CHAPTER 9, B. Is Under Oath Enough?

• Jurisdiction: United States

B. Is Under Oath Enough?

Issues of Evidence Considered on Summary Judgment

ABI Journal

September 2019

Alex Schmidt

U.S. Bankruptcy Court (N.D. Ohio)

Toledo, Ohio

Attorneys engaged in federal motion practice have long wrestled with the contours of what can and cannot be considered by a court faced with a motion for summary judgment. Though the basics of Federal Rule of Civil Procedure 56 motions seem to have settled during the decades following the U.S. Supreme Court's watershed decisions in Celotex Corp. v. Catrett¹ and Anderson v. Liberty Lobby Inc.,² questions regarding evidence and the divide between established facts and facts subject to inferences favorable to the non-moving party remain unsettled. This is especially so in bankruptcy adversary proceedings, given the importance and unique evidentiary nature of statements made at 341 hearings and 2004 examinations.

Unlike depositions conducted under Federal Rule of Civil Procedure 30, 341 meetings and 2004 examinations are not intended to be adversarial.³ Instead, both bankruptcy-specific hearings are meant to be informational and for the benefit of all parties to a bankruptcy.⁴ Nevertheless, statements made at 341 meetings and 2004 examinations are under oath.⁵ Despite their differences from transcripts of Rule 30 depositions, 341 meeting and 2004 examination transcripts frequently serve as the evidentiary basis for nondischargeability determinations and denials/revocations of a debtor's discharge.⁶ In the context of summary judgment, the issue then becomes this: Should the court grant summary judgment in reliance on 341 and 2004 transcripts that are untested by trial or formal deposition, or should the court deny summary judgment and hold a trial at which the statements made at 341 hearings and 2004 exams are subjected to further fact-finding scrutiny?

Both views have their merits. On the one hand, the relatively informal nature of 341 hearings and 2004 exams may prompt debtors (and other examinants) to "let their guard down" in a variety of ways. For example, debtors and creditors are not required to have their attorney present,⁷ and the parties are often expressly informed that the meetings are informational instead of adversarial. In addition, both 341 hearings and 2004 exams are broad in scope⁸ and have the potential to bring up matters on which a speaker is not prepared to testify. Also, neither meeting provides for formal cross-examination or objection, which might result in statements that are too general, too canned or too self-serving to be of decisional value at the summary-judgment stage of adversary proceeding litigation. Essentially, 341 meetings and 2004 exams are not rigorous fact-finding ventures, but are instead "fishing expeditions"⁹ that merely set the table before adversarial litigation begins.

On the other hand, 341 hearings and 2004 exams are crucial components of the bankruptcy fact-finding process that can (and often do) produce clear, documented evidence of a debtor's misconduct. The statements made at 341 meetings and 2004 exams are also made under oath, a cornerstone aspect of evidentiarily reliable testimony.¹⁰ Further, 341 and 2004 transcripts can be analogized to the debtor's petition and schedules — another source of "less-than-formal-deposition" evidence that frequently plays a prominent role in adversary proceedings.

Given the foundational importance of the debtor's responsibility to provide accurate information at each step of the bankruptcy process,¹¹ why should a court hold a trial to test the reliability of evidence that is ostensibly intended to stand on its own in the absence of an adversary proceeding? In other words, if a debtor establishes his/her entitlement to a discharge based on...