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Debtor v. Karen E. Bezner Trustee Morris Rosen

argued: January 25, 1993.

MORRIS ROSEN DEBTOR
v.
KAREN E. BEZNER TRUSTEE MORRIS ROSEN, APPELLANT



On Appeal From the United States District Court For the District of New Jersey. (D.C. Civil Action No. 91-05190).

Before: Stapleton and Cowen, Circuit Judges, and Dubois, District Judge*fn*

Author: Stapleton

Opinion OF THE COURT

STAPLETON, Circuit Judge:

This is an appeal by a Chapter 7 debtor of an order of the district court affirming a denial of discharge issued by the bankruptcy court pursuant to 11 U.S.C. § 727(a)(2)(A). In granting summary judgment for the trustee, the bankruptcy court relied on the "continuing concealment" doctrine to conclude that the debtor had concealed an asset during the year before bankruptcy with an intent to hinder, delay, or defraud a creditor. For the reasons set forth below, we will reverse and remand for further proceedings.

I.

On December 28, 1987, Morris Rosen transferred his interest in his principal residence to his wife Laurie Rosen for no consideration. The deed was properly recorded two days later. Morris Rosen continued to live in this residence, continued to make mortgage payments, and continued to be obligated on the mortgage notes on the property. In the course of civil litigation between Rosen and his principal creditor in May 1988, Rosen offered testimony disclosing this transfer of title.

On September 12, 1989, Rosen filed a chapter 7 bankruptcy petition. At the first meeting of creditors, Rosen again testified about the transfer of title. On March 23, 1990, the chapter 7 trustee filed a proceeding against Rosen seeking to avoid the transfer of Rosen's interest in the property. The bankruptcy court granted summary judgment for the trustee, finding that Rosen, "with the actual intent to hinder, delay, or defraud a creditor," transferred his interest in his principal residence to his wife. In addition, the court granted the trustee leave to amend her complaint to add a count seeking to bar the debtor's discharge.

The trustee subsequently filed a motion seeking to block Rosen's discharge, and on October 15, 1991, the bankruptcy court granted summary judgment to the trustee on this motion. On May 6, 1992, the district court entered an order affirming the bankruptcy court. Rosen filed this timely appeal.*fn1

II.

Summary judgment is proper only where "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Bankr. R. P. 7056. "The moving party has the initial burden of identifying the evidence that demonstrates the absence of a genuine issue of material fact . . . ." J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir. 1990), cert. denied, 113 L. Ed. 2d 246, 111 S. Ct. 1313 (1991). "Where the movant bears the burden of proof at trial and the motion does not establish the absence of a genuine factual issue, the . . . court should deny summary judgment even if no opposing evidentiary matter is presented." Resolution Trust Corp. v. Gill, 960 F.2d 336, 341 (3d Cir. 1992). In determining whether the movant has satisfactorily established that there is no genuine issue of material fact, courts must keep in mind that "inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (quoting United States v. Diebold, Inc. 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962)). Because summary judgment is only appropriate where there is no issue of material fact and judgment is appropriate as a matter of law, our review of a grant of summary judgment is plenary. Jefferson Bank v. Progressive Casualty Ins. Co., 965 F.2d 1274, 1276 (3d Cir. 1992).*fn2

III.

Section 727(a) of the Bankruptcy Code provides that a debtor shall be granted a discharge unless :

(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate . . . has transferred, removed, ...


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