calder, 93 Bankr. 734 (Bankr. D. Utah 1988), 

and, second, Calder challenges the bankruptcy court's allowance of 

a proof of claim. For the reasons set forth below, we affirm. 

I. 

Background· 

Calder filed the underlying voluntary petition for relief 

under Chapter 7 of the Bankruptcy Code on August 19, 1986. On 

November 21, 1986, Dennis and Reta Job (the Jobs), creditors of 

Calder, filed a complaint citing 11 U.S.C. § 727 and 11 u.s.c. 

§ 523 and objecting to the discharge of Calder's debts. 

Thereafter, Dennis Job executed and filed a proof of claim based 

on a state court judgment obtained against Calder for legal 

2 

Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 2 
\I, ii 

malpractice in February, 1986. Calder filed an objection to the 

proof of claim apparently pursuant to 11 u.s.c. § 502. In support 

of his objection, Calder argued that the Job's state court 

judgment was obtained in violation of the automatic stay under 11 

u.s.c. § 362(a) because the state court action was commenced after 

he had filed an earlier petition for relief under Chapter 13 of 

the Bankruptcy Code, and that bankruptcy proceeding was not 

dismissed until after the state court judgment was entered. 

Following a trial, the bankruptcy court ruled, on August 12, 

1988, that Calder was not entitled to a discharge of his debts. 

In reaching this decision, the bankruptcy court focused on the 

Statement of Affairs and Schedule B-1 filed by Calder with his 

petition. The bankruptcy court determined that Calder's failure 

to disclose the following information in his Statement of Affairs 

and Schedule B-1 constituted a false oath under 11 U.S.C. 

§ 727(a)(4)(A) 1 precluding a discharge: (1) an ownership interest 

in certain mineral rights, (2) two bank accounts, and (3) monthly 

income which was paid by a partnership (the Redlac Partnership) to 

Calder as a partner after April, 1984, and through the filing of 

the underlying bankruptcy petition, and designated by Calder for 

deposit in his wife's bank account. 2 

1 11 u.s.c. § 727 provides in pertinent part that "(a) The 

court shall grant the debtor a discharge, unless .•. (4) the 

debtor knowingly and fraudulently, in or in connection with the 

case ... (A) made a false oath or account .... " 

2 We reject Calder's argument that the bankruptcy court 

improperly resorted to judicial notice of his Statement of Affairs 

and Schedule B-1. Under Fed. R. Evid. 20l(b)(2), which is 

applicable in bankruptcy cases, see 11 u.s.c. § 9017, a court may 

take judicial notice of facts that are not subject to reasonable 

dispute in that they are "capable of accurate and ready 

3 

Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 3 
On October 13, 1988, the bankruptcy court entered a separate 

order rejecting Calder's objection to Dennis Job's proof of claim. 

The bankruptcy court determined that Calder could not claim the 

protections of the automatic stay under section 362(a) because he 

"failed to timely perform his obligation to provide notice to the 

state court of the fact that he had previously filed a petition 

under Chapter 13 of the Bankruptcy Code, and that failure 

constitutes a de facto stipulation between the Debtor and Job to 

grant Job relief from the automatic stay." The district court 

summarily affirmed both the denial of discharge and the allowance 

of the proof of claim. 3 

II. 

Denial of Discharge 

Ten categories of circumstances which can forestall a 

debtor's receipt of a discharge in bankruptcy are described in 11 

u.s.c. § 727(a). Calder does not dispute that an omission of 

assets from a Statement of Affairs or schedule may constitute a 

false oath under section 727(a)(4)(A). Farmers Co-op. Ass'n v. 

Strunk, 671 F.2d 391, 395 (10th Cir. 1982). To trigger section 

determination by resort to sources whose accuracy cannot 

reasonably be questioned." In this case the bankruptcy court, 

consistent with Rule 20l(b)(2), simply took judicial notice of the 

contents of Calder's Statement of Affairs and Schedule B-1 and not 

the truthfulness of the assertions therein. Furthermore, the 

bankruptcy court, contrary to Calder's suggestion, was not 

required to give prior notification of its intent to take notice. 

The burden rested with Calder to make a request for a hearing to 

challenge the propriety of taking judicial notice even after 

notice had been taken. See Fed. R. Evid. 20l(e). 

3 While the proceedings were pending 

Dennis Job died. 

4 

in the district court, 

Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 4 
727(a)(4)(A), the false oath must relate to a material matter and 

must be made willfully with intent to defraud. See 4 Collier on 

Bankruptcy, fl 727.04[1] at 727-54 to -57 (15th ed. 1987). 

We agree with the bankruptcy court that each of Calder's 

omissions was a material matter that would support denial of 

discharge. The omitted information concerned the existence and 

disposition of Calder's property. See In re Chalik, 748 F.2d 616, 

618 (11th Cir. 1984)("The subject matter of a false oath is 

'material,' and thus sufficient to bar discharge if it bears a 

relationship to the bankrupt's business transactions or estate, or 

concerns the discovery of assets, business dealings, or the 

existence and disposition of his property."). Calder has argued 

that he should not be denied a discharge of his debts because the 

undisclosed bank accounts and mineral interest were worthless 

assets. However, a "recalcitrant debtor may not escape a section 

727(a)(4)(A) denial of discharge by asserting that the admittedly 

omitted •.. information concerned a worthless business 

relationship or hold~ng; such a defense is specious." Id. 

Calder's primary contention on appeal is that the bankruptcy 

court erred in denying him discharge on the basis of the omitted 

information because these omissions were not made fraudulently 

within the meaning of section 727(a)(4)(A). Calder contends that 

the nondisclosures were merely the result of inadvertence. As 

Calder points out, much of his testimony at the trial on the 

objection to discharge, not surprisingly, was to the effect that 

he did not act with a fraudulent intent. Furthermore, Calder 

asserts that he did not disclose the transfer of income from the 

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Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 5 
Redlac Partnership to his wife's bank account after April, 1984, 

because that transfer was a gift and the Statement of Affairs only 

required disclosure of "gifts ..• to family members'' made during 

the year immediately preceding the filing of the petition. 

The problem in ascertaining whether a debtor acted with 

fraudulent intent is difficult because, ordinarily, the debtor 

will be the only person able to testify directly concerning his 

intent and he is unlikely to state that his intent was fraudulent. 

Williamson v. Fireman's Fund Ins. Co., 828 F.2d 249, 252 (4th Cir. 

1987). Therefore, fraudulent intent may be deduced from the facts 

and circumstances of a case. In re Devers, 759 F.2d 751, 754 (9th 

Cir. 1985); see also Farmers Co-op. Ass'n, 671 F.2d at 395 

("Fraudulent intent of course may be established by circumstantial 

evidence, or by inferences drawn from a course of conduct."). The 

bankruptcy court's ultimate determination concerning fraudulent 

intent will not be set aside unless clearly erroneous. 

Williamson, 828 F.2d at 252. 

In this case, several facts and circumstances, not disputed 

by Calder, support the bankruptcy court's conclusion that Calder 

acted fraudulently in making false oaths in connection with his 

bankruptcy. First, Calder, as the bankruptcy court noted, is an 

experienced attorney practicing exclusively in bankruptcy law. He 

should be aware that those who seek shelter of the bankruptcy code 

must provide "complete, truthful and reliable information.'' In re 

Tully, 818 F.2d 106, 110 (1st Cir. 1987). Furthermore, it is 

significant that there was 

from Calder's Statement of 

not one but four separate omissions 

Affairs and Schedule B-1. See 

6 

Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 6 
Williamson, 828 F.2d at 252. Finally, as the bankruptcy court 

also noted, records of the Redlac Partnership continued to reflect 

Calder's interest in the partnership after April, 1984. Thus, 

there is no indication that Calder absolutely and irrevocably 

divested himself of domination and control over his future 

partnership income in April, 1984. In view 

cannot say that the bankruptcy court's 

intent was clearly erroneous. 

III. 

of these facts, we 

finding of fraudulent 

Allowance of Proof of Claim 

Under section 362(a), the filing of a bankruptcy petition 

creates a broad automatic stay protecting the property of the 

debtor. Ordinarily, any action taken in violation of the stay is 

void and without effect, Ellis v. Consolidated Diesel Elec. Corp., 

894 F.2d 371, 372 (10th Cir. 1990), ~ven where there is no actual 

notice of the existence of the stay, In re Smith, 876 F.2d 524, 

526 (6th Cir. 1989). Nevertheless, equitable principles may, in 

some circumstances, be applicable to claimed violations of the 

stay. The existing case law indicates that courts will apply 

equitable considerations at least where the creditor was without 

actual knowledge of a bankruptcy petition and the bankrupt's 

unreasonable behavior contributed to the creditor's plight. See, 

~, In re Smith Corset Shops, Inc., 696 F.2d 971, 976-77 (1st 

Cir. 1982)(debtor not entitled to protection where debtor remained 

"stealthily silent" while creditor obtained a default judgment and 

execution from a state court in violation of the automatic stay); 

see also Matthews v. Rosene, 739 F.2d 249, 251 (7th Cir. 

7 

Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 7 
1984)(laches barred debtor's attempt to void a 33-month-old state 

court judgment on the basis of the automatic stay). 

In our view, it would be inequitable to allow Calder to claim 

any protections of the automatic stay under section 362(a) to 

defeat the Jobs' state court judgment. 4 The basic undisputed fact 

apparent from the record is that Calder actively litigated the 

state court action and did not provide notice of the pending 

Chapter 13 proceeding until just before the state court was to 

enter a final judgment. Calder must bear some responsibility for 

his unreasonable delay in asserting his rights under section 

362(a). Calder's only explanation, that he forgot, is not a 

legitimate excuse for his delay. To hold otherwise and permit the 

automatic stay provision to be used as a trump 9ard played after 

an unfavorable result was reached in state court, would be 

inconsistent with the underlying purpose of the automatic stay 

which is to give a debtor "'a breathing spell from his 

creditors.'" Ellis, 894 F.2d at 373 (quoting Association of St. 

Croix Condominium Owners v. St. Croix Hotel Corp., 682 F.2d 446, 

449 (3d Cir. 1982)). 

Accordingly, the district court's affirmance of the orders of 

the bankruptcy court is AFFIRMED. 

4 The bankruptcy court did not expressly state that it was 

relying on equitable principles as a basis for allowing Dennis 

Job's proof of claim. Nevertheless, this court is free to affirm 

the bankruptcy court's determination on any ground supported by 

the record. Reynolds v. United States, 643 F.2d 707, 710 (10th 

Cir.), cert. denied, 454 U.S. 817 (1981). 

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Appellate Case: 89-4120 Document: 01019880678 Date Filed: 06/29/1990 Page: 8