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David Jones, Appellant v. Scott Uhrmann Charlene Uhrmann

December 10, 2012


The opinion of the court was delivered by: Wigenton, District Judge.


Before the Court is David Jones's ("Appellant") appeal from a decision of the United States Bankruptcy Court, District of New Jersey, entered on June 29, 2012. The Bankruptcy Court's Order: (1) granted Scott Urhmann and Charlene Urhmann's ("Appellees") Summary Judgment Motion; (2) denied Appellant's bankruptcy discharge pursuant to 11 U.S.C. §§ 727(a)(3) and (a)(4); and (3) denied Appellant's cross-motion to dismiss. Both parties to this appeal are proceeding as pro se litigants.

This Court has jurisdiction to hear appeals of final judgments and orders of the Bankruptcy Court pursuant to 28 U.S.C. § 158(a)(1). This Court, having considered the parties' submissions, decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated below, this Court affirms the Bankruptcy Court's Order.


On April 28, 2011, with the assistance of an attorney, Appellant filed a voluntary Chapter 7 Bankruptcy Petition. (SeeExh. U-4, David Jones's Bankruptcy Petition ("Bankruptcy Petition"), Schedule 1.) The Bankruptcy Petition's statement of financial affairs required that a debtor list all businesses in which he was an officer, director, partner, managing executive, partner in partnership, sole proprietorship, or was self-employed in a trade, profession or other activity, within six years immediately preceding the commencement of the case. (See Bankruptcy Petition; Exh. U-3, In re: David Jones, 11-BK-24214, Transcript of Bankruptcy Proceeding ("Bankr. Tr.") at 28:19-29:2 (Bankr. D.N.J. Jun. 29, 2012).) In response to this inquiry, Appellant indicated "none" and failed to list the following four businesses: (1) Clover Hill; (2) Jones Estate Cleanouts Corporation ("Jones Cleanouts"); (3) Mount Olive Recovery and Recycling Estate; and (4) Estate Cleanouts and Liquidation. (Id.) Subsequently, Appellees filed an adversary proceeding against Appellant to deny discharge of his debt based on 11 U.S.C. § 727 of the Bankruptcy Code. See Uhrmann v. Jones, Adv. Proc. No. 11-02206-NLW (Bankr. D.N.J. 2011).

In the context of the bankruptcy proceeding, Appellant claimed that he did not report Clover Hill in his Bankruptcy Petition because the entity was defunct; however, the Bankruptcy Court found that Clover Hill was "likely in existence, whether defunct or not." (Bankr. Tr. 29:7-9.) Although Appellant did not admit to ownership interest in Jones Cleanouts, business records showed that he was the incorporator, the agent, the director, the only board member, and was employed by Jones Cleanouts. (Bankr. Tr. 29:7-17.) Furthermore, Appellant admitted to registering Mount Olive Recovery and Recycling Estate and Estate Cleanouts and Liquidation but stated that he did not report these businesses because they were non-functioning and worthless. (Bankr. Tr. 18-24.)

Additionally, in his Bankruptcy Petition, Appellant stated that he received a monthly income of eighty-one thirty-three and that he received no income over the six months preceding the Bankruptcy Petition. (SeeBankruptcy Petition.) However, a PayPal account in Appellant's name includes payments to Jones Cleanouts that were not included in his Bankruptcy Petition. (SeeBankruptcy Petition; Bankr. Tr. 30:13-31:7.) Although Appellant did not include the PayPal account and corresponding payments in his Bankruptcy Petition, he reported these payments to the Internal Revenue Service ("IRS") as income from Jones Cleanouts. (Bankr. Tr. 30:13-31:7.) Since completing and filing his Bankruptcy Petition in April 2011, Appellant did not submit an Amended Schedule to reflect any changes. (Bankr. Tr. 31:8-10.)

On June 29, 2012, the United States Bankruptcy Court, District of New Jersey, granted Appellees' Motion for Summary Judgment, denied Appellant's bankruptcy discharge, and denied Appellant's Cross Motion to Dismiss. (Bankr. Tr. 31:16-23; See Exh. U-1, In re: David Jones, 11-BK-24214, Order (Bankr. D.N.J. July 2, 2012).) Subsequently, Appellant filed an appeal of the Bankruptcy Court's Summary Judgment ruling.


This Court reviews the Bankruptcy Court's "factual findings for clear error and its exercise of discretion for abuse thereof." In re American Pad & Paper Co., 478 F.3d 546, 551 (3d Cir. 2007) (internal citations omitted); see also Fed. R. Bankr. P. 8013. A factual finding is clearly erroneous if, in reviewing all the evidence, the reviewing court is left with the "definite and firm conviction that a mistake has been committed," even if there is evidence to support the finding. In re Allegheny Int'l, Inc., 954 F.2d 167, 173 (3d. Cir. 1992); (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)). "A bankruptcy court abuses its discretion when its ruling is founded on an error of law or a misapplication of law to the facts." In re O'Brien Environmental Energy, Inc., 188 F.3d 116, 122 (3d. Cir. 1999). Additionally, this Court "is limited to review of the evidence before the Bankruptcy Court and which was made a part of the record at the time the [ ] decision was rendered." Matter of Halvajian, 216 B.R. 502, 509 (D.N.J. 1998) (stating that "in deciding the current appeal, [the] Court will disregard any pleadings not in the record before the Bankruptcy Court, in addition to any facts not supported by citations to the record").


Appellant raises a number of objections to the Bankruptcy Court's determination with respect to the nondischargeability of his debts, including the debt owed to Appellees. (See Appellant Br. 9-10.) Boiled down to its essence, Appellant contends that (1) the Bankruptcy Court made improper findings of fraud and erred in denying Appellant's discharge of debt, and

(2) the Bankruptcy Court "exceeded its jurisdiction." (Id.)

This Court has carefully reviewed the record and the Bankruptcy ...

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