Callaway, Trustee v. Bang

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
GEORGE W. BANG
DEBTOR
CASE NO.
05-04135-5-ATS
JOSEPH N. CALLAWAY, TRUSTEE
Plaintiff
v.
GEORGE W. BANG
Defendant.
ADVERSARY PROCEEDING NO.
S-06-00010-5-AP
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
The matter before the court is the plaintiff's motion for summary
judgment. A hearing took place in Raleigh, North Carolina on October
26, 2006.
George W. Bang filed a petition for relief under chapter 7 of the
Bankruptcy Code on September 23, 2005, and Joseph N. Callaway was
appointed trustee. On January 16, 2006, Mr. Callaway filed the
SO ORDERED.
SIGNED this 31 day of October, 2006.
________________________________________
A. Thomas Small
United States Bankruptcy Judge
____________________________________________________________
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complaint in this adversary proceeding objecting to the debtor's
discharge pursuant to 11 U.S.C. §§ 727(a)(2), (a)(3), (a)(4) and
(a)(5). Mr. Bang, acting pro se, filed an answer on February 14, 2006.
Based on Mr. Bang's answer and his failure to respond to Requests for
Admission, the trustee filed a motion for summary judgment on August 8,
2006.
On August 23, 2006, Mr. Bang filed an application for a mental
health examination pursuant to this court's mental health program.
Because Mr. Bang could afford to pay a mental health professional, he
did not qualify for the program, and his application was denied. In an
order dated August 25, 2006, denying Mr. Bang's application, the court
stated that "[i]t is not the court's policy to recommend a healthcare
professional, but Dr. Jay C. Williams . . . was instrumental in
establishing the pro bono mental health evaluation program, and may, or
may not, be willing to provide such information to the debtor." Mr.
Bang contacted Dr. Williams, and hired him to perform an evaluation,
which was submitted to the court. According to Mr. Bang, the
evaluation supports his defense to this adversary proceeding. Mr. Bang
also provided the court with a letter from Mariea P. Gregory, the
director of the Healthquest and Cardiopulmonary Rehabilitation Program
at Johnston Memorial Hospital, regarding Mr. Bang's physical and mental
health issues.
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Neither the evaluation by Dr. Williams nor the letter from Ms.
Gregory are in proper affidavit form, but because Mr. Bang is appearing
pro se, and because Dr. Williams is a member of the court's pro bono
panel, the court will consider Dr. Williams' statement as the debtor's
response to the plaintiff's motion. Mr. Bang did not otherwise file a
written response to the motion for summary judgment.
"[S]ummary judgment is proper 'if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.
Ct. 2548, 2552 (1986). In making this determination, conflicts are
resolved by viewing all facts and inferences to be drawn from the facts
in the light most favorable to the non-moving party. United States v.
Diebold, Inc., 369 U.S. 654, 82 S. Ct. 993 (1962). Summary judgment
should not be granted unless the moving party establishes his right to
judgment "with such clarity as to leave no room for controversy."
Portis v. Folk Constr. Co., Inc., 694 F.2d 520, 522 (8th Cir. 1982).
The trustee alleges, and Mr. Bang does not deny, that Mr. Bang
failed to keep adequate records from which his financial condition
could be ascertained, and to the extent he did maintain records, he
failed to timely provide those documents to the trustee. The trustee
further alleges, and Mr. Bang does not deny, that Mr. Bang failed to
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adequately explain the loss of $117,000 in cash assets within the two
years prior to filing his bankruptcy petition. The trustee also
contends that Mr. Bang made a false oath or account in his petition and
schedules by, among other things, omitting sources of income from his
schedules and failing to disclose bank accounts and losses in the stock
market.
Mr. Bang does not deny the trustee's allegations, but he contends
that he was suffering from major depression connected to
cardiovascular disease. Mr. Bang contends that his mental condition
negates any fraudulent intent and otherwise should be considered a
mitigating factor. Dr. Williams' report states that Mr. Bang suffers
from major depression, impulsive control disorder, and attention
deficit disorder. Whether or not these conditions are sufficient to
justify Mr. Bang's conduct is an issue of material fact that should be
decided at trial.
The elements of the trustee's causes of action have been
established and all that remains for trial is whether Mr. Bang's mental
health conditions justify that conduct.
At trial, the standard for establishing a mental illness
sufficient to rebut the facts that support a denial of discharge is
quite high. See Kamont v. West, 2003 WL 22477703 (5th Cir. 2003)
(debtor claimed she was suffering from work-related stress and
depression at the time she filed bankruptcy and only signed the
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complaints and schedules prepared by her attorney and husband. Summary
judgment granted in unscheduled lawsuit based on judicial estoppel;
court rejected debtor's argument that she was ignorant of the legal
requirement to list the claim); In re Green, 308 B.R. 677 (D. Del.
2004) (evidence that chapter 7 debtor may have been suffering from
depression at the time of the hearing on a motion to revoke debtor's
discharge was insufficient to show that he was incompetent to proceed
with hearing); In re Oliver, -- B.R. --, 2006 WL 2468297 (Bankr. W.D.
Tex. 2006) (on motion to dismiss pursuant to § 707(b), debtor testified
that he believed his income would likely decrease, that he lives a
great distance from work, and that he suffers from depression, anxiety
and bipolar disorder and is required to take medications. There was no
other testimony or evidence from any physicians regarding these
conditions, or that medications had been prescribed. Debtor has been
gainfully employed during the 15 years he contends he has suffered from
these conditions, and court did not find them to be sufficient to rebut
presumption of abuse.); but see In re Bauder, 333 B.R. 828, 2005 WL
3028243 (8th Cir. BAP 2005) (bankruptcy court clearly erred in denying
debtor's discharge for failure to list diamond ring on schedules.
Debtor suffered from adult attention deficit disorder, depression and
anxiety, and though he failed to list ring, he lacked requisite intent
to deny discharge.); In re Duffy, 331 B.R. 137 (Bankr. S.D.N.Y. 2005)
(debtor suffered from depression, emotional distress and obsessive-
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compulsive disorder that rendered him incapable of defending against
charges of medical misconduct and thereafter successfully pursuing a
new career. Property settlement debt discharged pursuant to §
523(a)(15)); In re Petersen, 323 B.R. 512 (Bankr. N.D. Fla. 2005)
(debtor's medical status, which included medication for depression,
coupled with the complexity of her finances, supported conclusion that
mistakes and omissions in petition and schedules were oversights and
did not support denial of discharge.).
It should be noted, as stated previously, that the debtor did not
qualify for the court's pro bono mental health evaluation program. Dr.
Williams is the defendant's witness and is not an expert witness
appointed by the court. A final pretrial conference will be scheduled,
at which time the court will consider how best to handle the evidence
of the debtor's expert witness.
Based on the foregoing, the trustee's motion for summary judgment
is DENIED.
SO ORDERED.
END OF DOCUMENT
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