- Case Type:
- Case Status:
- No. 20-6020 (8th Circuit, Apr 02,2021) Published
- BAP for 8th Cir. affirmed ruling of bankruptcy court (D. Neb.) granting debtors' motion for summary judgment on creditor's 11 USC 523 suit. There were no genuine issues of material fact and debtors were entitled to judgment as a matter of law. Creditor failed to demonstrate that individual debtors were personally liable for debt of contracting business for which debtors were principal operators.
- Procedural context:
- Bankruptcy court (D. Neb.) granted debtor's motion for summary judgment on creditor's 11 USC 523 suit. Creditor appealed to BAP for 8th Cir.
- Debtors--individuals--filed chapter 7 petition. Debtors included "Lund Ross Constructors" on their schedule of creditors holding unsecured claims and described the claim as contingent, unliquidated, disputed, and a "Corporate Debt; Notice Purpose Only. Debtors also referenced Lund-Ross on their schedule of codebtors, indicating Signature Electric, LLC ("Signature Electric") was a codebtor on the claim held by "Lund Ross Constructors[.]" In their statement of financial affairs, Debtors disclosed Lund-Ross had a pending state court lawsuit against Debtors and Signature Electric regarding "Contract Disputes." Lund-Ross timely commenced a nondischargeability action against Debtors under 11 U.S.C. § 523(a)(2)(A). Lund-Ross stated Debtors were the sole owners of Signature Electric, it had hired Signature Electric to do work on various projects for which Lund-Ross was the general contractor. Lund-Ross alleged Signature Electric and Debtors had, when requesting payment from Lund-Ross, untruthfully stated, via lien waivers, that all subcontractors engaged by Signature Electric had been "fully satisfied" for materials and labor they had provided, which resulted in substantial liens being placed on Lund-Ross's various projects. It wanted the value of those liens, which Lund-Ross had to clear, plus related costs, declared nondischargeable. Lund-Ross did not reference in its complaint any applicable nonbankruptcy statute or case law that would make Debtors, under the facts presented, personally liable to Lund-Ross.
- Nail, Schermer, Shodeen
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