Court Opinion

ID: 4018284
Source: CourtListenerOpinion
Date Created: 2016-07-22 20:01:15.619732+00
Date Added: 2024-06-11T07:44:56.924285
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            JUL 22 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

In re: STEVEN CARL GRONLUND;                     No. 14-60053
GINA MARIE GRONLUND,
                                                 BAP No. 13-1566
              Debtors,

                                                 MEMORANDUM*
STEVEN CARL GRONLUND,

              Appellant,

 v.

KARL T. ANDERSON,
Chapter 7 Trustee,

              Appellee.

                           Appeal from the Ninth Circuit
                            Bankruptcy Appellate Panel
             Kirscher, Pappas, and Taylor, Bankruptcy Judges, Presiding

                              Submitted July 8, 2016**
                                Pasadena, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: CLIFTON, and FRIEDLAND, Circuit Judges, and CHEN,*** District
Judge.

       Debtor Steven Gronlund appeals from the decision of the BAP, which

affirmed the bankruptcy court order denying discharge pursuant to 11 U.S.C.

§§ 727(a)(2) and 727(a)(4)(A). We affirm.

       We review the bankruptcy court’s judgment independently, without

deference to the BAP. Beaupied v. Chang (In re Chang), 163 F.3d 1138, 1140 (9th

Cir. 1998). We review the bankruptcy court’s conclusions of law de novo and its

findings of fact for clear error. Id.

       Under 11 U.S.C. § 727(a)(2), discharge can be denied when “the debtor,

with intent to hinder, delay, or defraud a creditor or an officer of the estate charged

with custody of property under this title, has . . . concealed, or has permitted to

be . . . concealed” either “property of the debtor, within one year before the date of

filing of the petition,” § 727(a)(2)(A), or “property of the estate, after the date of

the filing of the petition,” § 727(a)(2)(B). The bankruptcy court did not clearly err

in finding that Gronlund concealed his interest in an asset related to Mexican

property both before and after filing his petition for bankruptcy and that he

possessed fraudulent intent in doing so.

        ***
            The Honorable Edward M. Chen, United States District Judge for the
Northern District of California, sitting by designation.
                                            2
       Gronlund’s failure to specifically list the property interest in his schedules

and statement of financial affairs, as well as his failure to initially disclose the

existence of the asset during the 341(a) meeting amounted to acts of concealment.

The bankruptcy court was also entitled to infer that the concealment of the asset

was deliberate and fraudulent. The interest in the Mexican property was worth

several hundred thousand dollars and the income it provided made up a significant

portion of Gronlund’s monthly income. Although Gronlund contends that his

eventual disclosure of the asset’s existence to the Trustee during the 341(a)

meeting negates any finding of fraudulent intent, this argument ignores the fact that

he did not voluntarily bring the asset to creditors’ attention, but rather only

disclosed the asset in response to questioning regarding unexplained payments in

his statements and schedules.

       Gronlund’s conduct after disclosing the asset further supports a finding of

fraudulent intent. Gronlund answered the Trustee’s questions about the asset

during the 341(a) meeting in an inconsistent and evasive manner. And even after

amending the schedules to include the asset, Gronlund stated that the asset was

overencumbered on account of liens that the bankruptcy court determined did not

actually exist.

                                            3
      The bankruptcy court also did not clearly err in finding that Gronlund

“knowingly and fraudulently, in or in connection with the case[,] made a false oath

or account,” in violation of 11 U.S.C. § 727(a)(4)(A). The omission of the Mexican

property in the schedules and statement of financial affairs constituted a false oath.

Retz v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010) (“A false

statement or an omission in the debtor’s bankruptcy schedules or statement of

financial affairs can constitute a false oath.”). The existence of the asset was also a

material fact, given its high monetary value. The bankruptcy court was justified in

finding that the omission of the asset was knowing and fraudulent for the same

reasons that it found the existence of fraudulent intent under § 727(a)(2).

      AFFIRMED.

                                           4