574 B.R. 240
Bankr. D.N.M.2017Background
- Defendant Bryan Lamey, a sophisticated CPA and former accounting-firm owner, filed Chapter 7 on December 30, 2014; his pre-petition net worth had fallen dramatically after trading losses and business failures.
- In 2012 Lamey formed six related LLCs (the "United Entities") that operated unprofitable RV dealerships; those operations generated substantial net operating losses (NOLs) used to amend prior tax years.
- Between 2015–2017 Lamey received multiple tax refunds (based on pre-petition NOL carrybacks), sold a scheduled 2007 Mustang post-petition without notifying the trustee, and received/withdrew funds from his ex-wife’s Schwab account while holding power of attorney.
- Lamey omitted or late-disclosed numerous assets/transfers on his schedules, SOFAs, discovery responses, and deposition testimony (including the 2013 tax refund, other amended refunds totaling about $130,090–$149,453, the Mustang sale proceeds, the Schwab account transfers, a $14k sibling loan repayment, and a counterclaim).
- Plaintiff (LANB) alleged nondischargeability under § 523(a)(6) and sought denial of discharge under §§ 727(a)(2)(B), (a)(3), (a)(4), and (a)(5).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| §523(a)(6): Willful and malicious injury for sale of collateral | United Entities sold plaintiff’s secured collateral and did not remit proceeds, so part of debt nondischargeable | Security interest unclear; ownership and transaction details uncertain | Claim failed — plaintiff did not prove a security interest or sufficient evidence of sale/proceeds |
| §727(a)(2)(B): Post‑petition transfer/concealment of estate property | Lamey received and spent tax refunds (pre‑petition losses) and sold car post‑petition without turnover; also concealed Schwab transfers, sibling repayment, and a counterclaim — intent to hinder/defraud | Lamey did not timely disclose but disputes characterization; some records produced; argues no fraudulent intent shown | Held for plaintiff — discharge denied under §727(a)(2)(B) due to intentional concealment/transfers and pattern of withholding estate property |
| §727(a)(3): Failure to preserve records | Plaintiff contended records were inadequate and required subpoenas to reconstruct finances | Defendant produced substantial records; subpoenaed third‑party records filled gaps | Plaintiff failed to carry burden; claim dismissed |
| §727(a)(4): False oaths or accounts in schedules, SOFAs, discovery, deposition | Lamey knowingly made material false statements/omissions (schedules, SOFAs, discovery responses, deposition about Schwab account, late/false schedule amendments) to conceal assets | Lamey amended schedules belatedly; argues some disclosures were made and value issues immaterial | Held for plaintiff — multiple material false oaths made knowingly or with reckless indifference; discharge denied under §727(a)(4) |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (1991) (bankruptcy discharge limited to the honest but unfortunate debtor)
- Barowsky v. Serelson (In re Barowsky), 946 F.2d 1516 (10th Cir. 1991) (tax refunds based on pre‑petition years are property of the estate)
- Retz v. Samson (In re Retz), 606 F.3d 1189 (9th Cir. 2010) (knowingly signing incomplete schedules supports §727(a)(4) false oath)
- Brown v. Gullickson (In re Brown), 108 F.3d 1290 (10th Cir. 1997) (elements for denial of discharge under §727(a)(4))
- Calder v. Kenney (In re Calder), 907 F.2d 953 (10th Cir. 1990) (fraudulent intent may be inferred from surrounding facts)