Jordan v. Pritchard, 633 B.R. 314

In Aug. 2018 Nathanael and Rachel Jordan purchased 1301 Harrison Pike from debtor Brian Pritchard; parties executed a purchase agreement and a Tennessee property condition disclosure form.
The disclosure form denied roof defects, mold/asbestos, and unpermitted structural work (it noted only “minor” basement water intrusion).
After closing the Jordans discovered roof leaks/patches and roof sealant, mold and asbestos, and an addition with alleged unpermitted/substandard structural work; they sued Pritchard in state court (filed Oct. 31, 2019).
Pritchard filed a joint Chapter 13 with wife Dana on Dec. 20, 2019; Dana had been sole owner of the Eldredge Circle property and had created tenancy by the entirety with Pritchard; on June 22, 2020 Pritchard quitclaimed his interest back to Dana for $10.
Pritchard later split from Dana and converted to Chapter 7; the Jordans filed this adversary complaint in March 2021 alleging (1) §727(a)(2)(A) pre-petition fraudulent transfer, (2) §727(a)(2)(B) post-petition transfer, and (3) §523(a)(2)(A) fraud/non-disclosure regarding Harrison Pike.
Court: granted dismissal as to Count I (no transfer within one year pre-petition); denied dismissal of Count II (post-petition quitclaim to spouse) and Count III (fraudulent concealment/misrepresentation re: disclosure form).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §727(a)(2)(A) bars discharge for transfers within one year pre-petition	Pritchard transferred property to hinder creditors (count construed to concern Eldredge interest)	No transfer of estate property occurred within one year before the petition; Trustee report shows no intent	Dismissed — no qualifying transfer within the one-year pre-petition window
Whether §727(a)(2)(B) bars discharge for post-petition transfer of Eldredge property	June 22, 2020 quitclaim to spouse for $10, secrecy, and continued use of property show intent to hinder/defraud	Transfer was marital/domestic-property adjustment tied to divorce; no fraudulent intent; allegations are conclusory	Survives dismissal — allegations and circumstantial badges of fraud suffice to proceed to discovery
Whether debt from sale of Harrison Pike is nondischargeable under §523(a)(2)(A) for fraud/non-disclosure	Disclosure form contained material false denials (roof, mold/asbestos, unpermitted work) and Jordans reasonably relied to their detriment	Plaintiffs had a home inspection and waived some repair/code rights; allegations are conclusory	Survives dismissal — plaintiff plausibly alleged material misrepresentations/actual fraud tied to disclosure form; reasonable reliance to be resolved in discovery

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (motion-to-dismiss plausibility standard)
In re Keeney, 227 F.3d 679 (6th Cir. 2000) (elements for §727(a)(2) fraudulent-transfer claim)
Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. 665 (2015) (implied consent standard for bankruptcy adjudication)
Roell v. Withrow, 538 U.S. 580 (2003) (test for implied consent to adjudication)
Husky Int’l Elecs., Inc. v. Ritz, 578 U.S. 356 (2016) (definition/scope of “actual fraud” under §523)
Harris v. Viegelahn, 575 U.S. 510 (2015) (conversion from Chapter 13 to Chapter 7 does not change petition filing date)
In re Kaiser, 722 F.2d 1574 (2d Cir. 1983) (transfer to spouse while retaining benefit is a classic badge of fraud)