In re: Lance Herschel Harrison

Case Type:
Case Status:
21-8008 (6th Circuit, Feb 28,2022) Not Published
The Sixth Circuit B.A.P. affirmed the bankruptcy court's summary judgment order declaring debt to be nondischargeable on the basis of embezzlement and/or larceny. The Court held that although both larceny and embezzlement require an element of fraudulent intent, that intent may be proven by circumstantial evidence. The Court also found that Debtor's actions to remove property, after entry by the bankruptcy court of an order for stay relief and abandonment of the property, constituted either larceny or embezzlement.
Procedural context:
The bankruptcy court granted summary judgment and entered a order declaring debt non-dischargeable under 11 U.S.C. § 523(a)(2), (a)(4) andor (a)(6) without trial. Debtor appears to have argued that the requisite fraudulent intent could not be proved absent testimony. The Bankruptcy Appellate Panel did not directly address the § 523(a)(2) and (a)(6) rulings by the bankruptcy court, but affirmed on the basis of § 523(a)(4) because it was clear from the record that Debtor had either committed larceny or embezzlement, and the required fraudulent intent was properly proved at the summary judgment stage by the evidence presented.
Dr. Lance Herschel Harrison, Jr. (“Debtor”) owned and controlled Pleasant View Dental Spa. Pleasant View purchased a dental practice from Plaintiff with seller financing. Pleasant View defaulted and filed a Chapter 11 bankruptcy petition. After a motion for relief from stay, the parties entered into an agreed order that provided that, under certain conditions, title to the dental practice, including all property used in the business, would be transferred back to Plaintiff. Those conditions were triggered and title re-vested with Plaintiff. Debtor, however, told Pleasant View's employees to "pack and move everything that was not attached to the floor or wall." After two contempt motions were filed, and on the morning before the hearing on the second contempt motion, Debtor filed a personal Chapter 7 petition. Plaintiff filed an adversary proceeding challenging the discharge of Debtor's obligations to Plaintiff under 11 U.S.C. § 523(a)(2), (a)(4) and/or (a)(6). Plaintiff subsequently filed a motion for summary judgment, which was granted by the bankruptcy court.

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