NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 1 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
In re: WILLIAM WALTER PLISE, No. 15-15786
Debtor, D.C. No. 2:14-cv-00186-GMN ______________________________
WILLIAM WALTER PLISE, MEMORANDUM*
Appellant,
v.
SHELLEY D. KROHN, Chapter 7 Trustee,
Appellee.
Appeal from the United States District Court for the District of Nevada Gloria M. Navarro, Chief Judge, Presiding
Argued and Submitted December 6, 2017 Pasadena, California
Before: WARDLAW and GOULD, Circuit Judges, and COLLINS,** Chief District Judge.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Raner C. Collins, Chief United States District Judge for the District of Arizona, sitting by designation. William Walter Plise (“Plise”), Chapter 7 debtor and defendant in the related
adversary bankruptcy action, appeals the district court’s affirmance of the
bankruptcy court’s grant of partial summary judgment in favor of Shelley Krohn
(“Krohn”), trustee of his bankruptcy estate and plaintiff in the adversary action.
The contested order sustains Krohn’s claim that Plise should be denied discharge
under 11 U.S.C. § 727(a)(4)(A) because he knowingly and fraudulently made a
false oath or account on his bankruptcy schedules or statements of financial affairs
as they concern the entity 5550 Las Vegas, LLC.
The parties are familiar with the facts of this matter and, as such, we need
not repeat them here. We conclude, on the basis of those portions of the record
which neither party debates, that the bankruptcy court erred in granting partial
summary judgment in favor of Krohn.
I
The district court heard the initial appeal of this matter pursuant to 28 U.S.C.
§ 158(a). We have jurisdiction to review the district court’s decision pursuant
to 28 U.S.C. § 158(d)(1). “The role of the district court and this court are basically
the same in the bankruptcy appellate process . . . [w]e review the bankruptcy court
decision directly . . . [w]e review the bankruptcy court’s findings of fact for clear
error, and its conclusions of law de novo.” Microsoft Corp. v. DAK Indus., Inc. (In
re DAK Indus., Inc.), 66 F.3d 1091, 1094 (9th Cir. 1995) (citations omitted). Here,
2 15-15786 we review the bankruptcy court’s partial grant of summary judgment de novo,
“view[ing] the evidence in the light most favorable to the non-moving party and
‘determin[ing] whether there are any genuine issues of material fact and whether
the bankruptcy court correctly applied the substantive law.’” Caneva v. Sun Cmts.
Operating Ltd. P’ship (In re Caneva), 550 F.3d 755, 760 (9th Cir. 2008) (quoting
Parker v. Cmty. First Bank (In re Bakersfield Westar Ambulance, Inc.), 123 F.3d
1243, 1245 (9th Cir. 1997)).
II
As we have noted, the underlying issue in this case is whether, viewing the
evidence in the light most favorable to Plise, there was a genuine issue of material
fact as to whether he knowingly and fraudulently made a false oath or account as
described and condemned in 11 U.S.C. § 727(a)(4)(A). That section states: “[t]he
court shall grant the debtor a discharge, unless . . . the debtor knowingly and
fraudulently, in or in connection with the case[,] made a false oath or account.” 11
U.S.C. § 727(a)(4)(A). “A false statement or an omission in the debtor’s
bankruptcy schedules or statement of financial affairs can constitute a false oath.”
Khalil v. Developers Sur. & Indem. Co. (In re Khalil), 379 B.R. 163, 172 (9th Cir.
BAP 2007), aff'd, 578 F.3d 1167 (9th Cir. 2009).
As the party objecting to Plise’s discharge under § 727(a), Krohn bore the
burden of proving, by a preponderance of the evidence, that the discharge should
3 15-15786 be denied. Retz v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010). The
bankruptcy court was obliged to “‘construe §727 liberally in favor of [Plise] and
strictly against [Krohn].’” Id. (quoting Bernard v. Sheaffer (In re Bernard), 96
F.3d 1279, 1281 (9th Cir.1996)). Moreover, in considering the issue on summary
judgment, the bankruptcy court was obliged to refrain from weighing the evidence
or making credibility determinations. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986) (“Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury functions, not those
of a judge”).
Plise opposed Krohn’s motion for partial summary judgment by filing a
written response supported by a “statement of disputed facts” and a declaration
wherein he flatly denied that he possessed any fraudulent intent and spoke to his
“oversight” in failing to list 5550 Las Vegas, LLC on his statement of financial
affairs. During oral argument, the bankruptcy court made the following statements
about Plise and the evidence he proffered in support of his opposition:
“But isn’t there a point when you go this is such ridiculous lies...why should I bother listening to this person tell me these lies on the stand?”
“But isn’t there a point at which you just go these are such ridiculous lies?”
“How can I believe that somebody who went through $17,000,000, who purported to have $10,000,000 two years before he filed, who was as sophisticated business person couldn’t remember he had these
4 15-15786 bank accounts that he’d gone through $2,000,000? How can I possibly believe that?”
The bankruptcy court’s subsequent written order asserted that she had read
and considered Plise’s declaration but found that partial summary judgment was
nonetheless appropriate “based upon the Debtor’s false oaths and accounts in
failing to schedule his ownership interest in 5550 Las Vegas LLC.” The order also
incorporated, by reference, those findings of fact and conclusions of law the court
made on the record during oral argument.
The United States Supreme Court has held that if one party’s “version of
events is so utterly discredited by the record that no reasonable jury could have
believed him” summary judgment is appropriate. Scott v. Harris, 550 US 372, 380
(2007). However, we have also observed that “cases where intent is a primary
issue generally are inappropriate for summary judgment[.]” Provenz v. Miller, 102
F.3d 1478, 1489 (9th Cir. 1996). As the Ninth Circuit Bankruptcy Appellate Panel
explained: “Fraud claims, in particular, normally are so attended by factual issues
(including those related to intent) that summary judgment is seldom possible.” In
re Stephens, 51 B.R. 591, 594 (9th Cir. BAP 1985).
Admittedly, we have recently upheld a lower court’s grant of summary
judgment in a case where a debtor’s fraudulent intent was at issue. In Dzakula v.
McHugh, 746 F. 3d 399, 400 (9th Cir. 2013), the debtor filed bankruptcy schedules
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 1 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
In re: WILLIAM WALTER PLISE, No. 15-15786
Debtor, D.C. No. 2:14-cv-00186-GMN ______________________________
WILLIAM WALTER PLISE, MEMORANDUM*
Appellant,
v.
SHELLEY D. KROHN, Chapter 7 Trustee,
Appellee.
Appeal from the United States District Court for the District of Nevada Gloria M. Navarro, Chief Judge, Presiding
Argued and Submitted December 6, 2017 Pasadena, California
Before: WARDLAW and GOULD, Circuit Judges, and COLLINS,** Chief District Judge.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Raner C. Collins, Chief United States District Judge for the District of Arizona, sitting by designation. William Walter Plise (“Plise”), Chapter 7 debtor and defendant in the related
adversary bankruptcy action, appeals the district court’s affirmance of the
bankruptcy court’s grant of partial summary judgment in favor of Shelley Krohn
(“Krohn”), trustee of his bankruptcy estate and plaintiff in the adversary action.
The contested order sustains Krohn’s claim that Plise should be denied discharge
under 11 U.S.C. § 727(a)(4)(A) because he knowingly and fraudulently made a
false oath or account on his bankruptcy schedules or statements of financial affairs
as they concern the entity 5550 Las Vegas, LLC.
The parties are familiar with the facts of this matter and, as such, we need
not repeat them here. We conclude, on the basis of those portions of the record
which neither party debates, that the bankruptcy court erred in granting partial
summary judgment in favor of Krohn.
I
The district court heard the initial appeal of this matter pursuant to 28 U.S.C.
§ 158(a). We have jurisdiction to review the district court’s decision pursuant
to 28 U.S.C. § 158(d)(1). “The role of the district court and this court are basically
the same in the bankruptcy appellate process . . . [w]e review the bankruptcy court
decision directly . . . [w]e review the bankruptcy court’s findings of fact for clear
error, and its conclusions of law de novo.” Microsoft Corp. v. DAK Indus., Inc. (In
re DAK Indus., Inc.), 66 F.3d 1091, 1094 (9th Cir. 1995) (citations omitted). Here,
2 15-15786 we review the bankruptcy court’s partial grant of summary judgment de novo,
“view[ing] the evidence in the light most favorable to the non-moving party and
‘determin[ing] whether there are any genuine issues of material fact and whether
the bankruptcy court correctly applied the substantive law.’” Caneva v. Sun Cmts.
Operating Ltd. P’ship (In re Caneva), 550 F.3d 755, 760 (9th Cir. 2008) (quoting
Parker v. Cmty. First Bank (In re Bakersfield Westar Ambulance, Inc.), 123 F.3d
1243, 1245 (9th Cir. 1997)).
II
As we have noted, the underlying issue in this case is whether, viewing the
evidence in the light most favorable to Plise, there was a genuine issue of material
fact as to whether he knowingly and fraudulently made a false oath or account as
described and condemned in 11 U.S.C. § 727(a)(4)(A). That section states: “[t]he
court shall grant the debtor a discharge, unless . . . the debtor knowingly and
fraudulently, in or in connection with the case[,] made a false oath or account.” 11
U.S.C. § 727(a)(4)(A). “A false statement or an omission in the debtor’s
bankruptcy schedules or statement of financial affairs can constitute a false oath.”
Khalil v. Developers Sur. & Indem. Co. (In re Khalil), 379 B.R. 163, 172 (9th Cir.
BAP 2007), aff'd, 578 F.3d 1167 (9th Cir. 2009).
As the party objecting to Plise’s discharge under § 727(a), Krohn bore the
burden of proving, by a preponderance of the evidence, that the discharge should
3 15-15786 be denied. Retz v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010). The
bankruptcy court was obliged to “‘construe §727 liberally in favor of [Plise] and
strictly against [Krohn].’” Id. (quoting Bernard v. Sheaffer (In re Bernard), 96
F.3d 1279, 1281 (9th Cir.1996)). Moreover, in considering the issue on summary
judgment, the bankruptcy court was obliged to refrain from weighing the evidence
or making credibility determinations. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986) (“Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury functions, not those
of a judge”).
Plise opposed Krohn’s motion for partial summary judgment by filing a
written response supported by a “statement of disputed facts” and a declaration
wherein he flatly denied that he possessed any fraudulent intent and spoke to his
“oversight” in failing to list 5550 Las Vegas, LLC on his statement of financial
affairs. During oral argument, the bankruptcy court made the following statements
about Plise and the evidence he proffered in support of his opposition:
“But isn’t there a point when you go this is such ridiculous lies...why should I bother listening to this person tell me these lies on the stand?”
“But isn’t there a point at which you just go these are such ridiculous lies?”
“How can I believe that somebody who went through $17,000,000, who purported to have $10,000,000 two years before he filed, who was as sophisticated business person couldn’t remember he had these
4 15-15786 bank accounts that he’d gone through $2,000,000? How can I possibly believe that?”
The bankruptcy court’s subsequent written order asserted that she had read
and considered Plise’s declaration but found that partial summary judgment was
nonetheless appropriate “based upon the Debtor’s false oaths and accounts in
failing to schedule his ownership interest in 5550 Las Vegas LLC.” The order also
incorporated, by reference, those findings of fact and conclusions of law the court
made on the record during oral argument.
The United States Supreme Court has held that if one party’s “version of
events is so utterly discredited by the record that no reasonable jury could have
believed him” summary judgment is appropriate. Scott v. Harris, 550 US 372, 380
(2007). However, we have also observed that “cases where intent is a primary
issue generally are inappropriate for summary judgment[.]” Provenz v. Miller, 102
F.3d 1478, 1489 (9th Cir. 1996). As the Ninth Circuit Bankruptcy Appellate Panel
explained: “Fraud claims, in particular, normally are so attended by factual issues
(including those related to intent) that summary judgment is seldom possible.” In
re Stephens, 51 B.R. 591, 594 (9th Cir. BAP 1985).
Admittedly, we have recently upheld a lower court’s grant of summary
judgment in a case where a debtor’s fraudulent intent was at issue. In Dzakula v.
McHugh, 746 F. 3d 399, 400 (9th Cir. 2013), the debtor filed bankruptcy schedules
that omitted reference to an ongoing discrimination matter in which she was
5 15-15786 plaintiff. Only later, and in the face of a motion to dismiss filed by the defendant
in the discrimination matter, did the debtor file an amended schedule correcting the
omission. Id. On the facts of that case, we held that no reasonable finder of fact
could have concluded that the debtor lacked fraudulent intent. Id. In that matter,
however, the debtor did not present any evidence “by affidavit or otherwise
explaining her initial failure to include the discrimination action on her bankruptcy
schedules.” Id. at 401. She remained silent. Accordingly, there was no evidence
in the record to contradict a finding of fraudulent intent. Here, there was.
Viewing Plise’s declaration in the light most favorable to him, a reasonable
finder of fact could find that his version of events does not support a finding of
fraudulent intent. By disregarding such evidence the bankruptcy court was, in
effect, weighing it and making a credibility determination. While the bankruptcy
court is entitled to make such a determination following a bench trial and may be
entirely justified in doing so in this case, it was nonetheless improper for the court
to do so at the summary judgment stage. We therefore conclude that the
bankruptcy court erred in granting partial summary judgment in favor of Krohn. In
arriving at this decision we need not reach the remaining arguments Plise urges in
his briefs. Nor must we decide Plise’s motions for judicial notice (Dkt. Nos. 10
and 30).
6 15-15786 III
Plise has filed a number of other motions in this appeal (Dkt Nos. 45, 51, 52)
which we feel compelled to comment upon. Therein, counsel makes several ad
hominem attacks alleging unethical behavior on the part of opposing counsel,
former co-counsel, the prior judges who have heard this matter, and the trustee.
We are, in short, hugely unimpressed with counsel’s efforts, which we find both
improper and unprofessional. These motions are denied.
IT IS ORDERED that the bankruptcy court’s grant of partial summary
judgment is hereby VACATED and this matter is REMANDED for further
proceedings consistent with this opinion. Furthermore, all pending motions in this
matter are DENIED.
7 15-15786