Creal Dallas, LLC v. Viciedo, 612 B.R. 233

Plaintiff Creal Dallas, LLC (through its predecessor AFS) advanced floor-plan financing to Hammerhead Motors LLC, a used-truck dealer owned/operated by debtor Asbel Viciedo, to finance auction purchases (Floor Plan Agreement, $1.5 million note; debtor personally guaranteed).
Hammerhead also entered a separate Dealer Agreement with AFS/Creal to refer sub‑prime customer loans; AFS had sole discretion to fund loans; no loans were ultimately made under that agreement.
Initial funding problems (Creal not registered with auction) caused delays; Creal ultimately advanced roughly $500,000–$600,000 and Creal took security interests in the purchased vehicles; some double-floor‑planned vehicles and title issues ensued.
Creal demanded payment; repossessed nearly all collateral but one 2007 Chevy Silverado (the “Missing Truck”); Creal sued, and Hammerhead/Viciedo settled for $387,934.01, paying about $243,000 before default.
Creal sued in bankruptcy to except the remaining debt from discharge under 11 U.S.C. § 523(a)(2)(A) (fraudulent inducement) and § 523(a)(6) (willful and malicious injury/conversion). The Court held a trial and issued findings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether debt is nondischargeable under § 523(a)(2)(A) for fraudulent inducement of the Floor Plan Agreement	Creal: Viciedo knowingly induced Creal to advance funds with no intent to repay; retention of funds and failure to return advances shows intent to defraud	Viciedo: the transaction was a business experiment that went wrong; delays were logistical and parties discussed setoffs under Dealer Agreement; subsequent settlement and payments show intent to perform	Court: Judgment for Debtor; Creal failed to prove fraudulent intent by preponderance of evidence
Whether debt is nondischargeable under § 523(a)(6) for willful and malicious conversion of collateral (Missing Truck)	Creal: Viciedo knew Creal had a lien and the Missing Truck is gone from the lot, constituting willful conversion and nondischargeable injury	Viciedo: no evidence that Missing Truck was on Hammerhead’s lot, sold, or proceeds retained by Hammerhead/Viciedo; repossession of other collateral and settlement payments undermine willful‑conversion claim	Court: Creal failed to prove willful and malicious injury; any conversion claim limited to the Missing Truck’s value and may already be satisfied by payments; claim not excepted from discharge

Grogan v. Garner, 498 U.S. 279 (U.S. 1991) (creditor bears burden to prove nondischargeability by preponderance of the evidence)
In re Bilzerian, 153 F.3d 1278 (11th Cir. 1998) (elements of § 523(a)(2)(A) require proof of traditional common-law fraud)
In re Monson, [citation="661 F. App'x 675"] (11th Cir. 2016) (unauthorized removal or disposition of collateral known to be subject to a security interest can be a willful and malicious injury under § 523(a)(6))
Ford Motor Credit Co. v. Owens, 807 F.2d 1556 (11th Cir. 1987) (officer who controls a corporation and converts collateral may be personally liable and debt nondischargeable under § 523(a)(6))
In re Miller, 39 F.3d 301 (11th Cir. 1994) (discussing burden and narrow construction of exceptions to discharge)
Lee v. Ikner (In re Ikner), 883 F.2d 986 (11th Cir. 1989) (definition of "malicious" in the § 523(a)(6) context)
In re Reid, 598 B.R. 674 (Bankr. S.D. Ala. 2019) (contrast where facts supported a nondischargeable conversion because debtor sold collateral and used proceeds knowing it would harm creditor)