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In re Edwin Earl Elliott

Summarizing by Bradley Pearce

In re Donald and Jane Nichols

Summarizing by Lars Fuller

Johnson v. W3 Investment Partners, LP

Case Type:
Case Status:
BAP No. SC-17-1194-LBF (9th Circuit, Apr 16,2018) Not Published
BAP for 9th Cir. affirmed summary judgment entered by bankruptcy court (SD Cal.) on 523(a)(2)(A) claim. Bankruptcy court properly gave preclusive effect to prepetition stipulated judgment. BAP rejected Debtor defendants' argument that stipulated judgment was unenforceable prepetition waiver of discharge. Stipulated judgment met requirements for issue preclusion. Debtors' admissions in stipulated judgment of allegations of state court complaint established preclusive effect.
Procedural context:
Bankruptcy court (SD Cal.) granted summary judgment to plaintiff on 523(a)(2)(A) claim and debtor defendant appealed to BAP for 9th Circuit.
Creditors sued individuals and entities asserting various claims, including fraud. After two and a half years of litigation, the parties, represented by counsel, entered into a settlement whereby defendants agreed to stipulated judgment and payments to creditors' of $625,00o through monthly payments over six plus years. Individual defendants' denied liability in the settlement agreement, but personally guaranteed obligations of the entity defendants. Settlement agreement expressly provided that personal guarantees and stipulated judgment would be nondischargeable in bankruptcy. Parties read settlement agreement into record and individual defendants acknowledged that personal guarantees would not be dischargeable in bankruptcy. Defendants made payments for five years but then defaulted. State court did not enter stipulated judgment, but entered a form judgment in the principal amount of $516,000. The form judgment included declarations that Defendants have stipulated/agreed that allegations of complaint were true and accurate and arose out of breach of fiduciary duty and fraudulent conduct. Individual defendants filed bankruptcy under chapter 7 and sought to discharge obligation. Creditors sued to except debt from discharge.
Lafferty, Brand, Faris

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