IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
DOUGLAS MABERRY, No. 97-13026
CHARLES SIMS, Trustee,
v. A.P. No. 97-1296
Memorandum of Decision
Debtor Douglas Maberry was operating an auto repair business on August 12, 1997, the day
he filed his Chapter 7 petition. On that day, he had approximately $4,000.00 in accumulated cash
and undeposited checks from the week's receipts. In addition, he had $17,500.00 in his business
bank account. In his schedules, he stated that he had $50.00 in cash on hand and $250.00 in bank
accounts. The trustee discovered that these statements were false, and by this adversary
proceedings seeks denial of Maberry's discharge pursuant to section 727(a)(4)(A) of the
Mayberry admits that his schedules were false. As to the bank account balance, he claims that
his attorney told him that the amount he should schedule was the amount in his checkbook, not
the balance on the bank's books. As to the cash and undeposited checks, Mayberry raised no
There was no substantial evidence to support Maberry's allegation that he was relying on the
advice of his counsel. The advice Maberry says he received is contrary to the advice any
competent bankruptcy attorney would give. The attorney in question did not testify. The court
finds that Maberry did not prove that he was relying on his attorney's advice in filing false
It is of course possible that Maberry misunderstood his counsel's advice, so that his false
schedules would not result in a denial of discharge because they were not knowingly and
fraudulently false. However, this would not explain the $4,000.00 in business receipts which
Maberry failed to schedule and deposited into his bank account after his petition was filed, even
though they were on hand when he filed. Taking all the circumstances into account, the court
finds that it is more likely than not that Maberry intended to deceive his creditors and the trustee
when he made his false statements.
In addition, Maberry failed to schedule real property he owned at 1017 Evans Street in Napa.
Maberry argues that he had no realizable equity in this property, but lack of value does not
excuse a false schedule. In re Chalik
, 748 F.2d 616, 618 (11th Cir.1984). Maberry also falsely
stated that he had made no transfers of any property within one year of his bankruptcy filing
when in fact he had transferred title to this same property within one year before accepting a deed
for its return.
Once the trustee shows that a debtor's schedules are false, the burden shifts to the debtor to
show that he did not have fraudulent intent. In re Tully
, 818 F.2d 106, 110 (1st Cir. 1987). The
trustee in this case has shown that Maberry's schedules were pervasively false, and the court finds
Maberry's explanations unconvincing. Accordingly, Maberry's discharge will be denied. The
trustee shall recover his costs of suit.
This memorandum constitutes the court's findings and conclusions pursuant to FRCP 52(a)
and FRBP 7052. Counsel for the trustee shall submit an appropriate form of judgment forthwith.
Dated: June 8, 1998 _______________________