Sharma v. Salcido (In re Sharma)

Citation:
BAP Nos. CC-12-1302 and CC-12-1520 (entered May 14, 2013) (Unpublished)
Tag(s):
Ruling:
Bankruptcy Court did not commit reversible error when determining the issue of liability under 11 U.S.C. Sec. 523(a)(2)(A) without a hearing since the Court found sufficient evidence in Complaint's allegations to support determination of liability. BAP further affirmed the amount of damages based on Salcido and the Debtor previously stipulating to the Judgment and amount of damages prior to the filing of the bankruptcy. The 9th Circuit BAP reversed the Bankruptcy Court's decision to award attorney's fees based on settlement agreement between Salcido and the Debtor was not broad enough to include tort actions for fraud.
Procedural context:
On Appeal from the Bankruptcy Court for the Central District of California, the 9th Circuit BAP affirmed Bankruptcy Chief Judge Peter H. Carroll decision denying the Debtor's discharge pursuant to 11 U.S.C. Sec. 523(a)(2)(A); however, the 9th CIrcuit BAP reversed the second decisions to award attorney's fees. This decision is not binding and not to be published.
Facts:
Carmen Salcido (“Salcido”) made two loans to Prasad Sharma (“Debtor”) prior to the Debtor seeking relief under Title 11 of the United States Code. The First Loan, Salcido used the balance of a home equity line of creditor in the amount of $240,000 and loaned it to Debtor. Salcido lent the money based on representations that Debtor was in the business of “flipping homes” and the Debtor guaranteed a 20% profit on her investment. Salcido and Debtor entered into a promissory note on May 5, 2005. The parties to the note were Salcido and Sharma Developments, Inc. The Debtor performed under this promissory note. Salcido decided to “roll” over her investment for another year with the Debtor. When this second promissory note became due, the Debtor did not perform. Salcido discovers that the real property her funds were used to purchase or refurbish were in various stages of disarray and some even condemned. Salcido sued Debtor in State Court and the Debtor agreed to a settlement agreement wherein Debtor would pay Salcido $240,000 over 5 years at 7% interest. Debtor does not perform, and Salcido asserts that Debtor never intended on performing; rather, it was merely a delay tactic where Debtor transferred his assets in anticipation of filing bankruptcy.
Judge(s):
Markell, Taylor, Montali (9th Cir. BAP)

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