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Parties Involved:
Michael D. McGranahan
Plaintiff
Sylvia Mae Kinerson
Defendant

Document Text:

FiLED 

OEC:-42O1 

UNITED STATES BANKRUPTCY COURT 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF CALIFORNIA -. 

SACRAMENTO DIVISION 

Case No. 16-22163-A-7 

Inre 

SYLVIA MAE KINERSON, 

Debtor. 

MICHAEL D. MCGRANAHAN, Adv. No. 16-02160 

Chapter 7 Trustee, 

Plaintiff, 

vs. 

SYLVIA MAE KINERSON, 

Defendants. 

FINDINGS OF FACT AND CONCLUSIONS OF LAW 

Plaintiff Michael D. McGranahan is the chapter 7 trustee in 

the bankruptcy case filed by debtor and defendant Sylvia Mae 

Kinerson. He asks that defendant Kinerson's chapter 7 discharge 

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be denied on the ground, among others, that she concealed, and 

made a false oath in the bankruptcy case concerning, a transfer 

of an interest in real property to her son, Stanley G. 

Laffranchini. 

This action was consolidated for a court trial September 6 

and 7, 2017 with a second adversary proceeding, Case No. 16-2134, 

in which the plaintiff seeks to avoid the transfer to defendant 

Kinerson's son. 

This court has jurisdiction over this adversary proceeding 

pursuant to 28 U.S.C. §§ 151, 157,. and 1334. This is a core 

proceeding within the meaning of 28 U.S.C. § 157(B) (2) (J), in 

which the court has the constitutional power to enter a final 

judgment. 

Findinos of Fact 

The subject property is located at 955 Ebbetts Avenue, 

Manteca, California and is described as "Lot sixty-three (63), as 

shown upon Map entitled, TRACT No. 1128, SEQUOIA HOMESITES, UNIT 

No. 4, filed for record January 28, 1976, in Vol. 21 of Maps and 

Plats, Page 59, San Joaquin County Records" (hereafter, "the 

property" or "subject property") . Defendant Kinerson purchased 

it in 1977. 

Defendant Kinerson married Lawrence Kinerson in 1990. 

Mick Kinerson is the only child of Lawrence. Stanley 

Laffranchini is the only child of defendant Kinerson. 

On September 5, 2000, defendant Kinerson signed a grant 

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deed transferring an undivided one-half interest in the subject 

property to Stanley Laffranchini. This grant deed was recorded 

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1 on September 11, 2000. As a result of this transfer, defendant 

2 Kinerson and Stanley Laffranchini eabh owned a 50% undivided 

3 interest in the subject property as joint tenants. The plaintiff 

4 does not seek to avoid this transfer. 

5 5. In connection with the 2000 transfer, on September 5, 

6 2000 defendant Kinerson signed a Preliminary Change of Ownership 

7 Report indicating that the transfer was between a parent and 

8 child. In addition, both defendant Kinerson and Stanley 

9 Laffranchini signed and filed with the San Joaquin County 

10 Assessor a Claim for Reassessment Exclusion for Transfer Between 

11 Parent and Child. This document, signed under penalty of 

12 perjury, confirmed that defendant Kinerson transferred a 50% 

13 interest in the subject property to StanleyLaffranchini. 

14 6. In 2003, defendant Kinerson and Stanley Laffranchini 

15 established a $183,254 line of credit with Washington Mutual Bank 

16 using the subject property as collateral. In the deed of trust 

17 for this loan, recorded on November 12, 2003, defendant Kinerson 

18 and Stanley Laffranchini represented that they were the co-owners 

19 of the subject property. 

20 7. Defendant Kinerson and Lawrence Kinerson filed joint 

21 federal tax returns for the years 2007 and 2008 wherein they 

22 reported rental income and expenses for the subject property. 

23 8. Defendant Kinerson admitted at trial that she collected 

24 rent for the subject property after granting her son an interest 

25 in it. 

26 9. In 2010, Stanley Laffranchini filed a declaration in 

27 his divorce action stating under penalty of perjury that he and 

28 defendant Kinerson each were entitled to one-half of the rents 

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1 from the property. 

2 10. The foregoing clearly indicates that defendant Kinerson 

3 continued to own an undivided 50% interest in the subject 

4 property after the 2000 conveyance. As a result of this 

5 transfer, the defendants became co-owners of the property. 

6 11. The court does not believe the testimony of defendant 

7 Kinerson and Stanley Laffranchini to the effect that the 2000 

8 grant deed transferred or was intended to transfer a 100% 

9 interest to Stanley Laffranchini in exchange for his payment of 

10 $75,000.00 to defendant Kinerson, together with his agreement to 

11 shoulder the responsibility for repaying a $20,000 encumbrance on 

12 the property. This consideration, totaling approximately 

13 $95,000, was given for a 50% interest only. And, the assertion 

14 that defendant Kinerson transferred a 100% is flatly contradicted 

15 by the defendants' representations to the assessor and their 

16 division of the rents derived from the property. 

17 12. Further, while no party introduced evidence of the 

18 market value of the property at the time of the 2000 transfer, 

19 the court notes that the $183,254 line of credit obtained by both 

20 defendants in 2003 strongly suggests that the $95,000 in 

21 consideration given by Stanley Laffranchini was for one-half of 

22 defendant Kinerson's interest in the property.. 

23 13. Lawrence Kinerson died on November 7, 2009. 

24 Approximately two months before he died, Lawrence Kinerson filed 

25 a petition to dissolve hi's marriage with defendant Kinerson. 

26 However, no divorce was granted prior to his death. 

27 14. Lawrence Kinserson died intestate. Over defendant 

28 I Kinerson's objection, Nick Kinerson was appointed personal 

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1 representative of the probate estate (the "administrator") by the 

2 Merced County Superior Court. 

3 15. Defendant Kinerson filed a spousal property petition in 

4 the Merced County Superior Court. 

5 16. The administrator filed a petition under Cal. Probate 

6 Code § 850 to confirm assets of the probate estate. Defendant 

7 Kinerson's spousal property petition was consolidated for trial 

8 with the administrator's petition. Cyril Lawrence, attorney at 

9 law, represented defendant Kinerson. 

10 17. Defendant Kinerson and the administrator were locked in 

11 litigation for approximately three years. After a six-day court 

12 trial conducted in November and December 2013, on July 10, 2014, 

13 the Merced County Superior Court entered a judgment largely in 

14 the administrator's favor. 

15 18. Therefore, the Merced County Superior Court awarded the 

16 administrator his reasonable attorney's fees and costs pursuant 

17 to Probate Code § 859 and Welfare and Institutions Code § 15657.5 

18 based upon the court's finding that "Sylvia [Kinerson] and/or her 

19 son [Stanley Laffranchini] unabashedly testified at trial about 

20 financial schemes involving unrecorded cash transactions, 

21 manipulation of multiple bank accounts, shifting of assets and 

22 potential money laundering, tax evasion, perjury, and conspiracy 

23 to hide marital assets in dissolution proceedings." 

24 19. On July 11, 2014, the administrator filed a Memorandum 

25 of Costs in the probate case. 

26 20. Over defendant Kinerson's objection, the administrator 

27 was awarded costs of $11,278.20. These costs remain unpaid. 

28 21. As of July 8, 2014, the administrator had incurred 

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attorney's fees inexcess of $400,000. However, the prbbate 

court has not yet determined whether defendant Kinerson must pay 

any of these fees. This determination will be made by the 

probate court if defendant Kinerson's bankruptcy discharge is 

denied. 

On July 28, 2014, defendant Kinerson executed and 

recorded a second grant deed which conveyed her remaining 

undivided 50% interest in the property to Stanley Laffranchini. 

On September 9, 2014 and October 20, 2014, defendant 

Kinerson and Stanley Laffranchini, respectively, signed a Claim 

for Reassessment Exclusion for Transfer Between Parent and Child. 

This document confirmed that, prior to the 2014 grant deed, the 

property had been owned in joint tenancy by defendant Kinerson 

and Stanley Laffranchini. 

In connection with the 2014 grant deed, defendant 

Kinerson signed an Affidavit of Exemption from Documentary 

Transfer Tax wherein she confirmed under penalty of perjury that 

the transfer to Stanley Laffranchini was a gift for which no 

consideration was paid. 

Defendant Kinerson admitted at trial that at the time 

she signed the 2014 grant deed she was unable to pay any judgment 

in favor of the administrator, whether it was for $100 or 

$11,278.20. 

The probate judgment was served on Cyril Lawrence on 

July 10, 2014. Mr. Lawrence testified that it is his standard 

practice to promptly mail judgments and other orders to his 

clients upon his receipt of same. Mr. Lawrence further testified 

that he mailed the judgment to defendant Kinerson and that he met 

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1 with her to discuss it. 

2 27. Defendant Kinerson knew of the judgment when she 

3 executed the second grant deed on July 28, 2014. 

4 28. Mr. Lawrence is a creditor of defendant Kinerson. His 

5 fees were in arrears when the second grant deed was given to 

6 Stanley Laffranchini. As of that date, he was owed more than 

7 $40,000. 

8 29. Defendant Kinerson appealed the July 10, 2014 judgment. 

9 However, on February 22, 2016, the California Court of Appeal 

10 affirmed the judgment.and the award of costs to the 

11 administrator. 

12 30. This rather antiseptic 'recitation of the facts does not 

13 convey the deep animosity between the administrator and defendant 

14 Kinerson. Hard feelings abound and it is clear that defendant 

15 Kinerson executed and recorded the 2014 grant deed for the 

16 express purpose of preventing the administrator from collecting a 

17 judgment, whether it was for only the costs or for the costs plus 

18 his attorney's fees. 

19 31. Defendant Kinerson filed her bankruptcy petition on 

20 April 6, 2016, which was within two years of the execution, 

21 delivery, and recording of the 2014 grant deed. 

22 32. In her response to question 18 of the Statement of 

23 Financial Affairs, filed on April 6, 2016, defendant Kinerson 

24 indicated that she had not transferred any real property during 

25 two years prior to her bankruptcy petition. She signed the 

26 Statement of Financial Affairs under penalty of perjury. 

27 33. At the May 3, 2016 meeting of creditors; the 

28 administrator questioned defendant Kinerson about the 2014 grant 

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1 deed. This was when the plaintiff discovered the 2014 transfer 

2 to Stanley Laffranchini. At this meeting of creditors, the 

3 plaintiff instructed defendant Kinerson to file an amended 

4 Statement of Financial Affairs to disclose the transfer. 

5 34. On June 2, 2016, defendant Kinerson filed an amended 

6 Statement of Financial Affairs. Once again she responded under 

7 penalty of perjury that no transfer had been made within two 

8 years of bankruptcy. However, she qualified her denial by 

9 admitting a July 28, 2014 grant deed had been given to Stanley 

10 Laffranchini but claiming that it "solemnized" an earlier 

11 transfer on September 11, 2000 of her entire interest in the 

12 property. As explained above, the earlier transfer actually 

13 transferred, and was intended to transfer, only a 50% interest in 

14 the property to Stanley Laffranchini. Defendant Kinerson's 

15 response to question 18 in the amended Statement of Financial 

16 Affairs was false and was intended to discourage the plaintiff 

17 from avoiding the 2014 transfer. 

18 35. In her amended Statement of Financial Affairs filed on 

19 June 2, 2016, defendant Kinerson also falsely stated under oath 

20 that she had used the proceeds from the sale of an annuity to pay 

21 a retainer to her state court attorney, Cyril Lawrence, for legal 

22 representation in possible bankruptcy litigation. Mr. Lawrence 

23 testified that defendant Kinerson had not paid his such a 

24 retainer. The court finds that defendant Kinersor) made this 

25 false statement under oath to avoid turing over these funds to 

26 the plaintiff. 

27 36. To the extent any of the conclusions of law below are 

28 findings of fact, they are incorporated by reference as findings 

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of fact. 

Conclusions of Law 

To the extent any of the foregoing findings of fact are 

conclusions of law, they are incorporated by reference as 

conclusions of law. 

The plaintiff, as the bankruptcy trustee, has standing 

to object to the defendant's discharge. See 11 U.S.C. § 

704(a) (6) and 727 (c) (1) 

The 2014 grant deed transferred defendant Kinerson's 

remaining undivided 50% legal and beneficial interest in the 

subject property to StanleyLaffranchini. This was a transfer 

within the meaning of 11 U.S.C. § 101(54) (D) (i) and (ii). Until 

that transfer, defendant Kinerson was the owner of a 50% 

undivided interest in the property. 

Both defendant Kinerson and Stanley Laffranchini 

attempted to argue at trial that Stanley Laffranchini became the 

owner of100% of the subject pcoperty as a result of the 2000 

transfer. The court concludes otherwise. The 2000 transfer gave 

Stanley Laffranchini only a 50% interest in the property. He 

acquired the other 50% interest from his mother, defendant 

Kinerson, as a result of the 2014 transfer. 

"The owner of the legal title to property is presuthed 

to be the owner of the full beneficial title. This presumption 

may be rebutted only by clear and convincing evidence." See Cal. 

Evid. Code § 662, At trial, defendant Kinerson failed to 

present clear and convincing evidence that the 2000 grant deed 

transferred a 100%, not a 50%, interest to Stanley Laffranchini. 

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1 42. It is unnecessary, however, to rely only on the failure 

2 of defendant Kinerson to rebut this presumption. The 

3 circumstances clearly demonstrate that defendant Kinerson 

4 retained a 50% interest after the 2000 grant deed and gave it up 

5 only by executing the 2014 grant deed. See Findings of Fact, 191 

6 4 through 12, above. 

7 43. Pursuant to 11 U.S.C. § 727(a) (2) (A), the court must 

8 grant the debtor a discharge, unless "(2) the debtor with intent 

9 to hinder, delay, or defraud a creditor or an officer of the 

10 estate charged with custody of property under this title, has 

11 transferred, removed, destroyed, mutilated, or concealed, or has 

12 permitted to be transferred, removed, destroyed, mutilated, or 

13 concealed - (A) property of the debtor, within one year before 

14 the date of the filing of the petition." 

15 44. Here, defendant Kinerson transferred her remaining 50% 

16 I interest in the property when she gave Stanley Laffranchini the 

17 12014 grant deed more than one year before she filed her 

18 bankruptcy case. Accordingly, defendant Kinerson did not conceal 

19 an interest in the property from the bankruptcy trustee or a 

20 creditor during the year before her bankruptcy case was filed. 

21 45. Pursuant to 11 U.S.C. § 727(a) (2) (B), the court shall 

22 grant the debtor a discharge, unless "(2) the debtor with intent 

23 to hinder, delay, or defraud a creditor or an officer of the 

24 estate charged with custody of property under this title, has 

25 transferred, removed, destroyed, mutilated, or concealed, or has 

26 permitted to be transferred, removed, destroyed, mutilated, or 

27 concealed - (B) property of the estate, after the date of the 

28 filing of the petition." 

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1 F' 46. Here, defendant Kinerson transferred her remaining 50% 

2 interest in the property when she gave Stanley Laffranchini the 

3 2014 grant deed more than one yearbefore she filed her 

4 bankruptcy case. Accordingly, defendant Kinerson did not conceal 

5 an interest in the property after the bankruptcy petition was 

6 filed. 

7 13. Pursuant to 11 U.S.C. § 727(a) (4) (A) the court shall 

8 grant the debtor a discharge unless the debtor knowingly and 

9 fraudulently, in or connection with the case, made a false oath 

10 or account. 

11 47. Here, defendant Kinerson, in connection with her 

12 chapter 7 bankruptcy case, knowingly and fraudulently made a 

13 false oath in her response to question 18 of the Statement of 

14 Financial Affairs filed on April 6, 2016, wherein she indicated 

15 that she had not transferred any real property during the two 

16 years before filing her bankruptcy petition. Defendant Kinerson 

17 signed the Statement of Financial Affairs under penalty of 

18 perjury. Defendant Kinerson knowingly and fraudulently made this 

19 false oath to hinder, delay, or defraud her creditors and the 

20 I plaintiff. 

21 48. On June 2, 2016, defendant Kinerson filed an amended 

22 Statement of Financial Affairs. Once again she responded under 

23 penalty of perjury that no transfer had been made within two 

24 years of bankruptcy. However, she qualified her denial by 

25 admitting that a July 28, 2014 grant deed had been given to 

26 Stanley Laffranchini but claiming that it "solemnized" an earlier 

27 transfer on September 11, 2000 of her entire interest in the 

28 I property. As explained above, the earlier transfer actually 

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1 transferred, and was intended to transfer, only a 50% interest in 

2 the property to Stanley Laffranchini. Defendant Kinerson's 

3 response to question 18 in the amended Statement of Financial 

4 Affairs was knowingly false and was intended to hinder any 

5 attempt by the plaintiff to avoid the 2014 transfer. 

6 49. In her amended Statement of Financial Affairs filed on 

7 June 2, 2016, defendant Kinerson falsely stated under oath that 

8 she had used the proceeds from the sale of an annuity to pay a 

9 retainer to her state court attorney, Cyril Lawrence, for legal 

10 representation in possible bankruptcy litigation. Mr. Lawrence 

11 testified that defendant Kinerson had not paid such a retainer. 

12 The court concludes that defendant Kinerson knowing and 

13 fraudulently made this false statement under oath to avoid 

14 turning over these funds to the plaintiff. 

15 50. The plaintiff did notpresent any evidence concerning 

16 the fourth claim for relief under 11 U.S.C. § 727(a) (5). There 

17 is no cause, therefore, to deny defendant Kinerson's discharge 

18 pursuant to section 727 (a) (5) 

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20 Accordingly, the court will enter a separate judgment 

21 finding in favor of the plaintiff on the third claim for relief 

22 pursuant to 11 U.S.C. § 727(a) (4) (A). The plaintiff is entitled 

23 to no relief pursuant to the first, second, and fourth claims for 

24 relief. 

25 Because the defendant's discharge will be denied, the 

26 plaintiff is the prevailing party and shall recover costs, other 

27 than attorney's fees, from defendant Kinerson pursuant to Fed. R. 

28 Civ. P. 54(d) (1) as incorporated by Fed. R. Bankr. P. 7054. 

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Counsel for the plaintiff shall lodge a conforming judgment. 

Dated: 2-7i2f By the Court 

Michael S. McManus 

United States Bankruptcy Tudge 

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Instructions to Clerk of Court 

Service List - Not Part of Order/Judgment 

The Clerk of Court is instructed to send the Order/Judgment or other court 

generated document transmitted herewith to the parties below. The Clerk of 

Court will send the Order via the BNC. 

Michael D. McGranahan Sylvia Mae Kinerson Anthony D. Johnston 

P0 Box 5018 955 Ebbetts Ave. 1600 C Street. Suite103 

Modesto CA 95352 Manteca CA 95337 Modesto CA 95354 

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