In re Diodati, Bankruptcy No. 80-00809-HL

• Decision Date: 16 March 1981
• Docket Number: Bankruptcy No. 80-00809-HL,A80-0529.,Adv. No. A80-0567
• Citation: 9 BR 804
• Parties: In re James DIODATI, Debtor. GUARDIAN INDUSTRIAL PRODUCTS, INC. OF MASSACHUSETTS, Plaintiff, v. James DIODATI and Herbert C. Kahn, Trustee, Defendants.
• Court: U.S. Bankruptcy Court — District of Massachusetts

9 B.R. 804 (1981)

In re James DIODATI, Debtor.
GUARDIAN INDUSTRIAL PRODUCTS, INC. OF MASSACHUSETTS, Plaintiff,
v.
James DIODATI and Herbert C. Kahn, Trustee, Defendants.

Bankruptcy No. 80-00809-HL, Adv. Nos. A80-0567, A80-0529.

United States Bankruptcy Court, D. Massachusetts.

March 16, 1981.

9 BR 805

COPYRIGHT MATERIAL OMITTED

9 BR 806

Edmund R. Pitts, Boston, Mass., for plaintiff

Jordan L. Shapiro, Malden, Mass., for defendants.

MEMORANDUM ON DISCHARGE

HAROLD LAVIEN, Bankruptcy Judge.

The Plaintiffs in this proceeding, Guardian Industrial Products, Inc. of Massachusetts and Edward Smigielski, seek to bar the discharge of the Debtor, James Diodati, pursuant to Section 727 of the Bankruptcy Code.¹ Although it is not specified in this complaint, the particular subsection relied on by the Plaintiffs is § 727(a)(4)(A), which provides:

(a) The Court shall grant the Debtor a discharge, unless

(4) The Debtor knowingly and fraudulently in or in connection with the case

(A) made a false oath or account.

Specifically, the Plaintiffs allege twelve different transactions to which the Debtors made false oaths on their Petitions, required to be under oath by Bankruptcy Rule 109. At the trial, the Debtor conceded seven inaccuracies in his Schedules and Statement of Affairs but maintained that the inaccuracies were the result of innocent misunderstandings and mistakes and were not the result of any fraudulent intent. From all the evidence, I find that the Debtor's Schedules and Statement of Affairs contained the following false answers:

(1) On Schedule A-2, which requires the Debtor to list secured creditors, the Debtor answered "None". In fact, however, the Malden Trust Company held two outstanding mortgages with substantial balances. One was a mortgage on which the Debtor was jointly liable with his spouse. The other was a mortgage given by Valid Restoration Corp., which the Debtor assumed personally.

(2) The Debtor answered "No" to Question 9 of the Statement of Affairs, which reads:

"Is any person holding anything of value in which you have an interest? (Give name, address, location and description of the property, and circumstances of the holding.)"

In fact, various bank accounts were held by the Debtor\'s spouse in trust for the Debtor.

(3) In response to Question 8b of the Statement of Affairs, which reads:

"Have you made any assignment of your property for the benefit of your creditors within two years immediately preceding the filing of the original petition herein?)",

the Debtor answered "No". In fact, the Debtor did assign and transfer a $15,000 bank account held in trust for him to the Malden Trust Company, on August 17, 1979, well within the two years prior to the filing of the Petition on May 13, 1980.

(4) In response to Question 14a, which reads:

"Have you suffered any losses from fire, theft, or gambling during the year immediately preceding the filing of the original petition herein? (If so, give particulars, including dates, names, and places, and the amounts of money or value and general description of property lost.)",

the Debtor answered "No". In fact, the Debtor sustained gambling losses of $300.00 in 1979, as is indicated on his tax return for that year.

9 BR 807

(5) The Debtor answered "None" to Question 11, which reads:

"What repayments on loans in whole or in part have you made during

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