Gannett v. Carp

United States Court of Appeals
For the First Circuit

No. 02-2323

IN RE JOAN E. CARP,
Debtor.
___________________

RICHARD W. GANNETT,
Plaintiff, Appellant,

v.

JOAN E. CARP,
Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nancy Gertner, U.S. District Judge]
[Hon. Joan N. Feeney, U.S. Bankruptcy Judge]

Before

Selya, Circuit Judge,
Stapleton* and Baldock,** Senior Circuit Judges.

Stephanie L. Moon, with whom Richard W. Gannett and Gannett &
Associates were on brief, for appellant.
Richard S. Hackel for appellee.

August 18, 2003

_______________
*Of the Third Circuit, sitting by designation.
**Of the Tenth Circuit, sitting by designation.
 SELYA, Circuit Judge. This appeal arises out of a

creditor's quest to block a debtor's discharge in bankruptcy. The

bankruptcy court declined to default or sanction the debtor for

claiming her Fifth Amendment privilege against self-incrimination,

determined that she had not transgressed the strictures of 11

U.S.C. § 727(a), and granted the discharge. The district court

affirmed these rulings, and the debtor now appeals.

We agree with the creditor that there are suspicious

circumstances here. As an appellate court, however, we are not

free to second-guess the management of pretrial discovery, weigh

the evidence afresh, or make independent judgments about the

credibility of witnesses. Instead, our function is to examine the

record with care, defer to the properly supported factual findings

of the court of first instance, determine the applicable law, and

ensure that the trier properly applied it to the facts as found.

Having performed these tasks, we conclude, as did the district

court, that the decision of the bankruptcy court is impervious to

the creditor's attack. Consequently, we affirm the judgment below.

I.

Background

The underlying bankruptcy proceeding has been pending

since 1995. We do not here attempt to rehearse the entire history

of the case, but, rather, offer a synopsis of the facts designed to

give needed context to the issues on appeal.

-2-
 Joan E. Carp (the debtor) and her husband, Stephen Carp,

filed a joint petition for Chapter 7 bankruptcy relief in February

1995. See 11 U.S.C. §§ 701-784. Among the affected creditors was

the appellant, Richard W. Gannett. Gannett filed a timely proof of

claim for $82,093.85, plus interest and costs, arising out of the

rendition of legal services.

Several months later, Gannett commenced an adversary

proceeding, objecting to the Carps' proposed discharge in

bankruptcy. He relied on 11 U.S.C. § 727(a)(2) and (4), arguing

that the Carps had willfully failed to disclose their ownership

interests in a number of assets, including a parcel of real

property located at 824 Dedham Street, Newton, Massachusetts (the

Newton property) and three automobiles. With regard to the Newton

property Gannett asserted that the Carps owned an equitable

interest in it even though legal title reposed in one Mordechay

Pupkin. Gannett further asserted that the Carps were using Pupkin

as a straw in order to defraud creditors; that they had funded

Pupkin's mortgage payments; and that any semblance of rental

payments was a sham. With respect to the cars, Gannett alleged

that the Carps had attempted to defraud their creditors by giving

their children legal title to the automobiles. He argued that it

was absurd to think that the children owned three vehicles while

the parents themselves owned none. The Carps denied the material

allegations of Gannett's complaint.

-3-
 To say that matters did not proceed smoothly would be a

gross understatement. Gannett served deposition notices and

interrogatories in October 1995 and added a request for production

of documents in January of the following year. On February 29,

1996, he moved to compel, pointing out that the Carps had not

replied to these discovery requests. The bankruptcy court granted

the motion. When the Carps still did not cooperate, Gannett moved

for the entry of a default judgment. The Carps responded that they

would not submit to discovery because they were the targets of a

criminal investigation for bankruptcy fraud being conducted by the

United States Department of Justice.

On May 16, 1996, the bankruptcy court again ordered the

Carps to provide discovery. The court also imposed a $750 monetary

sanction and continued Gannett's motion for entry of a default

judgment. On August 22, 1996, the bankruptcy court denied that

motion.

Meanwhile, the criminal investigation went forward. On

October 14, 1996, the government filed a criminal information

against Stephen Carp, charging him with one count of bankruptcy

fraud, 18 U.S.C. § 152, related to his alleged failure to disclose

an equitable ownership interest in the Newton property. On April

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27, 1997, Stephen Carp pled guilty to this charge. The district

court sentenced him the next day.1

The bankruptcy court had wisely continued the case until

the outcome of the criminal prosecution was finally determined. In

the interim, the court maintained careful watch, holding no fewer

than five status conferences from the fall of 1996 through the

spring of 1997. From time to time, Gannett mentioned that he was

still awaiting discovery materials but no action was taken. At a

status conference held on April 24, 1997, Gannett again raised the

issue, and the debtor acknowledged that she had not yet complied

with the discovery orders because of her asserted Fifth Amendment

privilege. The court stated that there was no point in attempting

to press forward with discovery if the debtor was going to plead

the Fifth Amendment and directed the parties to file a joint status

report following Stephen Carp's sentencing.

Once the criminal prosecution had ended2 and the

adversary proceeding against Stephen Carp had been resolved, see

supra note 1, the bankruptcy court set a trial date for the

adversary proceeding against the debtor. Prior to the scheduled

1
Following Stephen Carp's admission of guilt, Gannett moved
for summary judgment against him in the pending adversary
proceeding. See Fed. R. Bankr. P. 7056. The bankruptcy court
granted this motion and denied Stephen Carp a discharge. Because
Stephen Carp's case is closed, we treat Joan Carp as the sole
debtor.
2
The debtor was never criminally charged.

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start of trial, the trustee in bankruptcy moved to consolidate that

proceeding with an adversary proceeding that he (the trustee) had

brought against Pupkin. The court consolidated the two actions and

vacated the scheduled trial date. The trustee eventually settled

with Pupkin, thus undoing the consolidation.

The next bump in this long and winding road occurred in

April of 2001 when the bankruptcy court scheduled an evidentiary

hearing on the debtor's discharge for October 3 of that year.

Gannett dawdled for several months and then, on August 23, filed a

renewed motion for entry of a default judgment or, in the

alternative, for additional time to conduct discovery. At a

hearing held on September 24, the court denied both prayers on

condition that the debtor submit to a deposition prior to trial and

produce the previously requested documents before the deposition.

The debtor delivered the designated documents and appeared for a

deposition on October 1. Although she did not assert her Fifth

Amendment privilege, she nonetheless refused to answer certain

questions pursuant to her counsel's instructions.

Gannett made no further complaint about inadequate or

untimely discovery, and the bankruptcy court conducted the

previously scheduled bench trial on October 3. The debtor

testified without asserting any privilege against self-

incrimination. In an ore tenus decision, the bankruptcy court

found the debtor credible and concluded that there was insufficient

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proof that she had either knowingly concealed property or

vouchsafed a false oath. Discerning no basis for the denial of a

discharge, the court entered judgment accordingly. The district

court affirmed, see Gannett v. Carp (In re Carp), No. 02-10086 (D.

Mass. Aug. 30, 2002) (unpublished), and this appeal followed. We

have jurisdiction under 28 U.S.C. § 158(d).

II.

Standard of Review

Notwithstanding the fact that we are the second-in-time

reviewers, we cede no special deference to the district court's

determinations. Brandt v. Repco Printers & Lithographics, Inc. (In

re Healthco Int'l, Inc.), 132 F.3d 104, 107 (1st Cir. 1997).

Rather, our review directly addresses the bankruptcy court's

decision. Gronan v. Watman (In re Watman), 301 F.3d 3, 7 (1st Cir.

2002). We scrutinize that court's findings of fact for clear error

and its conclusions of law de novo. Id.

The application of the Bankruptcy Code to a particular

case poses a mixed question of law and fact, which this court

reviews for clear error unless the bankruptcy court's analysis was

based on a mistaken view of the legal principles involved. See

Miller v. Peterson (In re Indep. Eng'g Co.), 197 F.3d 13, 16 (1st

Cir. 1999). Under the clear error standard, the trier's findings

of fact and the conclusions drawn therefrom ought not to be set

aside "unless, on the whole of the record, we form a strong,

-7-
unyielding belief that a mistake has been made." Cumpiano v. Banco

Santander, 902 F.2d 148, 152 (1st Cir. 1990). It follows that if

the bankruptcy court's findings are supportable on any reasonable

view of the record, we are bound to uphold them. See Boroff v.

Tully (In re Tully), 818 F.2d 106, 109 (1st Cir. 1987); see also

Anderson v. Beatrice Foods Co., 900 F.2d 388, 392 (1st Cir. 1990)

(warning that appellate review of "fact-dominated issues cannot be

allowed to descend to the level of Monday-morning quarterbacking").

III.

The Merits

Although Gannett's asseverations are not neatly

segregated, we distill them into two principal lines of argument.

First, he challenges the bankruptcy court's decision to allow the

debtor to testify without penalty after repeatedly having invoked

the Fifth Amendment to insulate herself from furnishing discovery

— and he couples this challenge with a more general objection to

the court's oversight of the discovery process. Second, he

calumnizes the bankruptcy court for its refusal to block the

debtor's discharge under 11 U.S.C. § 727(a). We discuss these two

lines of argument sequentially.

A.

The Fifth Amendment

We turn first to those contentions related to the

debtor's invocation of the Fifth Amendment. We review a bankruptcy

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court's discovery decisions for abuse of discretion — and that

discretion is very wide. Brandt v. Wand Partners, 242 F.3d 6, 18

(1st Cir. 2001). The fact that the Fifth Amendment is implicated

in Gannett's litany of discovery-related complaints does not serve

to alter this standard of review. See Gutierrez-Rodriguez v.

Cartagena, 882 F.2d 553, 575-77 (1st Cir. 1989); see also Serafino

v. Hasbro, Inc., 82 F.3d 515, 518 (1st Cir. 1996). Unless we can

fairly say that the bankruptcy court abused this wide discretion,

its management of the pretrial discovery process must be respected.

As a matter of law, Gannett's claim that the bankruptcy

court should not have allowed the debtor to testify without

sanction lacks force. Gannett does not dispute — nor could he —

that a debtor in a bankruptcy proceeding can invoke the Fifth

Amendment. See, e.g., McCormick v. Banc One Leasing Corp. (In re

McCormick), 49 F.3d 1524, 1526 (11th Cir. 1995); Martin-Trigona v.

Belford (In re Martin-Trigona), 732 F.2d 170, 175 (2d Cir. 1984).

He does not allege — nor could he on this record — that the

debtor's invocation of the privilege was chimerical or otherwise

improper. Rather, Gannett's thesis is that pleading the Fifth

Amendment in a civil proceeding should yield consequences, and that

the condign consequence of the debtor's action should have been

preclusion. In other words, the bankruptcy court ought not to have

allowed the debtor to testify because she did not provide discovery

until the eve of trial.

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 The short answer to this importuning is that Gannett did

not preserve the issue for appeal. After the documents were finally

tendered and the deposition held, Gannett never complained to the

bankruptcy court that the discovery was either too scanty or too

tardy. By the same token, he did not question the propriety of the

objections interposed by the debtor's counsel during the

deposition. To cap matters, far from asserting that the debtor's

testimony should be precluded by her longstanding invocation of the

Fifth Amendment, he himself called the debtor to the witness stand.

If delayed discovery, once received, is incomplete, inadequate, or

timed so as to impede effective trial preparation, the aggrieved

party must object in advance of trial. The failure to do so

constitutes a failure to raise the issue at the proper time and in

the proper setting. That failure bars the aggrieved party from

raising the issue on appeal. See Hemingway Trans., Inc. v. Kahn

(In re Hemingway Trans., Inc.), 993 F.2d 915, 935 (1st Cir. 1993);

LaRoche v. Amoskeag Bank (In re LaRoche), 969 F.2d 1299, 1305 (1st

Cir. 1992).

To be sure, Gannett did assert at the September 24

hearing that the debtor should not be permitted to testify at trial

because she had persistently invoked the Fifth Amendment. In

response to that assertion, the bankruptcy court ordered that the

debtor produce documents and submit to an immediate deposition. If

this was not a satisfactory ameliorative, Gannett was obliged to

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renew his complaint following the receipt of the documents and the

taking of the deposition. Cf. DesRosiers v. Moran, 949 F.2d 15, 22

(1st Cir. 1991) (stating that when a party proceeds with trial

without complaining about delayed discovery, the court will not

permit that party to complain after judgment). He did not do so.

Gannett's fallback position is that the bankruptcy court

erred by refusing to enter a default judgment against the debtor.

In the last analysis, however, the decision as to whether discovery

sanctions are warranted and the choice of what sanctions should be

imposed are matters within the sound discretion of the trial

court.3 Poulin v. Greer, 18 F.3d 979, 984 (1st Cir. 1994). The

disallowance of a discharge — which would have been the effective

result of a default judgment in this case — is strong medicine.

There is no basis either in the record or in the law for us to

second-guess the bankruptcy court's discretionary refusal to

prescribe so harsh a penalty.

In a modest variation on this theme, Gannett suggests

that the bankruptcy court at least should have drawn a negative

inference against the debtor due to her repeated invocation of the

Fifth Amendment privilege. But in a civil proceeding, the drawing

3
Gannett's claim that the debtor should have been denied a
discharge because of her failure to comply with court orders could
have been framed as a claim under 11 U.S.C. § 727(a)(6)(A) rather
than as an argument that sanctions were wrongly withheld. But
Gannett never advanced such a claim in the bankruptcy court, and he
therefore has forfeited it.

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of a negative inference is a permissible, but not an ineluctable,

concomitant of a party's invocation of the Fifth Amendment. See

Mulero-Rodríguez v. Ponte, Inc., 98 F.3d 670, 678 (1st Cir. 1996).

While the law does not forbid adverse inferences against civil

litigants who refuse to testify on Fifth Amendment grounds, see

Baxter v. Palmigiano, 425 U.S. 308, 318 (1976), it does not mandate

such inferences. When all is said and done, the trial court has

discretion over whether a negative inference is an appropriate

response to the invocation of the Fifth Amendment in a particular

civil case.

The bankruptcy court, in the exercise of this discretion,

chose not to draw such an inference here. The record evinces no

special factors suggesting that this choice was arbitrary or

capricious, and we are hesitant to overturn a trial court's

discretionary decision to afford an extra measure of protection to

a litigant's constitutional right against self-incrimination. Cf.

Serafino, 82 F.3d at 518 (emphasizing that courts must take special

pains to ensure that the Fifth Amendment privilege is safeguarded).

There was no error.4

4
Gannett's argument that the burden of persuasion should have
shifted to the debtor as a result of her invocation of the Fifth
Amendment is simply a restatement of the argument that the court
should have drawn a negative inference against the debtor. Thus,
we reject this version of the argument for the reasons discussed
above.

-12-
 We give short shrift to Gannett's final discovery-related

point: that the bankruptcy court failed to balance Gannett's right

to a fair trial against the debtor's Fifth Amendment interests.

Once again, the specter of a procedural default looms. Although

Gannett did object generally to the bankruptcy court's management

of the discovery process, he never specifically asserted an

infringement of his right to a fair trial. More importantly, he

did not make any claim regarding the unfairness of proceeding after

he had secured discovery. Thus, the bankruptcy court had neither

the occasion nor the opportunity to decide whether the discovery

that Gannett belatedly received was sufficient to cure any prior

harm. If that discovery — i.e., the document production and

deposition — had not rectified the situation and restored the

balance, Gannett had an affirmative obligation to come forward and

request further relief from the court. See Macaulay v. Anas, 321

F.3d 45, 52 (1st Cir. 2003) (holding that "[a] party who has the

opportunity to ask the trial court for relief but fails to do so

forfeits the right to claim, on appeal, that the relief should have

been granted"); Anderson, 900 F.2d at 397 (similar).

Even were we to reach the merits of this claim, Gannett's

cause would not prosper. He relies chiefly upon our Serafino

decision to undergird the argument that the bankruptcy court failed

adequately to consider his right to a fair trial. But that

-13-
decision simply cannot support the weight that Gannett places upon

it.

It is true that Serafino stands for the proposition that

"one party's assertion of his constitutional right should not

obliterate another party's right to a fair proceeding." 82 F.3d at

518. It is also true, however, that the balancing of these factors

is left largely to the informed discretion of the trial court. See

id. The court need not make an elaborate series of written

findings. Cf. United States v. LaCruz, 902 F.2d 121, 123-24 & n.1

(1st Cir. 1990) (holding that explicit findings as to the probative

worth/prejudicial effect balance under Evidence Rule 403 are not

always required). What counts is that the court's implicit

conclusion — that Gannett would receive a fair trial

notwithstanding the delayed discovery — is satisfactorily anchored

in the record. After all, the bankruptcy court made significant

efforts to ensure that Gannett could gain access, prior to trial,

to the information necessary to prosecute his case. Moreover,

Gannett never identified what information he coveted that was not

available from other sources. Under these circumstances, we are at

a loss to see how Gannett's rights were unfairly impugned.

B.

11 U.S.C. § 727(a)

Gannett next contends that the bankruptcy court erred on

the merits in granting the debtor a discharge. As the objecting

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party, Gannett had the burden of proving that the debtor should be

denied a discharge. See Commerce Bank & Trust Co. v. Burgess (In

re Burgess), 955 F.2d 134, 136 (1st Cir. 1992), abrogated on other

grounds by Field v. Mans, 516 U.S. 59, 72-75 (1995). Although the

ultimate decision about whether to grant or withhold a discharge is

a mixed question of law and fact, Gannett takes dead aim at the

district court's factual findings. Accordingly, we "review only

for clear error, with 'due regard . . . to the opportunity of the

bankruptcy court to judge the credibility of witnesses.'" In re

Burgess, 955 F.2d at 137 (quoting Fed. R. Bankr. P. 8013)

(alteration in original).

Gannett identifies two statutory bases for denying a

discharge in this case. We treat these in the ensemble. In doing

so, we note that one of the Bankruptcy Code's core purposes is to

give worthy debtors a fresh start. See Jamo v. Katahdin Fed.

Credit Union (In re Jamo), 283 F.3d 392, 398 (1st Cir. 2002).

Thus, exceptions to discharge should be construed narrowly.

Rutanen v. Baylis (In re Baylis), 313 F.3d 9, 17 (1st Cir. 2002).

Gannett's first sortie involves section 727(a)(2) of the

Bankruptcy Code, which provides in pertinent part that the

bankruptcy court shall withhold a discharge if

the debtor, with intent to hinder, delay, or
defraud a creditor or an officer of the estate
. . . has transferred, removed, destroyed,
mutilated, or concealed, or has permitted to
be transferred, removed, destroyed, mutilated,
or concealed — (A) property of the debtor,

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 within one year before the date of the filing
of the petition; or (B) property of the
estate, after the date of the filing of the
petition . . . .

11 U.S.C. § 727(a)(2).

Gannett's second sortie involves section 727(a)(4) of the

Bankruptcy Code, which provides in pertinent part that a discharge

shall not be granted if "the debtor knowingly and fraudulently, in

or in connection with the case — (A) made a false oath or account."

Id. § 727(a)(4). Under that proviso, a discharge can be refused

only if the false oath "relat[ed] to a material fact." In re

Tully, 818 F.2d at 110.

Each of these provisions requires a showing of fraudulent

intent. See In re Chavin, 150 F.3d 726, 727 (7th Cir. 1998). The

bankruptcy court found that Gannett had failed to make this

showing. Because the determination of intent depends largely upon

an assessment of the debtor's credibility, respect for the

bankruptcy court's factual findings is particularly appropriate in

this context. See In re Burgess, 955 F.2d at 137. Even when the

totality of the circumstances might plausibly support an inference

of skullduggery, the bankruptcy court's contrary finding must be

credited unless the evidence is so one-sided as to compel the

inference of fraud. See Palmacci v. Umpierrez, 121 F.3d 781, 790

(1st Cir. 1997).

Here, the bankruptcy court found the debtor to be

completely credible, and Gannett's insinuations certainly do not

-16-
compel the opposite conclusion. That seemingly ends the matter.

In re Burgess, 955 F.2d at 137. Gannett, however, seeks to capsize

the bankruptcy court's finding on the ground that intent or

culpability should be imputed to the debtor because her husband

acted fraudulently (a fact that is, at this stage, beyond cavil)

and she was her husband's alter ego or agent.

We do not reach the merits of the first of these

suggestions because Gannett neglected to raise the alter ego theory

before the bankruptcy court. See In re LaRoche, 969 F.2d at 1305

(holding that a failure to advance an issue before the bankruptcy

court forfeits the right to raise it on appeal). That a party may

not advance an argument for the first time on appeal "is a

virtually ironclad rule" in this circuit, Cochran v. Quest

Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003), and this case

presents no excusatory circumstances sufficient to persuade us to

relax the rule.

Gannett's agency theory is properly before us — but it is

unavailing. He says, in effect, that the debtor was Stephen Carp's

agent because they had been married for over thirty years and had

been involved in real estate projects together in the past. The

bankruptcy court rejected this theory on the merits. That ruling

is beyond reproof.

The sins of the husband are not automatically visited

upon the wife. Thus, the existence of a marital relationship does

-17-
not itself prove an agency relationship. See Rousseau v. Gelinas,

507 N.E.2d 265, 268 (Mass. App. Ct. 1987); Fennell v. Wyzik, 422

N.E.2d 1387, 1389 (Mass. App. Ct. 1981).5 Similarly, the fact that

the Carps may have done business together in the past is

insufficient to show that the bankruptcy court committed clear

error in finding a lack of agency vis-à-vis the Newton property.

See Dudley v. Hannaford Bros. Co., 333 F.3d 299, 311 (1st Cir.

2003) (explaining that "[w]hen a [trial] court chooses between two

plausible but conflicting interpretations of the evidence, its

choice cannot be clearly erroneous"); Valentin v. Hosp. Bella

Vista, 254 F.3d 358, 367 (1st Cir. 2001) (similar).

Gannett has yet another string to his bow. In the

criminal case, Stephen Carp admitted to being the equitable owner

of the Newton property. Building on this foundation, Gannett

contends that the debtor also had an undisclosed equitable interest

in that property because, under Massachusetts law, Stephen Carp's

equitable interest would become a part of their marital estate upon

divorce. Gannett insists that the failure to list this interest

rendered the debtor's oath false (and, thus, violated 11 U.S.C. §

727(a)(4)).

5
Of course, marital partners may be each other's agents if
other factors lead to that conclusion. See, e.g., Fennell, 422
N.E.2d at 1389 (imputing misrepresentation of wife to husband when
the couple jointly owned the subject property, the wife held
herself out as able to speak authoritatively as to the condition of
the property, and the couple had communicated about the relevant
issues). The record in the case at hand lacks any such evidence.

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 The bankruptcy court found that this circumstance did not

compel the conclusion that the debtor erred in not listing that

interest as part of her bankruptcy estate. In this regard, the

bankruptcy court noted that the debtor had made no contribution to

the purchase of the Newton property and had no interest in it at

the time of the bankruptcy proceedings.

As a matter of law, the bankruptcy court was correct.

Cf. id. § 541(a)(5)(B) (stating that property received as a result

of a property settlement or agreement of divorce is property of the

estate if the debtor acquires or becomes entitled to acquire it

within 180 days of the date of filing bankruptcy). Thus, even

assuming for argument's sake that Stephen Carp's equitable interest

in the Newton property was part of the marital estate — a matter on

which we take no view — it was not property of the debtor's

bankruptcy estate at the relevant time.

At the risk of carting coal to Newcastle, we add that

even were we to classify this contingent interest as property of

the bankruptcy estate, that fact alone would not be enough to

trigger section 727(a)(4). Gannett would still have to show that

the exclusion of the property from the debtor's schedules was done

with intent to hinder, delay, or defraud creditors. It is not at

all difficult to imagine innocent reasons for the failure to

mention such a contingent interest — especially since the debtor

testified (credibly, in the bankruptcy court's estimation) that she

-19-
was unaware that she held any such interest. To the extent that

Gannett invites us to declare as a matter of law that a spouse's

failure to include a contingent and as yet undetermined interest in

real property — an interest that will arise only in the event of

divorce — in a bankruptcy petition warrants denial of a discharge,

we decline the invitation.

Gannett's last-ditch claim is that the debtor should have

been denied a discharge because she used and controlled automobiles

that were omitted from her bankruptcy schedules. This claim

focuses on the debtor's assertion that she did not own even one

car, yet her two children (neither of whom were employed full-time)

owned three vehicles between them. Gannett argued vigorously to

the bankruptcy court that the debtor placed the automobiles in her

children's names for the purpose of defrauding creditors. The

bankruptcy court did not buy the argument.

The situation as to ownership of the vehicles strikes us

as irregular. We are not, however, a court of first instance. The

bankruptcy judge saw and heard the witnesses and found the debtor

to be credible. The mere fact that the situation seems suspect is

not sufficient to justify disregarding this credibility call. See

In re Burgess, 955 F.2d at 137. The bankruptcy court reasonably

could have believed, for example, that the placing of title in the

children's names was simply another manifestation of Stephen Carp's

scheming, and that the debtor was unaware of his connivance. Given

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this record, there is no principled way in which we can disturb the

bankruptcy court's judgment.

IV.

Conclusion

We need go no further. It is not enough that reasonable

minds might differ regarding either the bankruptcy court's

management of pretrial discovery or its evaluation of the evidence

presented at trial. For the reasons elucidated above, we uphold

both the bankruptcy court's decision and the district court's

affirmance of that decision.

Affirmed.

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