Kupperstein v. Schall, 61 F.4th 1

Background

Debtor Donald C. Kupperstein filed a voluntary Chapter 7 petition on January 11, 2018 after repeated state-court judgment violations; appellees (Massachusetts EOHHS and Irene Schall) filed adversary proceedings seeking denial of discharge under 11 U.S.C. §§ 523 and 727(a)(4)(A).
Appellees alleged Kupperstein omitted and misrepresented material facts in his SOFA and Schedule A/B: undisclosed law-practice income, a $17,500 title-insurance payment, and an interest in Boston real estate (including a recorded $250,000 mortgage and assignment of rents).
Documentary evidence contradicted Kupperstein’s SOFA/Schedule: he prepared federal tax returns showing law-practice income and the $17,500 payment and submitted a financial statement to a state court weeks before filing; the mortgage and assignment were recorded in the registry of deeds.
Kupperstein missed the deadline to respond to appellees’ statement of undisputed facts and his belated filing for leave to respond was denied; the bankruptcy court nevertheless examined the properly submitted record.
The bankruptcy court granted appellees’ motion for summary judgment, holding Kupperstein made knowing and fraudulent false oaths that were material under § 727(a)(4)(A), denied his discharge; the district court affirmed and the First Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether denial of leave to file a belated response to appellees’ statement of facts was an abuse of discretion	Kupperstein: denial prejudiced him because appellees’ facts would be deemed admitted without his response	Appellees: local rules require timely response; moving party still must cite supporting evidence; court properly enforced rule	No abuse of discretion; court correctly applied Local Rule 7056-1 and considered only properly submitted evidence
Whether omissions in the SOFA and Schedule A/B amounted to false oaths	Kupperstein: not required to disclose because he was an independent contractor (not "employment/operating a business"); settlement was reimbursement/non-taxable; mortgage not his	Appellees: tax returns and state-court financial statement show business income and settlement; recorded mortgage/assignment show property interest; forms require broad disclosure	Omissions were false oaths: income, settlement, and recorded property interests should have been disclosed
Whether the false oaths were made knowingly and fraudulently and were material under § 727(a)(4)(A)	Kupperstein: lacked culpable intent; contested admissibility of some exhibits; offered alternative explanations	Appellees: documentary evidence (self-prepared tax returns, state financial statement, recorded deeds) shows actual knowledge; conduct shows reckless indifference; omissions concerned assets/income relevant to estate	Court found knowing or recklessly indifferent intent and that the omissions were material; summary judgment denying discharge affirmed

Key Cases Cited

In re Kupperstein, 943 F.3d 12 (1st Cir. 2019) (prior appellate decision in the same dispute)
In re Kupperstein, 994 F.3d 673 (1st Cir. 2021) (prior appellate decision in the same dispute)
Premier Cap., LLC v. Crawford (In re Crawford), 841 F.3d 1 (1st Cir. 2016) (standard for denying discharge under § 727)
Grogan v. Garner, 498 U.S. 279 (U.S. 1991) (discharge exceptions interpreted to protect integrity of bankruptcy system)
Boroff v. Tully (In re Tully), 818 F.2d 106 (1st Cir. 1987) (discussing limits on discharge for fraudulent conduct)
Hannon v. ABCD Holdings, LLC (In re Hannon), 839 F.3d 63 (1st Cir. 2016) ("knowingly and fraudulently" standard and reckless indifference)
In re Marrama, 445 F.3d 518 (1st Cir. 2006) (summary judgment standards in discharge litigation)
In re Mascolo, 505 F.2d 274 (1st Cir. 1974) (materiality defined by relation to discovery of assets and financial transactions)
Santiago v. Canon U.S.A., Inc., 138 F.3d 1 (1st Cir. 1998) (summary judgment/inference principles)
In re Moultonborough Hotel Grp., LLC, 726 F.3d 1 (1st Cir. 2013) (summary judgment standards apply in bankruptcy proceedings)