Robbins v. Haynes (In re Haynes)
549 B.R. 677
Bankr. D.S.C.2016Background
- Debtor Albert D. Haynes filed a Chapter 7 petition pro se on May 11, 2015 and signed schedules under penalty of perjury. Several assets and business interests were omitted from his Original Schedules.
- At the § 341 meeting (June 12, 2015) UST counsel questioned Haynes about framed jerseys, artwork, jewelry, a 1999 Mitsubishi, an IRA, clothing/sporting goods, and ownership interests in RightWay Services, Athletes United, ABS Diabetes Center, and ABS Transportation; Haynes then admitted ownership of most items.
- Haynes filed multiple amendments to Schedule B and the SOFA over the following months; the final amendments were filed months later (latest amendment Jan. 10, 2016), after UST scrutiny and shortly before summary-judgment briefing/hearing.
- The UST sued to deny Haynes’s discharge under 11 U.S.C. §§ 727(a)(4)(A) and (a)(2); the Court granted summary judgment as to omissions but held a trial on materiality and intent. Trial was held March 23, 2016.
- Evidence included Haynes’s prior bankruptcy filings (multiple dismissals and a prior finding that he repeatedly failed to disclose assets), his business education and experience, the sequence of admissions at the § 341 meeting, and the timing/quality of amendments.
- The Court concluded Haynes knowingly made materially false statements under oath with reckless indifference to the truth and denied his Chapter 7 discharge under § 727(a)(4)(A).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Haynes’s omissions constitute actionable concealment under § 727(a)(2) | UST: Haynes knowingly concealed estate property by omission of assets/business interests | Haynes: Omissions were inadvertent, oversight, or errors; prior filings not controlling | Court: Omissions better addressed under § 727(a)(4)(A); § 727(a)(2) not the appropriate basis here |
| Whether Haynes made a false oath under § 727(a)(4)(A) | UST: Haynes signed false schedules/SOFA and knew they were false | Haynes: Mistakes/oversight; later amendments cured errors | Court: Elements met (false sworn statements); later amendments do not cure initial false oath |
| Whether the false statements were material to the bankruptcy case | UST: Omissions concerned assets/business interests relevant to discovery of assets | Haynes: Items were of little or no value or irrelevant to a Chapter 7 no-asset case | Court: Materiality satisfied—disclosure duty is broad and includes worthless assets/business interests |
| Whether Haynes acted with fraudulent intent (knowingly/with reckless indifference) | UST: Multiple omissions, prior bankruptcy history, and delay in amending show reckless indifference/intent | Haynes: Lack of intent; prior drafts were for Chapter 13 and not relied upon; errors were innocent | Court: Intent inferred from course of conduct, education/business background, prior bankruptcies, repeated omissions and late amendments—reckless indifference shown; denial of discharge warranted |
Key Cases Cited
- Keeney v. Smith (In re Keeney), 227 F.3d 679 (6th Cir. 2000) (elements of § 727(a)(4)(A) enumerated)
- Williamson v. Fireman's Fund Ins. Co., 828 F.2d 249 (4th Cir. 1987) (materiality standard for false oaths)
- In re Gannon, 173 B.R. 313 (Bankr. S.D.N.Y.) (later amendment does not cure initial false oath; disclosure duty includes worthless assets)
- In re Hooper, 274 B.R. 210 (Bankr. D.S.C.) (burden-shifting and reckless-indifference standard for intent)