Chou v. Brody
- Summarized by Laura Coordes , Arizona State University, Sandra Day O'Connor College of Law
- 8 years 11 months ago
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- NC-15-1315-SKuB (9th Circuit, Mar 15,2017) Not Published
- Tag(s):
-
- Ruling:
- Bankruptcy court's decision that creditor failed to prove claims under § 523(a)(2) and (a)(6) to except from discharge a prepetition judgment against debtor for unpaid real estate commissions affirmed.
- Procedural context:
- Appeal from the bankruptcy court for the Northern District of California; reviewed de novo (for whether the claim was excepted from discharge) and for clear error (with respect to the bankruptcy court's findings of fact).
- Facts:
- Debtor managed a mortgage brokerage firm. Creditor began work at debtor's firm, but failed to execute the salesperson contract which debtor provided her. Instead, debtor and creditor signed a one-page, undated summary of creditor's understanding of the terms of her employment and compensation. Debtor maintained that the summary did not constitute a contract because it was undated, and debtor continued to insist that creditor sign the salesperson contract and provide debtor with her real estate license. Creditor began closing loans despite not having signed the contract or providing the license; creditor was not paid a commission for these closings. Debtor did pay creditor one commission after creditor improperly personally reimbursed a client for closing costs. Shortly thereafter, debtor terminated creditor's employment with his company. Creditor filed a state court complaint against debtor, and the court determined that creditor was entitled to commissions and costs, but not to interest on her claim. Creditor had initially submitted a fraud/tort claim against debtor in state court but did not present this claim at trial. At the time of debtor's bankruptcy filing, creditor had not been paid anything on the state court judgment. Creditor objected to the dischargeability of the judgment in the bankruptcy, asserting that debtor falsely represented an intention to pay her commissions and that the nonpayment of commissions willfully and maliciously injured her. The bankruptcy court conducted a trial and ruled in debtor's favor on both claims. Creditor appealed.
- Judge(s):
- Spraker, Kurtz, Brand
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