In re Wolfson
| Citation | 152 BR 830 |
| Decision Date | 23 March 1993 |
| Docket Number | No. 92 Civ. 4567 (CSH).,92 Civ. 4567 (CSH). |
| Parties | In re Stanley WOLFSON, Debtor. Alan NISSELSON, as Trustee, Plaintiff-appellee, v. Stanley WOLFSON, Defendant-appellant. Judith Ripps WOLFSON, Plaintiff-appellee, v. Stanley WOLFSON, Defendant-appellant. |
| Court | U.S. District Court — Southern District of New York |
Brauner Baron Rosenzweig & Klein (Robert Minkoff, of counsel), New York City, for trustee plaintiff-appellee.
Jill Lesser, New York City, for plaintiff-appellee Judith Ripps Wolfson.
Phillip Mann, New York City, for debtor defendant-appellant.
Debtor-defendant Stanley Wolfson appeals from a judgment of the United States Bankruptcy Court for the Southern District of New York (Burton R. Lifland, Chief Judge) granting summary judgment to plaintiffs Alan Nisselson, the bankruptcy trustee, and Judith Ripps Wolfson, which denied the debtor-defendant a discharge in bankruptcy. 139 B.R. 279 (1992).
On January 23, 1990, Wolfson filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. Alan Nisselson was appointed trustee of the debtor's estate. Nisselson thereafter became a plaintiff in the adversary proceeding from which this appeal was taken. The other plaintiff, Judith Ripps (formerly known as Judith Ripps Wolfson), is involved in divorce proceedings with the debtor.
After proceedings in the bankruptcy court which I need not describe in detail, plaintiff Nisselson as trustee commenced an adversary proceeding against the debtor by filing a complaint dated May 2, 1990. Plaintiff Judith Ripps Wolfson (hereinafter "Ripps") filed a complaint against the debtor dated May 7, 1990. Both complaints object to the discharge of the debtor, and pray for judgment pursuant to § 727(a) of the Bankruptcy Code, 11 U.S.C. § 727(a), denying the debtor a discharge in bankruptcy.
Specifically, the trustee's complaint alleged as a first claim for relief that the debtor, Wolfson, had concealed or failed to keep or preserve any recorded information from which his financial condition or business transactions might be ascertained.
As a second claim for relief, the trustee alleged that Wolfson had knowingly and fraudulently withheld recorded information relating to his property and financial affairs from officers of the estate entitled to possession of such information.
As a third claim for relief, the trustee alleged that Wolfson had refused to obey a lawful order of the bankruptcy court. It appears from the motion papers that the order in question related to Wolfson moving out of a certain co-operative apartment.
Ripps's complaint mirrored that of the trustee, specifying in the pleading the particular sub-sections of the Bankruptcy Code upon which she relied. Thus Ripps's first claim for relief invokes § 727(a)(3); her second claim for relief invokes § 727(a)(4)(D); and her third claim for relief invokes § 727(a)(6)(A).
On November 25, 1991, the plaintiffs moved jointly for summary judgment under Rule 56, Fed.R.Civ.P., made applicable to adversary proceedings in bankruptcy by Fed.R.Bank.P. 7056. Plaintiffs sought summary judgment denying the discharge of Wolfson as debtor, relying in their motion papers upon 11 U.S.C. § 727(a)(3), (4), (5) and (6). Wolfson opposed plaintiffs' motion for summary judgment and cross-moved for discovery under Rule 37, Fed. R.Civ.P., made applicable to the adversary proceeding by Bankruptcy Rule 7037.
In a written opinion, Chief Judge Lifland granted plaintiffs' motion for summary judgment and denied Wolfson a discharge in bankruptcy. He based his decision upon § 727(a)(3), (4), and (5), regarding it as "unnecessary to decide whether the § 727(a)(6) grounds for denial of discharge have also been met." 139 B.R. at 289. Wolfson appeals.
Under Fed.R.Civ.P. 56(c), the moving party is entitled to summary judgment if the papers "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." On such a motion, "a court's responsibility is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried." Knight v. U.S. Fire Insurance, 804 F.2d 9, 11 (2d Cir.1986) (citation omitted), cert denied., 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). "All justifiable inferences are to be drawn in the nonmovant's favor," Eastman Kodak Co. v. Image Technical Servs., Inc., ___ U.S. ___, ____, 112 S.Ct. 2072, 2077, 119 L.Ed.2d 265 (1992) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986)), but the nonmovant "must set forth specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e). While the party resisting summary judgment must show a dispute of fact, it must also be a material fact in light of the substantive law. As the Supreme Court has held, "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court may refuse the motion or order a continuance for discovery if it appears from the opposing affidavits that the nonmovant "cannot for reasons stated present by affidavit facts essential to justify" the opposition. R. 56(f).
On this appeal from a grant of summary judgment, the scope of review is well settled. See Sulewski v. Federal Express Corp., 933 F.2d 180, 182 (2d Cir.1991):
Our review of summary judgment decisions follows a familiar pattern: review is de novo, Burtnieks v. City of New York, 716 F.2d 982, 985 (2d Cir.1983); we view the evidence in the light most favorable to the non-moving party, City of Yonkers v. Otis Elevator Co., 844 F.2d 42, 45 (2d Cir.1988); the moving party is entitled to summary judgment if he can "show that there is no genuine issue as to any material fact," Fed.R.Civ.P. 56(c); and "the substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.E.2d 202 (1986).
In this case, the governing law is furnished by those provisions of the Bankruptcy Code pursuant to which the bankruptcy court granted summary judgment to plaintiff. They are found in 11 U.S.C. § 727(a)(3), (4) and (5), which provide in pertinent part:
In a carefully reasoned opinion, Chief Judge Lifland concluded that the preponderance of evidence standard, which the Supreme Court applied to the prevention of the discharge of a debtor under § 523(a) of Bankruptcy Code in Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991), also applies to comparable proceedings under § 727. I agree with the bankruptcy court's analysis, which the parties do not appear to challenge on this appeal. It follows that the plaintiffs at bar are required to show by a preponderance of the credible evidence the factual elements necessary to deny Wolfson a discharge in bankruptcy under the cited subsections of § 727, except that Wolfson bears the burden of proving that any act or failure falling within § 727(a)(3) "was justified under all of the circumstances of the case." Within the context of summary judgment under Rule 56, plaintiffs must show that there is no genuine issue as to any material fact with respect to these elements.
Although separately stated, the acts or omissions on the part of a debtor condemned by subsections (3), (4) and (5) may be interrelated. Thus a debtor who has concealed pertinent recorded information under subsection (3) may well have made a false oath or account, or withheld from the trustee information the latter was entitled to possess, in violation of subsections (4)(A) and (D), and in consequence have failed to explain satisfactorily any loss or deficiency of assets, in violation of subsection (5).
The evidentiary material available to the bankruptcy court on plaintiffs' summary judgment motion consisted of affidavits of the trustee, the debtor, and counsel for plaintiff Ripps; contemporaneous exchanges of correspondence between the trustee and the debtor reflecting the trustee's efforts to obtain documents relating to Wolfson's property and financial affairs; the transcript of Wolfson's deposition; and various documents generated as exhibits during these activities. Having considered this evidentiary material, the bankruptcy court concluded that plaintiffs were entitled to summary judgment on three of the four § 727 bases which they asserted. As noted, the bankruptcy court did not reach the fourth asserted ground, namely, Wolfson's alleged refusal to obey the bankruptcy court's order to vacate an apartment, in violation of § 727(a)(6)(A)1.
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