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FILED

JUN 01 2015

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-14-1361-TaPaKi

)

JESUS BENCOMO, ) Bk. No. 13-11245-BR

)

Debtor. ) Adv. No. 13-01451-BR

______________________________)

)

JESUS BENCOMO, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

WESLEY HOWARD AVERY, )

Chapter 7 Trustee; UNITED )

STATES TRUSTEE, )

)

Appellees. )

______________________________)

Argued and Submitted on March 19, 2015

at Pasadena, California

Filed - June 1, 2015

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Barry Russell, Bankruptcy Judge, Presiding

 

Appearances: Glenn Ward Calsada of the Law Offices of Glenn

Ward Calsada argued for appellant; Stella A.

Havkin of Havkin & Shrago argued for appellee.

 

Before: TAYLOR, PAPPAS, and KIRSCHER, Bankruptcy Judges.

* This disposition is not appropriate for publication.

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value.

See 9th Cir. BAP Rule 8024-1(c)(2).
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Chapter 71 debtor Jesus Bencomo appeals from a judgment

denying his bankruptcy discharge pursuant to § 727(a)(4)(A). We

determine that the bankruptcy court did not err when it included

the Debtor’s misconduct in a prior bankruptcy as a basis for its

decision. The bankruptcy court, however, did not make findings

that allow us to review how it resolved the Debtor’s objections

to the admissibility of expert testimony from the bankruptcy

trustee’s sole witness. As a result, we VACATE the judgment and

REMAND the case to the bankruptcy court. 

FACTS

The Debtor filed a chapter 7 petition on January 16, 2013. 

Wesley H. Avery was appointed as the chapter 7 trustee

(“Trustee”). The bankruptcy case was the Debtor’s second. He

filed a chapter 7 petition in May of 1998 and received a

discharge three months later. 

In the second case, the Debtor scheduled real property

located in Norwalk, California (the “Property”) at a value of

$175,000.2 He also scheduled a $145,879 claim secured by the

Property and claimed a $29,121 exemption in the Property under

1 Unless otherwise indicated, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. 

All “Rule” references are to the Federal Rules of Bankruptcy

Procedure, all “Civil Rule” references are to the Federal Rules

of Civil Procedure, and all “Evidence Rule” references are to

the Federal Rules of Evidence.

2 We exercise our discretion to take judicial notice of

documents electronically filed in the adversary proceeding and

the underlying bankruptcy case. See Atwood v. Chase Manhattan

Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP

2003).

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state law.

Following the § 341(a) meeting of creditors, the Trustee

filed an application to employ Re/Max of Santa Clarita and

Miguel Soler as the broker for the estate preparatory to

marketing and selling the Property. The employment application

asserted that the actual current value of the Property was

between $305,000 and $333,000. Thus, even if the Debtor claimed

the maximum statutory exemption against the Property, the

Trustee estimated a net realization for the estate of between

$60,000 and $86,000. 

Two weeks later, the Debtor amended his schedules; he

increased the scheduled value of the Property from $175,000 to

$245,000 and the amount of the claim secured by the Property

from $145,879 to $214,929.27. He also increased his claimed

exemption from $29,121 to $100,000. 

The Debtor also opposed the Trustee’s application to employ

a broker. Following various continued hearings, the bankruptcy

court entered an order granting the employment application. 

Meanwhile, the Trustee commenced an adversary proceeding

against the Debtor, objecting to his bankruptcy discharge under

§ 727(a)(2)(A) and (a)(4)(A). As relevant to this appeal, the

adversary complaint alleged that the Debtor was a longtime real

estate professional and, as a result, knew that at the time of

the filing of the petition the value of the Property was in the

$300,000 range, rather than $175,000 as initially scheduled. 

The adversary complaint also alleged that the Debtor knowingly

and fraudulently “severely undervalued” the Property in his

schedules.

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The bankruptcy court entered the parties’ joint pretrial

conference order; it disclosed Soler and the Debtor as the

Trustee’s intended witnesses at trial. Pursuant to another

bankruptcy court order, Soler provided his direct testimony by

declaration. 

In his declaration, Soler attested that he was a licensed

real estate agent and specialized in residential real estate

sales. Soler opined that the value of the Property was at least

$305,000 at the time of the petition, based initially on a

review of multiple listings in the area; he confirmed his

opinion almost a year later by a physical inspection.

The Debtor objected to Soler’s declaration and moved to

strike his testimony. He disputed Soler’s qualifications and

the methodology Soler employed in rendering his opinion that the

Property was valued at $305,000. The Debtor particularly

challenged Soler’s failure to provide a written report or to

identify the sources of data used to render the $305,000 value. 

As a result, the Debtor complained that he was hindered from

evaluating the accuracy and completeness of Soler’s analysis. 

The bankruptcy court held a one-day trial on June 17, 2014. 

Both the Debtor and Soler provided additional testimony. 

The Debtor, over his counsel’s objections, responded to the

Trustee’s specific inquiries regarding several prior transfers

of the Property. He testified that within a two-week period in

December 1996, there were three transfers of the Property: from

the previous owner to him, then from him to a third party, and

finally from the third party back to him. The last deed

transferring the Property back to the Debtor remained in his

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possession for approximately six years, without recordation,

until he finally recorded the deed in 2002. He acknowledged

that he did not disclose the Property in his 1998 chapter 7

case. 

At the conclusion of trial, the bankruptcy court recognized

that it was a close case; nonetheless, it sustained the

Trustee’s objection to discharge under § 727(a)(4)(A) based on

the Debtor’s undervaluation of the Property in his schedules. 

The bankruptcy court found that the value of the Property

was “significantly higher” than $175,000. It also found that

the Debtor knew that he undervalued the Property. Conversely,

the bankruptcy court found credible the testimony of Soler, as

the Trustee’s “qualified expert”; Soler both attacked the

Debtor’s value and valuation methodology and gave his own

opinion of value. The bankruptcy court also found that the

Debtor’s actions in his first bankruptcy case constituted an

inappropriate manipulation of the bankruptcy system and

supported its credibility determinations. 

The bankruptcy court entered findings of fact and

conclusions of law and a judgment denying discharge. The Debtor

timely appealed. 

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(J). We have jurisdiction under 28 U.S.C.

§ 158.

///

///

///

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ISSUES3

1. Whether Soler was required to file a written expert report

pursuant to Civil Rule 26(a)(2)(B) and whether, in the

absence of such a report, the bankruptcy court erred in

permitting Soler’s testimony.

2. Whether the bankruptcy court erred by “widening the scope”

of trial so as to include a false oath made in the Debtor’s

first bankruptcy case.

STANDARDS OF REVIEW

In a proceeding for denial of discharge, we review: (1) the

bankruptcy court’s determinations of the historical facts for

clear error; (2) its selection of the applicable legal rules

under § 727 de novo; and (3) its application of the facts to

those rules requiring the exercise of judgments about values

animating the rules de novo. Searles v. Riley (In re Searles),

317 B.R. 368, 373 (9th Cir. BAP 2004), aff’d, 212 F. App’x. 589

(9th Cir. 2006).

To reverse an evidentiary ruling, we must find that the

bankruptcy court abused its discretion and that the error was

prejudicial to the appellant. Van Zandt v. Mbunda

(In re Mbunda), 484 B.R. 344, 351 (9th Cir. BAP 2012). A

bankruptcy court abuses its discretion if it applies the wrong

3 The Debtor delineates 20 issues on appeal, some of which

are substantively identical, but posed in the converse. In his

opening brief, however, the Debtor only specifically addresses

the issues we identify above.

Given our ultimate determination, we do not address whether

the bankruptcy court erred in determining that sufficient

evidence existed supporting the $305,000 value.

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legal standard, misapplies the correct legal standard, or if its

factual findings are illogical, implausible, or without support

in inferences that may be drawn from the facts in the record. 

See TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832

(9th Cir. 2011) (citing United States v. Hinkson, 585 F.3d 1247,

1262 (9th Cir. 2009) (en banc)).

DISCUSSION

Section 727(a)(4)(A) provides that the debtor’s discharge

may be denied where: (1) the debtor made a false oath in

connection with the bankruptcy case; (2) the oath related to a

material fact; (3) the oath was made knowingly; and (4) the oath

was made fraudulently. Retz v. Sampson (In re Retz), 606 F.3d

1189, 1197 (9th Cir. 2010) (citation and internal quotation

marks omitted).

 Objections to discharge are liberally construed in favor

of the debtor and against the objector. Khalil v. Developers

Sur. & Indem. Co. (In re Khalil), 379 B.R. 163, 172 (9th Cir.

BAP 2007), aff’d, 578 F.3d 1167 (9th Cir. 2009). For that

reason, the objector bears the burden to prove by a

preponderance of the evidence that the debtor’s discharge should

be denied. Id.

On appeal, the Debtor argues that the bankruptcy court

erred by permitting Soler to testify at trial when he did not

file a written expert report and by expanding the scope of trial

so as to include an alleged false oath that the Debtor made in

his first bankruptcy case. He does not raise issues related to

any of the elements expressly required for a denial of discharge

under § 727(a)(4)(A), and, in particular, he does not even

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implicitly discuss the second or third elements of a

§ 727(a)(4)(A) claim. Therefore, we do not address those

elements here.

A. On this record, we cannot tell how the bankruptcy court

ruled on the issue of Soler’s testimony.

The Debtor argues that Civil Rule 37(c)(1) compelled the

exclusion of Soler’s testimony based on his failure to produce a

written report in accordance with Civil Rule 26(a)(2)(B). This

failure, the Debtor contends, was not harmless as the Trustee’s

case was based entirely on Soler’s testimony. The Debtor

alleges that without the report, he was unable to adequately

prepare for cross-examination.

The Trustee disagrees that any report was required; he

argues that Soler was retained to market and sell the Property,

not to testify. He further asserts that Soler’s duties in

connection with his authorized employment did not regularly

involve giving expert testimony. Rather, the Trustee argues,

Soler’s testimony was that of a percipient witness.

Civil Rule 26(a)(2)(B) requires “a written report -

prepared and signed by the witness - if the witness is one

retained or specially employed to provide expert testimony in

the case or one whose duties as the party’s employee regularly

involve giving expert testimony.” If a party fails to provide a

written report, Civil Rule 37(c)(1) dictates that both testimony

and information supplied by the expert witness are prohibited at

trial. An exception exists if the failure was substantially

justified or harmless. See id.

Here, the bankruptcy court did not expressly rule on the

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Debtor’s objections to Soler’s testimony. It permitted Soler to

testify on cross-examination, subject to a later determination. 

It subsequently deemed Soler’s testimony credible and referred

to Soler as a “qualified expert.” It thus appears that it

overruled the Debtor’s evidentiary objections.

On this record, however, we cannot determine with any

certainty how the bankruptcy court ruled. And that the

bankruptcy court did not expressly address or resolve the

Debtor’s objection to Soler’s testimony is a serious concern

because we are unable to appropriately review the merits of the

Debtor’s argument absent adequate findings by the bankruptcy

court on this subject. 

The bankruptcy court apparently treated Soler as an expert

witness. Its lone finding in this regard is not particularly

helpful: “Trustee’s qualified expert, Miguel Soler, testified

that the true value of [the Debtor’s] Property at the time that

he filed the Second Bankruptcy was at least $305,000.00 and not

$175,000.00 as claimed by [the Debtor] in his original

bankruptcy schedules.” Findings of Fact and Conclusions of Law

Following the Trial (Adv. ECF No. 52) at 3 ¶ 13. In that

circumstance, Soler’s failure to provide a written report is

problematic under Civil Rule 26(a)(2)(B), unless, of course, the

bankruptcy court determined that the error was substantially

justified or harmless pursuant to Civil Rule 37(c)(1). On this

record, we cannot discern what the bankruptcy court determined. 

In particular, we do not know what value the bankruptcy court

utilized when it determined that the Debtor “severely

undervalued” the Property. Soler gave his opinion that the

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value was at least $305,000, while the Debtor conceded some

undervaluation when he revalued the Property at $245,000.

Civil Rule 52(a) requires that the bankruptcy court find

the facts specifically and state its conclusions of law

separately.4 Without complete findings, we may vacate a

judgment and remand the case to the bankruptcy court to make the

requisite findings. First Yorkshire Holdings, Inc. v. Pacifica

L 22, LLC (In re First Yorkshire Holdings, Inc.), 470 B.R. 864,

870 (9th Cir. BAP 2012).

We conclude that the bankruptcy court abused its discretion

by failing to make sufficient findings regarding Soler’s opinion

testimony. Consequently, we VACATE the judgment and REMAND the

matter to the bankruptcy court with instructions that it enter

appropriate findings concerning the Debtor’s objection to

Soler’s testimony, and that it consider the impact of those

findings upon its conclusions and judgment.

B. The Debtor’s prior acts in regards to the Property were 

admissible impeachment evidence.

The Debtor also argues that the bankruptcy court erred by

admitting into evidence his prior acts involving the Property. 

He questions whether this evidence constituted appropriate

impeachment and argues that it was irrelevant and prejudicial as

the events in the prior bankruptcy were too remote in time. He

finally argues that there was no evidence that he made a false

oath in the first bankruptcy case and that, in any event, it was

4 Civil Rule 52 is incorporated in adversary proceedings

by Rule 7052.

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a collateral matter where he was not provided with reasonable

notice and a fair opportunity for rebuttal. 

In response, the Trustee contends that he utilized evidence

of actions in the Debtor’s first bankruptcy case only to show

that the Debtor had “gone to every conceivable length to protect

his interest in the [] Property” – not to revoke his discharge

in the first case. 

The joint pretrial conference order in this case resolves

this debate. The parties stipulated to the terms of this order,

which identified the exhibits each intended to offer at trial. 

It also qualified the identification of documents with the

statement that it was complete except for “exhibits to be used

for impeachment only.” Joint Pretrial Conference Order (Adv.

ECF No. 26) (emphasis added). There was no due process problem

with introducing the evidence for purposes of impeaching the

Debtor’s generalized assertion of truthfulness.

Pursuant to Evidence Rule 608(b), the bankruptcy court may

permit a witness to be cross-examined about specific instances

of conduct in order to attack the witness’s character for

truthfulness. Determining whether the testimony is probative of

truthfulness or untruthfulness is committed to the discretion of

the bankruptcy court. In exercising its discretion, the

bankruptcy court may take into consideration how remote in time

the impeaching conduct occurred. See United States v. Jackson,

882 F.2d 1444, 1448 (9th Cir. 1989) (“[R]emoteness remains a

relevant factor for the trial court to consider in assessing the

probative value of the evidence” for impeachment under Evidence

Rule 608(b)).

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Here, the bankruptcy court permitted the Trustee to crossexamine the Debtor regarding the transfers of the Property and

his failure to schedule the Property in his first bankruptcy

case in order to raise questions as to the Debtor’s character

for truthfulness. In doing so, it implicitly determined that

this evidence constituted appropriate impeachment and was more

probative of the Debtor’s truthfulness than prejudicial. It

also implicitly concluded that the evidence was not too remote

in time.

We agree. Evidence of the Debtor’s prior acts in relation

to the Property – namely, omitting the Property from his

schedules in the first bankruptcy case despite his possession of

a deed transferring the Property to him – was probative of his

truthfulness. That the acts occurred years before the second

bankruptcy case and the adversary proceeding did not mandate

exclusion. See Jackson, 882 F.2d at 1448 (prosecution was

permitted to question a witness attorney about his disbarment

fourteen years earlier for misappropriation of client funds).

The bankruptcy court did not improperly expand the scope of

the trial. Nor did it abuse its discretion in permitting the

impeachment evidence.

CONCLUSION

Based on the foregoing, we VACATE the judgment and REMAND

to the bankruptcy court for entry of appropriate findings

concerning the Debtor’s objection to Soler’s testimony.

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