Clarence Cummings v. Ust- US Trustee, Phoenix , 595 F. App'x 707 ( 2015 )

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NOT FOR PUBLICATION FEB 10 2015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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