Boan v. Damrill (In Re Damrill)

232 B.R. 767, 1999 Bankr. LEXIS 345, 1999 WL 198975
CourtUnited States Bankruptcy Court, W.D. Missouri
DecidedApril 2, 1999
Docket19-30123
StatusPublished
Cited by7 cases

This text of 232 B.R. 767 (Boan v. Damrill (In Re Damrill)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boan v. Damrill (In Re Damrill), 232 B.R. 767, 1999 Bankr. LEXIS 345, 1999 WL 198975 (Mo. 1999).

Opinion

MEMORANDUM OPINION AND ORDER

JERRY W. VENTERS, Bankruptcy Judge.

This matter comes before the Court on the Objection to Discharge filed by Shawn Boan, Allstate Optical, Inc., and Clean Credit Corporation of America, Inc., (“Plaintiffs”) and the Plaintiffs’ Application for Leave to File an Amended Objection to Discharge, which is opposed by the Debtors. The.issues are whether the Plaintiffs should be allowed (1) to amend their original Objection to Discharge to bring in *769 replevin and other claims filed pre-petition in state court and (2) to expand their § 727 objections to discharge after the deadline for the filing of dischargeability complaints in these Chapter 7 proceedings. For the reasons stated herein, the Court will deny the Plaintiffs’ Application for Leave to File an Amended Objection to Discharge, will grant the Plaintiffs 15 days leave to amend their original Objection to Discharge to clarify the statutory grounds on which they are proceeding, and will grant Plaintiffs leave to file another lift stay motion if they desire to pursue their claims for non-monetary relief against the Debtors in the state court.

The following constitutes my Findings of Fact and Conclusions of Law in accordance with Rule 52 of the Federal Rules of Civil Procedure as made applicable to this proceeding by Rule 7052 of the Federal Rules of Bankruptcy Procedure.

FACTUAL BACKGROUND

Chester Damrill and his wife, Andre’ Damrill, (“Damrills” or “Debtors”) filed for relief under Chapter 13 of the Bankruptcy Code on December 24, 1996. In their bankruptcy schedules and statement of financial affairs, the Debtors failed to list the Plaintiffs as creditors and failed to disclose a lawsuit that had been filed against them by the Plaintiffs on September 3, 1996, in the Circuit Court of Newton County, Missouri. A Chapter 13 Plan was filed on January 7, 1997, but it made no mention of any debt owed to the Plaintiffs. On February 25, 1997, the Court, without objection, confirmed the Chapter 13 Plan. On June 26, 1998, the Court dismissed the Damrills’ Chapter 13 case because of a default in the Plan payments. However, at the request of the Debtors, the Court set aside its Order of Dismissal and then, on August 7, 1998, the Debtors filed a Motion to convert the Chapter 13 to a proceeding under Chapter 7, which they had a right to do under 11 U.S.C. § 706(a). The Court entered its Order converting the case to Chapter 7 on August 10, 1998. In their conversion schedules and statement of financial affairs, the Debtors again failed to list the Plaintiffs as creditors and again failed to disclose the Newton County lawsuit. 1

As a result of the conversion to Chapter 7, a new deadline of December 14, 1998, was set for the filing of dischargeability complaints. On December 11, 1998, the Plaintiffs filed a Motion to Lift Automatic Stay, asking the Court to lift the automatic stay of 11 U.S.C. § 362(d) so that the Plaintiffs could pursue the state court litigation. At the same time, the Plaintiffs filed their Objection to Discharge, in which they sought denial of the Debtors’ discharge in bankruptcy pursuant to 11 U.S.C. § 727. It is unquestioned that this Objection to Discharge was timely filed before the December 14, 1998, deadline. The sole basis asserted for denial of the Debtors’ discharge was the following allegation:

“3. That the above-mentioned lawsuit against the Debtors and the debt owed to Movants was not listed in the Debtors’ schedule filed with this Court and sworn under oath by the debtors to be true and accurate.”

The Plaintiffs alleged that they would be “adversely affected” if the debt allegedly owed to them by the Debtors was discharged, but cited no substantive provision of the Bankruptcy Code in support of their objection to discharge. Their only references to the Bankruptcy Code pointed to non-existent Code sections, “§ 727(1)” and “§ 727(2).”

The Debtors filed a Response to the Motion to Lift Automatic Stay in which they stated that the state court litigation “has now been discharged.” The Court 2 *770 held a conference with the attorneys for the parties on January 8, 1999, at which time both the Motion to Lift Automatic Stay and Objection to Discharge were discussed. In that conference, Judge Feder-man suggested that perhaps the state court action could be heard by the Bankruptcy Court along with the Objection to Discharge, thereby conserving the time and resources of the parties, the attorneys and the Court. Accordingly, Judge Feder-man entered an Order denying the Motion to Lift Automatic Stay, in which he stated that the subject matter of the motion for relief could be taken up in the pending dischargeability action. Taking a cue from the Court’s comments, counsel for the Plaintiffs then filed their Application for Leave to File an Amended Objection to Discharge, and attached thereto their proposed Amended Objections to Discharge.

The proposed Amended Objections to Discharge set out five Counts, the first four of which appear to be a duplication of the Newton County lawsuit in all particulars. The Counts are: Count I — Replevin; Count II — Equitable Relief; Count III— Injunction; and Count IV — Accounting. Summarized, the four Counts allege that the Damrills have refused to return the personal and business property of the Plaintiffs, request that the Damrills be enjoined from destroying, concealing or transferring the Plaintiffs’ property, request that the Damrills be enjoined from using and/or disclosing the confidential trade secrets and confidential business records of the Plaintiffs, and request an accounting with respect to the business operations which Chester Damrill previously managed for the Plaintiffs. In Counts I through IV of their Amended Objections to Discharge, Plaintiffs once again failed to specify in any way — by reference to a specific provision of the Bankruptcy Code, namely any subsection of § 523 that might constitute grounds for a denial of discharge, or even by general reference to the Bankruptcy Code — how the Debtors’ conduct violated the Bankruptcy Code or why the Debtors should be denied a discharge.

The final Count, Count V, is a vastly expanded version of the original Objection to Discharge.

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Cite This Page — Counsel Stack

Bluebook (online)
232 B.R. 767, 1999 Bankr. LEXIS 345, 1999 WL 198975, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boan-v-damrill-in-re-damrill-mowb-1999.