Marinace et al v. Marinace

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
BRUCE E. MARINACE, 	No. 08-12485
Debtor(s).
______________________________________/
MICHAEL MARINACE, et al.,
Plaintiff(s),
v. 	A.P. No. 10-1005
BRUCE E. MARINACE,
Defendant(s).
_______________________________________/
Memorandum After Trial
_________________
Debtor and defendant Bruce Marinace filed his Chapter 7 petition on November 20, 2008. He
scheduled an “account receivable” owing to him from Jeremy Larsen as having a value of one dollar,
even though there was then about $40,000 plus interest owing to him, Larsen had paid him a few
thousand dollars just before bankruptcy, and a similar obligation to Marinace’s wife had been paid in
full. Marinace claimed the “receivable” exempt in the amount of one dollar.
Between the date of filing and the meeting of creditors about five weeks later, Marinace
Entered on Docket
December 13, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-01005 Doc# 20 Filed: 12/13/10 Entered: 12/13/10 16:02:59 Page 1 of 3

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1Marinace duly scheduled their claim in his schedules in care of their lawyer, but the lawyer
moved his office and the bankruptcy notice was not forwarded so plaintiffs had no actual knowledge of
the bankruptcy until after the discharge was entered. This fact might be relevant in an action to
determine the dischargeability of a debt, but has no relevance in an action to revoke a discharge under
§ 727(d)(2).
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received several thousand dollars in payments from Larsen. Although the Chapter 7 trustee asked
Marinace questions about the Larsen obligation, Marinace did not tell the trustee about the postpetition
payments nor did he amend his schedules. Marinace continued to receive regular payments from
Larsen, including about $35,000.00 after Marinace’s discharge was entered on February 18, 2009.
Marinace did not disclose any of these payments until after his bankruptcy was reopened at the request
of plaintiffs so that they could bring this action to revoke Marinace’s discharge.
Plaintiff Michael Marinace is Bruce Marinace’s father. He holds a power of attorney for two of
Bruce’s brothers. Along with brothers Peter Marinace and Keith Marinace, who are also plaintiffs,
they hold a claim against him arising out of his managing of their mother’s affairs as guardian.1
Section 727(d)(2) of the Bankruptcy Code provides that upon request of a creditor the court
shall revoke the debtor’s discharge if the debtor acquired property of the estate and knowingly and
fraudulently failed to report the property or deliver it to the trustee. Since the “receivable” from
Larsen was exempt only to the extent of one dollar, everything above that amount which Marinace
received from Larsen after the bankruptcy filing belonged to the bankruptcy trustee. Schwab v. Reilly,
– U.S. –, 130 S.Ct. 2652, 177 L.Ed.2d 234 (2010). 	The court has no difficulty finding that Marinace
knowingly and fraudulently failed to turn over his postpetition payments from Larsen to the trustee
based on his failure to disclose them to the trustee when the subject came up at the meeting of creditors
and the fact that Marinace himself had, before bankruptcy, used the threat of pursuit by a bankruptcy
trustee to induce Larsen to pay him.
Marinace’s argues that Robert Marinace is not a real party in interest and is not entitled to bring
this action on behalf of his sons Michael and Phillip by virtue of a power of attorney. However, the
court notes that even if this argument has merit Rule 17(a)(3) provides that an action may not be
Case: 10-01005 Doc# 20 Filed: 12/13/10 Entered: 12/13/10 16:02:59 Page 2 of 3

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dismissed without giving the real parties in interest the opportunity to ratify the action. In addition,
Keith Marinace is a named plaintiff suing for himself and is a scheduled creditor. Only a single
creditor plaintiff is necessary to revoke a discharge pursuant to § 727(d)(2).
For the foregoing reasons, judgment shall be entered revoking the discharge. Plaintiffs shall
recover their costs of suit.
This memorandum constitutes the court’s findings and conclusions pursuant to FRCP 52(a) and
FRBP 7052. Counsel for plaintiffs shall submit an appropriate form of judgment forthwith.
Dated: December 13, 2010
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 10-01005 Doc# 20 Filed: 12/13/10 Entered: 12/13/10 16:02:59 Page 3 of 3