CHRISTIAN H. DRIBUSCH, Chapter 7 Trustee, Appellant,
THOMAS E. ZEBROWSKI, Appellee.
WHITEMAN, OSTERMAN, & HANNA, LLP, CHELSEY T. LESTER, ESQ., One Commerce Plaza, Albany, New York, Attorneys for Appellant.
HIGGINS, ROBERTS &, SUPRUNOWICZ, P.C., MICHAEL E. BASILE, ESQ., Niskyuna, New York, Attorneys for Appellee.
MEMORANDUM-DECISION AND ORDER
MAE A. D'AGOSTINO, District Judge.
Currently before the Court is an appeal from an order of the United States Bankruptcy Court, Northern District of New York entered on October 25, 2012 overruling and denying Appellant's objection to discharge and dismissing the adversary proceeding. See Dkt. No. 1-2.
On January 28, 2011, Appellee-Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. See Dkt. No. 4 at 6. The case was selected for audit by the United States Trustee and an audit was conducted. See Dkt. No. 2-7 at 2. On April 4, 2011, as part of the audit, Appellee executed an affidavit of non-ownership ("Affidavit") concerning a 2007 trailer and a 1997 Mercedes Benz S. Class. See Dkt. No. 4 at 7. Appellee had, in fact, owned the trailer on January 29, 2009, within two years of filing of the petition. See Dkt. No. 2-7 at 2. On September 7, 2011, Appellant-Trustee initiated an adversary proceeding against Appellee by filing a complaint pursuant to 11 U.S.C. § 727(a)(4), objecting to Appellee's discharge. See Dkt. No. 4 at 9.
The bankruptcy court held a bench trial at which Appellee, Mary Ellen Zebrowski, and Ernest Verni were called as witnesses and testified. See id. at 10. As the bankruptcy court points out, "[t]he [Appellant] dedicated eleven of sixteen minutes of the direct examination... to issues other than the Affidavit." Dkt. No. 1-2 at 10. Appellee testified that he signed the Affidavit at his lawyer's office. See Dkt. No. 2-6 at 23:13-14. Appellee was then asked if he had an opportunity to go over the document with his attorney, to which Appellee responded, "I think his assistant gave it to us." Id. at 23:15-18. Appellee was further examined as to whether he had reviewed any of his records prior to signing the Affidavit. Id. at 23:21-22. Appellee stated that he had no records with him to review. Id. at 23:23.
On cross examination, Appellee offered his explanation for the false statement contained in the Affidavit. When asked what he thought about the trailer when he examined the Affidavit before signing it, Appellee stated "[w]ell, I thought it was an older trailer before the other one because the sled was newer[.]" Id. at 30:17-18. When questioned further about the older trailer, Appellee discussed a trailer that he had previously owned and which he believed was the one referenced in the Affidavit. See id. at 30:22-31:12. After the cross examination was completed, Appellant was given the opportunity to examine further but declined that opportunity. See id. at 33:13-16.
Next, Mrs. Mary Ellen Zebrowski was called by Appellant. See id. at 34. Mrs. Zebrowski testified that she signed the Affidavit after having time to review it. See id. at 39:1-7. Mrs. Zebrowski further testified that she had an opportunity to ask questions concerning the Affidavit, but did not recall having a conversation with Appellee about the trailer and did not ask him about it. See id. at 39:5-16. Mrs. Zebrowski indicated that she would not be able to recognize the trailer. See id. at 36:17-19. The third and final witness called by Appellant was Ernest Verni. See id. at 47. Mr. Verni testified that the trailer was transferred to him in July of 2010. See id. at 54:18-55:2.
Appellee was recalled to the stand upon the conclusion of the Appellant's case, and testified that the trailer was transferred to Mr. Verni in December of 2009. See id. at 59:2. Following a short examination by both sides, Appellee rested. See id. at 58:18-61:11. Upon conclusion of the testimony, the bankruptcy court issued the order appealed from, overruling and denying Appellant's objection to discharge and dismissing the adversary proceeding. See Dkt. No. 1-2. Specifically, the bankruptcy court found that "the [Appellant] has not proven... the element of knowledge... needed to sustain his § 727(a)(4)(A) cause of action." See id. at 12.
On December 6, 2012, Appellant filed this appeal seeking reversal of the bankruptcy court's order. See Dkt. No. 1.
A. Standard of ...