Daily v. Garrett

September 13, 2018
Case Type:
Case Status:
EC-16-1265-HKuB (9th Circuit, Aug 24,2018) Not Published
Ninth Circuit Bankruptcy Appellate Panel affirmed order from bankruptcy court finding Plaintiffs did not prove a claim under § 523(a)(2)(A) when they failed to provide evidence supporting allegations that the Debtor made a misrepresentation, fraudulent omission, or engaged in deceptive conduct. Evidence only showed Plaintiffs may have had a breach of contract action, but nothing more.
Procedural context:
Appeal to the Ninth Circuit BAP from order of bankruptcy court granting motion in limine and discharging debt owed to Plaintiffs.
Plaintiffs and the Debtor signed a contract for the Debtor to build a single family home. Debtor abandoned the project before completion. Debtor then sought relief under Chapter 7. Plaintiffs filed adversary proceeding seeking a determination the debt owed to them was not dischargeable under § 523(a)(2)(A) claiming the Debtor induced them to sign the construction contract by making false and fraudulent representations. Plaintiffs claimed the Debtor represented he had liability insurance and workers’ compensation insurance. At the trial, however, it became clear the Plaintiffs were relying on the general language of the contract, and not on statements made by the Debtor. Bankruptcy court found no inducement when Plaintiffs also admitted that prior to signing the contract, they were impressed with the Debtor’s work.
Hursh, Kurtz, Brand

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