Howard v. Ray Hodge & Associates, LLC
24-2292
9th Cir.Mar 11, 2025Background
- Plaintiff Ray Hodge & Associates, L.L.C. (RHA) made a $150,000 loan to defendant Vincent Howard pursuant to a May 10, 2018 agreement.
- RHA’s principal, Ryan Hodge, executed the agreement on behalf of RHA.
- Howard failed to disclose that he was a defendant in a $75 million enforcement action by the CFPB, contrary to disclosure requirements in the agreement.
- The bankruptcy court found the loan nondischargeable due to Howard’s misrepresentations and omissions; this was affirmed by the Bankruptcy Appellate Panel (BAP).
- The BAP denied RHA’s request for attorney’s fees under California Civil Code section 1717, but that denial was reversed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RHA was a party to and had standing to enforce the agreement | RHA was principal, signed and funded loan | Only Hodge or different entity funded/agreement violations | RHA was a party with standing |
| Whether RHA funded the $150k loan | Loan came from RHA as per testimony | Contested funding source; required docs for proof | RHA funded loan; Howard’s admissions binding |
| Whether debt was nondischargeable under § 523(a)(2)(A) | Misrepresentations and omissions by Howard | Omissions objectively immaterial; lacked intent to deceive | Misrepresentations were material, intentional, and damaging |
| Whether RHA was entitled to attorney’s fees under § 1717 | Action was “on a contract” requiring enforcement | Not "on a contract" since contract issues conceded | Action was "on a contract," remanded for attorney’s fees award |
Key Cases Cited
- In re Slyman, 234 F.3d 1081 (9th Cir. 2000) (establishes elements for nondischargeability under § 523(a)(2)(A))
- Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224 (9th Cir. 1988) (judicial admissions bind parties during litigation)
- In re Kennedy, 108 F.3d 1015 (9th Cir. 1997) (intent to deceive may be inferred from circumstances)
- Field v. Mans, 516 U.S. 59 (1995) (defines justifiable reliance standard for fraud claims)
- In re Baroff, 105 F.3d 439 (9th Cir. 1997) (interprets actions “on a contract” for California fee awards)