Section 727(a)(6)(A) of the Bankruptcy Code provides in relevant part that “[t]he court shall grant the debtor a discharge, unless, the debtor has refused, in the case – (A) to obey any lawful order of the court, other than an order to respond to a material question or to testify.” Therefore, “refusal” is a predicate to a §727(a)(6)(A) claim. However, the term “refused” is not defined in the Bankruptcy Code, giving rise to the question what does it mean to refuse to obey a lawful order of the court? Courts have come to different conclusions.
The majority of courts have held that the mere failure or inability to comply with a court order, by itself, does not warrant a denial or revocation of discharge. These courts require a willful and intentional refusal to obey a court order. In re Appleby, 634 B.R. 84 (Bankr.S.D.Ohio 2021) took this position. Here, the court noted that there is a difference between the words “fail” and “refuse.” It noted that in other sections of the Bankruptcy Code, a mere failure to do an act actionable. However, §727(a)(6)(A) focuses on refusal.
Appleby noted that “failure” is defined as an “omission of occurrence or performance.” Id. at 69. “Refuse,” on the other hand, is a word derived from “refusal,” which is defined as “to show or express unwillingness to do or comply with.” Id. The court noted that “[d]efinitionally, these two words have different meanings as a ‘failure’ is merely an omission whereas a ‘refusal’ requires intent based on unwillingness. Absent this unwillingness to obey – or refusal – there is no claim.” Id.[1]
Similarly, in In re Tahseen, 650 B.R. 883, 899 (Bankr.N.D.Ill.2023), the court held that a plaintiff must prove a “willful or intentional act. Consequently, an inadvertent or negligent failure to comply with an order should not result in denial of discharge. In In re Cableton-Wells, 2024 WL 63033 at *4 (Bankr.D.Utah Jan. 4, 2024) the court also noted that for purposes §727(a)(6)(A) “refused” means that debtor could have obeyed the order, but they made an intentional choice either to not obey it or to take another action that they knew would make it improbable or impossible for them to obey it. Thus, Cableton-Wells noted that if a debtor was unaware of the order in question or if it was impossible for the debtor to comply with it, through no fault of his own, then he has merely “failed” to comply, which does not implicate t§727(a)(6)(A). See also, In re Gauri, 663 B.R. 88, 108) (Bankr.N.D.Ill.2024) (he Court agrees with the majority. Accordingly, Parent may meet its burden by showing that Gauri willfully or intentionally failed to comply with the terms of the Case Management Procedures order.)
Other courts have found the concept of “refusal” for purposes of §727(a)(6) to be akin to a charge of civil contempt, which does not require the element of intent. Courts that have taken this position include United States v. Richardson (in re Richardson), 85 B.R. 1008, 1011 (Bankr.W.D.Mo.1988); Hunter v. Magack (In re Magack), 247 B.R. 406, 409-10 (Bankr.N.D.Ohio 1999); and In re Thompson, 383 B.R. 407 (Bankr.N.D.Ohio 2007) (Debtor will be found to have “refused” to obey lawful order of court, within meaning of discharge exception, when debtor’s inaction would give rise to charge of civil contempt. To hold party liable for civil contempt, complainant must establish the following three elements: (1) that the alleged contemnor had knowledge of order which he is said to have violated; (2) the alleged contemnor did in fact violate order; and (3) that order violated was specific and definite.).
[1] See also, Smith v. Jordan (In re Jordan), 521 F.3d 430, 433 (4th Cir.2008) (“The term used in §727(a)(6)(A) is ‘refused’ not ‘failed.’”); Wilmington Tr. v Jarrell (In re Jarrell), 129 B.R. 29, 33 (Bankr.D.Del.1991); and Concannon v. Constantini (In re Constantini), 201 B.R. 312, 315-16 (Bankr.M.D.Fla.1996).
Matthew T. Gensburg
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