CHP v. Schwyhart ( 2022 )

Case: 21-10704 Document: 00516326309 Page: 1 Date Filed: 05/19/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
May 19, 2022
No. 21-10704 Lyle W. Cayce
Clerk
In re: Bill Wayne Schwyhart; Carolyn Joyce
Schwyhart,
Debtors,
CHP, L.L.C.,
Appellee—Cross Appellant,
versus
Bill Wayne Schwyhart; Carolyn Joyce Schwyhart,
Appellants—Cross Appellees.
Appeal from the United States Bankruptcy Court
for the Northern District of Texas
USBC No. 3:21-CV-117-G
Before Richman, Chief Judge, and Costa and Ho, Circuit Judges.
Per Curiam:*
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-10704 Document: 00516326309 Page: 2 Date Filed: 05/19/2022
No. 21-10704
This case calls for direct review of consolidated appeals from two
bankruptcy court rulings. For the reasons discussed below, we affirm in one
appeal and dismiss the other appeal as moot.
Bill and Carolyn Schwyhart jointly filed for Chapter 7 bankruptcy
relief in 2018. One of their creditors, CHP, L.L.C., brought an adversary
proceeding objecting to the Schwyharts’ discharge. Following trial, the
bankruptcy court found that CHP had failed to carry its evidentiary burden
and denied its objections. CHP timely appealed. While that appeal was
pending in district court, the Schwyharts filed a Request for Discharge. The
bankruptcy court denied their Request, holding that CHP’s appeal had
divested it of jurisdiction to enter supplemental orders bearing on the same
substantial rights. The Schwyharts timely appealed. The district court
consolidated the appeals and certified them for direct review in this court.
We consider CHP’s appeal first. It is “the basic principle of
bankruptcy that exceptions to discharge must be strictly construed against a
creditor and liberally construed in favor of a debtor.” Matter of Hudson, 107
F.3d 355, 356 (5th Cir. 1997). The bankruptcy court has “wide discretion”
to determine whether to uphold a creditor’s objections to discharge. In re
Dennis, 330 F.3d 696, 703 (5th Cir. 2003). And because the bankruptcy
court’s analysis was necessarily predicated on crucial credibility
determinations, it is owed “even greater deference.” Anderson v. City of
Bessemer City, N.C., 470 U.S. 564, 565 (1985). Against this backdrop, we see
no basis to disturb the bankruptcy court’s denial of CHP’s objections to the
Schwyharts’ discharge. Accordingly, we affirm. And as the Schwyharts
acknowledged at oral argument, our affirmance in CHP’s appeal renders
their own appeal moot.
2