Case Type:
Case Status:
BAP No. OR-21-1129-SLB (9th Circuit, Dec 21,2021) Not Published
The Ninth Circuit Bankruptcy Appellate Panel affirmed the bankruptcy court's summary judgment in favor of plaintiff-judgment creditor on his 523(a)(2)(A) claim against the defendant debtor based on the application of Oregon's issue preclusion to a state court judgment entered against debtor pre-petition.
Procedural context:
Plaintiff judgment credit had obtained a judgment against the defendant debtor for fraud in Oregon state court after a 2-day trial. After the defendant debtor filed for chapter 7 bankruptcy, the judgment creditor filed a non-dischargeability action against the debtor under section 523(a)(2)(A) for fraud. The judgment creditor filed a motion for summary judgment and the bankruptcy court granted the motion by applying Oregon's issue preclusion doctrine to find all of the elements of section 523(a)(2)(A) fraud met by the finding of fraud by a jury in state court.
The dispute arose from the possession of four mules and a horse. The judgment creditor had unilaterally taken possession of the mules and horse in partial payment of a loan he had made to John Gorbett. Debtor, her family's ranch, and Gorbett sued the judgment creditor for conversion claiming that three of the mules were owned by the debtor or the ranch and the other mule and the horse were owned by a third party. Judgment creditor had filed counterclaims against those parties, including a claim for fraud based on their inducement for judgment creditor to make a $55,000 loan to Gorbett by leading judgment creditor to believe that the animals were Gorbett's property. After a two-day trial, a jury returned a verdict in favor of judgment creditor.
Spraker, Lafferty, and Brand

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