Court Opinion

ID: 2778302
Source: CourtListenerOpinion
Date Created: 2015-02-10 21:01:33.766689+00
Date Added: 2024-06-11T10:53:54.469298
License: Public Domain

FILED
                            NOT FOR PUBLICATION                                FEB 10 2015

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

In re: CLARENCE THOMAS                           No. 12-60077
CUMMINGS,
                                                 BAP No. 12-1114
              Debtor,

                                                 MEMORANDUM*
CLARENCE THOMAS CUMMINGS and
PAMELA K. CUMMINGS,

              Appellants,

  v.

UST- UNITED STATES TRUSTEE,
PHOENIX,

              Appellee.

                          Appeal from the Ninth Circuit
                           Bankruptcy Appellate Panel
               Dunn, Jury, and Houle, Bankruptcy Judges, Presiding

                            Submitted February 5, 2015**
                              San Francisco 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: TALLMAN and RAWLINSON, Circuit Judges, and DEARIE, Senior
District Judge.***

      Chapter 7 debtors Clarence Thomas Cummings and Pamela K. Cummings

appeal from the judgment of the Bankruptcy Appellate Panel (“BAP”) affirming the

portion of the bankruptcy court’s order denying discharge on the ground that the

debtors made false oaths within the meaning of section 727(a)(4)(A) of the

Bankruptcy Code, 11 U.S.C. § 727(a)(4)(A). (The BAP did not examine the

bankruptcy court’s alternative denial of discharge under section 727(a)(2)(A) and

(B), based on findings of fraudulent pre- and post-petition property concealment or

transfers). The bankruptcy court rejected the explanatory testimony of Mr.

Cummings as “not credible” and “beyond not credible” and the BAP found that

“there is ample evidence to support the bankruptcy court’s findings under §

727(a)(4)(A).”

      We “conduct[ ] ‘an independent review of the bankruptcy court’s decision

without deferring to the BAP.’” Ghomeshi v. Sabban (In re Sabban), 600 F.3d
1219, 1221 (9th Cir. 2010) (quoting Turtle Rock Meadows Homeowners Ass’n v.

Slyman (In re Slyman), 234 F.3d 1081, 1085 (9th Cir. 2000)). We review

        ***
             The Honorable Raymond J. Dearie, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.

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conclusions of law de novo and findings of fact for clear error, reversing only when

a factual determination “is illogical, implausible, or without support in the record.”

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

fraudulent intent is a finding of fact reviewed for clear error.” Id. at 1197. Of

course, “[w]hen factual findings are based on determinations regarding the

credibility of witnesses, we give great deference to the bankruptcy court’s findings,

because the bankruptcy court, as the trier of fact, had the opportunity to note

‘variations in demeanor and tone of voice that bear so heavily on the listener’s

understanding of and belief in what is said.’” Id. (quoting Anderson v. City of

Bessemer City, N.C., 470 U.S. 564, 575 (1985)).

      We affirm.

      Wisely abandoning any challenge to the bankruptcy court’s credibility

findings per se, debtors claim that the bankruptcy court failed to consider other

“[v]oluminous independent and undisputed documentary evidence” introduced at

trial that, they assert, “completely obliterated any suggestion of [fraudulent] intent.”

The materials on which debtors rely, however, are inextricably intertwined with Mr.

Cummings’ testimony, and it was not error for the bankruptcy court to elect not to

address each by name. Tevis v. Wilke, Fleury, Hoffelt, Gould & Birney, LLP (In re

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Tevis), 347 B.R. 679, 696 (9th Cir. B.A.P. 2006) (“The [bankruptcy] court has no

obligation to mention all of the evidence that it has considered”).

      More critically, these materials do not advance debtors’ claim of inadvertence

or otherwise suggest bankruptcy court error. To the contrary, the documents

corroborate the obviousness of debtors’ fraud and the objective it advanced, viz., to

insulate First Beacon Management Co., LLC, the new corporate anchor of their

post-petition fresh start, from the stigma of bankruptcy.

      Debtors’ eventual disclosure of their interest in First Beacon on their third

amended Schedule B does not negate their initial fraud. Beauchamp v. Hoose (In re

Beauchamp), 236 B.R. 727, 734 (9th Cir. B.A.P. 1999), aff’d, 5 Fed. App’x 743

(9th Cir. 2001) (affirming for reasons set forth in BAP’s opinion). To the contrary,

the sequence of debtors’ filings substantiates the presence of fraud: they elected,

twice, to amend their Schedule B without adding First Beacon, and disclosed First

Beacon only after the issuance of an order granting the Trustee additional time to

investigate.

      Debtors’ collateral assertions are likewise without merit. The bankruptcy

court’s consideration of matters outside the four corners of the Trustee’s pleading

was not improper, as debtors consented in the joint pre-trial statement to the

admissibility of the evidence on which the court based its findings and, in any

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event, the bankruptcy court was entitled to consider any evidence presented at trial

and to base its decision on any grounds within the claims alleged. Tevis, 347 B.R.

at 695 (“It is the bankruptcy court’s responsibility to evaluate the evidence

presented”). This Court, of course, may affirm on any ground supported in the

record. ASARCO, LLC v. Union Pacific R. Co., 765 F.3d 999,1004 (9th Cir. 2014)

(citations omitted).

      The Trustee fully carried its burden of proving by a preponderance of the

evidence each of the elements of a section 727(a)(4)(A) claim, i.e., that under the

circumstances, debtors’ failure to disclose their interest in First Beacon as debtor

property was a “false oath” relating to a material fact made knowingly and

fraudulently. See 11 U.S.C. § 727(a)(4)(A); Retz, 606 F.3d at 1197 (reciting the

required elements of claim of false oath under section 727(a)(4)(A); Khalil v.

Developers Sur. & Indem. Co. (In re Khalil), 379 B.R. 163, 176 (9th Cir. B.A.P.

2007) (“[T]he size or nature of a single [misstatement or omission] might suffice to

support a finding that a debtor knowingly and fraudulently made a false oath or

account.”), aff’d, 578 F.3d 1167, 1168 (9th Cir. 2009) (“The BAP’s published

opinion is a correct statement of the applicable law.”).

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      We need not reach the bankruptcy court’s finding that debtors made other

false oaths or its alternative decision to deny discharge under section 727(a)(2).

             AFFIRMED.

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