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In re Crawford

United States District Court, D. Massachusetts

February 26, 2016

In Re RICHARD D. CRAWFORD, Debtor,
v.
RICHARD D. CRAWFORD Defendant/Appellant. PREMIER CAPITAL, LLC Plaintiff/Appellee,

MEMORANDUM AND ORDER ON BANKRUPTCY APPEAL

LEO T. SOROKIN, District Judge.

I. INTRODUCTION

Chapter 7 debtor Richard D. Crawford ("Crawford") appeals from a final order of the United States Bankruptcy Court for the District of Massachusetts. Having determined that Crawford impliedly consented to trial of certain issues, the bankruptcy court denied Crawford a discharge on two grounds: (1) for concealment of his "de facto" interest in three antique automobiles titled in his wife's name pursuant to 11 U.S.C. § 727(a)(2)(A); and (2) for failing to disclose a Cash Balance Plan ("CBP"), pursuant to 11 U.S.C. § 727(a)(4)(A). After review of the record on appeal and supporting briefs filed, the judgment of the bankruptcy court denying Crawford's discharge is AFFIRMED.[1]

II. BACKGROUND

Crawford's voluntary petition for bankruptcy was filed on August 11, 2009. Doc. 15-1 at A28.[2]On September 8, 2009, Crawford filed his original bankruptcy schedules, including his Schedule B. Doc. 15-6. On September 22, 2009, Crawford filed Amended Schedules. Doc. 15-8. On November 16, 2009, Premier Capital LLC ("Premier"), filed an adversary proceeding seeking to deny Crawford a discharge under 11 U.S.C. § 727. Doc. 15-1 at A27-36. The bankruptcy court found it "impossible from the complaint to determine which of the alleged facts" constituted the basis for Premier's "a2" (intent to conceal) claim, Doc.15-1 at A283, and that "[m]ost of the alleged false oaths as to which Premier, " sought "judgment were not mentioned in Premier's complaint." Id. at A288.

Premier's pleading defects required the bankruptcy court to determine, seriatim, whether Crawford impliedly consented to trial of eight assets which were purportedly the subject of Premier's a4 (false oath) claim. Doc. 15-1 at A288-93. Out of the eight assets, the bankruptcy court determined that Crawford impliedly consented to trial of two, with only the CBP having formed the basis of the a4 denial. Id. at A290. Crawford challenges the determination of trial by implied consent, as well as the underlying substantive findings. Doc. 14. The Court addresses the only issues raised as they relate to the CBP.[3]

A. CBP

Crawford's Statement of Financial Affairs and supporting Schedule B, item 12, required

Crawford to disclose his "[i]nterests in IRA, ERISA, Keough or other pension or profit sharing plans. Give particulars." Doc. 15-9 at A912. Crawford responded by stating: "401(k) with Wells Fargo." Doc. 15-6 at A879. However, Wells Fargo also held Crawford's CBP as part of his "Total Retirement Accounts." Doc. 15-4 at A849. The statements issued by Wells Fargo listed separately his 401k and CBP. Nowhere on Schedule B did Crawford separately identify his CBP. On his September 8, 2009, Schedule B, Crawford listed $148, 000 as the amount held in his "401k." He testified this number was taken from his quarterly statement ending June 30, 2009 (some two months before he filed his Schedules). Doc. 15-2 at A824-25. The $148, 000 represented the combined amount of his 401k and CBP from that Wells Fargo statement. Id. at A649.[4]Yet the Wells Fargo quarterly statements listed both separately and cumulatively the amount held in the 401k and CBP. Id. at A824-25 (quarterly statement covering July 1, 2009-September 30, 2009 submitted into evidence as trial exhibit 847-1). In the quarterly statement covering the period July 1, 2009-September 30, 2009, the combined amount held in the 401k and CBP was approximately $180, 000, with the CBP balance listed as approximately $33, 000. Doc. 15-4 at A847. The 401K has increased by about $22, 000 during this period. Crawford did not amend his Schedule B (initially filed on September 8, 2009) to reflect the increase in the value that may have occurred between June 30, 2009 and September 8, 2009, nor did he amend to disclose the existence of the CBP.

B. Trial of CBP

The issue of the CBP was first raised on the second day of trial, when Premier sought admission of the foregoing Wells Fargo statements, over the objection of Crawford:

Q: Okay. But you can recognize those as your quarterly 401K statements?
A. Yes.
Q. Those are the dates that are exhibited on the statement.
A. Yes.
MR. CURRAN: I'd ask that that be admitted as Exhibit 21 Number 847-1.
MR. KERWIN: Your Honor, if you please, as to this, I think under Rule 403 that these documents are cumulative and, frankly, unnecessary. There was disclosure of the 401K and, frankly, the record is enormous at this point. And I don't think there's been a proffer as to why they're relevant.
MR. CURRAN: They're not cumulative at all, Judge, and -
THE COURT: They're not cumulative?
MR. CURRAN: They're not cumulative at all. They're - and as you will soon see when I examine the witness, they're very important to this case and his disclosures.
THE COURT: They refer to assets of the debtor, correct?
MR. CURRAN: Absolutely.
THE COURT: They were - and during a period just prior to filing?
MR. CURRAN: Yes, during -
THE COURT: Are they '09 through '010?
MR. CURRAN: During the period of 7 -
THE WITNESS: Those are documents after.
THE COURT: Hold on.
MR. CURRAN: July 1, 2009 through September 30, 2009. He filed on September-
THE COURT: '08.
MR. CURRAN: He filed on September 20th is -September 8, 2009.
THE COURT: 2009.
MR. CURRAN: This is the - the top schedule is the statement period from July through September.
THE COURT: All right. I'll overrule that objection. They're admitted.

Doc. 15-2 at A621-23 (emphasis added).

After the bankruptcy court overruled Crawford's objection to admission of the Wells Fargo statement, Premier examined Crawford:

Q: You had - at the time that you filed your bankruptcy petition you had a 401K plan and a CBP, did you not?
A. Yes.
Q. Okay. And you had approximately $146, 000 in your 401K plan. You listed that on your schedules, did you not?
A. Yes.
Q. Okay. But you also had approximately $33, 000 in your CBP which was vested and you never listed that ...

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