Dotson v. Cogswell (In re Cogswell)
462 B.R. 28
Bankr. D. Mass.2012Background
- In Dec 2003 Dotson contracted with Cogswell and Shelton (S.C. Construction) to purchase Lot 1 Jewett Road, Barre, MA; a nearly completed house existed with landscaping remaining at closing and a $3,000 escrow to cover completion or legal fees; landscaping was not completed by June 1, 2004 and the escrow funds were not applied.
- In Sept 2004 Dotson sued in MA district court for breach of contract and Chapter 93A; the fraudulent conveyance claim was dismissed before trial.
- In June 2007 the MA district court ruled for Dotson on breach of contract but for the defendants on the 93A claim and awarded Dotson $35,200 plus interest and costs for defective grading and water pooling.
- On Nov 28, 2007 Cogswell offered to settle the district court judgment for the $3,000 escrow amount plus $7,000 cash and warned of bankruptcy; the appeal followed, with the appellate division affirming in Feb 2010 and Dotson obtaining a lien on Cogswell’s residence.
- On July 7, 2010 Cogswell filed a Chapter 7 bankruptcy; Dotson, pro se, commenced an adversary proceeding on Aug 17, 2010 seeking denial of discharge and dischargeability of the debt.
- In 2011 the court limited the adversary to claims under 727(a)(2), (a)(3), and (a)(4); summary judgment denied for § 727(a)(4) claim, but granted summary judgment for § 727(a)(2) and § 727(a)(3); trial was deemed necessary on § 727(a)(4).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 727(a)(2) denial of discharge is warranted | Dotson argues Cogswell transferred or concealed property (Lot 2 Jewett Road) within the applicable period with intent to hinder | Cogswell had no post-petition transfers and no within-one-year concealment; no sufficient evidence of intent to defraud | Grant summary judgment for Cogswell on § 727(a)(2) |
| Whether § 727(a)(3) denial of discharge is warranted | Dotson contends Cogswell concealed or failed to preserve records relevant to financial condition | No genuine issue; Dotson failed to show concealed or destroyed records beyond what was produced | Grant summary judgment for Cogswell on § 727(a)(3) |
| Whether § 727(a)(4) false oath claims survive | Sworn statements and testimony may be false and material to discharge determination | Some alleged false statements are merely technical errors; others require factual trial | Survives; trial necessary on § 727(a)(4) |
Key Cases Cited
- In re Sullivan, 444 B.R. 1 (Bankr. D. Mass. 2011) (reckless disregard treated as fraud under § 727(a)(4))
- In re Mukerjee, 98 B.R. 627 (Bankr. D.N.H. 1989) (fraud standard for false oath analysis)
- In re Tully, 818 F.2d 106 (1st Cir. 1987) (fraud-equivalent treatment of false oath standard)
- Devers v. Bank of Sheridan, 759 F.2d 751 (9th Cir. 1985) (intent and fraud inference in § 727 analysis)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (genuine issue standard for summary judgment)