BEN BARRY, Bankruptcy Judge.
On May 23, 2016, Arvest Bank [Arvest] filed its complaint objecting to the debtor's discharge pursuant to 11 U.S.C. § 727(a)(2) and (a)(4)(A) and seeking a determination that certain debts owed to Arvest are nondischargeable under 11 U.S.C. § 523(a)(2)(A). On June 14, 2016, the debtor filed an answer to Arvest's complaint. The Court held a trial beginning on January 19, 2017, and concluding on January 20, 2017. Lyndsey D. Dilks appeared on behalf of the debtor. Branch T. Fields appeared on behalf of Arvest. At the conclusion of the trial, the Court granted Arvest's request for the parties to submit post-trial briefs in lieu of closing arguments. Upon receipt of the parties' respective briefs on February 10, 2017, the Court took the matter under advisement. For the reasons stated below, the Court finds that Arvest proved by a preponderance of the evidence that the debtor is not entitled to a discharge under § 727(a)(2) and (a)(4)(A). Therefore, the Court denies the debtor's discharge.
The Court has jurisdiction over this matter under 28 U.S.C. § 1334 and 28 U.S.C. § 157, and this is a core proceeding under 28 U.S.C. § 157(b)(2)(I) and (J). This order contains findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052.
Since 1997, the debtor has owned and operated several businesses in North Little Rock, Arkansas. In addition to running her diverse businesses-enumerated below in section I. together with the debtor's corporations-the debtor has taken business classes and is a licensed real estate agent. In 2004, the debtor paid approximately $100,000.00 to purchase four acres and a building located at 1400 145th Street, North Little Rock, Arkansas [the 145th Street property]. She has used the building as a warehouse, nightclub, and event center. In 2006, one of the debtor's four corporations, Red Barn, Inc. [Red Barn], bought six acres adjacent to the 145th Street property [the Dineen property]. The debtor used the Dineen property as overflow parking for the nightclub and event center. On April 14, 2014, the debtor transferred the 145th Street property to her adult daughter, Talesha Dokes [Talesha], a graduate student residing in Michigan. The same day, acting as Red Barn's president, the debtor also transferred the Dineen property to Talesha. At the time of the transfers, both properties were unencumbered.
On the date of each of the debtor's bankruptcy filings, the debtor was the sole shareholder of four corporations:
(1) Dokes Quality Auto Sales, Inc. [Dokes Auto]
(2) JNYLECO, Inc. [JNYLECO]
(3) Jocelyn's Grille, Inc. [Jocelyn's Grille] d/b/a Xclusive of Little Rock f/k/a Red Barn, Inc.
(4) Lending Hand Foundation
Arvest's involvement with the debtor arises from two loans, each involving the debtor and one of her corporations. The first loan originated on September 16, 2005, when the debtor borrowed $40,000 from Arvest [debtor's personal loan]. As security for the debtor's personal loan, JNYLECO mortgaged three of its properties to Arvest: 10 Goodwin Circle, 112 Prairie View Drive, and 704 West 18th Street. The debtor, acting in her capacity as JNYLECO's president, executed the mortgage on behalf of JNYLECO. The debtor did not repay the loan when it matured and became due on March 16, 2013. The second loan originated on January 24, 2008, when Dokes Auto borrowed $245,000 from Arvest [Dokes Auto loan]. The Dokes Auto loan was secured by its property at 2500 East Broadway. The debtor, who was president of Dokes Auto at the time, executed the loan on behalf of the corporation and also personally guaranteed the loan. Pursuant to a debt modification agreement dated January 24, 2011, the Dokes Auto loan matured on January 24, 2014. Arvest received a payment on the Dokes Auto loan in February 2014, but neither Dokes Auto nor the debtor made any further payments on the loan.
On April 14, 2014, the debtor consulted attorney John Phillips about filing bankruptcy. As part of the consultation, the debtor filled out a client information form [intake form] provided by Phillips's office. (Def. Ex. A.) On the intake form, the debtor listed her employer as Quality Auto Sales and stated that her job title was "manager." She indicated on the form that she had been employed by Quality Auto Sales for ten years. However, she did not disclose an ownership interest in Dokes Quality Auto Sales, Inc. nor did she disclose her sole ownership of three other corporations. To the contrary, in response to a question on the form asking whether the debtor owned "any stocks (either publicly traded or closely held) or bonds" the debtor marked the box next to "no" and left blank the space provided to describe "the stocks/bonds, your number of shares and who manages them, or if of a business that you own, please describe the business." Similarly, the debtor did not provide an answer to the question "do you drive or have in your possession a vehicle/boat/ATV/etc [sic] that belongs to someone else (describe)." She also did not provide any information in response to the form's directive to "please list any real property or time shares you own
The same day that she consulted Phillips about filing bankruptcy-April 14, 2014-the debtor drafted a pair of quitclaim deeds that transferred two unencumbered properties to Talesha. The first deed transferred the 145th Street property from the debtor to Talesha; the second transferred the Dineen property from Red Barn, Inc. to Talesha.
On April 23, 2014, the debtor filed Schedules I and J and her Statement of Financial Affairs [SOFA]. On Schedule I, the debtor stated that she was employed as the manager of Quality Auto Sales, but listed no wages, salary, or commission derived from her employment. Rather, she stated that her sole monthly net income was $3750.00 received "from rental property and from operating a business, profession, or farm." The debtor listed no income from being a real estate agent. The second paragraph of the debtor's April 23, 2014 SOFA instructed that
Question 1 of the SOFA asked the debtor to
In response to Question 1, the debtor stated:
Question 2 of the SOFA required the debtor to
In response to Question 2, the debtor answered:
Question 10 of the SOFA required the debtor to
In response, the debtor marked the box labeled "None." Question 14 required the debtor to "List all property owned by another person that the debtor holds or controls." In response, the debtor marked the box labeled "None." Question 18 instructed the debtor to
In response to Question 18, the debtor marked the box labeled "None." Although the debtor had filed a chapter 13 plan proposing to pay $2520.00 per month, she failed to make even one plan payment in the five months that her case was pending. As a result, the Court dismissed the debtor's first case on September 4, 2014.
On January 30, 2015, Arvest filed suit in state court against several defendants, including the debtor, Dokes Auto, and JNYLECO to foreclose on the collateral securing the Dokes Auto loan and the debtor's personal loan-specifically, Dokes Auto's property at 2500 East Broadway and JNYLECO's property at 112 Prairie View Drive and 10 Goodwin Circle. Attorney Everett Martindale represented the debtor, Dokes Auto, and JNYLECO in the state court litigation with Arvest. On July 31, 2015, the debtor, represented by Martindale this time, filed her second chapter 13 case.
Schedule A in the debtor's second case disclosed the same properties as her prior case, with the exception of 6 Cedar Creek Court.
(1) Commercial property at 2500 East Broadway St.-NLR (lots 1,2,3) value of debtor's interest $177,550.00; secured claim $211,952.00
(2) Rental Home at 112 Prairie View Dr.-NLR value of debtor's interest $51,000.00; secured claim $20,000.00
(3) Rental Home at 10 Goodwin Cir.-NLR value of debtor's interest $0.00; secured claim $30,000.00
(4) Rental Home at 2500 E. 2nd St.-NLR value of debtor's interest $20,000.00; secured claim $25,000.00
On Schedule I, the debtor stated, as she had in her first case, that her employer was Quality Auto Sales. This time, however, the debtor listed her occupation as "used car sales" rather than "manager." She listed $2000.00 in monthly "gross wages, salary and commission" but listed no income "from rental property and from operating a business, profession, or farm" as she had in her 2014 case. As before, she disclosed no income derived from being a real estate agent. Like her 2014 SOFA, the debtor's July 31, 2015 SOFA instructed that
Question 1 of the SOFA asked the debtor to
In response to Question 1, the debtor stated:
Question 2 of the SOFA required the debtor to
Although she had disclosed rental income in her prior case, in response to Question 2 in her second case, the debtor answered "None."
Consistent with her answer to the same question in her first case, the debtor marked the box labeled "None" in response to SOFA Question 10, which required the debtor to
In step with the answers that the debtor gave in her first case, the debtor marked the boxes labeled "None" in response to Questions 14 and 18 which respectively required the debtor to "List all property owned by another person that the debtor holds or controls[]" and to
Although the debtor's answers to SOFA Questions 10, 14, and 18 were consistent with the answers she gave in her first case, her responses to other questions differed. For instance:
• In response to Question 2, the debtor deleted any reference to rental income;
• In response to Question 4, the debtor disclosed the pending state court lawsuit with Arvest;
• In response to Question 5, the debtor disclosed that Everhome Mortgage had foreclosed on her property at 6 Cedar Creek Court.
On February 4, 2016, the debtor attended her chapter 13 § 341(a) meeting of creditors. Matthew Black, appearing for the chapter 13 trustee, swore the debtor in prior to questioning her at the meeting. In response to his questions, the debtor stated under oath that she was familiar with her petition and schedules, that the information provided was true and correct to the best of her knowledge, and that she knew of no errors or omissions that needed to be brought to his attention. Trial Tr. vol II, 32-33.
On August 19, 2015, Arvest filed a Motion to Dismiss With Prejudice, or in the Alternative, Motion for Relief From the Automatic Stay and Motion to Abandon. In its motion, Arvest alleged that the debtor had filed inaccurate and misleading schedules in which the debtor omitted and undervalued assets and claimed ownership of property owned by Dokes Auto and JNYLECO to stall Arvest's foreclosure in state court. Neither the debtor nor Martindale appeared at the hearing scheduled for October 29, 2015. On December 2, 2015, the Court entered an order granting Arvest's alternative prayer for relief from the automatic stay, finding that "the Debtor is the owner of a business named Dokes Quality Auto Sales, Inc. Debtor is also the owner of a business named JNYLECO, Inc. which does business as JNYLECO Properties. (Pl. Ex. 2.) The Court also found that "the Dokes Auto Collateral is owned by the entity Dokes Quality Auto Sales, Inc. and the JNYLECO Collateral are [sic] owned by JNYLECO, Inc. As such the Collateral are not property of the bankruptcy estate, and are not subject to the automatic stay." (Pl. Ex. 2.)
On December 30, 2015, Arvest filed a Motion to Convert Case to a Case Under Chapter 7, or in the Alternative, To Dismiss Case With Bar to Future Discharge [motion to convert]. In its motion to convert, Arvest again alleged that the debtor had improperly claimed ownership of collateral that was actually owned by Dokes Auto and JNYLECO in an attempt to delay Arvest's foreclosure on the properties. Arvest also alleged that the debtor had failed to disclose her 2014 transfers of the 145th Street and Dineen properties to Talesha, as well as her ownership of Dokes Auto and JNYLECO, in addition to omitting several other assets from her schedules and statements-including two bank accounts, a liquor license, and an interest in a home located at 1217 Curtis Sykes Drive that she had inherited from her parents.
(Pl. Ex. 8.) At the February 9, 2016 hearing on the motion to convert,
Mot. to Convert Hr'g Tr. 73-74.
Mot. to Convert Hr'g Tr. 71-72. Despite acknowledging that she transferred the 145th Street property to Talesha and transferred the Dineen property to Talesha on behalf of Red Barn within two years of filing her second case, the debtor admitted that she did not disclose the transfers, testifying unequivocally on the issue at the hearing on the motion to convert:
Mot. to Convert Hr'g Tr. 67-68. The debtor also testified that she drafted a second set of deeds on April 14, 2014, that were recorded on June 3, 2014, that purported to transfer the same properties-the four acres and event center located at 145th Street and the adjacent six acres located on Dineen Drive-to DM of NLR, LLC [DM of NLR]. The debtor acknowledged that none of four deeds transferring property to Talesha or DM of NLR bore tax stamps indicating that the property had been transferred for value. She also admitted that the Real Property Transfer Tax Affidavit of Compliance Form that she completed for the transfer of the Dineen property to DM of NLR stated that the "full consideration for the transaction" was $1.00. The debtor maintained at the hearing that she had no interest in DM of NLR; rather, the LLC was owned by her nephew, Darren McFadden, and Talesha. She claimed that she did not know the nature of DM of NLR's business. She knew, however, that the property that she and Red Barn had ostensibly transferred to DM of NLR was being used as an event center—and had been for the past two years—and testified that someone wanting to schedule an event at the event center could call her and she would "put them in touch where they needed to be." Mot. to Convert Hr'g Tr. 85. She also confirmed that the event center serves alcohol using the liquor license held in the debtor's name. Mot. to Convert Hr'g Tr. 85. The debtor acknowledged that although the Arkansas Secretary of State's records reflect that Talesha Dokes is the registered agent for DM of NLR, Talesha's address is on record with the Secretary of State as 1217 Curtis Sykes in North Little Rock-the debtor's residence and mailing address at the time of the hearing-rather than Talesha's address in Michigan, where she resides. Mot. to Convert Hr'g Tr. 78-79.
At the conclusion of the hearing on the motion to convert, the Court ruled that conversion of the debtor's case to a case under chapter 7 was warranted. In its ruling, the Court found that the debtor had made material non-disclosures in both her first and second cases, that in both cases the debtor had failed to disclose relevant business ownerships, interests, and relationships, and that the debtor had made questionable pre-petition transfers of property. In relation to the debtor's pre-petition transfers, the Court stated for the record that
Mot. to Convert Hr'g Tr. 121.
Mot. to Convert Hr'g Tr. 121-122. Based upon these and other findings, the Court entered an order converting the debtor's second chapter 13 case to a case under chapter 7 on February 10, 2016. M. Randy Rice was appointed chapter 7 trustee [the trustee] of the debtor's case. On May 4, 2016, the trustee filed a Motion to Compel Debtor to Attend Meeting of Creditors, alleging that the debtor had failed to appear for two scheduled § 341(a) meeting of creditors and seeking an order compelling her to attend the next scheduled meeting. On May 10, 2016, the Court granted the trustee's motion to compel. When the debtor finally attended her chapter 7 § 341(a) meeting on June 14, 2016, she refused to answer questions upon Martindale's advice, citing potential criminal issues. Trial Tr. vol II, 146, Jan. 20, 2017.
On May 23, 2016, Arvest filed this adversary proceeding, seeking a denial of the debtor's discharge under § 727(a)(2) and (a)(4)(A). In its complaint, Arvest further developed the allegations upon which it had based its motion to convert; namely, that the debtor failed to disclose numerous assets, sources of income, and transfers of property when she filed her current bankruptcy case. Specifically, Arvest alleged in its adversary proceeding that the debtor falsely claimed to own collateral that she knew was owned by non-debtor entities JNYLECO and Dokes Auto; failed to disclose rental income; failed to list her interests in JNYLECO and Dokes Auto; failed to disclose her transfers of the 145th Street property to Talesha and DM of NLR, LLC; failed to disclose her interest in her deceased parents' home at 1217 Curtis Sykes Drive, failed to disclose her real estate license and the income received from selling real estate; failed to account for two bank accounts that were closed within one year of filing this case; failed to list any debts owed to taxing authorities; and failed to disclose that she drives a vehicle owned by Dokes Auto. On June 14, 2016, the debtor, still represented by Martindale at the time, filed a one-page answer that generally denied Arvest's allegations and reserved the right to "file a more complete response" to the complaint because the debtor was in the process of retaining new counsel. The Court originally scheduled the trial for October 4, 2016, but because Lyndsey Dilks did not enter an appearance as the debtor's counsel in this adversary proceeding until September 30, 2016, the Court granted the debtor's motion to continue and the trial was rescheduled for January 19, 2017.
On January 18, 2017-one day before trial-the debtor amended her schedules and SOFA. (Def. Ex. I.) In this amendment, the debtor made the following changes and new disclosures:
• clarified that her inherited interest in 1217 East 15th Street also known as 1217 Curtis Sykes Drive is a 1/8 interest with a value of $9264.00;
• disclosed an additional $700.00 in personal clothing;
• changed value of liquor license from $1000.00 to $10,000.00;
• reduced her ownership interest in Dokes Auto from 100% to 50%;
• disclosed her 100% ownership of Lending Hand Foundation;
• disclosed existence of $1300.00 lien filed by IRS;
• disclosed debt to IRS of $14,113.54;
• disclosed debt to Arkansas Federal Credit Union;
• disclosed debt to Miranda Keener;
• disclosed small claims lawsuit filed by Miranda Keener within one year prior to debtor filing bankruptcy;
• disclosed debt to Sprint Nextel Distributions
• disclosed two credit card debts owed to Wells Fargo (although Wells Fargo had been listed on the debtor's initial Schedule F filed in this case on July 31, 2015, the debtor had previously provided no address for this creditor and only one account number)
• disclosed that Dokes Auto and JNYLECO were codebtors on the two Arvest debts
• on Schedule I, changed her employer from Quality Auto Sales to Dokes Quality Auto Sales
• on Schedule I, deleted the previously scheduled $2000.00 in "monthly gross wages, salary, and commissions" and added $2300.00 in "net income from rental property and from operating a business, profession, or farm."
• on Schedule I, disclosed "occasional income from Rental Income, currently $300/month" and changed income from real estate commissions from $1000.00 on Amendment to Petition to $155.00 per month
• on Schedule J, added monthly expenses of $125.00 for personal property taxes, $25.00 for life insurance, $100.00 for real estate taxes, and $100.00 for "property, homeowner's, or renter's insurance";
• deleted her previously scheduled monthly expense of $500.00 for transportation expenses;
• disclosed on Schedule J a monthly payment $394.00 to Bank of America for the "2nd Street Property";
• in her SOFA, disclosed rental income of $1800.00 and real estate commission of $1500.00 for the period of January 1, 2015 to July 31, 2015;
• in her SOFA, disclosed "cash contributed on a monthly basis in an aggregate total of $1,200.00" to Samaritan Hills Baptist Church for "Jan-Dec";
• in her SOFA, disclosed transfer of 145th Street property and "adjacent lot" to Talesha on April 14, 2014, in exchange for "Real property taxes paid and $100,000 floor plan obtained";
• in her SOFA, disclosed that she had closed a checking account at Arkansas Federal Credit Union with balance of $250.00 within one year of filing bankruptcy (Amendment to Petition stated balance was .00);
• in her SOFA, disclosed the dates she obtained her corporate interests:
In the light of the number of changes and first-time disclosures that the debtor made in her February 8, 2016 Amendment to Petition and January 18, 2017 amendment, the debtor-prudently-did not attempt to convince the Court that the schedules filed on July 31, 2015, were accurate. Instead, the debtor acknowledged at trial that her initial schedules and statements were incorrect when she filed them but argued that the omissions and inaccuracies were not intentional and not her fault for a myriad of reasons discussed below.
The debtor listed 1217 East 15th Street as her street address when she filed this case but testified that she was not living there at that time. Rather, the debtor maintained that she was living with a friend and simply used 1217 East 15th Street as her mailing address. At trial, she acknowledged that she has lived at 1217 East 15th Street in the past and recognized that she has testified at a prior hearing in this case that she was, in fact, residing at that address.
Although the debtor reluctantly accepted responsibility for failing to disclose her interest in 1217 East 15th Street, she was unwilling to shoulder even partial blame for much else, contending that most of the problems in this case are due to the errors of her attorneys. Specifically, the debtor argued that most of the errors in this case could be traced to Phillips, the attorney that filed her prior case in 2014. The debtor maintained that she disclosed to Phillips the information that was necessary to file accurate schedules in her first case but, for reasons unknown to the debtor, Phillips did not put the information on her schedules. According to the debtor, Phillips's mistakes in the first case carried over into her second case because Martindale "went online and pulled the documents from the first case and that's what was put on the second case." Trial Tr. vol II, 155. Because the debtor largely attributed the errors and omissions in this case to mistakes made by Phillips in her first case, the parties spent a significant amount of time at trial attempting to ascertain what information the debtor did, in fact, disclose to Phillips. When the debtor was questioned by her attorney regarding her disclosures to and alleged reliance upon Phillips, she testified:
A. Yes.
A. Yes.
Trial Tr. vol II, 152-54. The debtor maintained that she told Phillips about the transfer of the 145th Street property to Talesha, disagreeing with Arvest's contention that she failed to disclose the transfer even though it did not appear on her 2014 SOFA. Specifically, the debtor testified:
A. No, it's not listed on there.
Trial Tr. vol II, 129. In response to Arvest's counsel's inquiries regarding the debtor's failure to list any of her corporate ownership interests, the debtor testified that "It's not listed on here, but it was known about JNYLECO, Dokes Quality Auto Sales. The Red Barn had been transferred, so I didn't assume I had an interest in Red Barn." Trial Tr. vol II, 126. When Arvest's counsel asked the debtor to confirm that she did not see a need to disclose her interest in Red Barn to her attorney, the debtor testified that she believed that she had transferred Red Barn, Inc. to Talesha, and therefore did not have an interest in Red Barn, Inc. or Jocelyn's Grille to disclose to Phillips:
Q. At the same time that you transferred the properties to her?
Trial Tr. vol II, 126-28. When Arvest's counsel questioned the debtor about her alleged belief that she had transferred the corporation of Red Barn, Inc. to Talesha when she transferred the Dineen property (owned by Red Barn, Inc.) to her, the debtor maintained that she had told Phillips about the transfer. Yet, she also testified that Red Barn's property was "with the land commission" when she consulted Phillips:
Q. Correct?
Trial Tr. vol II, 129-31. The debtor admitted that she did not disclose her ownership of a liquor license in the course of her 2014 case. Trial Tr. vol II, 126. She did not attempt to justify her failure to disclose the license. Phillips testified that he first met with the debtor on April 14, 2014. To the extent that he could recall, Phillips testified about his interactions with the debtor in 2014, and, more generally, about his office protocols for handling a bankruptcy case:
Trial Tr. vol II, 95-96. Both the debtor's counsel and Arvest's counsel questioned Phillips about the information that the debtor had disclosed to him regarding property transfers-focusing their inquiries on the "property transfer" section of the intake form that asked whether the debtor had sold or transferred any real property in the last three years. In response, the box next to "yes" was checked. Under the next question on the form stating "If yes, when and to whom did you transfer it:" there is a notation stating only "Commissioner Land Sale." The location of the property is disclosed as "1400 145 St. Wrightsville 72206." When the debtor's counsel asked Phillips about the property transfer section of the form, he testified:
Trial Tr. vol II, 89. However, when Arvest's counsel cross-examined Phillips, he clarified that the information about the land commissioner sale of the 145th Street property was added to the intake form by his assistant rather than the debtor and he did not know if the information was added to the form on April 14, 2014, or in the days after that date. Trial Tr. vol II, 97. When Phillips was asked if he recalled discussing the land commissioner sale with the debtor, he testified:
Trial Tr. vol II, 97-98. The redemption deed for the 145th Street property substantiated Phillips's recollection that the 145th Street property had already been redeemed from the land commissioner when the debtor consulted him on April 14, 2014. (Def. Ex. F.) The redemption deed recited that the 145th Street property had been certified to the Commissioner of State Lands for the non-payment of taxes and that Jocelyn Dokes, claiming to the be the owner of the property, had filed a petition to redeem the property. For "consideration of $13,105.59 so paid," the Commissioner of State Lands transferred the property to Jocelyn Dokes on April 10, 2014. Phillips testified that the debtor did not provide him with any copies of deeds showing transfers of property to or from the debtor or her companies. Trial Tr. vol II, 106.
Phillips filed the debtor's first chapter 13 petition and most of her schedules on April 16, 2014. He filed the debtor's SOFA and Schedules I and J on April 23, 2014. He testified that he requires, in all instances, for his clients to sign the exact copy of the schedules and statements that he files with the Court. He counsels his clients regarding the potential penalties that could arise if they file incorrect information with the Court. He stated that his clients "have to give us the information and verify it and sign those documents." Trial Tr. vol II, 104-05. Phillips testified that if the debtor had spoken up and said that something was not correct in the documents that he asked her to sign, he would have made the necessary corrections. Trial Tr. vol II, 105-6. Phillips confirmed that he filed no amended schedules or statements on behalf of the debtor prior to her case being dismissed approximately five months after it was filed. Trial Tr. vol II, 93.
After the debtor's first case was dismissed on January 9, 2015, Arvest sued the debtor, Dokes Auto, and JNYLECO in state court. The debtor retained Martindale to defend her and her two entities in the Arvest litigation and later agreed with Martindale's suggestion that she should file a second chapter 13 case. The debtor testified that Martindale did not provide an intake form similar to Phillips's but instead prepared her second case by using the same information that Phillips had filed in her 2014 case:
Trial Tr. vol II, 16. In response to Arvest's counsel's questions, the debtor testified:
Trial Tr. vol II, 10-11,16. Despite the debtor's testimony that she reviewed each page of her petition and schedules prior to filing her second case, the debtor admitted, as noted previously, that she did not list an interest in 1217 Curtis Sykes Drive. Trial Tr. vol II, 132. The debtor also admitted that she did not disclose that she regularly drives vehicles owned by Dokes Auto. Trial Tr. vol II, 138-39. She also acknowledged that she failed to list any licenses, including the liquor license held in her name, and offered no justification for this particular omission. Trial Tr. vol II, 135. Additionally, although the debtor was the president of Dokes Auto, Jocelyn's Grille, Red Barn, and JNYLECO within the past six years, she admitted that she did not disclose that she was an officer of any company within that time frame. Trial Tr. vol II, 140. She also admitted that she did not list an interest in Jocelyn's Grille (formerly Red Barn) or in any other business. Trial Tr. vol II, 134-35.
However, the debtor absolved herself of responsibility for failing disclose her business interests by insisting that she had told Phillips and Martindale that she had transferred Red Barn, Inc. to Talesha
The debtor maintained that she had told Phillips prior to the filing of her first case that she was planning to transfer the 145th Street property and Dineen property to Talesha in exchange for Talesha paying the delinquent taxes to redeem the two properties from the land commissioner and obtaining a line of credit to operate Dokes Auto.
Trial Tr. vol II, 220. According to Talesha, on April 10, 2014, she redeemed the 145th Street property by paying delinquent taxes of $13,105.59 and redeemed the Dineen property by paying delinquent taxes of $3623.89. Trial Tr. vol II, 198-99. Additionally, Talesha said that she paid delinquent taxes of $2681.00 to redeem a third property located at 2500 East 2nd Street. Trial Tr. vol II, 198. Talesha said that she had "money in a bank account" that her brother withdrew to pay the taxes because she is "always out of town." Trial Tr. vol II, 209-11. Talesha testified that in exchange for her help with the floor plan financing and delinquent taxes, she received the 145th Street and Dineen properties, but later decided that she "didn't want it specifically in my personal name." Trial Tr. vol II, 202-03. She said that she created DM of NLR to hold title to the properties. Trial Tr. vol II, 203. She acknowledged that the deeds transferring property to DM of NLR are dated April 14, 2014, but the Articles of Incorporation filed with the Arkansas Secretary of State indicate that DM of NLR was formed on May 7, 2014. Trial Tr. vol II, 213-14; Pl. Ex. 25.
Trial Tr. vol II, 214-15. Talesha testified that she has received no income from DM of NLR since it was formed in 2014. Trial Tr. vol II, 224. She also said that she had executed a contract with Tony Woods in 2010 for work that was to be done on the 145th Street property and that she and the debtor still owe a debt to Woods as a result. Trial Tr. vol II, 195-96. Talesha could not explain, however, why she obligated herself to pay a debt for hundreds of thousands of dollars to repair the 145th Street property in 2010-four years before she had any interest in the property. Trial Tr. vol II, 230.
Although the debtor attributed the vast majority of the inaccuracies in her schedules to mistakes made by Phillips and Martindale, the debtor also suggested that some of the errors in her schedules were due to her own lack of familiarity with the terms contained in the questions. The debtor stated generally that some of the terms confused her and-more specifically-that she did not know what the word "priority" meant as it related to tax claims. Trial Tr. vol II, 157-58. However, regarding her failure to list a debt to the IRS in this case, she explained that she did not think that she owed any taxes when her second case was filed. Trial Tr. vol II, 174. In any event, the debtor said that she answered the questions to the best of her ability but relied on both Phillips and Martindale "for the answers." Trial. Tr. vol II, 158. According to the debtor, if she had a question, she would ask Phillips or Martindale. She also testified that once she gave each attorney the information, she "relied on them to do what was necessary and what was needed to file the bankruptcy case. . . ." Trial Tr. vol II, 158.
Arvest seeks a denial of the debtor's discharge under § 727(a)(2) and (a)(4)(A). Because the denial of a discharge is a "harsh and drastic penalty," the statute's provisions are "strictly construed in favor of the debtor." Korte v. U.S. Internal Revenue Serv. (In re Korte), 262 B.R. 464, 471 (B.A.P. 8th Cir. 2001) (internal citations omitted). Once a party objecting to a debtor's discharge "establishes a prima facie case, the burden then shifts to the debtor defendant to offer credible evidence to explain [her] conduct." Robbins v. Haynes (In re Haynes), 549 B.R. 677, 685 (Bankr. D.S.C. 2016). However, the objecting party bears the ultimate burden of proving by a preponderance of the evidence that a debtor is not entitled to a discharge. In re Korte, 262 B.R. at 471. In this case, Arvest must prove each element of § 727(a)(2) or (a)(4)(A) by a preponderance of the evidence in order to prevail upon its objection to the debtor's discharge.
Under § 727(a)(2) the Court shall grant a debtor a discharge, unless—
11 U.S.C. § 727(a)(2). Section 727(a)(2) is fundamental to the concept that a debtor's chapter 7 discharge is granted upon the condition that he has disclosed all of his assets and made them available for distribution. Helena Chem. Co. v. Richmond (In re Richmond), 429 B.R. 263, 302 (Bankr. E.D. Ark. 2010). A creditor objecting to a debtor's discharge under § 727(a)(2) has the burden of proving four elements by a preponderance of the evidence—
See 11 U.S.C. § 727(a)(2); see also In re Korte, 262 B.R. at 472. Proof that a creditor or the estate was harmed as a result of the debtor's act is not required under § 727. In re Richmond, 429 B.R. at 302 (citing In re Snyder, 152 F.3d 596, 601 (7th Cir. 1998)) (citation omitted). Arvest contends that debtor's discharge should be denied under § 727(a)(2) because she concealed property of the estate when she failed to fully disclose her assets and income when she filed her petition and schedules. For the reasons stated below, the Court finds that Arvest met its burden of proof under § 727(a)(2).
The Court finds that the debtor concealed property after she filed her petition, satisfying the first and third elements of § 727(a)(2). Failing to list assets on bankruptcy schedules and statements is tantamount to an act of concealment falling within the time frame required by either prong of § 727(a)(2). See Fowler v. Weathers (In re Weathers), No. 5:09-ap-7203, 2011 WL 3207950, at *3 (Bankr. W.D. Ark. July 21, 2011) (citing Cobb v. Hadley (In re Hadley), 70 B.R. 51, 53 (Bankr. D. Kan. 1987)). It is generally acknowledged that "`concealment is a continuing act and although the act of concealment might have commenced prior to the one year period,' if it continues post-petition, the requirement of § 727(a)(2) is satisfied." Id. (quoting Peterson v. Hazen (In re Hazen), 37 B.R. 329, 332 (Bankr. M.D. Fla. 1983)). In this case, the debtor failed to list numerous assets when she filed her initial schedules and statements on July 31, 2015, and made no effort to correct her omissions during the subsequent seven months. Instead, the debtor filed amendments only when facing an imminent hearing with potentially adverse consequences for the debtor, filing her first amendment on February 8, 2016—the day before the February 9, 2016 hearing on the motion to convert—and her second amendment on January 18, 2017—the day before this trial was scheduled to begin on January 19, 2017. Under most circumstances, debtors may amend schedules liberally. Kaelin v. Bassett (In re Kaelin), 308 F.3d 885, 889 (8th Cir. 2002) (citing Armstrong v. Harris (In re Harris), 886 F.2d 1011, 1015 (8th Cir. 1989)). However, amendments filed after a creditor reveals the falsity of the original documents-as Arvest revealed in both its motion to convert and the complaint commencing this adversary proceeding-do not negate the fact that the debtor's original schedules and statements were inaccurate. Sholdra v. Chilmark Fin. LLP (In re Sholdra), 249 F.3d 380, 382-83 (5th Cir. 2001).
The Court also finds that it was the debtor that concealed assets when she omitted them from her schedules, satisfying the second element of § 727(a)(2). Despite the debtor's attempt to place the blame on Phillips and Martindale, the debtor had a "duty to make complete and accurate disclosures on [her] petition, schedules and statements." Doeling v. Berger (In re Berger), 497 B.R. 47, 66 (Bankr. D.N.D. 2013). Although Phillips vaguely recalled a discussion with the debtor about a business that he believed was a car dealership and Martindale ostensibly should have known to disclose the debtor's interests in Dokes Auto and JNYLECO because he represented those entities in state court, there is no evidence-other than the debtor's self-serving testimony-that either attorney was apprised of the full extent of the debtor's assets and income. However, even if the debtor told Martindale, her attorney in this case, about some of the assets that were omitted from her schedules, she could not abdicate her independent duty to ensure that her schedules accurately depicted her assets. See In re Killian, No. 07-3315, 2008 WL 5834017, *7 (Bankr. D. Or. Nov. 17, 2008). Additionally, although the debtor blamed many of the omissions in her schedules on her alleged reliance on attorney advice, there is nothing in the record to suggest that Phillips, Martindale, or any other attorney advised the debtor to omit assets and obscure information about her income when she filed her schedules and statements.
The Court further finds that the debtor acted with the intent to hinder, delay, or defraud a creditor or an officer of the estate, satisfying the fourth element of § 727(a)(2). Section 727(a)(2) requires a showing that the debtor acted with the actual intent. In re Korte, 262 B.R. at 472. Constructive intent will not suffice. Jacoway v. Mathis (In re Mathis), 258 B.R. 726, 733 (Bankr. W.D. Ark. 2000). Debtors rarely admit that they had the requisite intent. In re Korte, 262 B.R. at 472. Thus, the necessary intent may be "`inferred from the facts and circumstances of the debtor's conduct.'" Id. at 472-73 (quoting Fox v. Schmit (In re Schmit), 71 B.R. 587, 590-91 (Bankr. D. Minn. 1987)). Here, the debtor's case has been pending for almost two years, affording her ample time to accurately disclose all of her assets and income had she intended to do so. It is apparent based on the facts and circumstances surrounding the debtor's conduct that she did not so intend.
When the debtor filed her initial schedules in this case on July 31, 2015, she failed to disclose her inherited interest in 1217 East 15th Street. The debtor tried to justify this omission by saying that her mother had made it clear that the debtor was not to inherit or even share in the property with her siblings. However, the debtor's actions relating to this property belie her alleged belief that she had no interest in it. She has consistently used the address to receive her mail, she listed the address on her petition, and she has lived there both alone and with her son. In addition, although she claimed that she was living elsewhere with a friend when she filed her petition, she identified neither the friend nor the address of her alleged residence as of July 31, 2015. Further, the debtor did not testify to whom her mother directed the property to go and there is no evidence that any of the debtor's siblings are claiming to own the property to the exclusion of the debtor.
The debtor also failed to disclose in her initial schedules her liquor license and her bank account for Dokes Auto. At trial, she offered no explanation for her failure to disclose these particular assets. However, based upon the debtor's non-disclosure of her corporate ownership interests, discussed below, it is easily conceivable that the debtor intentionally concealed her liquor license and corporate bank account not only to hide the assets themselves, but because disclosing these items would have led creditors or the trustee to question why someone who had listed her only source of income as employment in "used car sales" would possess a liquor license or be a signatory on a corporate account. Further, the debtor failed to disclose her ownership of four corporations while simultaneously claiming that property owned by two of them-Dokes Auto and JNYLECO-was her own in order to delay Arvest's foreclosure efforts in state court. Although she tried throughout the trial to blame her omissions on Phillips and Martindale, there is no indication that either attorney knew the extent of her corporate interests-let alone advised her to refrain from disclosing those interests on her schedules. In any event, while "a debtor who acts in reliance on the advice of counsel can lack the intent required to deny a discharge, reliance on advice of counsel is not a defense when it should be evident that the information should be included." In re Killian, 2008 WL 5834017, *7. In this case, it should have been evident to the debtor that the omitted assets should have been disclosed.
In addition, she tried to conceal the amount of equity in the properties that she disclosed by changing the property values and secured debt amounts to show negative equity of $38,402.00 in her July 31, 2015 schedules despite representing that the same properties had equity of $250,847.98 only fifteen months earlier when she filed her first case. At trial, the debtor failed to satisfactorily explain the basis for her devaluation of the properties.
Additionally, a debtor has a duty to update schedules as soon "as reasonably practicable" after becoming aware of any inaccuracies or omissions. In re Berger, 497 B.R. at 62. Yet, despite the debtor being made indisputably aware during the course of the February 9, 2016 hearing that her February 8, 2016 amendment had failed to rectify a number of omissions on her schedules and statements, the debtor did not file another amendment for eleven months—and only then on the literal eve of this trial. In the debtor's January 18, 2017 amendment, she disclosed assets for the first time that included: an additional $700.00 in clothing; an additional $9000.00 in the liquor license's value; 100% ownership of Lending Hand Foundation; $2300.00 in "net income from rental property and from operating a business, profession, or farm"; monthly rental income of $300.00 per month; and rental income of $1800.00 for the period of January 1, 2015 to July 31, 2015. Based upon the number of assets that the debtor omitted, the implausible or nonexistent explanations for the omissions, and the suspect timing and content of the debtor's amendments-as well as for the reasons supporting the Court's finding of fraudulent intent under § 727(a)(4)(A), discussed below-the Court concludes that the debtor intentionally failed to list property that she owned in an attempt to hinder, delay, or defraud her creditors or the trustee. The Court finds that Arvest proved each element of § 727(a)(2) by a preponderance of the evidence. Therefore, the Court denies the debtor's discharge under § 727(a)(2).
"Bankruptcy provides debtors with a great benefit: the discharge of debts." Home Serv. Oil Co. v. Cecil (In re Cecil), 542 B.R. 447, 454 (B.A.P. 8th Cir. 2015) (quoting Ellsworth v. Bauder (In re Bauder), 333 B.R. 828, 834 (B.A.P. 8th Cir. 2005) (Schermer, J., dissenting)). However, "[t]he price a debtor must pay for that benefit is honesty and candor. If a debtor does not provide an honest and accurate accounting of assets to the court and creditors, the debtor should not receive a discharge." Id. The bankruptcy code "requires nothing less than a full and complete disclosure of any and all apparent interests of any kind." In re Korte, 262 B.R. at 474 (citation omitted). When a debtor fails to comply with the code's disclosure and veracity requirements, it "necessarily affects the creditors, the application of the Bankruptcy Code, and the public's respect for the bankruptcy system as well as the judicial system as a whole." Nat'l Am. Ins. Co. v. Guajardo (In re Guajardo), 215 B.R. 739, 742 (Bankr. W.D. Ark. 1997). "`A fundamental purpose of § 727(a)(4)(A) is to ensure that dependable information is supplied for those interested in the administration of the bankruptcy estate on which they can rely without the need for the trustee or other interested parties to dig out the true facts in examinations or investigations.'" In re Haynes, 549 B.R. at 686 (quoting Sergent v. Haverland, (In re Haverland), 150 B.R. 768, 770 (Bankr. S.D. Cal. 1993). To that end, § 727(a)(4)(A) provides for the denial of a debtor's discharge if "the debtor knowingly and fraudulently, in or in connection with the case, made a false oath or account." 11 U.S.C. § 727(a)(4)(A). A party objecting to a debtor's discharge under (a)(4)(A) has the burden of proving by a preponderance of the evidence that—
In re Richmond, 429 B.R. at 307.
The first and second elements under § 727(a)(4)(A) require that the debtor made a false statement under oath. Debtors are required to verify their schedules and statements under the penalty of perjury. Daniel v. Boyd (In re Boyd), 347 B.R. 349, 354 (Bankr. W.D. Ark. 2006). The debtor testified that she and Martindale's assistant reviewed her petition and schedules page by page before the debtor signed them. Trial Tr. vol II, 11. On July 31, 2015, the day that Martindale filed the debtor's case, the debtor signed a declaration concerning her schedules that stated: "I declare under penalty of perjury that I have read the foregoing summary and schedules, consisting of 19 sheets, and that they are true and correct to the best of my knowledge, information, and belief." The debtor signed a similar declaration regarding her SOFA that stated: "I declare under the penalty of perjury that I have read the answers contained in the foregoing statement of financial affairs and any attachments thereto and that they are true and correct." The debtor's declarations regarding her schedules and statements have the "force and effect of an oath." Id. at 355 (citing Cepelak v. Sears (In re Sears), 246 B.R. 341, 347 (8th Cir. B.A.P. 2000)). However, despite the debtor's declaration under the penalty of perjury that her schedules and statements were true and correct, they were rife with inaccuracies and omissions, a fact that the debtor admitted at trial-but one that she could not have denied plausibly given the extent of each of her two amendments. Specifically, the debtor admitted that she did not initially list on her schedules and statements her inherited interest in 1217 Curtis Sykes Drive; her ownership interests in Dokes Auto, Lending Hand Foundation, JNYLECO, Jocelyn's Grille f/k/a Red Barn, Inc.; the fact that she had been an officer of all four corporations within the six years prior to filing; her use of vehicles owned by Dokes Auto; her liquor license; or her April 14, 2014 transfers to Talesha. Additionally, according to the debtor's own testimony, she transferred a portion of her interest in Dokes Auto to Talesha at some point in 2014 prior to filing her first case on April 16, 2014. Even if the debtor transferred shares of Dokes Auto to Talesha on January 1, 2014, the transfer occurred within the two-year period preceding the filing of this case on July 31, 2015, and should have been-but was not-disclosed in response to SOFA Question 10.
As the Court previously stated above in its analysis of § 727(a)(2), filing an amendment after a creditor demonstrates the falsity of the original documents does not absolve the debtor of the ramifications of filing inaccurate documents in the first place. In re Sholdra, 249 F.3d at 382-83. In any event, despite having filed three sets of schedules and statements in the twenty-one months that this case has now been pending, the debtor has never accurately disclosed all of the relevant information. For instance, she has still not disclosed in her SOFA that she was president of Dokes Auto within the six years before filing, or that she was president of JNYLECO, Jocelyn's Grille, and Lending Hand Foundation at the time that she filed this case. She has also never disclosed in her SOFA that she transferred shares of Dokes Auto to Talesha in 2014. She has never disclosed in her SOFA that she drives vehicles owned by Dokes Auto. She has never disclosed on her schedules that she holds a real estate license. She has never disclosed on her schedules the substantial debt that she claims to owe Tony Woods. The debtor's initial schedules and statements did not disclose a liquor license at all. Her February 8, 2016 amendment referenced a "Liquor License at 1300 [sic] 145th Street" valued at $1000.00 under the heading "Schedule B: Personal Property." The debtor's January 18, 2017 amendment stated on Schedule A/B that Jocelyn's Grille owns a liquor license worth $10,000.00. However, the debtor has never disclosed on any schedule since the inception of this case that she personally holds a liquor license worth $10,000.00. For these reasons, the Court finds that the debtor made a false statement under oath, satisfying the first and second elements necessary to deny the debtor's discharge under § 727(a)(4)(A).
The third and fourth elements under § 727(a)(4)(A) require that the debtor knew that her statements were false and had fraudulent intent. Whether the debtor had the requisite knowledge and intent under § 727(a)(4)(A) is a matter of fact. In re Sears, 246 B.R. at 347 (citing Palatine Nat'l Bank v. Olson (In re Olson), 916 F.2d 481, 484 (8th Cir. 1990)). In this case, the debtor has owned and run multiple businesses for the past twenty years. She has taken business classes. She has executed loan documents on behalf of herself, Dokes Auto, and JNYLECO. She has drafted numerous deeds. She has filed documents with the Arkansas Secretary of State on behalf of her corporations. In addition to her various business endeavors, she owns rental property and is a real estate agent. For all of these reasons, the Court finds that the debtor is relatively experienced in matters relating to business, finances, and real estate. When the debtor's knowledge in these areas is viewed in concert with her admission that she reviewed each page of her petition and schedules before signing them, that she paid attention to the documents, and that she was aware of the information that had been provided to the Court, the Court finds that the debtor knew that the statements that she verified as true were actually false. Nevertheless, the debtor denies that she intended for her schedules and statements to be inaccurate.
As stated above in the Court's analysis of § 727(a)(2), fraudulent intent may be "inferred from the facts and circumstances of the debtor's conduct." In re Korte, 262 B.R. at 472-73 (quoting In re Schmit, 71 B.R. at 590). Even if a debtor is merely careless, the `"cumulative effect of all the falsehoods together evidences a pattern of reckless and cavalier disregard for the truth to support fraudulent intent."' In re Sholdra, 249 F.3d at 383 (quoting Economy Brick Sales, Inc. v. Gonday (In re Gonday), 27 B.R. 428, 432 (Bankr. La. 1983)). Therefore, reckless indifference to the accuracy of the information that the debtor provided in her schedules and statements is sufficient to prove intent. See In re Richmond, 429 B.R. at 298. Additionally, although a debtor's false oath in a previous case cannot serve as a basis for denying a debtor's discharge under § 727(a)(4)(A) in a later case, such "historical evidence" may be relevant to a determination of fraudulent intent in a subsequent case. In re Haynes, 549 B.R. at 688 (citations omitted). At trial, the debtor argued that she did not have fraudulent intent in this case because she disclosed to Phillips all of the information required for accurate and complete schedules before filing her first case in 2014-but Phillips nonetheless made errors when he filed her 2014 case. According to the debtor, Martindale perpetuated Phillips's errors by copying the debtor's 2014 schedules and statements and refiling the same information in this case. The Court will address each facet of this domino-effect argument in turn-the debtor's allegedly complete disclosures to Phillips in her first case and Martindale's alleged duplication of Phillips's work in her second.
First, the Court finds that neither the intake form nor Phillips's testimony supports the debtor's assertion that she made the necessary disclosures to Phillips in her first case. The debtor's intake form from her 2014 filing with Phillips is replete with omissions and outright misrepresentations. Despite driving a vehicle—or vehicles—owned by Dokes Auto, the debtor left blank the space after the question "Do you drive or have in your possession a vehicle/boat/ATV/etc that belongs to someone else (describe)." Despite owning rental property at 2500 E. 2nd Street and a share of inherited property at 1217 Curtis Sykes Drive, the debtor wrote nothing after the question asking the debtor to "Please list below any real property or time shares you own other than the home you live in." Despite owning stock in Dokes Auto, JNYLECO, Lending Hand Foundation, and Jocelyn's Grille, the debtor answered "no" to the question "Do you own any stocks (either publicly traded or closely held) or bonds. She provided no information to the next question asking the debtor to "please describe the stocks/bonds, your number of shares and who manages them, or if of a business that you own, please describe the business[.]" (emphasis added) Under the income section of the intake form, the debtor indicated that she was paid monthly-ostensibly from her employment at the car dealership-but made no reference to her real estate commissions or rental income next to the question asking the debtor to state the sources and amounts of "other income." Further, the "property transfer" section of the intake form contains only a cryptic reference to a transfer of the 145th Street property to the land commissioner on a date unknown. What the intake form does not contain is so much as a hint that the debtor transferred the 145th Street property to Talesha within hours of her consultation with Phillips.
Second, the Court finds that Martindale did not merely duplicate the debtor's 2014 schedules and statements when he filed the debtor's second case.
The Court finds that the debtor did not avail herself of that opportunity. Even if the Court believed that Martindale had prepared the debtor's schedules and statements in this case by using the exact same information as Phillips had filed in the debtor's 2014 case, the debtor unequivocally testified that she reviewed her schedules and statements in this case prior to Martindale filing them.
The debtor also argued that her omissions and inaccuracies were not the product of any fraudulent intent, but instead occurred because she failed to understand all of the terms contained in the questions on the schedules and statements. The debtor testified that she relied on Phillips and Martindale to answer her questions, and, although there is no evidence before the Court that the debtor ever asked either attorney a single question aimed at clarifying an unfamiliar term, she acknowledges that she could have done so. Additionally, the only specific term that the debtor said that she did not understand was the word "priority" in the context of tax claims. She did not testify to any additional terms that she found to be perplexing. Because of the debtor's experience in real estate and business matters, as discussed in detail above, the Court finds it inconceivable that the debtor was genuinely confused about questions relating to her business interests, property ownership, or transfers of property. As another bankruptcy court found when faced with similar facts, the Court finds that the debtor's contention that she is "an unsophisticated individual who is unable to understand the meaning of questions on the Statement of Financial Affairs stated in plain English flies in the face of common sense and every-day experience of anyone with even a minimum of business savvy and experience." In re Muscatell, 113 B.R. at 75. For all of these reasons, as well as those stated above in relation to the Court's finding that the debtor possessed the requisite intent under § 727(a)(2), the Court finds that the debtor had fraudulent intent under § 727(a)(4)(A).
Finally, the Court finds that the debtor's false statements related materially to her bankruptcy. In order to warrant the denial of the debtor's discharge under § 727(a)(4)(A), the debtor's false statements must be material to her bankruptcy case. In re Richmond, 429 B.R. at 307. "A false statement is material if it `bears a relationship to the [debtor's] business transactions or estate, or concerns the discovery of assets, business dealings, or the existence and disposition of [her] property.'" In re Mathis, 258 B.R. at 736 (quoting Mertz v. Rott, 955 F.2d 596, 598 (8th Cir. 1992)). If each of the debtor's numerous false statements could be viewed in isolation, perhaps not all of them would be material. However, when the debtor's false statements are viewed as part of the broader landscape of this case, their effect is cumulative and they are material. See Mosely v. Sims (In re Sims), 148 B.R. 553, 557 (Bankr. E.D. Ark. 1992). Further, the debtor made numerous false statements that are alone sufficient to warrant the denial of her discharge under § 727(a)(4)(A). She failed to disclose her interests in Dokes Auto, JNYLECO, and Jocelyn's Grille, she failed to disclose her transfers of unencumbered property to Talesha;
For the above stated reasons, the Court finds that the elements of § 727(a)(2) and (a)(4)(A) have been met. The Court denies the debtor's discharge pursuant to both sections.
IT IS SO ORDERED.
The debtor testified that Woods-whom she characterized as a close friend that she has known for years-completed work on the 145th Street property in 2013. Woods was not called as a witness at trial.