In re Swanson, BAP NO. NC-82-1401-AsEV
| Decision Date | 10 February 1984 |
| Docket Number | BAP NO. NC-82-1401-AsEV,Adv. No. 81-0738.,Bankruptcy No. 581-1321-A |
| Citation | 36 BR 99 |
| Parties | In re Alan Wendell SWANSON, Debtor. Jerome ROBERTSON, Trustee, Plaintiff/Appellee, v. Alan Wendell SWANSON, Defendant/Appellant. |
| Court | U.S. Bankruptcy Appellate Panel, Ninth Circuit |
Marilyn Morgan, Morgan, Morgan, Towery, Morgan & Spector, San Jose, Cal., for defendant/appellant.
William C. Lewis, Ensign & Lewis, Palo Alto, Cal., for plaintiff/appellee.
Before ASHLAND, ELLIOTT and VOLINN, Bankruptcy Judges.
Debtor appeals from a judgment of the bankruptcy court denying him a discharge. The court determined that the debtor intentionally omitted valuable assets from his schedules. We reverse.
Debtor, an accountant, filed a voluntary Chapter 7 on March 6, 1981. In the accompanying schedules he did not specifically list as an asset his accountancy practice.
On August 27, 1981 the trustee objected to discharge based on debtor's alleged fraudulent concealment of his accountancy practice. Trial was had and a judgment was issued on July 22, 1982 denying debtor a discharge. Debtor's motion for rehearing was denied on September 9, 1982.
The bankruptcy court found as fact that the debtor "intentionally omitted his accountancy practice from his bankruptcy schedules to avoid attempts by his trustee and creditors to realize value from the accountancy practice." The court concluded as matters of law that the debtor:
1. intentionally concealed his accountancy practice in order to hinder, delay or defraud his creditors 11 U.S.C. § 727(a)(2);
2. knowingly and fraudulently made a false oath or account § 727(a)(4); and
3. failed satisfactorily to explain the loss of assets or deficiency of assets to meet his liabilities § 727(a)(5).
Each ground, if proven, is alone sufficient to deny discharge under § 727(a).
We take no issue with the bankruptcy court's factual determination that the debtor did not list his accountancy practice in his bankruptcy schedules. Indeed, we note that there is no place in the bankruptcy schedules to set forth an accountancy practice as an asset of the estate. Debtor did, however, make reference to his employment in the statement of affairs.
We do not agree with the bankruptcy court's conclusions of law.
Whereas findings of fact may not be set aside unless clearly erroneous, Federal Rules of Civil Procedure Rule 52(a), no such standard applies to the review of conclusions of law and we may review them freely. Pullman-Standard v. Swint, 456 U.S. 273, 102 S.Ct. 1781, 72 L.Ed. 66 (1982); Vesey v. U.S., 626 F.2d 627 (9th Cir.1980).
The bankruptcy court made much of the fact that a state court had given a dollar value to debtor's accountancy practice during dissolution proceedings. This, coupled with the fact that the debtor had been engaged in negotiations immediately before filing bankruptcy to sell his practice, led the bankruptcy court to conclude that the debtor knew his practice had value. That debtor's accountancy practice was given a value by the state court during dissolution proceedings, however, is not relevant to the bankruptcy proceedings. In the dissolution proceeding the valuation would be relevant to a determination of alimony and...
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