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
DIANA GRIBBON MOTZ,
concurring in the judgment:
For the following reasons, I agree with my colleagues that 11 U.S.C. § 523 (a)(2)(A) (2000) does not render Rountree’s debt to Nunnery nondischarga-ble.
Section 523(a)(2)(A) provides that the bankruptcy code “does not discharge an individual debtor from any debt — ... for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by- — false pretenses, a false representation, or actual fraud” (emphasis added). The statute does not render Rountree’s debt to Nunnery non-dischargable because Nunnery has not demonstrated that the debt was “obtained by” fraud.
To be sure, Rountree apparently made misrepresentations in Nunnery’s tort suit. But, as the district court noted, it “is impossible to determine with any degree of certainty” that Nunnery would have won the tort case absent Rountree’s misrepresentations. Although Nunnery later obtained an award against Rountree for emotional damages to her resulting from Rountree’s misrepresentations, Nunnery never claimed, let alone proved, that she lost the tort action because of Rountree’s fraud. Thus, Nunnery has not met the § 523(a)(2)(A) requirement that “the debt- or’s fraud must result in a loss of property to the creditor.” Collier on Bankruptcy, ¶ 523.08[l][a] (15th ed., rev.2004).