In re Boyajian, 367 B.R. 138 (9th Cir. BAP 2007)
For purposes of § 523(a)(2)(B), only the lender who extended the original credit need have reasonably relied on a false financial statement, not the assignee of the loan.
In re McGee, 359 B.R. 764, 771 (9th Cir. BAP 2006)
Bankruptcy court properly denied default judgment for a payday lender on its dischargeability complaint, where it found at the prove-up hearing that justifiable reliance was a material fact at issue, given the loan’s 190.37% interest rate.
In re Vinhnee, 336 B.R. 437 (9th Cir. BAP 2005)
Creditor’s electronic business record were properly not admitted into evidence sua sponte, resulting in judgment for the debtor in this credit card case.
In re Cossu, 410 F.3d 591 (9th Cir. 2005)
Debt to insurance company (to extent the company had a valid claim) would be nondischargeable, where he falsely stated in a questionnaire that he was not selling unregistered securities and not engaged in any outside business.
Muegler v. Bening, 413 F.3d 864 (9th Cir. 2005)
“It is only the fact of an adverse fraud judgment, and nothing more, that is required for a debt to be nondischargeable.” The debtor does not need to have received a benefit from the fraud.
In re Slyman, 234 F.3d 1081 (9th Cir. 2000)
“The five elements, each of which the creditor must prove by a preponderance of the evidence, are: (1) misrepresentation, fraudulent omission or deceptive conduct by the debtor; (2) knowledge of the falsity or deceptiveness of his statement or conduct; (3) an intent to deceive; (4)justifiable reliance by the creditor on the debtor's statement or conduct; and (5) damage to the creditor proximately caused by it's reliance on the debtor's statement or conduct.”
In re Stearman, 256 B.R. 788 (9th Cir. B.A.P. 2000)
Debtor did not have an intent to deceive when she signed a promissory note, where she was expecting to receive a large inheritance from which she could repay the loan. This was true even though she was insolvent at the time of the loan even accounting for the inheritance and was in chapter 13.
In re Kong, 239 B.R. 815 (9th Cir. B.A.P. 1999)
Even though gambler did not meet all of the Anastas factors (i.e. offer to enter into repayment plan, etc.), unreasonable belief in his ability to repay cash advances was not tantamount to fraud. No reckless indifference established.
In re Maldonado, 228 B.R. 735 (9th Cir. B.A.P. 1999)
Debtor may not discharge leaseback obligation if debtor could have anticipated that third party would rely on false financial information in deciding whether to take assignment of debt.
In re Ettell, 188 F.3d 1141 (9th Cir. 1999)
Court need not make findings as to all Daugherty factors in credit card cases.
In re Smith, 242 B.R. 694 (9th Cir. B.A.P. 1999)
Debtor could not discharge debt for purchase of business after presenting false financial statement during third-party meetings attended by seller.
In re Cobe, 229 B.R. 15 (9th Cir. B.A.P. 1998)
State Court award based on finding of intentional misrepresentation satisfied elements for nondischargeability.
In re Tallant, 218 B.R. 58 (9th Cir. B.A.P. 1998)
Attorney’s failure to reveal $3 million in personal debts on law practice’s profit and loss statement did not render statement materially false under 523(a)(2)(B). Debt found nondischargeable under (a)(2)(A)
In re Barrack, 217 B.R. 598 (9th Cir. B.A.P. 1998)
Creditor’s claim for nondischargeability based on wilful and malicious injury not supported by same facts that failed to support claim that debtors misrepresented financial condition.
Cohen v. De La Cruz, 523 U.S. 213(1998)
Treble damages and costs awarded on account of debtor’s fraud subject to exception from bankruptcy discharge
In re Gergely,110 F.3d 1448 (9th Cir. B.A.P. 1997), aff’d, 11 Fed.Appx. 705 (9th Cir. 2000)
Debtor-physician not entitled to discharge of debt based on malpractice in performing procedure performed on creditor’s mother because of misrepresentation.
In re Lund, 202 B.R. 127 (9th Cir. B.A.P. 1996)
Landlord’s testimony that debtor tenants reneged on promise to pay back rent from lawsuit proceeds did not support nondischargeability of debt for fraud.
In re Anastas, 94 F.3d 1280 (9th Cir. 1996)
“We have previously held that reckless disregard for the truth of a representation satisfies the element that the debtor has made an intentionally false representation in obtaining credit. Houtman v. Mann (In re Hautman), 568 F.2d 651, 656 (9th Cir. 1978). However, in applying the concept of reckless disregard for the truth of a representation in the case of credit card debt, we must be careful to keep in mind that the representation being made by the card holder is solely as to intent to repay, not as to the debtor’s ability to repay. Thus, courts faced with the issue of dischargeability of credit card debt must take care to avoid forming the inquiry under section 523(a)(2)(A) as whether the debtor recklessly represented his financial condition. The correct inquiry is whether the debtor either intentionally or with recklessness as to its truth or falsity, made the representation that he intended to repay the debt.
“As we emphasized in Eashai, the other elements of fraud normally required in section 523(a)(2)(A) cases also apply in the case of credit card debt. Eashai, 87 F.3d at 1088. Thus, to find an individual credit card charge non-dischargeable the bankruptcy court must also find justifiable reliance by the card issuer on the card holder’s representation of intent to repay, and must find that representation and the card issuer’s reliance on it was the proximate cause of the credit card debt sought to be discharged. As we explained in Eashai, the credit card issuer justifiably relies on a representation of intent to repay as long as the account is not in default and any initial investigations into a credit report do not raise red flags that would make reliance unjustifiable. Eashai, 87 F.3d at 1091.”
In re Eashai, 87 F.3d 1082 (9th Cir. 1996)
Kiting credit cards.
Field v. Mans, 516 U.S. 59(1995)
In re Arm, 87 F.3d 1046 (9th Cir. 1996)
“We make clear, what we have not held before, that the indirect benefit to the debtor from a fraud in which he participates is sufficient to prevent the debtor from receiving the benefits that bankruptcy law accords the honest person. See In re Ashley, 903 F.2d 599, 604, n. 4 (9th Cir. 1990).”
In re Candland, 90 F.3d 1466 (9th Cir. 1996)
§ 523(a)(2)(B). Significant misrepresentations of financial condition of type which would generally affect lender’s or guarantor’s decision are “material” for purposes of nondischargeability.
In re Alvi, 191 B.R. 724 (Bankr. N.D. Ill. 1996)
(Ginsberg) Mans applied to credit card.
In re Lee, 186 B.R. 695 (9th Cir. B.A.P. 1995)
Credit card shopping spree. In re Ward disapproved.
In re Apte, 180 B.R. 223 (9th Cir. B.A.P. 1995), aff’d, 96 F.3d 1319 (9th Cir. 1996)
Justifiable reliance - (a)(2) and (6) not mutually exclusive.
In re Arm, 175 B.R. 349 (9th Cir. B.A.P. 1994), aff’d, 87 F.3d 1046 (9th Cir. 1996)
Benefit to debtor need not be direct.
In re Berr, 172 B.R. 299 (9th Cir. B.A.P. 1994)
FDIC can only rely on D’Oench Duhme doctrine where there is a disde agreement between the bank and the debtor.
In re Aboukhater, 165 B.R. 904 (9th Cir. B.A.P. 1994)
Conclusory allegations unsupported by specific facts justified dismissal.
In re Kim, 163 B.R. 157 (9th Cir. B.A.P. 1994), aff’d, 62 F.3d 1511 (9th Cir. 1995)
No new money requirement for an extension or renewal. Only need to show that it had valuable collection remedies at the time of the extension or renewal, that it did not exercise those remedies due to reliance on debtor’s misrepresentations, and that those remedies lost value as a proximate result.
In re Yarbrow, 150 B.R. 233 (9th Cir. B.A.P. 1993)
Under the D’Oench, Duhme doctrine, bank does not need to prove reasonable reliance. Collateral estoppel applied as to fraud.
In re Begun, 136 B.R. 490, 494 (Bankr. S.D. Ohio 1992)
“False Pretense” involves an implied misrepresentation or conduct intended to create or foster a false impression . . . . A false pretense has been defined to include a “mute charade” where the debtor’s conduct is designed to convey an impression without oral representation. . . . . A “false representation” on the other hand is an expressed misrepresentation.
In re Kirsh, 973 F.2d 1454 (9th Cir. 1992)
1. Test is justifiable reliance, not reasonable reliance; per curiam; judge concurring on grounds creditor had not reasonably relied.
2. § 523(a)(2)(B) only applies where the document sets forth the debtor’s net worth or overall financial condition.
In re Siriani, 967 F.2d 302, 304 (9th Cir. 1992)
§ 523(a)(2)(B).
“This court has not previously ruled on what a creditor must prove in a nondischargeability action under section 523(a)(2)(B). However, we have held that, to recover under companion section 523(a)(2)(A), the creditor must show:
(1) a representation of fact by the debtor,
(2) that was material
(3) that the debtor knew at the time to be false,
(4)that the debtor made with the intention of deceiving the creditor,
(5) upon which the creditor relied,
(6) that the creditor’s reliance was reasonable,
(7) that damage proximately resulted from the misrepresentation.”
Same test applies in both (a)(2)(A) and (B) cases. Siriani concentrates on burden of proof regarding proximate cause - did creditor have reasonable prospects of collecting - and reasonable reliance.
In re Levy, 951 F.2d 196 (9th Cir. 1991), cert. denied, 504 U.S. 985 (1992)
Punitive damage award not excepted from discharge under § 523(a)(2).
In re Britton, 950 F.2d 602 (9th Cir. 1991)
Debtor’s misrepresentation of himself as doctor rendered subsequent judgment against him for fraud nondischargeable.
In re Franklin, 922 F.2d 536 (9th Cir. B.A.P. 1991)
Debtors could not invoke state’s anti-deficiency judgment laws as defense to creditor’s nondischargeability action for fraud - Creditor held guarantee secured by DOT on debtor’s house.
In re Howarter, 114 B.R. 682 (9th Cir. B.A.P. 1990)
Creditor must prove reasonable reliance on debtor’s misrepresentations to establish nondischargeability.
In re Neal, 113 B.R. 607 (9th Cir. B.A.P. 1990)
Cash loans not same as luxury goods and services for nondischargeability finding.
In re Hultquist, 101 B.R. 180 (9th Cir. B.A.P. 1989)
§ 523(a)(2)(A) - reasonable reliance - intent to deceive
In re Karelin, 109 B.R. 943 (9th Cir. B.A.P. 1990)
Debtor’s withdrawal of funds beyond credit card limit ruled fraudulent.
In re Ashley, 903 F.2d 599 (9th Cir. 1990)
Judgment under § 523(a)(2) nondischargeable where debtor profits from loans he induced creditors to make to bankrupt corporation - Corporation, rather than debtor, received money. Review of right to fees under California law.
In re Ellwanger, 105 B.R. 551 (9th Cir. B.A.P. 1989)
Punitive damages discharged in § 523(a)(2).
In re Lewsadder, 84 B.R. 711 (Bankr. D. Or. 1988)
In re Rubin, 875 F.2d 755 (9th Cir. 1989)
Elements of § 523(a)(2); bad bookkeeping.
In re Dougherty, 84 B.R. 653 (9th Cir. B.A.P. 1988)
For credit card prerevocation charges to be found nondischargeable, card issuer had to prove that debt was incurred through actual fraud.
