In re Burke
| Decision Date | 08 May 1989 |
| Docket Number | Adv. No. 89-4103-2.,Bankruptcy No. 88-00668-2 |
| Citation | 99 BR 431 |
| Court | U.S. Bankruptcy Court — Western District of Missouri |
| Parties | In re Robert M. BURKE, Sr., Debtor. Paul E. BERMAN, Trustee Plaintiff, v. Robert M. BURKE, Sr. & Darlene Burke, Defendants. |
Scott B. Haines, Kansas City, Mo., for debtor/defendants.
Lyndell A. Mason, Berman, DeLeve, Kuchan & Chapman, Kansas City, Mo., for trustee/plaintiff.
Defendant Robert Michael Burke, Sr. filed a voluntary petition for relief under Chapter 13 on February 12, 1988, filed a plan and made one voluntary payment to begin funding the plan. He married defendant Darlene K. Burke in April of 1988. In May of 1988 he received $41,790.00 (net after taxes) from General Motors Corporation for a buyout of his pension plan rights. He did not tell the Chapter 13 Trustee or the Court that he had received said funds. Apparently he rented a safe deposit box, put the money in same, and then used the funds to buy cashier's checks to disburse same.
The admitted expenditures from said funds were as follows:
Meanwhile the Chapter 13 Trustee filed a Motion To Dismiss for material default in payment under the plan on July 7, 1988. Debtor had made one plan payment in March and nothing further. The Trustee then moved to convert and a hearing was held on September 26, 1988. Counsel for debtor did not contest conversion but consented thereto at the hearing. The case was duly converted and the Chapter 7 Trustee seeks in this adversary action to revoke the discharge granted debtor on February 9, 1989 on the grounds of fraud. The Chapter 7 Trustee's complaint was filed February 15, 1989.
Initially it must be observed that the Discharge of Debtor issued on February 9, 1989, seems to be more the product of the automatic discharge entry sixty days after the 11 U.S.C. § 341 Meeting date by the Clerk's Office than the debtor's fraud. The Chapter 7 Trustee had not filed a final report, was gathering evidence and the case was not ready for closing and no discharge should have been entered. However, it appears that the Chapter 7 Trustee need neither allege nor prove fraud to effect the requested revocation. 11 U.S.C. § 727(e) provides that the trustee . . . may request a revocation of a discharge . . . before one year after granting of such discharge . . . under § 727(d)(2). The latter section provides for revocation of discharge if the debtor acquired property of the estate . . . and knowingly or fraudulently failed to report the acquisition of . . . said property.
In a Chapter 13 proceeding, property acquired by the debtor becomes property of the estate. In re Professional Technical Services, Inc., 94 B.R. 578, 581 (E.D. Mo.1988), In re Woodson, 839 F.2d 610 (9th Cir.1988). Thus, the $41,900.00 that debtor received in May of 1988 became property of the estate and debtor's failure to report same, if done knowingly and fraudulently, provides ample grounds for revocation of discharge. Likewise his failure to turn over same to either the Chapter 13 or Chapter 7 Trustee provides comparable grounds. Debtor claims that none of his acts were done knowingly or fraudulently. He testified that he called the Chapter 13 Trustee's Office twice to get a payoff figure on two separate occasions and was told he did not owe anything for some reason that he did not articulate at all convincingly. On the other hand, the trustee produced the testimony of Mrs. Glenda Lefman, an employee of the Chapter 13 Trustee's Office who had taken the only two telephone calls from the debtor. The Trustee's Office logs a synopsis of all calls on their computer and they become a part of the record and print out from the computer. Mrs. Lefman testified that she talked to Mr. Burke on May 13, 1988, and on May 31, 1988. Both times Mr. Burke wanted to know the total dollar amount to pay off his Chapter 13, and both times she told him that she would not know the total amount until after June 6, 1988, which was the last date for filing claims.
Mrs. Lefman testified there was no computer record of any other telephone calls and debtor never told her of any buyout of his pension fund. Mrs. Lefman's testimony and manner were highly credible and were supported by the computer printout on debtor's file. The Court specifically finds that Mrs. Lefman's testimony was more credible than Mr. Burke's testimony and believes her...
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