Bauer v. Hayes, 24-90005

Bauers contracted with Garic Hayes General Contractor LLC (GHGC) to build a custom Palmer, Alaska home in 2021; initial contract signed July 1, 2021 with a $190,500 deposit (25% of $762,000).
Dirk Imlach drafted plans; GHGC and Bauers exchanged multiple iterations but never finalized drawings.
Amendment on August 24, 2021 increased square footage and required a second deposit ($134,059) to secure lumber packages; lumber was never purchased.
Foundation poured fall 2021 but foundation and staking were disputed; project progressed with ongoing design disputes and delays.
GHGC faced severe cash-flow problems during 2021; finances were commingled, Kamiko Newsom was hired to fix accounting, and the Hayeses later filed personal bankruptcy in 2024; Bauers allege fraud under § 523(a)(2)(A) but court rules for Hayeses.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether initial deposit was fraudulently induced.	Bauer claims Hayeses knew GHGC would not perform and misrepresented intent.	Hayeses argue they intended to perform and delays resulted from design issues and non-final plans.	No, elements not proven by preponderance.
Whether the additional lumber deposit was fraudulently induced.	Bauer argues funds were promised for lumber but no lumber was purchased.	Plans were incomplete; deposit intended to lock in lumber costs and was not misused.	No, not proven by preponderance.
Whether Hayeses are personally liable for fraud as GHGC agents.	Ghgc agents committed fraud in obtaining deposits.	Hayeses acted as GHGC agents; no personal fraud found.	Hayeses personally liable only to the extent of proven fraud; court finds no personal fraudulent intent.
Whether debt is nondischargeable under 11 U.S.C. §523(a)(2)(A).	Fraudulent misrepresentation exceptions apply against the discharged debt.	No fraudulent misrepresentation proven; debt not excepted.	Debt not discharged under §523(a)(2)(A) for either deposit.

Banks v. Gill Distrib. Ctrs., Inc., 263 F.3d 862 (9th Cir. 2001) (elements for fraud under §523(a)(2)(A) align with Alaska law elements)
Jarvis v. Ensminger, 134 P.3d 353 (Alaska 2006) (Alaska fraud standard aligned with federal standard under §523(a)(2)(A))
Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001 (9th Cir. 1986) (fraud elements and reliance considerations in bankruptcy context)
Comm. for Idaho’s High Desert, Inc. v. Yost, 92 F.3d 814 (9th Cir. 1996) (personal liability of corporate officers for torts committed as agents)