Elliott v. Weil (In Re Elliott), 529 B.R. 747

Background

Edward Elliott (Debtor) filed Chapter 7 on Dec. 1, 2011, listed a Hiawatha St. address and did not schedule any real property or certain judgment creditors.
Debtor testified at the §341 meeting that schedules were true and that he owned no real property; Trustee filed a no-distribution report and Debtor received a discharge March 8, 2012; case closed March 13, 2012.
On March 26, 2012, a corporation controlled by Debtor (LWI) quitclaimed the Buckingham Property to Debtor; Debtor later informed judgment creditors of the transfer, triggering discovery of prior transfers and connections between Debtor and the property.
Judgment creditors moved to reopen; case reopened Jan. 7, 2013; Trustee reappointed and on June 4, 2013 filed an adversary complaint seeking (1) turnover of the Buckingham Property under §542 and (2) revocation of Debtor’s discharge under §727(d)(1).
Trustee moved for summary judgment (Jan. 13, 2014); bankruptcy court granted judgment revoking discharge and ordering turnover on Apr. 7, 2014, finding Debtor knowingly concealed the residence; Debtor appealed.
On appeal the Panel concluded Trustee’s §727(d)(1) revocation claim was filed after the one-year deadline in §727(e)(1), depriving the bankruptcy court of jurisdiction to revoke discharge; turnover order was vacated and remanded for further proceedings consistent with allowed exemptions.

Issues

Issue	Plaintiff's Argument (Trustee)	Defendant's Argument (Elliott)	Held
Whether bankruptcy court had jurisdiction to revoke discharge under §727(d)(1) given §727(e)(1) one-year limit	§727(d)(1) applies; Trustee filed to revoke after learning of fraud and sought relief	Debtor did not timely disclose property; but Debtor argued omissions were attorney error and created factual disputes	Court held §727(e)(1) is jurisdictional (statute of repose); Trustee filed after the one-year period so court lacked jurisdiction — revocation vacated and §727(d) claim must be dismissed
Whether equitable tolling or other doctrines save late §727(d)(1) action	Trustee implicitly argued relief should be allowed; later suggested judgment could be based on §727(d)(2)	Debtor argued reliance on counsel and factual disputes precluded summary judgment	Court rejected equitable tolling and held §727(e) is non-waivable; alternative §727(d) bases were also untimely; tolling unavailable
Whether turnover of the Buckingham Property to Trustee under §542(a) was proper	Property belonged to estate because Debtor concealed it and exemption was disallowed, so turnover appropriate	Debtor claimed attorney error, late disclosure, and later successfully challenged homestead disallowance on appeal	Court vacated turnover judgment because prior disallowance of homestead exemption was vacated; remanded to reassess turnover considering possible valid exemption
Whether failure to timely raise §727(e) is forfeited	(Not argued below) Trustee proceeded despite lateness	Debtor did not raise timeliness in bankruptcy court but this jurisdictional defect may be raised sua sponte	Court held §727(e) jurisdictional and may be raised sua sponte; timeliness is not forfeitable when it affects jurisdiction

Key Cases Cited

Kontrick v. Ryan, 540 U.S. 443 (2004) (filing deadlines in Bankruptcy Rules are claim‑processing rules, but only Congress may define subject‑matter jurisdiction)
Law v. Siegel, 134 S. Ct. 1188 (2014) (limits on trustee’s powers and treatment of debtor exemptions under bankruptcy law)
Wilshire Courtyard v. Cal. Franchise Tax Bd., 729 F.3d 1279 (9th Cir. 2013) (standard for reviewing bankruptcy subject‑matter jurisdiction questions)
The Cadle Co. v. Andersen (In re Andersen), 476 B.R. 668 (1st Cir. B.A.P. 2012) (§727(e)(1) is jurisdictional; one‑year limit is non‑waivable)
Newman v. Schwartzer (In re Newman), 487 B.R. 193 (9th Cir. B.A.P. 2013) (whether property is estate property is a legal question reviewed de novo)