IN RE: KIMBERLY ANN ZIZZA, Debtor.
WILLIAM K. HARRINGTON, UNITED STATES TRUSTEE FOR REGION, Appellee. KIMBERLY ANN ZIZZA, Appellant,
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Indira Talwani, U.S. District
G. Baker, on brief for appellant.
K. Bradford, Stephen E. Meunier, and John Postulka, Trial
Attorneys for the Office of the U.S. Trustee, on brief for
Lynch, Stahl, and Barron, Circuit Judges.
Ann Zizza appeals an order from the bankruptcy court denying
her Chapter 7 discharge on the grounds that she made
material, knowing, and fraudulent false oaths in the course
of her bankruptcy proceedings. 11 U.S.C. § 727(a)(4).
The bankruptcy court found that Zizza had failed to disclose
in her schedules and at her first creditors' meeting,
with reckless indifference to the truth, two lawsuits to
which she was a party. After careful consideration, we
is a licensed attorney in Massachusetts. In 2007 and 2008,
she was involved in two separate automobile accidents in
which she claims she sustained injuries. On November 23,
2010, she filed suit against the driver in the first accident
in Essex Superior Court in Lawrence ("the Duffy
action"). On February 11, 2011, she filed suit against
the driver in the second accident in Essex Superior Court in
Salem ("the Sapienza action"). On February
25, 2011, the Superior Court dismissed the Duffy
action for failing to meet the court's $25, 000
March 6, 2011, Zizza filed a voluntary bankruptcy petition
under Chapter 13, retaining Anthony Rozzi as her attorney for
the bankruptcy case. In her initial Statement of Financial
Affairs, Zizza was asked to identify all suits to which she
was a party within one year of filing her bankruptcy case. In
her filed schedules, she did not disclose either the
Duffy or Sapienza actions.
first meeting with her creditors on April 8, 2011, Zizza,
accompanied by Attorney Rozzi, testified under oath and when
asked whether there were any changes she wanted to make to
her initial filings, she said "No." Attorney Rozzi
stepped in and stated that "[t]here are lawsuits . . .
[t]hat need to be added . . . both lawsuits that Ms. Zizza or
Attorney Zizza has out. And, uh, and she also has a personal
injury claim." Later at the meeting, Attorney Rozzi said
that he was "going to add any lawsuits that are
important" in an amended filing. Finally, when the
Chapter 13 trustee asked about a $20, 000 payment listed in
the plan, Zizza responded that she had "several
judgments right now" and was "anticipating that one
of those judgments would come through by the end of the
plan." Four days after the creditors' meeting, Zizza
appeared in Essex Superior Court to argue a motion to
reinstate the Duffy action.
Rozzi filed amended schedules on Zizza's behalf on
September 23, 2011, which added several accounts receivable
and money judgments, but did not list either the still
pending Duffy or Sapienza actions. In
September of 2012, Zizza settled the Sapienza action
for $20, 000, but she did not seek bankruptcy court approval
for the settlement. On October 5, 2012, the Chapter 13
trustee, still unaware of the two lawsuits or the settlement,
filed a motion to dismiss Zizza's bankruptcy case for
failure to make plan payments. In response, on October 30,
2012, Zizza again amended her filings, finally disclosing the
Duffy and Sapienza actions, as well as the
settlement in Sapienza.
light of Zizza's failure to disclose the Duffy
and Sapienza actions in a timely manner, the Chapter
13 trustee moved to convert Zizza's Chapter 13 petition
to a Chapter 7 petition. At the hearing on the trustee's
motion, Attorney Rozzi argued that Zizza had not disclosed
the lawsuits earlier because she did not believe they were
viable. Attorney Rozzi further claimed that Zizza had not
told him that the two lawsuits were active until October
bankruptcy judge granted the motion to convert the case to a
Chapter 7 petition, concluding that Zizza's failure to
disclose the lawsuits indicated that she had not filed her
bankruptcy case in good faith. The United States Bankruptcy
Appellate Panel for the First Circuit affirmed the bankruptcy
judge's decision. Zizza v. Pappalardo (In re
Zizza), 500 B.R. 288 (B.A.P. 1st Cir. 2013).
on September 30, 2014, William Harrington, the United States
Trustee for Region One, commenced an action seeking to deny
Zizza's discharge on the grounds that she had made false
oaths within the meaning of 11 U.S.C. § 727(a)(4), or
alternatively, that she had concealed property of the estate
within the meaning of 11 U.S.C. § 727(a)(2)(B) by
failing to disclose the two lawsuits. After a trial, the
bankruptcy judge denied Zizza's discharge under 11 U.S.C.
§ 727(a)(4), concluding that she had acted with reckless
indifference to the truth by failing to disclose ...