Boone v. Bentley (In re Bentley)
| Decision Date | 21 September 2021 |
| Docket Number | 20-90547,Adv. 20-09014 |
| Parties | In Re JEFFREY J. BENTLEY, Debtor. v. JEFFREY J. BENTLEY, Defendant. CARRIE L. BOONE, Plaintiff, |
| Court | U.S. Bankruptcy Court — Central District of Illinois |
Before the Court, after trial, is a Complaint Objecting to Discharge of Debtor filed by Carrie L. Boone, the Debtor's ex-wife. The complaint alleges that the Debtor knowingly and fraudulently made false oaths in connection with his bankruptcy case. Because Ms. Boone met her burden of proof on all elements of the cause of action, the Debtor's discharge will be denied.
Jeffrey J. Bentley ("Debtor"), acting pro se filed his voluntary Chapter 7 petition on June 11, 2020. At paragraph four on the petition-requiring disclosure of any business names he had used in the last eight years-the Debtor listed thirty business names under which he said he was doing business or had formerly done business. Relevant here, the names included: FDBA Bentley Builders Construction and Development Inc; DBA Bentley Holdings Bloomington, LLC; DBA Bentley Holdings Champaign, LLC; DBA Bentley Holdings Rochester, LLC; DBA Welbrook Bloomington Operating Company LLC; DBA Welbrook Bloomington, LLC; DBA Carriage Crossing Champaign, LLC; FDBA Carriage Crossing Management LLC; FDBA Carriage Crossing A Randall Residence Bloomington, LLC; DBA Carriage Crossing a Randall Residence Champaign, LLC; FDBA Carriage Crossing Randall Residence Heyworth, LLC; FDBA Carriage Crossing Rochester, LLC; DBA Carriage Crossing Senior Life Inc.; FDBA Carriage Crossing Senior Living Addison, LLC; DBA Carriage Crossing Senior Living Arcola LLC DBA Carriage Crossing Senior Living Decatur, LLC; FDBA Carriage Crossing Senior Living, LLC; DBA Carriage Crossing Senior Living LLC; DBA Carriage Crossing Senior Living Mundelein, LLC; DBA Carriage Crossing Senior Living Rochester, LLC; FDBA Carriage Crossing SL, LLC.
Following standard operating procedures, the Clerk of Court added the names of all of the entities into the caption of the Debtor's petition in the Court's electronic case filing ("ECF") system. Thus, a search for any of the names results in identification of the named entity as a debtor in the bankruptcy case.
The Debtor also listed several entities in an attachment to the voluntary petition for "Additional Sole Proprietorship(s)." The sole proprietorships listed included: Bentley Contractors Corp.; Bentley Holdings - Bloomington LLC; Bentley Holdings - Champaign LLC; Bentley Holdings Rochester, LLC; Welbrook Bloomington Operating Company; Welbrook Bloomington, LLC; Carriage Crossing Champaign, LLC; Carriage Crossing a Randall Residence (located in Champaign); Carriage Crossing Senior Life, Inc; Carriage Crossing Senior Living, Arcola; Carriage Crossing Senior Living Decatur; Carriage Crossing Senior Living LLC; Carriage Crossing Senior Living Mundelein; and Carriage Crossing Senior Living Rochester.
The Debtor did not include various required documents, such as a statement of financial affairs and the schedules, with his petition. After retaining an attorney and receiving multiple extensions of time, the missing documents were filed in late July 2020. On his Schedule A/B: Property, the Debtor listed several businesses in which he claimed an ownership interest. Relevant here, he described his business interests and the value of his interests as follows: "Bentley Builders Construction and Development Inc 50/50 with ex-wife Carry (sic) Boone," $0; "Carriage Crossing Senior Living Arcola Inc. 50/50 owner with Ex-wife - owns 17% of Carriage Crossing Arcola Development," $350,000; "Bentley Holdings Champaign LLC - owns 30% of Carriage Crossing Champaign 50/50 with ex-wife," $900,000; "Bentley Holdings Bloomington Illinois LLC owns 28% of Wellbrook Senior Living LLC 50/50 with ex-wife," $1,200,000; "Carriage Crossing Senior Living Decatur LLC 50/50 with ex-wife," $500,000; "Carriage Crossing Senior Living Mundeline (sic) 50/50 with ex-wife," $2,000,000; "Carriage Crossing Senior Living Rochester 50/50 with ex-wife," $1,200,000.
The Debtor's ex-wife and business partner, Carrie Boone, filed her Complaint Objecting to Discharge of Debtor based on allegations of false oaths made in connection with the case. The complaint alleges that the Debtor misrepresented his ownership interests in a number of entities, many of which he had no direct interest in, for the purpose of harassing Ms. Boone and her business partners and to harm those businesses. The complaint also alleges that the Debtor falsely asserted that he was the sole proprietor of or did business as various entities in which he had no involvement beyond holding an indirect, minority interest. Further, the complaint alleges that the Debtor overstated his assets and falsely claimed that Ms. Boone had stolen property from him and owed him a substantial debt that was being litigated in marital dissolution proceedings in state court. In his answer to the complaint, the Debtor admitted the allegations related to what he had claimed in his bankruptcy papers but otherwise denied Ms. Boone's allegations of wrongdoing.
A Notice of Pretrial Conference and Pretrial Order was subsequently entered, setting a telephonic pretrial conference for early January 2021, directing the parties to complete their initial disclosures required by Federal Rule of Civil Procedure 26(a)(1), and ordering submission of a joint pretrial statement prior to the conference. Ms. Boone timely filed her pretrial statement with no apparent participation from the Debtor wherein she stated that she had complied with the Rule 26(a)(1) disclosure requirements. At the pretrial conference, the Debtor's attorney apologized for not complying with the pretrial order and asked for additional time to do so. The pretrial conference was continued for a week during which the parties filed their joint pretrial statement proposing a discovery deadline of March 31, 2021. The joint pretrial statement also noted that the Debtor had not yet complied with the Rule 26(a)(1) disclosure requirements but that he had agreed to do so by January 28, 2021. A trial order was then entered, adopting the proposed discovery deadline of March 31, 2021, and, by agreement of the parties, setting the matter for trial by video conference beginning June 8, 2021.
On March 8, 2021, Ms. Boone filed a Motion to Compel Rule 26 Disclosure reciting the history of the Debtor's failure to comply with the Court's pretrial orders and Rule 26(a)(1), as well as her attorney's efforts to obtain the required disclosures from the Debtor's counsel. She also filed a separate Motion to Compel Discovery, explaining that the Debtor had yet to respond to interrogatories and requests for production of documents that had been sent on February 1, 2021. She claimed that the parties were not able to resolve the discovery dispute despite the efforts of her attorney to do so.
After the discovery motions were filed by Ms. Boone, the Debtor's attorney moved to withdraw from representing the Debtor and was allowed to do so. During that same period of time, the Debtor apparently moved to Florida and notices sent directly to him by the Clerk were being returned as undeliverable. A hearing on the pending discovery motions was held April 7, 2021; the Debtor appeared at the telephonic hearing pro se. The Court admonished the Debtor on his responsibility to provide a current, valid mailing address and to comply with his discovery obligations. The Debtor was specifically advised that, if he did not comply with discovery requests, he could be barred from presenting evidence at the upcoming trial and ultimately be denied his discharge. The matters were briefly continued to give the Debtor an opportunity to retain new counsel.
The Debtor did retain new counsel, who appeared at the continued hearing on the Debtor's behalf. The motions to compel were granted, and the Debtor was ordered to fully comply with all disclosure requirements and discovery requests by May 13, 2021, with a compliance status conference scheduled for May 20, 2021. At the May 20 status conference, Ms. Boone's attorney reported that the Debtor had failed to comply with the May 13 deadline and that the Debtor's new attorney contacted him for copies of the discovery requests only after that deadline had passed. He said he then received what he called "woefully inadequate" responses to the discovery requests just that day. He still had not received the Rule 26(a)(1) disclosures and stated his intent to file a motion for sanctions. The Debtor's attorney acknowledged that his client had not fully complied with outstanding discovery requests and the Court's orders.
Shortly thereafter, Ms. Boone filed her Motion for Rule 37 Sanctions reciting the history of the Debtor's failures to comply with discovery obligations and asking the Court to enter a default judgment against the Debtor or bar him from opposing her claims. The motion also sought an award of attorney fees. At a hearing held on the motion, the Debtor's attorney orally requested more time to comply and a continuance of the upcoming trial. But he failed to provide any credible excuse for the Debtor's previous failure to comply with his discovery obligations and, accordingly, an order was entered granting the motion, in part. As a sanction for his failure to cooperate in the discovery process, the Debtor was prohibited from presenting any witnesses, documents, or exhibits in his own defense. The prohibition explicitly did not extend to his ability to cross-examine witnesses offered by Ms. Boone but did extend to cross-examination based on any evidence that should have been previously produced by the Debtor. The request for...
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