528 B.R. 860
Bankr. N.D. Ga.2015Background
- Defendant filed Chapter 7 on June 1, 2012, received a discharge on September 25, 2012; Trustee filed adversary proceeding under § 727(d)(1) within one year seeking to revoke discharge for alleged nondisclosures and fraud.
- Trustee examined Defendant in January 2015 about her Statement of Financial Affairs (SOFA) and Schedule B; SOFA Question 18 (officer/partner/self-employed within six years) was checked "None."
- Trustee pressed whether that "None" answer was accurate; Defendant invoked the Fifth Amendment when asked about Question 18 and refused other questions as irrelevant (including payors and amounts and follow-up about a post-discharge lawsuit).
- At deposition Defendant voluntarily testified about involvement with International Environmental Association, conducting forensic loan audits/analyses, and instructing related courses.
- Trustee moved to compel answers to the Fifth-privileged questions and to compel responses defendant had refused as irrelevant; Court heard argument and reserved ruling on the Fifth issues but ordered answers to relevancy objections pending further ruling.
- Court concluded the Fifth Amendment could apply to questions about the SOFA (risk of perjury), found no waiver based on the deposition testimony, denied motion as to the Fifth-claimed questions, and granted the motion as to relevancy objections (ordering a further deposition by May 5, 2015).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendant may invoke Fifth Amendment for questions about SOFA Q18 (accuracy of "None") | Trustee: answer is compelled; defendant cannot withhold verification of sworn SOFA answer | Defendant: invoking Fifth because answering could incriminate (reffed to "extenuating circumstances" and risk of barratry/perjury) | Court: Fifth may be invoked — realistic risk of criminal liability (perjury); motion to compel these answers denied |
| Whether Defendant waived Fifth by voluntarily testifying about related activities at deposition | Trustee: testimony about forensic audits and activities waived privilege as to related matters | Defendant: testimony was non-incriminating or collateral; retained privilege as to the disputed questions | Court: no waiver — prior testimony not sufficiently incriminating or prejudicial, and further answers could produce new incrimination; privilege preserved |
| Whether defendant must answer questions she objected to as irrelevant (income sources, Schedule B disclosures, post-discharge lawsuit) | Trustee: questions are relevant to alleged nondisclosures and revocation claim | Defendant: questions irrelevant or intrusive | Court: relevancy objections overruled; defendant must answer those questions and reasonable follow-ups at a further deposition by deadline |
Key Cases Cited
- U.S. v. Argomaniz, 925 F.2d 1349 (11th Cir. 1991) (describes scope of Fifth Amendment privilege in civil and criminal proceedings)
- Fisher v. United States, 425 U.S. 391 (1976) (testimonial communications protected by Fifth Amendment)
- Hoffman v. United States, 341 U.S. 479 (1951) (court decides whether assertion of privilege is justified; privilege applies when answer would be incriminating)
- Marchetti v. United States, 390 U.S. 39 (1968) (privilege requires reasonable cause to apprehend danger of criminal liability)
- Rogers v. United States, 340 U.S. 367 (1951) (voluntary incriminating testimony in same proceeding can waive privilege as to disclosed matters)
- Klein v. Harris, 667 F.2d 274 (2d Cir. 1981) (two-prong test for testimonial waiver: risk of distortion and knowledge that statements would be construed as waiver)
- Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298 (11th Cir. 2009) (in civil cases court may draw adverse inference from invocation of Fifth Amendment)