Barton Properties, Inc. v. Blaskey (In re Blaskey)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
11 years 2 days ago

Citation:

In re Blaskey, No. CC-14-1340-KuDKi (9th Cir. B.A.P. Feb. 27, 2015).

Tag(s):

Ruling:

The ordinary preponderance-of-the-evidence standard applies to the determination of factual issues in nondischargeability actions. Not-for-publication memorandum.

Procedural context:

Plaintiff creditors brought a nondischargeability action against the chapter 7 debtor under sections 523(a)(2)(A), (4), and (6). The bankruptcy court ruled for the debtor, dismissing all claims. The creditors appealed to the BAP, which affirmed the ruling under section 523(a)(4), but reversed the rulings under section 523(a)(2)(A) and (6) and remanded.

Facts:

The bankruptcy court incorrectly indicated that the policy in nondischargeability litigation favoring discharge of the debtor extended beyond the construction of section 523(a) to the determination of factual issues. Instead, the ordinary preponderance standard applies to section 523(a) claims. The bankruptcy court correctly declined to apply issue prelusion to the creditors’ California state-court judgment, which did not contain express or implied findings of nondischargeable conduct. The BAP could not say that no reasonable trier of fact could have found for the creditors on each of the elements necessary to establish nondischargeability under sections 523(a)(2)(A) and (6) if the preponderance standard had been applied. The bankruptcy court properly dismissed the section 523(a)(4) claim because the debtor, a California attorney, is not a fiduciary under section 523(a)(4) except with respect to funds held in a trust account.

Judge(s):

Frank L. Kurtz, Randall L. Dunn, and Ralph B. Kirscher, Bankruptcy Judges.

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