450 B.R. 231
Bankr. N.D. Ga.2011Background
- Debtors Hannah Hyun Lee and Leo Lusier filed for Chapter 7 relief in the Northern District of Georgia (Gainesville Division).
- FIA Card Services, N.A. sued Debtor-Debtor in an adversary proceeding seeking nondischargeability under 11 U.S.C. § 523(a)(2).
- Plaintiff asserts $4,730 of the charges were within the 523(a)(2)(C) presumptive period and $10,753 in cash advances; total claimed debt is $13,483.00.
- Debtor does not deny incurring the charges but denies intending not to repay; she contends she filed bankruptcy because she lacks means to satisfy debts.
- Plaintiff moved for summary judgment on August 3, 2010; Debtor responded August 27, 2010.
- The Court denied summary judgment, finding a genuine dispute about Debtor's intent to defraud and scheduled a trial for resolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the debt is nondischargeable under 523(a)(2)(A). | Plaintiff alleges Debtor deceived to obtain credit with intent to defraud. | Debtor asserts no intent to defraud; she lacked means to repay and filed for relief accordingly. | Issue disputed; summary judgment denied. |
| Whether the 523(a)(2)(C) presumptions apply to the challenged charges. | Some charges/cash advances fall within presumptive period. | Debtor may rebut presumption by showing change in circumstances or lack of intent at time of transactions. | Presumptions exist but are rebuttable; genuine issues remain. |
| Whether summary judgment was appropriate given genuine issues of intent. | Evidence supports fraud through intent to deceive. | Intent is a subjective state of mind and not suitable for resolution on summary judgment. | Not appropriate; trial required. |
Key Cases Cited
- In re Vann, 67 F.3d 277 (11th Cir. 1995) (elements of 523(a)(2)(A) require actual fraud with reasonable reliance)
- In re Gosnell, 151 B.R. 608 (Bankr. S.D. Fla. 1992) (legal/constructive fraud distinctions; intent required)
- In re Hutchinson, 193 B.R. 61 (Bankr. M.D. Fla. 1996) (fraud elements and intent considerations)
- Green, 296 B.R. 173 (Bankr. C.D. Ill. 2003) (presumption under 523(a)(2)(C) considerations and rebuttal)
- In re Spradley, 313 B.R. 119 (Bankr. E.D.N.Y. 2004) (application of presumptions to consumer debts)
- Birmingham Trust Nat’l Bank v. Case, 755 F.2d 1474 (11th Cir. 1985) (reckless disregard as possible basis for nondischargeability)