Court Opinion

ID: 4251034
Source: CourtListenerOpinion
Date Created: 2018-03-01 21:00:35.588277+00
Date Added: 2024-06-11T13:26:53.334033
License: Public Domain

NOT FOR PUBLICATION                         FILED
                    UNITED STATES COURT OF APPEALS                        MAR 1 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

In re: WILLIAM WALTER PLISE,                    No.    15-15786

             Debtor,                            D.C. No. 2:14-cv-00186-GMN
______________________________

WILLIAM WALTER PLISE,                           MEMORANDUM*

                Appellant,

 v.

SHELLEY D. KROHN, Chapter 7 Trustee,

                Appellee.

                   Appeal from the United States District Court
                            for the District of Nevada
                    Gloria M. Navarro, Chief Judge, Presiding

                     Argued and Submitted December 6, 2017
                              Pasadena, California

Before: WARDLAW and GOULD, Circuit Judges, and COLLINS,** Chief
District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
              The Honorable Raner C. Collins, Chief United States District Judge
for the District of Arizona, sitting by designation.
      William Walter Plise (“Plise”), Chapter 7 debtor and defendant in the related

adversary bankruptcy action, appeals the district court’s affirmance of the

bankruptcy court’s grant of partial summary judgment in favor of Shelley Krohn

(“Krohn”), trustee of his bankruptcy estate and plaintiff in the adversary action.

The contested order sustains Krohn’s claim that Plise should be denied discharge

under 11 U.S.C. § 727(a)(4)(A) because he knowingly and fraudulently made a

false oath or account on his bankruptcy schedules or statements of financial affairs

as they concern the entity 5550 Las Vegas, LLC.

      The parties are familiar with the facts of this matter and, as such, we need

not repeat them here. We conclude, on the basis of those portions of the record

which neither party debates, that the bankruptcy court erred in granting partial

summary judgment in favor of Krohn.

                                           I

      The district court heard the initial appeal of this matter pursuant to 28 U.S.C.

§ 158(a). We have jurisdiction to review the district court’s decision pursuant

to 28 U.S.C. § 158(d)(1). “The role of the district court and this court are basically

the same in the bankruptcy appellate process . . . [w]e review the bankruptcy court

decision directly . . . [w]e review the bankruptcy court’s findings of fact for clear

error, and its conclusions of law de novo.” Microsoft Corp. v. DAK Indus., Inc. (In

re DAK Indus., Inc.), 66 F.3d 1091, 1094 (9th Cir. 1995) (citations omitted). Here,

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we review the bankruptcy court’s partial grant of summary judgment de novo,

“view[ing] the evidence in the light most favorable to the non-moving party and

‘determin[ing] whether there are any genuine issues of material fact and whether

the bankruptcy court correctly applied the substantive law.’” Caneva v. Sun Cmts.

Operating Ltd. P’ship (In re Caneva), 550 F.3d 755, 760 (9th Cir. 2008) (quoting

Parker v. Cmty. First Bank (In re Bakersfield Westar Ambulance, Inc.), 123 F.3d

1243, 1245 (9th Cir. 1997)).

                                          II

      As we have noted, the underlying issue in this case is whether, viewing the

evidence in the light most favorable to Plise, there was a genuine issue of material

fact as to whether he knowingly and fraudulently made a false oath or account as

described and condemned in 11 U.S.C. § 727(a)(4)(A). That section states: “[t]he

court shall grant the debtor a discharge, unless . . . the debtor knowingly and

fraudulently, in or in connection with the case[,] made a false oath or account.” 11

U.S.C. § 727(a)(4)(A). “A false statement or an omission in the debtor’s

bankruptcy schedules or statement of financial affairs can constitute a false oath.”

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).

      As the party objecting to Plise’s discharge under § 727(a), Krohn bore the

burden of proving, by a preponderance of the evidence, that the discharge should

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be denied. Retz v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010). The

bankruptcy court was obliged to “‘construe §727 liberally in favor of [Plise] and

strictly against [Krohn].’” Id. (quoting Bernard v. Sheaffer (In re Bernard), 96

F.3d 1279, 1281 (9th Cir.1996)). Moreover, in considering the issue on summary

judgment, the bankruptcy court was obliged to refrain from weighing the evidence

or making credibility determinations. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 255 (1986) (“Credibility determinations, the weighing of the evidence,

and the drawing of legitimate inferences from the facts are jury functions, not those

of a judge”).

      Plise opposed Krohn’s motion for partial summary judgment by filing a

written response supported by a “statement of disputed facts” and a declaration

wherein he flatly denied that he possessed any fraudulent intent and spoke to his

“oversight” in failing to list 5550 Las Vegas, LLC on his statement of financial

affairs. During oral argument, the bankruptcy court made the following statements

about Plise and the evidence he proffered in support of his opposition:

      “But isn’t there a point when you go this is such ridiculous lies...why
      should I bother listening to this person tell me these lies on the
      stand?”

      “But isn’t there a point at which you just go these are such ridiculous
      lies?”

      “How can I believe that somebody who went through $17,000,000,
      who purported to have $10,000,000 two years before he filed, who
      was as sophisticated business person couldn’t remember he had these

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      bank accounts that he’d gone through $2,000,000? How can I
      possibly believe that?”

      The bankruptcy court’s subsequent written order asserted that she had read

and considered Plise’s declaration but found that partial summary judgment was

nonetheless appropriate “based upon the Debtor’s false oaths and accounts in

failing to schedule his ownership interest in 5550 Las Vegas LLC.” The order also

incorporated, by reference, those findings of fact and conclusions of law the court

made on the record during oral argument.

      The United States Supreme Court has held that if one party’s “version of

events is so utterly discredited by the record that no reasonable jury could have

believed him” summary judgment is appropriate. Scott v. Harris, 550 US 372, 380

(2007). However, we have also observed that “cases where intent is a primary

issue generally are inappropriate for summary judgment[.]” Provenz v. Miller, 102

F.3d 1478, 1489 (9th Cir. 1996). As the Ninth Circuit Bankruptcy Appellate Panel

explained: “Fraud claims, in particular, normally are so attended by factual issues

(including those related to intent) that summary judgment is seldom possible.” In

re Stephens, 51 B.R. 591, 594 (9th Cir. BAP 1985).

      Admittedly, we have recently upheld a lower court’s grant of summary

judgment in a case where a debtor’s fraudulent intent was at issue. In Dzakula v.

McHugh, 746 F. 3d 399, 400 (9th Cir. 2013), the debtor filed bankruptcy schedules

that omitted reference to an ongoing discrimination matter in which she was

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plaintiff. Only later, and in the face of a motion to dismiss filed by the defendant

in the discrimination matter, did the debtor file an amended schedule correcting the

omission. Id. On the facts of that case, we held that no reasonable finder of fact

could have concluded that the debtor lacked fraudulent intent. Id. In that matter,

however, the debtor did not present any evidence “by affidavit or otherwise

explaining her initial failure to include the discrimination action on her bankruptcy

schedules.” Id. at 401. She remained silent. Accordingly, there was no evidence

in the record to contradict a finding of fraudulent intent. Here, there was.

      Viewing Plise’s declaration in the light most favorable to him, a reasonable

finder of fact could find that his version of events does not support a finding of

fraudulent intent. By disregarding such evidence the bankruptcy court was, in

effect, weighing it and making a credibility determination. While the bankruptcy

court is entitled to make such a determination following a bench trial and may be

entirely justified in doing so in this case, it was nonetheless improper for the court

to do so at the summary judgment stage. We therefore conclude that the

bankruptcy court erred in granting partial summary judgment in favor of Krohn. In

arriving at this decision we need not reach the remaining arguments Plise urges in

his briefs. Nor must we decide Plise’s motions for judicial notice (Dkt. Nos. 10

and 30).

                                           6                                    15-15786
                                        III

      Plise has filed a number of other motions in this appeal (Dkt Nos. 45, 51, 52)

which we feel compelled to comment upon. Therein, counsel makes several ad

hominem attacks alleging unethical behavior on the part of opposing counsel,

former co-counsel, the prior judges who have heard this matter, and the trustee.

We are, in short, hugely unimpressed with counsel’s efforts, which we find both

improper and unprofessional. These motions are denied.

      IT IS ORDERED that the bankruptcy court’s grant of partial summary

judgment is hereby VACATED and this matter is REMANDED for further

proceedings consistent with this opinion. Furthermore, all pending motions in this

matter are DENIED.

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