[00:00:05] Speaker 04:
Okay, who is the appellee here?

[00:00:18] Speaker 04:
Which of the two of you?

[00:00:20] Speaker 03:
I'm sorry.

[00:00:21] Speaker 04:
I'm sorry.

[00:00:21] Speaker 04:
Excuse me.

[00:00:21] Speaker 04:
Who's the appellant?

[00:00:22] Speaker 04:
My mistake.

[00:00:23] Speaker 04:
Sorry about that.

[00:00:25] Speaker 03:
I am sir Jason Eatman

[00:00:27] Speaker 04:
OK.

[00:00:29] Speaker 04:
You've got 15 minutes.

[00:00:31] Speaker 04:
You can reserve as much of that time as you'd like for rebuttal.

[00:00:34] Speaker 04:
Just tell us how much, and we'll make a note of it, OK?

[00:00:37] Speaker 03:
I'd like to reserve three minutes.

[00:00:39] Speaker 03:
Three minutes?

[00:00:40] Speaker 04:
OK.

[00:00:40] Speaker 04:
That's fine with us.

[00:00:41] Speaker 04:
OK.

[00:00:42] Speaker 04:
OK.

[00:00:42] Speaker 04:
You can start.

[00:00:44] Speaker 03:
OK.

[00:00:45] Speaker 03:
Thank you, Your Honors.

[00:00:47] Speaker 03:
May it please the Court, my name is Jason Eadman, and I'm clearly appearing pro se.

[00:00:53] Speaker 03:
I'm asking the panel to reverse the denial of my discharge and remand

[00:00:56] Speaker 03:
with instructions to enter a discharge consistent with the judgment entered for my wife, Christine.

[00:01:04] Speaker 03:
This appeal is not about whether my schedules were perfect because they were not.

[00:01:10] Speaker 03:
It was about whether 727 was applied even handedly to two debtors on an indistinguishable record and whether a dormant, fully exposed contract

[00:01:19] Speaker 03:
and corrected emissions can legally amount to knowing fraudulent concealment.

[00:01:23] Speaker 04:
Can I ask you a question just so I'm not going off on the wrong track here?

[00:01:27] Speaker 04:
I mean, I hear your argument about you think that there was inconsistency between the dispositions between your wife and you, but with respect to the contract, I mean, that was not relevant to your wife one way or the other, right, or was it?

[00:01:40] Speaker 03:
It was not a contract with her name on it, sir.

[00:01:43] Speaker 04:
Okay.

[00:01:43] Speaker 04:
So to the extent the bankruptcy court relied on that, that's just an issue we should look at discreetly.

[00:01:49] Speaker 04:
Is that fair?

[00:01:51] Speaker 04:
Yes.

[00:01:52] Speaker 03:
Yes.

[00:01:52] Speaker 03:
Okay.

[00:01:53] Speaker 03:
Thanks.

[00:01:53] Speaker 03:
I feel like that's fair.

[00:01:54] Speaker 03:
Yes.

[00:01:58] Speaker 03:
So, yep, lost my place.

[00:02:01] Speaker 03:
I knew that was going to happen.

[00:02:01] Speaker 03:
Okay.

[00:02:02] Speaker 03:
So I'm asking you to correct two

[00:02:06] Speaker 03:
legal misapplications of 7271, uneven application between two debtors and indistinguishable record and number two, treating a long dead fully exposed contract and a set of corrected schedule emissions as the kind of knowing fraudulent concealment that justifies the extreme penalty of a denied discharge.

[00:02:27] Speaker 03:
I'd love to tackle these

[00:02:31] Speaker 03:
two issues in whatever order you'd like.

[00:02:34] Speaker 03:
I like this hot bench thing more than me reading.

[00:02:38] Speaker 00:
That's fair.

[00:02:39] Speaker 00:
Why don't you focus on the book and the contract?

[00:02:43] Speaker 00:
And I think as it was developed and has come through to us, it's not really the book

[00:02:49] Speaker 00:
It's the existence of the contract and its continuation through the petition date, which was the concern and really the genesis of the ultimate finding.

[00:03:01] Speaker 00:
I think as Judge Lafferty has indicated, understand your comments about your wife's ruling, but that is not the basis that we judge the decision as to you.

[00:03:14] Speaker 00:
We look at the facts as to you, so I think

[00:03:17] Speaker 00:
Your time is best served by trying to incorporate that specifically and my understanding is largely the court surveyed everything but really focused on the failure to disclose the contract as the basis for the denial of your discharge Is that how you understand it?

[00:03:39] Speaker 03:
I?

[00:03:40] Speaker 03:
Well, I love I love thank you for that that that

[00:03:44] Speaker 03:
that point, I saw it as two different things, but I'm more than happy just to focus on the book contract, if that's helpful to your honors.

[00:03:51] Speaker 00:
I think that's probably the area we're more interested in.

[00:03:55] Speaker 03:
Okay, so instead of me reading, I'm going to frame it as I see it, and I'd love

[00:04:00] Speaker 03:
be hot-vinced along the way.

[00:04:04] Speaker 03:
I think we started a bad precedent here.

[00:04:11] Speaker 03:
When I was preparing, I'm like, what does that even mean?

[00:04:13] Speaker 03:
And now I know.

[00:04:16] Speaker 04:
Well, you'll be a regular here now, right?

[00:04:18] Speaker 04:
Just watching.

[00:04:20] Speaker 03:
Well, I'm going to, I'm going to subscribe to the channel for sure.

[00:04:22] Speaker 03:
Um, so, all right.

[00:04:24] Speaker 03:
So concerning the book contract, yes, there was a book contract.

[00:04:28] Speaker 03:
We signed it back in 2018.

[00:04:30] Speaker 03:
I don't remember the exact date and that was a contract between myself and a co-op.

[00:04:36] Speaker 03:
Well, the co-author and myself had a contract with Wiley, the publisher.

[00:04:40] Speaker 03:
Uh, there was several, many, many aspects to contract as there always is.

[00:04:45] Speaker 03:
And I think the thing that's important here is that there was this payment of this $12,500 done at the onset of the contract many, many, many, many years before bankruptcy was filed.

[00:05:01] Speaker 03:
That's not in denial.

[00:05:03] Speaker 03:
That money was spent.

[00:05:05] Speaker 03:
That said, the contract required me to go produce documentation, produce manuscripts, not transcripts, manuscripts.

[00:05:15] Speaker 03:
And it never happened.

[00:05:18] Speaker 03:
So lots of things happened, including COVID.

[00:05:22] Speaker 03:
And so the contract just kind of died this anemic death.

[00:05:27] Speaker 03:
There was no correspondence with the publisher, no correspondence with the co-author, who, by the way, in the meantime, wrote five or six other books with the publisher, skipping over the book that I had.

[00:05:43] Speaker 03:
I was able to produce no communication with either the co-author or the publisher because none existed.

[00:05:54] Speaker 03:
And so they were subpoenaed.

[00:05:55] Speaker 03:
And again, no correspondence outside of the initial contract signing back in 2018 or 2019 was uncovered, showing that there was a reasonable

[00:06:08] Speaker 03:
that it was reasonable that I had forgotten that this contract was in existence.

[00:06:12] Speaker 03:
I mean, the dates had come and gone.

[00:06:14] Speaker 03:
Nothing in the contract was fulfilled and no one had even said anything to me.

[00:06:20] Speaker 03:
So when it was just forgotten on the initial submission for bankruptcy paperwork on our initial submissions.

[00:06:29] Speaker 03:
So when it was brought up, however, in cross-examination with

[00:06:38] Speaker 03:
opposing counsel, everything was exposed.

[00:06:41] Speaker 03:
We talked about it openly.

[00:06:43] Speaker 03:
We asked questions.

[00:06:44] Speaker 03:
There was not a bunch of I don't knows outside of the fact that I didn't have any communications.

[00:06:50] Speaker 03:
I don't know how the publishing industry works.

[00:06:53] Speaker 03:
I'm not a writer.

[00:06:55] Speaker 03:
I've never published a book before.

[00:06:58] Speaker 03:
My co-author is a very established author that's written many, many, many books.

[00:07:05] Speaker 03:
there's no manuscript, no correspondence.

[00:07:09] Speaker 03:
And no one's, I just thought the contract was dead and the dates support the contract itself supports the fact that it's dormant.

[00:07:17] Speaker 03:
And so when it brought up, I feel like in court, it was positioned as this active

[00:07:21] Speaker 03:
monetarily valuable.

[00:07:24] Speaker 00:
I think that the court, I don't know if the court really thought it was valuable except that it could have been.

[00:07:32] Speaker 00:
In another situation, another SVAC pattern, it could have been and that gets to the whole obligation of the disclosure at the beginning so that the trustee can figure out if it is or isn't.

[00:07:43] Speaker 00:
And I think that's where you're getting caught in the 727 is the debtor's obligation to do that.

[00:07:51] Speaker 00:
So the trustee starts with a fair, you know, disclosure of what could be regardless of whether it turns out to be.

[00:08:00] Speaker 00:
So the court actually specifically found that you made, you concealed it with the fraudulent intent.

[00:08:09] Speaker 00:
So it rejected as a factual matter

[00:08:12] Speaker 00:
that there was a reasonable basis for that.

[00:08:14] Speaker 00:
Why is that error?

[00:08:17] Speaker 03:
Yeah, thank you, your honor.

[00:08:19] Speaker 03:
I don't have any idea how someone could see something that was innocently forgotten, fully exposed and discussed, and then later known to the trustee and done nothing with it.

[00:08:34] Speaker 03:
It feels like this is... I had no idea that in that section about contracts that

[00:08:40] Speaker 03:
that I should have written every dormant contract that I have or expired contract.

[00:08:45] Speaker 04:
Can I ask you a quick one?

[00:08:47] Speaker 04:
Yes.

[00:08:47] Speaker 04:
I think I just heard something there that maybe I should have heard it before.

[00:08:51] Speaker 04:
There's a difference between I totally forgot about it and I knew about it, but it's not worth anything.

[00:08:58] Speaker 04:
So did you change your mind about it at some point?

[00:09:03] Speaker 03:
Thank you for that opportunity to clarify.

[00:09:06] Speaker 03:
When we initially filed for, which was initially a Chapter 13,

[00:09:10] Speaker 03:
It wasn't, it was just forgotten.

[00:09:13] Speaker 03:
We haven't discussed it with anybody for several years.

[00:09:16] Speaker 03:
It wasn't even something that came to mind when we were filling out the paperwork.

[00:09:21] Speaker 03:
When it was brought up is during an examination from opposing counsel during our depositions, I think is when it first came up.

[00:09:29] Speaker 03:
In what case?

[00:09:32] Speaker 03:
In the adversary proceeding.

[00:09:36] Speaker 00:
I have a recollection that

[00:09:40] Speaker 00:
This may have also been brought up in a pre-petition case involving the creditors.

[00:09:50] Speaker 02:
Forgive me, Your Honor.

[00:09:51] Speaker 02:
I don't know what that means.

[00:09:54] Speaker 00:
Your creditors, the Lockwoods, didn't they start a lawsuit against you prior to the bankruptcy?

[00:10:02] Speaker 03:
Yes.

[00:10:02] Speaker 03:
The reason I have the bankruptcy is because of that.

[00:10:05] Speaker 00:
And within that lawsuit, did the contract ever come up?

[00:10:10] Speaker 03:
Yeah, yes, it did it did and they wanted manuscripts but none existed and so Yes, it came up.

[00:10:19] Speaker 03:
It's not like I wouldn't have known that it was there's a contract in place So somebody would said hey, do you have?

[00:10:25] Speaker 03:
Book contract I said, oh, well, I don't think so because it's it's dead It's not that I I just didn't see it as I didn't remember it to be any type of asset We filled the paper there was no

[00:10:38] Speaker 03:
And there's a gap there too, Your Honor, too.

[00:10:41] Speaker 03:
And I just want to kind of paint, I'm not trying to make excuses, but I want to paint the picture of duress.

[00:10:46] Speaker 03:
So when we initially filled this out, we did not even think about that as some asset because we didn't even remember it.

[00:10:55] Speaker 03:
And then when it was exposed during depositions, we openly discussed it.

[00:11:01] Speaker 03:
And then it was, I think, I think all of the evidence submitted supported the fact that we had no correspondence and it seemed very reasonable and plausible that we did not, that we could have forgotten about it.

[00:11:14] Speaker 03:
And also that it had no value once it was exposed.

[00:11:17] Speaker 03:
And I'm not saying, so I guess I'm trying to say I forgot about it.

[00:11:21] Speaker 03:
Then we exposed it.

[00:11:22] Speaker 03:
It was determined that it had no value based on my layman-ness and, and I don't even know if that's the word, but in my layman,

[00:11:31] Speaker 03:
definition and with in accordance with my bankruptcy counsel we elected to not In fact, there was even confusion on whether it should be a creditor because if I didn't submit the manuscript I technically owed them the 12,500 which by the way isn't actually payment It's like a it's like a loan against book sales So unless the book sales I still owe the money back like we didn't have and once we started talking about we didn't even know where to put it

[00:11:57] Speaker 04:
But even getting at the kind of prophylactic reasoning why we want people to do these things, had you listed them as a creditor, the trustee might have said, oh, what's this about?

[00:12:07] Speaker 04:
And that's kind of what we're getting at here.

[00:12:10] Speaker 04:
One is, did the judge make a clear factual error in his determination that you knew about this and didn't disclose it, and that it mattered enough?

[00:12:20] Speaker 04:
And secondly, the policy behind this, which is even if this one thing

[00:12:25] Speaker 04:
isn't worth a million bucks, we don't know that till we know it.

[00:12:29] Speaker 04:
You know, until the trustee knows they can't pursue things.

[00:12:33] Speaker 04:
And sometimes there's a very indirect benefit.

[00:12:38] Speaker 04:
You know, you may disclose this and it may hint at something else that the trustee does want to go find and might be valuable.

[00:12:45] Speaker 04:
So that's why this probably seems like kind of a harsh result, but there's a lot of policy reasons why we don't want people to be editors.

[00:12:51] Speaker 04:
You know, we don't want people to editorialize, oh, I don't think this is worth anything, so I'm not going to list it.

[00:12:56] Speaker 04:
And that's just built into the code, whether we like it or not.

[00:12:59] Speaker 03:
Yes, Your Honor.

[00:13:01] Speaker 03:
And this is where I'm going to show you prosaic-ness, if that's an adjective.

[00:13:07] Speaker 03:
I don't have any idea how that section, I think it was Section G, is worded.

[00:13:12] Speaker 03:
But I don't recall it saying active or dormant.

[00:13:14] Speaker 03:
And it might.

[00:13:15] Speaker 03:
But I don't recall seeing something that would have triggered

[00:13:20] Speaker 00:
dormantness and every that's the problem with the evidence that was presented because there was a declaration in this vargo I believe her name is with Wiley that that did have the The emails that did show that Wiley was continuing to consider that dormant not extinguished Yes, your honor, but yes, thank you for that.

[00:13:42] Speaker 03:
I appreciate that because I think you're also into into your time for if you want to pause now You're at about two minutes.

[00:13:47] Speaker 04:
Yeah

[00:13:48] Speaker 03:
OK, so should I answer that?

[00:13:50] Speaker 02:
Yeah, just pause now if you want, OK?

[00:13:53] Speaker 02:
You can come back and deal with that.

[00:13:54] Speaker 02:
Oh, OK.

[00:13:56] Speaker 02:
In your two minutes.

[00:13:57] Speaker 02:
OK, thank you.

[00:14:01] Speaker 01:
Thank you.

[00:14:02] Speaker 01:
May it please the court, Jamie Dreher for Appellee's The Lockwoods.

[00:14:05] Speaker 01:
My comments are going to be brief.

[00:14:06] Speaker 01:
And what may not surprise you, as an appellee, are going to be focused on the standard of review, burden of proof, especially with respect to credibility findings.

[00:14:17] Speaker 00:
But before you launch into that, and I appreciate the credibility, we certainly expect that, but do you agree that the Bankersley Court's decision on Mr. Eatman's discharge was based solely, really, on the non-disclosure of the book contract?

[00:14:40] Speaker 01:
I will respond directly, and I don't think so, and I'll tell you why.

[00:14:44] Speaker 01:
And I've studied the ruling.

[00:14:45] Speaker 01:
I read it a bunch more last night and this morning.

[00:14:48] Speaker 01:
And so I would describe the findings, in fact, and the conclusions of law as working together.

[00:14:53] Speaker 01:
So a few things.

[00:14:54] Speaker 01:
One, yes, in his conclusions of law, he did say, I'm going to focus on the book.

[00:14:59] Speaker 01:
That's, I think, the phrase he used, and that's what he talked about when the judge issued his conclusions of law.

[00:15:05] Speaker 01:
That said, in his findings of fact, the judge did address and go over the 21 other approximate misstatements and omissions from the schedules.

[00:15:16] Speaker 00:
But there has to be a specific concealment.

[00:15:18] Speaker 00:
There has to be something that was concealed.

[00:15:22] Speaker 00:
Right.

[00:15:23] Speaker 00:
And reading the facts, there was a lot of concern about bad acts.

[00:15:27] Speaker 00:
But the thing that was concealed was the book contract.

[00:15:32] Speaker 00:
Nothing else.

[00:15:34] Speaker 00:
Was there something else that was concealed?

[00:15:37] Speaker 01:
Yes, Your Honor.

[00:15:37] Speaker 00:
That the court found that was concealed and not explained?

[00:15:43] Speaker 01:
I don't think the court had made that finding with particularity.

[00:15:47] Speaker 01:
I would suggest just to follow up with that, in reading the BAP's litigant manual, I found the case all that says BAP can affirm for any reason supported by the record.

[00:15:56] Speaker 01:
And the list of concealments is detailed with specific citations to the record at pages 11 to 13 of our brief.

[00:16:02] Speaker 01:
I'm not going to give you the laundry list like maybe we did at trial, life insurance policies, retirement accounts.

[00:16:08] Speaker 01:
And to the panel's earlier question to Mr. Eatman, there is a policy issue here, which is like, the debtor doesn't get to decide, or the debtor's counsel, what to list and whatnot.

[00:16:19] Speaker 00:
Well, I don't think the book is... But that's not quite... The debtor doesn't get to decide.

[00:16:23] Speaker 00:
That's absolutely right.

[00:16:25] Speaker 00:
The debtor loses his or her discharge only if that failure was a fraudulent intentional act.

[00:16:33] Speaker 00:
So there's no dispute that the contract was not listed.

[00:16:36] Speaker 00:
We're there.

[00:16:38] Speaker 00:
Was that act of not listing it fraudulently made?

[00:16:44] Speaker 01:
Your Honor, the court found so.

[00:16:45] Speaker 01:
And the court found so based on a determination of Mr. Eatman's credibility, which is only over.

[00:16:51] Speaker 00:
Credibility as to what?

[00:16:52] Speaker 00:
The book contract?

[00:16:54] Speaker 01:
why it wasn't listed, why it wasn't scheduled, what value it had, whether or not he had communication with the publisher.

[00:17:02] Speaker 01:
So the burden of proof then shifts after we made that case, and the burden shifts to the debtor in 727 cases to come up with the explanation and convince the court otherwise, and Mr. Eatman didn't do it.

[00:17:13] Speaker 04:
Well, let me pull that apart a little bit, okay?

[00:17:19] Speaker 04:
We almost always get to a fraud determination based on inferences, right?

[00:17:24] Speaker 04:
It's the rare person who comes in and says, yeah, I was trying to fool you the whole time, you got me.

[00:17:29] Speaker 04:
So we're dealing with inferences here.

[00:17:31] Speaker 04:
One inference is, was this thing valuable?

[00:17:34] Speaker 04:
I mean, would we infer that the person didn't disclose it because it was valuable or is going to become valuable?

[00:17:41] Speaker 04:
And there are some rights that are going to, you know, that are presently,

[00:17:45] Speaker 04:
maybe a little dormant or not, you know, not realizing cash right now that might do so later.

[00:17:50] Speaker 04:
So, I mean, that's a classic instance of, yeah, there's a reason, it's believable why this person wouldn't have disclosed this and they did it intentionally to get the asset for themselves and not somebody else.

[00:18:02] Speaker 04:
That doesn't seem to be the case here, okay, from what I can tell.

[00:18:08] Speaker 04:
What you might be saying is, in your comment that there was some credibility issues and a lot of other things kind of in the miasma here, is Judge Sarge is based on a whole bunch of things that were not dealing with this contract, just determined that, well, I just don't think this guy's telling the truth.

[00:18:26] Speaker 04:
And therefore, I'm going to assume he's not telling the truth about this contract.

[00:18:30] Speaker 04:
I mean, if that's what you're saying, that's really a very different argument.

[00:18:34] Speaker 01:
I think that's true.

[00:18:35] Speaker 01:
That's a fair way to interpret his ruling.

[00:18:37] Speaker 01:
OK.

[00:18:38] Speaker 04:
And what I'm worried about, and I think Judge Spraker said it better than I'm about to, is we're going to turn this into a strict liability question.

[00:18:49] Speaker 04:
It is not my job to judge plausibility, but the idea that I entered into this contract X years ago

[00:18:58] Speaker 04:
I don't know how to write a book.

[00:19:00] Speaker 04:
To be blunt, the other guy's going to write the book.

[00:19:02] Speaker 04:
I'm going to tell him stories.

[00:19:03] Speaker 04:
I got a $12,000 deposit years ago.

[00:19:06] Speaker 04:
I haven't done a darn thing on this.

[00:19:08] Speaker 04:
I don't think I'm going to.

[00:19:10] Speaker 04:
That's a very plausible story in terms of did he really intend to defraud or was there any present value to this thing?

[00:19:15] Speaker 04:
No.

[00:19:16] Speaker 04:
But what we're stuck with is the judge did make a ruling.

[00:19:19] Speaker 04:
But my policy concern is this is turning something that does require a fraudulent finding into something that's practically strict liability.

[00:19:28] Speaker 04:
So if you have any comments, and I know that there's a bunch of reasons why we don't want debtors to be their own editors.

[00:19:34] Speaker 04:
We don't want them deciding what should be disclosed and what's not.

[00:19:38] Speaker 04:
I get all that.

[00:19:39] Speaker 04:
But this troubles me because I just think that there's, you know, I don't get to re-decide this, but there's a lot of plausibility behind what the debtor's telling us here in terms of why he didn't think this had any value and why in his mind it didn't have to be disclosed.

[00:19:55] Speaker 01:
I appreciate that, Your Honor.

[00:19:57] Speaker 01:
And with respect to the judge's findings on credibility and not believing that testimony, you can see in the record and you can see in the judge's factual findings, the part of the underpinning for that was the miasma or the constant other failure should disclose.

[00:20:14] Speaker 01:
trailers sold, storage unit, retirement accounts, bank accounts.

[00:20:19] Speaker 01:
We wouldn't be here, Your Honor, and I'll just throw this out here as a discussion point.

[00:20:24] Speaker 01:
You know, there was, for example, we found 21 omissions and misstatements in the schedules and SOFA.

[00:20:29] Speaker 01:
Okay, well, one small category of those was these bank accounts with the kids.

[00:20:33] Speaker 01:
So the debtors were listed as, you know, co-owners of these bank accounts with their children.

[00:20:38] Speaker 01:
Those weren't listed.

[00:20:40] Speaker 01:
If that was all that was there, we wouldn't be here.

[00:20:43] Speaker 01:
Okay, I'm just admit and say, and acknowledge that I think that goes partially to your point, we wouldn't be here so with respect to materiality that's not grafted on to the false oath component of denial of discharge, but I don't think any judge would deny discharge based on a failure to disclose.

[00:21:00] Speaker 01:
for bank accounts that their kids were on that they forgot about.

[00:21:04] Speaker 01:
It's when you add up all the other things and then finally get to the book where it all becomes rather troubling.

[00:21:10] Speaker 01:
And secondly, with respect to bring it back to standard review, when there are two permissible views of the evidence, the bankruptcy court's choice between them cannot be clearly erroneous.

[00:21:24] Speaker 01:
And I think that's what we have here.

[00:21:27] Speaker 00:
But the problem that seems to present is, pulling one instance, the court remarked that Mr. Eatman had a repeating failure to remember on other matters.

[00:21:42] Speaker 00:
Seems like he remembered as to the book.

[00:21:46] Speaker 00:
So what do all those other bad acts establish as to the book?

[00:21:53] Speaker 00:
Or is it just that he evaded and did other bad things and therefore I am going to deny credibility in his explanation which was really uncontested otherwise and actually supported quite honestly by Ms.

[00:22:09] Speaker 00:
Vargo's declaration that I can find as a matter of credibility alone that he must be lying on that and is actually fraudulently intending to conceal that.

[00:22:21] Speaker 01:
I think that's the ruling and that's a fair interpretation of it.

[00:22:27] Speaker 00:
But why is that not clearly erroneous if there's nothing as to the book that suggests an implausibility or a lack of truthfulness?

[00:22:36] Speaker 01:
So I think, Your Honor, a couple of things.

[00:22:37] Speaker 01:
One is, I mean, part of the overview to this case is here's a difficulty representing credit or bankruptcy case.

[00:22:45] Speaker 01:
When debtors don't fully disclose, I'm pulling back just half a step, really shifting the burden to the creditor to, we started this case trying to find out where the buyout money from the buyer of the company went.

[00:22:56] Speaker 00:
But the problem with that, Mr. Dryer, is that should every Chapter 7 trustee then bring a 727 action against every pro se?

[00:23:06] Speaker 00:
especially when they don't file anything and they file the bankruptcy and the schedules are blank essentially.

[00:23:12] Speaker 00:
Does that mean that really that what should happen in that instance is that everybody should be facing a 727?

[00:23:18] Speaker 01:
I don't think so, Your Honor.

[00:23:20] Speaker 01:
I think that where I was going with that is we had to do the work to uncover all the lies.

[00:23:26] Speaker 01:
And that's going back to the policy issue.

[00:23:30] Speaker 01:
The debtor's responsibility in order to get a discharge is pretty simple.

[00:23:34] Speaker 01:
Disclose everything and tell the truth.

[00:23:37] Speaker 01:
Maybe it's a little bit more complicated than that, but it's like full disclosure.

[00:23:41] Speaker 00:
Part of my problem here, and it's more in the air than specific, is it seems your client knew about the book and the contract, right, from the pre-petition.

[00:23:52] Speaker 00:
And the trustee's not complaining.

[00:23:54] Speaker 01:
So I don't recall that exactly.

[00:23:56] Speaker 01:
I heard you ask the question earlier to the extent it came up in the underlying litigation.

[00:23:59] Speaker 01:
And I would just say that I'm not saying it didn't or did not.

[00:24:02] Speaker 01:
I just don't recall as I sit here.

[00:24:04] Speaker 01:
I didn't work on that underlying litigation.

[00:24:05] Speaker 01:
It was in my office.

[00:24:08] Speaker 01:
But it's got to be disclosed to everybody, to the trustee.

[00:24:12] Speaker 01:
And that's another example of why.

[00:24:15] Speaker 01:
So here's some assets that were not disclosed.

[00:24:17] Speaker 01:
that Mr. Eatman in one of his briefs, maybe his supplemental brief, talked about kind of like no harm, no foul, because these weren't big dollar amounts and weren't disclosed.

[00:24:30] Speaker 01:
The book wasn't worth anything.

[00:24:31] Speaker 00:
That gets to materiality.

[00:24:33] Speaker 00:
And I think we all agree with materiality.

[00:24:35] Speaker 00:
That's a very low bar.

[00:24:36] Speaker 00:
fraudulent intent's a little different.

[00:24:39] Speaker 00:
And that's why there's a concern about, see all these things that are bad but not the basis for a 727 action, see this thing that was explained, I'm going to find that's the basis for the 727 denial of discharge.

[00:24:53] Speaker 01:
Well, I think all the other things, those predicate things that he's looking at, I disagree with the judge on that point to the extent he found otherwise.

[00:24:59] Speaker 01:
I'm not sure I don't think he did.

[00:25:01] Speaker 01:
At least it wasn't explicit.

[00:25:02] Speaker 01:
I mean, the ways findings were couched were I'm focusing on the book.

[00:25:07] Speaker 01:
And so I'm just saying to you, Your Honor, that all those other things that we talked about, I think those do provide the basis for denial of discharge.

[00:25:14] Speaker 00:
So your point is that if take the book aside and remove the book altogether, you can still deny the 727.

[00:25:20] Speaker 00:
I mean, the night to discharge 100%.

[00:25:23] Speaker 01:
Yes.

[00:25:24] Speaker 01:
Life insurance policies that were never disclosed.

[00:25:27] Speaker 01:
Oh, I wanted to make a comment about an argument that was made about, well, I amended to address this.

[00:25:33] Speaker 01:
You know, putting the policy issue aside, I found case law, there's this in Ray Beauchamp case, which is a BAP case, which talks about that there seems to be a general, I don't know if it's a rule, your honor, but like an understanding that amendments need to be made and assets disclosed by the time of the 341 meeting.

[00:25:53] Speaker 01:
The Beauchamp case talks about that.

[00:25:56] Speaker 01:
I will tell you that didn't happen here.

[00:25:57] Speaker 01:
To the extent that's a rule, and I don't know what it is, I don't think that disclosure

[00:26:02] Speaker 01:
that's forced out of a debtor at trial on a 727, and amendments filed the day before trial, which aren't up the record here but didn't disclose everything, I don't think that cures the initial concealment, and especially the fault.

[00:26:17] Speaker 00:
But how close to Judge Lafferty's point does that move us towards strict liability?

[00:26:24] Speaker 00:
I mean, you don't even need to explain why you didn't, because you didn't do it by the 341, therefore you lost your discharge.

[00:26:30] Speaker 01:
Well, I don't know.

[00:26:31] Speaker 01:
I understand the question.

[00:26:32] Speaker 01:
I'm sensitive to that.

[00:26:33] Speaker 01:
And I hear what you're saying.

[00:26:36] Speaker 01:
I don't think a strict liability type standard like that is necessarily appropriate.

[00:26:41] Speaker 01:
But it's like one of these things like, I'm not going to come up with the right phrase, but when it walks and talks like a duck, it's probably a duck.

[00:26:50] Speaker 01:
And I think that's what Judge Sargent's found here.

[00:26:52] Speaker 01:
So in direct response to your question about when and is it strict liability,

[00:26:57] Speaker 01:
Is there a rule that amendments and disclosures have to be fixed or made by the 341 boot champs suggest that I'm not really sure that's 100% supportable under other case law, but I just suggest that.

[00:27:10] Speaker 01:
Not disclosing or failure to amend by the time of a 727 trial.

[00:27:14] Speaker 01:
Maybe that should be strict liability.

[00:27:20] Speaker 01:
OK.

[00:27:23] Speaker 01:
Um.

[00:27:25] Speaker 01:
I was going to address very briefly.

[00:27:27] Speaker 01:
I don't think it is accurate to complain about what the appellant describes as disparate treatment between him and his wife, just very briefly.

[00:27:34] Speaker 01:
One is, the citation is, I think, to an in Ray Cox case in the Ninth Circuit, completely different.

[00:27:40] Speaker 01:
In that case, it was also husband and wife, and the wife's discharge was denied because the bankruptcy judge found that even though she didn't keep the

[00:27:50] Speaker 01:
family business or the household's books and records, the husband's failure to do so was imputed to her.

[00:27:57] Speaker 01:
Well, that's the opposite of what we have here.

[00:27:59] Speaker 01:
Here, Christine, just no disrespect meant by using first names, testified and the judge believed her.

[00:28:05] Speaker 01:
She really didn't know about a lot of these things and the family finances and where the money went and the book, et cetera.

[00:28:11] Speaker 01:
So that's a completely different factual scenario.

[00:28:14] Speaker 01:
Secondly, back to the credibility determination.

[00:28:16] Speaker 01:
The judge found her explanations and responses to questions sitting there in the courtroom, looking at her face, looking at her face, hearing the tone of voice, feeling the vibe.

[00:28:28] Speaker 01:
He believed that she really didn't know.

[00:28:30] Speaker 01:
And that's a distinction between that finding and what he instead said about Mr. Eatman, which he actually was explicit about both at the beginning and at the end of his findings and conclusions, which is he found Mr. Eatman's testimony not credible.

[00:28:46] Speaker 01:
So that's it on the disparate treatment.

[00:28:49] Speaker 01:
And I guess close, I won't read the quote, but the Bolden Arrow case that's cited in our brief does talk about, and I am sensitive again to this strict liability notion, that one false oath is enough, but what it does is it shifts the burden.

[00:29:04] Speaker 01:
And then the debtor has to come back and convince the judge that it wasn't knowing and fraudulent.

[00:29:08] Speaker 01:
And that finding, that burden of proof obviously wasn't carried here and the judge didn't believe it.

[00:29:13] Speaker 01:
And I see my time ticking down and that's all I have.

[00:29:18] Speaker 04:
Any other questions?

[00:29:20] Speaker 04:
Nothing.

[00:29:20] Speaker 04:
Okay.

[00:29:20] Speaker 04:
Thank you very much.

[00:29:21] Speaker 04:
Appreciate it.

[00:29:22] Speaker 04:
Okay.

[00:29:22] Speaker 04:
Mr. Eapman, you got a couple of minutes.

[00:29:25] Speaker 03:
Okay.

[00:29:26] Speaker 03:
So where we, where I want to get to Mr. Dreyer's comments in a moment, but I, where we left off was at the email supplied by the, the publisher.

[00:29:37] Speaker 03:
And I would, I would love if those could be reviewed closely because you'll see that I'm never on them.

[00:29:45] Speaker 03:
those correspondence when they did the subpoena, they did so in a way that looked for all kinds of correspondence, including with me, which you'll go see only is limited to the initial onset of the contract many, many, many years ago.

[00:29:59] Speaker 03:
And you'll also see, and you'll see it in, in, in, and I don't, I don't know how the judge saw this, but it was very clear to me sitting on the stand that when they were, they were categorizing and emails showing a publishing date,

[00:30:15] Speaker 03:
But the title is redacted, which means it clearly wasn't the book I was supposedly writing.

[00:30:21] Speaker 03:
But they used it in their vernacular and their presentation as if it was.

[00:30:26] Speaker 03:
And that's clearly erroneous and quite frankly, untrue.

[00:30:29] Speaker 03:
It's false.

[00:30:31] Speaker 03:
So it didn't have anything to do with the book.

[00:30:33] Speaker 03:
I think that supports the fact that I would likely not remember.

[00:30:37] Speaker 03:
Concerning this pattern of omissions, we

[00:30:42] Speaker 03:
We did.

[00:30:42] Speaker 03:
We didn't know to include bank accounts that we thought weren't ours.

[00:30:46] Speaker 03:
And we explained that to the court and we amended everything.

[00:30:49] Speaker 03:
So this comment of never disclosed, I don't know what to say other than yes, we did.

[00:30:58] Speaker 02:
But the book contract was never disclosed.

[00:31:00] Speaker 02:
It was never amended, was it?

[00:31:03] Speaker 02:
No, Your Honor.

[00:31:03] Speaker 03:
But I'm saying in context of this credibility and omission pattern of omissions, because the pattern of omissions here to me,

[00:31:11] Speaker 03:
It was fully corrected.

[00:31:13] Speaker 03:
It wasn't never corrected to use this exact verbiage.

[00:31:17] Speaker 03:
And they were all corrected with the exception of the book, which with counsel, we didn't know where to put it.

[00:31:23] Speaker 03:
It didn't belong anywhere because it was dormant.

[00:31:24] Speaker 03:
And that's my explanation.

[00:31:26] Speaker 03:
So concerning the pattern of omissions and the supposed character flaws, all I can say is we amended them in good faith as quickly as we possibly could.

[00:31:39] Speaker 03:
And I'm not entirely sure how that could possibly show intent.

[00:31:42] Speaker 03:
I was there, it was me.

[00:31:44] Speaker 03:
There was never an intent.

[00:31:45] Speaker 03:
So I hope that you have enough to see that there was never an intent to fraud anyone.

[00:31:54] Speaker 04:
Okay, well, you're a little over your time.

[00:31:56] Speaker 04:
If you want to make one last closing comment, you can, and we'll... No, thank you.

[00:32:00] Speaker 03:
Okay.

[00:32:01] Speaker 04:
I've enjoyed the hot bench.

[00:32:02] Speaker 04:
Well, thank you very much, and we'll take the matter under submission.

[00:32:06] Speaker 04:
We'll get your written decision as soon as we can.

[00:32:08] Speaker 04:
Thanks for your good arguments.

[00:32:10] Speaker 04:
And with that, I think we've concluded the calendar for this month for the BAP.

[00:32:14] Speaker 04:
Okay.

[00:32:15] Speaker 04:
Thanks very much, everybody.

[00:32:17] Speaker 04:
Thank you, Mr. Dreier.

[00:32:21] Speaker ?:
The session is now adjourned.