Premier Capital, LLC v. Crawford (In Re Crawford)
561 B.R. 1
| 1st Cir. | 2016Background
- Richard Crawford, a mortgage originator and majority owner of Oak Street Realty, personally guaranteed a loan that resulted in a large judgment and execution in favor of Premier Capital.
- Crawford filed for bankruptcy and listed two retirement accounts held at Wells Fargo: a 401(k) and a Cash Balance Plan (CBP). On Schedule B he listed only "401(k) with Wells Fargo" and gave a value that combined both accounts, but did not identify the CBP by name.
- Premier sued to deny Crawford's discharge under 11 U.S.C. § 727(a)(4)(A) (false oath) and § 727(a)(2)(A) (concealment). Trial focused on the omission of the CBP from Schedule B.
- The bankruptcy court found Crawford lacked credibility, concluded he impliedly consented to trial on the unpleaded CBP omission, and held the omission constituted a material false oath; the district court affirmed.
- The First Circuit reviewed implied consent and burden-shifting issues and affirmed the denial of discharge under § 727(a)(4)(A), finding the CBP omission material despite disclosure of a combined value.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Crawford impliedly consented to trial of an unpleaded false-oath theory based on omission of the CBP | Premier: Crawford repeatedly testified about the CBP and did not object, thus he impliedly consented | Crawford: The omission was not pled and he objected to certain exhibits | Court: Crawford impliedly consented by engaging the issue at trial and in post-trial filings; no abuse of discretion |
| Whether the court improperly shifted burden to Crawford before plaintiff proved a prima facie case | Premier: Burden-shifting framework was properly applied after plaintiff established a prima facie case | Crawford: Court required him to disprove materiality/falsity prematurely | Court: No improper shift; bankruptcy court applied correct framework and plaintiff presented prima facie evidence |
| Whether omission of the CBP from Schedule B constituted a false oath under § 727(a)(4)(A) | Premier: Omission of the CBP (an asset) is a false oath even if combined value was disclosed | Crawford: He disclosed the combined value; omission of the account name was not a false oath or lacked fraudulent intent | Court: Omission of the account itself is a false oath; debtor must disclose existence of each asset |
| Whether the omission was material | Premier: Existence of an undisclosed account relates to estate and creditor investigation, thus material | Crawford: Disclosure of combined value meant creditors were informed; omission not material | Court: Materiality threshold is low; knowledge of value alone is insufficient—omitting an asset’s existence is material |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (1991) (bankruptcy discharges interpreted liberally for honest debtors but exceptions apply)
- Boroff v. Tully (In re Tully), 818 F.2d 106 (1st Cir. 1987) (false oath exception protects against debtors who "play fast and loose" with assets; materiality standard)
- Daniels v. Agin (In re Daniels), 736 F.3d 70 (1st Cir. 2013) (omission of asset despite disclosure of combined value treated as material)
- In re Mascolo, 505 F.2d 274 (1st Cir. 1974) (burden-shifting: plaintiff must make prima facie showing, then debtor must rebut)