Old Republic National Title Insurance Co. v. Levasseur (In re Levasseur)
- Summarized by Samuel Mushell , Americans United for Government Reform
- 12 years 2 months ago
- Citation:
- In re Andrea Levausser, No. 13-1869
- Tag(s):
-
- Ruling:
- The First Circuit ruled in favor of the Creditor that its claim is exempted from discharge due to debtor's false representations and malicious and willful injury.
- Procedural context:
- Debtor filed for bankruptcy. Creditor sought to exempt its claim from discharge pursuant to 523(a). The Bankruptcy Court ruled in favor of the Creditor and the District Court affirmed. Debtor appealed to the First Circuit.
- Facts:
- Debtor took a home equity line of credit on her home from Fleet Bank, which later merged with Bank of America (BOA), for the amount of $124,200 and later sold the property. Because the debtor did not have equity in her home, she had no line of credit. Although debtor, who worked in a real estate office, was familiar with this, she did not inform Fleet that she sold the property. Debtor later drew on the entire Fleet/BOA account and deposited the money at a different bank. BOA eventually foreclosed on the original property, and Old Republic, which insured the new homeowners of the original property, sought to collect the entire amount plus interest from debtor. Debtor eventually filed for bankruptcy and sought discharge of the debt to Old Republic. Old Republic countered that debtor's actions were excepted to discharge due to false pretenses and willful and malicious injury. For the exception to discharge, Old Republic must prove: (1) intent; (2) the bank relied on her misrepresentation; and (3) that reliance caused a loss. The record shows that debtor was aware, based on her occupation, that the equity line was no longer available,proving her intent. BOA relied on her representations that the account was still active, and those representations eventually lead to BOA's foreclosure action.So the creditor satisfied the elements to except discharge based on false pretenses. In addition, debtor's actions were also malicious because it was with the intent to injure without just cause and it was willful based on her actions with the false pretenses. As such, the lower courts' rulings are affirmed.
- Judge(s):
- Lynch, Stahl and Lipez,
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