concluding that § 523(a)(2)(A) of the Bankruptcy Code “is not ... the appropriate exception to discharge in bankruptcy for Nunnery’s judgment claim against Roun-tree” and affirming the final order of the United States District Court for the Eastern District of Virginia, which found the debt to be dischargeable
How later courts described this case
- concluding that § 523(a)(2)(A) of the Bankruptcy Code “is not ... the appropriate exception to discharge in bankruptcy for Nunnery’s judgment claim against Roun-tree” and affirming the final order of the United States District Court for the Eastern District of Virginia, which found the debt to be dischargeable
- holding that section 523(a)(2)(A) requires that a debtor fraudulently obtain money, property, services or credit from the creditor; a debt arising from fraud that results in a debt to the creditor without evidence that the debtor obtained something is not sufficient to meet this burden
- holding that “[a] plain reading of this subsection demonstrates that Congress excepted from discharge not simply any debt incurred as a result of fraud but only debts in which the debtor used fraudulent means to obtain money, property, services, or credit.”
- finding that “[a] plain reading of [§ 523(a)(2)(A) ] demonstrates that Congress excepted from discharge not simply any debt incurred as a result of fraud but only debts in which the debtor used fraudulent means to obtain money. ...”
Written by the judges who cited it.
The opinion
WILKINSON, Circuit Judge,
concurring:
I am pleased to concur in Judge Gregory’s opinion in this case. I write simply to emphasize that it does not open the floodgates to debtors receiving discharges from debts brought about by their own fraud or misrepresentation. Rountree’s activity here was nothing if not deceitful as she tracked Nunnery’s behavior on behalf of an insurance company under the cloak of a pretended friendship. To condemn the behavior, however, is not to say that Roun-tree obtained “money, property, services” or other financial benefit by virtue of her conduct as required by the statute. See 11 U.S.C. § 523 (a)(2)(A) (2000).
I suspect this will not be the usual situation. The more common occurrence will reflect the fact that frauds and misrepresentations are committed precisely for the purpose of obtaining that which the statute forbids. See, e.g., Maj. Op. at 221 (discussing Pleasants v. Kendrick, 219 F.3d 372, 374-75 (4th Cir.2000)). As Pleasants illustrates, to be nondischargeable, money need not pass directly to the debtor from the creditor: the statutory language simply does not add that qualification. See 11 U.S.C. § 523 (a)(2)(A). With that understanding, I am happy to join Judge Gregory’s very thoughtful opinion.