Church Joint Venture, L.P. v. Blasingame (In re Blasingame)

559 B.R. 692
CourtBankruptcy Appellate Panel of the Sixth Circuit
DecidedNovember 7, 2016
DocketNos. 15-8008/8025
StatusPublished
Cited by21 cases

This text of 559 B.R. 692 (Church Joint Venture, L.P. v. Blasingame (In re Blasingame)) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Church Joint Venture, L.P. v. Blasingame (In re Blasingame), 559 B.R. 692 (bap6 2016).

Opinion

OPINION

C. KATHRYN PRESTON, Chief Bankruptcy Appellate Panel Judge.

In these consolidated appeals, Earl Be-nard Blasingame (“Benard Blasingame”) and Margaret Gooch Blasingame (“Marga-ret Blasingame”) (together, “Debtors”) ap-peal the order denying their discharges and the order striking certain documents from the record on appeal. For the reasons stated below, the Panel affirms the order denying Debtors’ discharges, and affirms in part and reverses in part the order striking documents from the record.

ISSUES ON APPEAL

Debtors raised the following issues on appeal:

1. Was the bankruptcy court’s finding that Debtors concealed assets or trans-ferred property with intent to hinder and delay a creditor or officer of the estate, as .required to deny their dis-charges pursuant to § 727(a)(2)(A) and [695]*695(B) of the Bankruptcy Code, clearly er-roneous?
2. Was the bankruptcy court’s finding that Debtors knowingly and fraudulently made false oaths for purposes of 11 U.S.C. § 727(a)(4) clearly erroneous?
3. Was the bankruptcy court’s finding that Debtors did not reasonably rely on the advice of their bankruptcy counsel in connection with their bankruptcy filings clearly erroneous, not supported by the facts, and contrary to the law of the case?
4. Was the bankruptcy court’s decision to strike certain documents in the record on appeal in BAP Case No. 15-8008 (specifically ECF Nos. 543, 556, 557 and 564 in the underlying bankruptcy case, and ECF Nos. 477, 508, 528, 535, 536 and 537 in the adversary proceeding) clearly erroneous and an abuse of dis-cretion?

JURISDICTION AND STANDARD OF REVIEW

Under 28 U.S.C. § 158(a)(1), this Panel has jurisdiction to hear appeals “from final judgments, orders, and decrees” issued by the bankruptcy court. For purposes of appeal, an order is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citation and quotation marks omitted). “An order denying a discharge pursuant to 11 U.S.C. § 727(a)(2)(A) and (a)(4)(A) is a final order, see, e.g., Hamo v. Wilson (In re Hamo), 233 B.R. 718, 720 (6th Cir. BAP 1999), and final orders of a bankruptcy court may be appealed by right under 28 U.S.C. § 158(a)(1).” Pinnacle Tech. Res., Inc. v. Spencer (In re Spencer), 2006 WL 3539295 at *1, 359 B.R. 357 (6th Cir. BAP 2006) (table).

The Panel reviews a “bankruptcy court’s factual findings for clear error and [its] conclusions of law de novo.” Adell v. John Richards Homes Bldg. Co. (In re John Richards Homes Bldg. Co.), 439 F.3d 248, 254 (6th Cir. 2006) (citation omitted). “A finding of fact is clearly erroneous ‘when although there is evidence to support it, the reviewing court, on the entire evidence, is left with the definite and firm conviction that a mistake has been committed.’” United States v. Mathews (In re Mathews), 209 B.R. 218, 219 (6th Cir. BAP 1997) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985)).

FACTS

After meeting with several attorneys, Debtors filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on August 15, 2008. Tommy L. Fullen (“Fullen”) signed the petition as the attor-ney of record. The petition, schedules, and statement of financial affairs (“SoFA”), as initially filed, did not disclose Debtors’ in-terests in several trusts and corporations, certain household goods, multiple annuities, property held for others, several bank accounts and several liabilities, and an as-signment to Martin Grusin (“Grusin”).1 [696]*696Prior to their testimony at the § 341 Meet-ing, Edward L. Montedonico, the Chapter 7 Trustee (“Trustee”) required both of the Debtors to sign and submit an affidavit. (Required Statement By Debtor for 341 Hearing (collectively, “§ 341 Affidavits”), Sept. 24, 2008, Bankr. Case No. 08-28289 PI. Exs. 118, 119). Debtors signed the § 341 Affidavits under oath. In the § 341 Affidavits, Debtors affirmed that they had read and signed their petition, schedules, statements, and related documents; that they were personally familiar with the in-formation contained in the documents; and that, to the best of their knowledge, the information contained in the documents was true and correct. Additionally, during the § 341 Meeting, Debtors testified under oath that they had helped prepare, had read, and had signed their bankruptcy pe-tition; that it listed all of their assets and liabilities; that the information contained in their schedules and SoFA was true; and that the statements in their § 341 Affida-vits were true. (Certified Copy of Meeting of Creditors Record, Sept. 24, 2008, Bankr. Case No. 08-28289 ECF No. 463-1 PI. Ex. 114). The SoFA and schedules were amended multiple times throughout the course of the bankruptcy case. Trustee and creditors Church Joint Venture and Farm-ers & Merchants Bank (together, “Church Joint Venture”) conducted extensive dis-covery, including lengthy Rule 2004 exami-nations of Debtors and others. Debtors also received several extensions of time to file amendments. On September 29, 2009, Trustee and Church Joint Venture filed an adversary proceeding (Adv. No. 09-00482) seeking denial of Debtors’ discharges pur-suant to several Bankruptcy Code sec-tioná.2

Lengthy and contentious litigation en-sued, which is detailed in other opinions, including- an opinion from this Panel en-tered contemporaneously with this opin-ion.3 In summary, the Trustee and Church Joint Venture filed a motion for partial summary judgment on the discharge issue which the bankruptcy court granted, but later set aside. Church Joint Venture filed motions for sanctions against Fullen and Grusin, which were granted and Grusin appealed. The bankruptcy court removed Fullen and Grusin as counsel for Debtors. Debtors then obtained new counsel and the bankruptcy court conducted a trial on the complaint objecting to Debtors’ bank-ruptcy discharges. On January 15, 2015, the bankruptcy court entered its opinion and order denying Debtors’ discharges pursuant to § 727(a)(2)(A) and (B) and § 727(a)(4) of the Bankruptcy Code.

Debtors timely filed this appeal assert-ing that, the bankruptcy court erred in determining that they had fraudulent in-tent under § 727. Debtors assert that they fully disclosed everything to their attor-neys and relied on the advice of counsel in completing their petition, schedules and SoFA. In connection with this appeal, Debtors filed the obligatory designation of record; Appellees moved to strike certain documents included in the designation.

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Cite This Page — Counsel Stack

Bluebook (online)
559 B.R. 692, Counsel Stack Legal Research, https://law.counselstack.com/opinion/church-joint-venture-lp-v-blasingame-in-re-blasingame-bap6-2016.