427 F. App'x 813
11th Cir.2011Background
- Freedman purchased Image Marketing in 2002 for about $1 million; Ershowsky was a key employee with client relationships.
- A Phantom Stock Agreement was drafted in 2005 after initial promises of future profits and benefits; a final agreement and employment contract were signed in January 2005.
- Freedman allegedly concealed substantial company debts; he later forged Ershowsky’s signature on a new employment agreement related to a sale.
- Crab Key Holdings purchased Image Marketing in July 2006; Freedman sold the company and provided Ershowsky with a net payment under the Phantom Stock Agreement.
- The bankruptcy court found nondischargeable debts under 11 U.S.C. § 523(a)(2)(A) for false representations and § 523(a)(4) for fiduciary fraud; Freedman appealed to the district court, which dismissed the appeal for waiver of arguments not raised in bankruptcy court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether oral representations can support § 523(a)(2)(A) nondischargeability. | Freedman argues § 523(a)(2)(B) requires written misrepresentations; oral cannot satisfy A. | Ershowsky contends the bankruptcy court used § 523(a)(2)(A) regardless of written form. | Oral representations can support § 523(a)(2)(A); issue not dispositive of the judgment. |
| Whether Freedman waived the argument by not raising it in bankruptcy court. | Freedman asserts waiver exception applies. | District court correctly held waiver; no exception applies. | Waived; district court did not abuse discretion. |
| Whether a first-time-on-appeal argument is reviewable under special circumstances. | Freedman seeks consideration of new legal theory on appeal. | No exceptional circumstances present; waiver applies. | Not reviewable; discretionary denial upheld. |
| Whether the district court properly applied de novo review for mixed questions of law and fact. | N/A in brief; focus on waiver. | Standard of review proper as appellate function; factual findings reviewed for clear error. | Standard correctly applied; underlying findings affirmed. |
Key Cases Cited
- In re Sublett, 895 F.2d 1381 (11th Cir. 1990) (appellate review framework for bankruptcy appeals; de novo recitation of law; factual findings reviewed for clear error)
- GJR Investments, Inc. v. County of Escambia, 132 F.3d 1359 (11th Cir. 1998) (liberal construction of pro se pleadings; court not de facto counsel; preservation requirement)
- Espino, 806 F.2d 1001 (11th Cir. 1986) (preservation of issues; lack of proper presentation in bankruptcy court)
- Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324 (11th Cir. 2004) (five-factor test for considering first-time-on-appeal issues; miscarriage of justice concerns)
- Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009) (discretion to consider pure questions of law first raised on appeal; general impact considerations)