HOWARD V. RAY HODGE & ASSOCIATES, LLC
- Case Type:
- Consumer
- Case Status:
- Affirmed in part and Reversed in part
- Citation:
- 24-2292 and 24-3833 (9th Circuit, Mar 11,2025) Not Published
- Tag(s):
-
- Ruling:
- The Court of Appeals found that the facts supported the bankruptcy court's finding that a debt was nondischargeable due to the debtor's failure to disclose material facts before entering into an agreement with the creditor. The Court of Appeals then reversed the BAP, which had denied the creditor's request for attorney's fees under California Civil Code § 1717. The Court of Appeals held that the nondischargeability was an action on the contract, as required by § 1717, because the bankruptcy court had to determine the enforceability of the agreement that the debtor had fraudulently entered.
- Procedural context:
- The debtor and the creditor appealed from (i) the bankruptcy court's determination that the debtor's obligations to the creditor were nondischargeable under 11 U.S.C. § 523(a)(2)(A) and (ii) the BAP's refusal to award the creditor it's attorney's fees under California Civil Code § 1717.
- Facts:
- The debtor, Vincent Howard, entered into a 2018 loan agreement executed by Ryan Hodge, as the principal of Ray Hodge & Associates, L.L.C. ("RHA"). Howard argued that RHA was not a party to the agreement and that RHA did not fund the loan. The bankruptcy court found to the contrary—RHA was a party to the loan agreement and had funded the loan. RHA argued that the loan was nondischargeable under 11 U.S.C. § 523(a)(2)(A) because Howard failed to disclose that he was a defendant in a $75MM enforcement action brought by the Consumer Financial Protection Bureau. The bankruptcy court found that Howard's omission was material and made with the intent to deceive or defraud RHA, and that RHA justifiably relied on Howard's omission.
- Judge(s):
- SANCHEZ and H.A. THOMAS, Circuit Judges, and DONATO, District Judge, sitting by designation
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