In re Phouminh

• Decision Date: 25 July 2005
• Docket Number: Adversary No. 04-1050 HRT.,Bankruptcy No. 03-26899 HRT.
• Citation: 339 B.R. 231
• Parties: In re Sarah M. PHOUMINH, Debtor. Charles F. McVay, United States Trustee, Plaintiff, v. Sarah M. Phouminh, Defendant.
• Court: U.S. Bankruptcy Court — District of Colorado

339 B.R. 231

In re Sarah M. PHOUMINH, Debtor.

Charles F. McVay, United States Trustee, Plaintiff, v. Sarah M. Phouminh, Defendant.

Bankruptcy No. 03-26899 HRT.

Adversary No. 04-1050 HRT.

United States Bankruptcy Court, D. Colorado.

July 25, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

John Cimino, Denver, CO, Keith Moskowitz, Boulder, CO, for debtor.

Leigh Lichtenegger, Paul G. Quinn, Denver, CO, for U.S. Trustee.

ORDER ON AMENDED COMPLAINT TO DENY DISCHARGE

HOWARD R. TALLMAN, Bankruptcy Judge.

This case comes before the Court on the United States Trustee's ["UST's"] Amended Complaint to Deny Discharge [the "Amended Complaint"].

The case came on for trial on May 13, 2005. Leigh Lichtenegger and Paul Quinn appeared for the United States Trustee and H. Christopher Clark appeared for the Defendant. After the presentation of evidence, the parties were requested to submit their closing arguments to the Court in writing with the UST's final response to be due no later than June 15, 2005. Upon submission of the UST's final response, the matter was taken under advisement. After having considered the evidence presented at trial along with the pleadings and written arguments submitted by the parties, the Court is ready to rule.

I. JURISDICTION

This matter is brought under 11 U.S.C. § 727(a). This is a civil proceeding arising under title 11 over which the district court exercises original jurisdiction under 28 U.S.C. § 1334(b). The matter is referred to this Court under 28 U.S.C. § 157(a). It is a core proceeding which this Court may hear and determine under 28 U.S.C. §§ 157(b)(1) & (b)(2)(J). The following constitutes this Court's findings of fact, conclusions of law and final order.

II. FACTS

The following facts were stipulated to by the parties in their Joint Pretrial Statement filed with the Court on April 28, 2005.

1. The Defendant, Sarah M. Phouminh, filed her Chapter 7 Voluntary Petition, Schedules and Statement of Financial Affairs ["SOFA"] on August 26, 2003.

2. The Original Petition, Schedules, and SOFA were signed and dated under the penalty of perjury on August 25, 2003.

3. Mr. Glen R. Anstine, the Chapter 7 trustee, conducted the Meeting of Creditors required by 11 U.S.C. § 341 on October 2, 2003.

4. On November 24, 2003, the Enger Family Partnership, through counsel Martin E. Long, took a FED. R. BANKR. P.2004 examination of the Defendant ("Rule 2004 Examination").

5. On December 1, 2003, the Defendant filed her First Amended Petition

and her First Amended SOFA. The First Amended Petition was signed under the penalty of perjury on November 25, 2003. The First Amended SOFA was not signed by the Defendant, but the Defendant did initial every page of the First Amended SOFA.

6. The First Amended Petition contained the following amendments in the "All Other Names used by the Debtor in the last 6 years" box:

a. "Fdba Super Asian Market" was amended to "Member & Manager Super Asian Market LLC"

b. "As a Member And Manager Of S

& M LLC" was amended to "Member & Manager Of S M LLC"

7. The First Amended SOFA contained the following amendments:

a. The First Amended SOFA, Q. 4., was corrected to disclose the Enger Family Partnership, LLLP, lawsuit.

b. The First Amended SOFA, Q. 3.a., was amended to include the following sentence: "The supplement to Statement of Financial Affairs, Question 3 which was included in the original filing relates to payments made by Super Asian Market LLC."

c. The First Amended SOFA, Q. 19.a., was amended to include Hull & Associates as the Defendant's accountant.

d. The First Amended SOFA, Q. 19.-d., was amended to include Jerry Enger as a creditor to whom a financial statement was issued within the two years immediately preceding the commencement of the bankruptcy case.

8. On January 30, 2004, the UST filed his Complaint to Deny Discharge against the Defendant ["Original Complaint"], Adversary No. 04-1050-HRT.

9. On March 17, 2004, John A. Cimino filed a motion to substitute counsel requesting that he be allowed to substitute as counsel in place of Keith Moskowitz. This motion was granted on March 18, 2004.

10. On March 17, 2004, the UST, through counsel, and the Defendant, through counsel, agreed to hold matters in abeyance for sixty days in which to exchange information.

11. On March 29, 2004, the UST sent the Defendant's counsel a letter requesting that certain documents be produced. On May 21, 2004, the Defendant partially responded to the UST's March 29, 2004, informal request for documents.

12. On July 2, 2004, the Defendant filed her Answer to the UST's Original Complaint. The only affirmative defense asserted in the Defendant's Answer was that the complaint fails to state a claim for which relief can be granted.

13. On September 17, 2004, the UST mailed the Defendant the UST's Interrogatories, Requests for Production of Documents and Requests for Admissions.

14. On September 20, 2004, the UST filed his Amended Complaint to Deny Discharge against the Defendant ["Amended Complaint"]. The Amended Complaint did not add any new causes of actions or new parties, but did add additional factual statements to support the causes of actions stated in the Original Complaint.

15. On October 19, 2004, the Defendant filed her Second Amended Petition. The Second Amended Petition was signed under the penalty of perjury on October 19, 2004.

16. The Second Amended Petition made the following changes:

a. The Second Amended Petition corrected the "Name of Debtor" box by replacing Sarah M. Phouminh with Sarah Manithong Phouminh.

b. The Second Amended Petition corrected the "All Other Names used by the Debtor in the last 6 years" box by including the following names: fdba Translation And Marketing; fdba Translation And Consultation; fods Denver Therapy, Inc.; fmem S & M, LLC; fmem Super Asian Market, LLC; and fdba First Class Travel.

c. The Second Amended Petition corrected the "Street Address of Debtor" to list the Defendant's current address of 2185 Pinon Cir., Erie, CO 80516-7958.

d. The Second Amended Petition corrected the "Location of Principal Assets of Business Debtor" to list 8868 Federal Blvd. # 12, Denver, CO 80260-5852.

e. The Second Amended Petition changed the Estimated Assets from $500,000 — $1 million to $0 to $50,000.

f. The Second Amended Petition changed the Estimated Debts from $500,000 — $1 million to $0 to $50,000.

17. On November 12, 2004, the UST was provided with the Defendant's Answers to the UST's Interrogatories, Requests for Production of Documents and Requests for Admissions.

18. November 13, 2004, the Defendant filed her Answer to the UST's Amended Complaint. The Defendant's Answer to the Amended Complaint asserted four affirmative defenses including attorney malpractice of Keith Moskowitz, disorganized records, lack of knowledge, intent or fraud, and that a full explanation had been provided on November 12, 2004.

19. On November 22, 2004, the UST, through counsel, took the deposition of the Defendant.

20. On November 23, 2004, the Defendant filed her Third Amended Petition and her Second Amended SOFA. The Third Amended Petition and Second Amended SOFA were signed under the penalty of perjury on November 22, 2004.

21. The Third Amended Petition made the following changes:

a. The Third Amended Petition corrected the "All Other Names used by the Debtor in the last 6 years" box by replacing "fmem S & M, LLC" with "fmem S & N, LLC."

b. The Third Amended Petition corrected the "Last four digits of Soc. Sec. No./Complete EIN or other Tax I.D. No." to include the number 41-3049941.

c. The Third Amended Petition removed the address listed in the "Location of Principal Assets of Business Debtor" box.

d. The Third Amended Petition changed the Estimated Assets to $100,000 to $500,000.

e. The Third Amended Petition changed the Estimated Debts to $100,000 to $500,000.

22. The Second Amended SOFA contains the following changes:

a. SOFA, Q. 1., changed the Defendant's income for the years 2001, 2002, and 2003.

b. SOFA, Q. 4.a., was changed to include the Trilogy Builders, Inc. lawsuit.

c. SOFA, Q. 8., was changed to include gambling losses of $30,000 instead of the $6,000 on the original SOFA.

d. SOFA, Q. 8., was changed to include the loss of her Asian Super Market business.

e. SOFA, Q. 9., was changed to include the sentence, "Debtor also paid the filing fee of $200.00."

f. SOFA, Q. 10., was changed to include the sentence, "Debtor also borrowed $10,000 from this individual and gave her a lien against the debtor's 2001 Nissan Quest GXE in July, 2003. These sale and this loan were separate transactions."

g. SOFA, Q. 11., was changed to provide more details on the two accounts previously listed.

h. SOFA, Q. 15., was changed to include the Defendant's address of the petition date as a "Prior address of debtor."

i. SOFA, Q, 18., was changed to add Denver Therapy, Inc.; First Class Travel; Translation & Marketing; S & N, LLC; and Translation And Consultation.

j. SOFA, Q. 20., was changed to include the inventory of the Defendant's Super Asian Market.

23. During the time period of October. 2000, through July, 2003, the Defendant was an employee of North Irving Chiropractic and served as an office manager. During this same time period, the Defendant also worked as a sole proprietor doing "translation and consulting" and "translation and marketing" whereby she translated for a variety of chiropractic businesses, doctors and lawyers. The Defendant's sole proprietorships were not disclosed on the original SOFA, Q. 18., nor the Amended SOFA, Q. 18., but were disclosed on the Second Amended SOFA, Q. 18.

24. For the tax years 2001, 2002 and 2003, the Defendant filed a Schedule C (Form 1040) Profit or Loss from Business for both the "Translation and Consultation" business and the "Translation and Marketing Business." The name of the proprietor for each of these businesses is Sarah M. Phouminh, the Defendant.

25. The ...