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In Re: Rodney andrews and Valerie v. United States Trustee

March 1, 2011

IN RE: RODNEY ANDREWS AND VALERIE ANDREWS,
RODNEY ANDREWS AND VALERIE ANDREWS, APPELLANTS,
v.
UNITED STATES TRUSTEE, APPELLEE.



The opinion of the court was delivered by: August B. Landis, Acting

Adv. Proc. Case No.: Debtors. 09-21543-C Bk. App. Panel Case No.: EC-10-1133 Bk. Ct. Case No.: 08-28963

ORDER AFFIRMING THE BANKRUPTCY COURT‟S ORDER

This matter is before the Court on Debtors/Appellants Rodney and Valerie Andrews‟ ("Appellants") Appeal (Doc. #7) from the Bankruptcy Court‟s Order denying Appellants‟ discharge under 11 U.S.C. § 727(a)(4)(A). Appellee/Trustee August Landis ("Appellee") asks the Court to affirm the Bankruptcy Court‟s order (Doc. #8). This matter was set for a hearing on January 12, 2011, and ordered submitted on the papers.*fn1 For the reasons set forth below, the

Bankruptcy Court‟s order is AFFIRMED.

I. FACTUAL AND PROCEDURAL BACKGROUND

On July 2, 2008, Appellants filed for bankruptcy protection under Chapter 7, in the Bankruptcy Court for the Eastern District of California. In the course of the bankruptcy case, in Appellants‟ written filings and in the meeting of the creditors, under oath, numerous inconsistencies and omissions were discovered.

Appellants did not report one of their businesses, omitted the income, accounts and debts related to that business, did not report one bank account, did not disclose their previous Chapter 13 bankruptcy, and gave inconsistent answers regarding whether they had reviewed the bankruptcy filings prior to signing them.

On March 4, 2009, the United States Trustee filed a complaint to deny Appellants discharge under Section 727(a)(4)(A) of the Bankruptcy Code, for false statements under oath. Trial was conducted on March, 9, 2010, and concluded with Bankruptcy Judge David Russell ruling in favor of the United States Trustee. Judgment was entered denying the Appellants discharge pursuant to 11 U.S.C. § 727(a)(4)(A).

The issue raised by Appellants on appeal is whether the Bankruptcy Court committed a reversible error in dismissing the Chapter 7 petition under 11 U.S.C. § 727(a)(4)(A), despite "the Court‟s anguish in doing so and clear, accusatory and candid acknowledgement on the transcript of the record of the adversarial trial proceedings and before counsel and Appellants in those proceedings that Appellants‟ bankruptcy counsel (Steele Lamphier, Esquire,) who represented them through and, not including, the adversarial trial proceedings, had committed acts of gross negligence in their "representation,‟ that they "had recourse‟ against that attorney, where such gross negligence directly resulted in injury to them (i.e. the dismissal) which gross negligence they had no reason to know about or protect themselves against contrary to equity and the remedial principles of FRCP Rule 60(b)(6)." (Appellants‟ Brief, p. 2-3.)

Appellants assert that the Bankruptcy Court did not make any errors in its factual findings, but made an error of law by "not applying the equitable remedial principles of Federal Rule of Civil Procedure 60(b)(6)." Appellee argues that no Rule 60 motion was brought before the Bankruptcy Court, that the Bankruptcy Court did not make the purported findings of gross negligence, and that the Bankruptcy Court properly denied Appellants‟ bankruptcy claim under 11 U.S.C. § 727(a)(4)(A).

II. OPINION

A. Legal Standard

The Bankruptcy Court‟s interpretations of the Bankruptcy Code and conclusions of law are reviewed de novo by this Court. Blausey v. United States Trustee, 552 F.3d 1124, 1132 (9th Cir. 2009) (internal citations omitted). This Court reviews the Bankruptcy Court‟s factual findings for clear error. Id. Factual review under this standard requires deference to the Bankruptcy Court. McClure v. Thompson, 323 F.3d 1233, 1240 (9th Cir. 2003). Review under the clearly erroneous standard requires significant deference to the trial court. Ambassador Hotel Co., Ltd. v. Wei-Chuan Inv., 189 F.3d 1017, 1024 (9th Cir. 1999) (internal citations omitted). The factual findings will only be clearly erroneous if the reviewing court has the "definite and firm conviction that a mistake has been committed." Id. (quoting Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers Pension Trust, 508 U.S. 602, 623 (1993)); see also Latman v. Burdette, 366 F.3d 774, 776 (9th Cir. 2004). "Clear error is not demonstrated by pointing to conflicting evidence in the record." Nat‟l Wildlife Fed‟n v. Nat‟l Marine Fisheries Serv., 422 F.3d 782, 795 (9th Cir. 2005) (quoting United States v. Frank, 956 F.2d 872, 875 (9th Cir. 1991)).

Instead, if the trial court‟s account of the evidence is plausible in light of the record viewed in its entirety, the reviewing court may not reverse it even though convinced that, had it been sitting as the trier of fact, it would ...


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