Reeves v. Davis, 638 F.3d 549

Reeves obtained a 2007 Indiana state-court judgment against Davis for violating the Indiana Home Improvement Contracts Act and for deceptive acts; the judgment totaled about $77,016.
Davis filed for bankruptcy on October 25, 2007; Reeves sought to except the debt from discharge under 11 U.S.C. § 523(a)(2)(A).
Indiana state court found Davis agreed to construct a porch, failed to complete the work, and that his contract was vague; it also found a deceptive act under IC § 24-5-11-14.
The bankruptcy court held the debt dischargeable, rejecting Reeves’s collateral-estoppel theory and making own findings about Davis’s intent.
The district court, affirming, held Davis’s intent issue was not clearly erroneous and that collateral estoppel did not compel non-dischargeability based on the state court findings.
The Seventh Circuit affirmed the district court’s judgment, concluding the bankruptcy court’s fact-finding on intent was not clearly erroneous and the remaining arguments were unpersuasive.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether collateral estoppel binds Davis’s intent from the state court decision	Reeves argues the porch finding and Davis’s testimony show intent to defraud.	Davis contends no intent finding was made in state court; collateral estoppel does not reach intent.	Collateral estoppel binds the porch factual issue but not the intent question; intent remains for the bankruptcy court to determine.
Whether Davis had fraudulent intent for § 523(a)(2)(A)	Davis’s misrepresentation and failure to perform show intent to defraud.	Intent to deceive was not proven; miscommunications/contract interpretation alone do not prove fraud.	Bankruptcy court’s finding of no fraudulent intent was not clearly erroneous; dispute framed as miscommunication rather than fraud.
Whether other alleged misrepresentations/unfinished work support § 523(a)(2)	Defective work, unfinished job, and acceptance of payment for unperformed work indicate fraud.	These issues were not pled or raised in a way to support § 523(a)(2); no clear fraud intent established.	Arguments waived and lack sufficient fraudulent-intent showing for § 523(a)(2).
Whether Reeves adequately preserved licensing misrepresentation and other claims	Licensing misrepresentation and related misstatements support non-dischargeability.	Licensing issue not pled; other facts not shown to establish fraud; waived.	Waived/insufficient to establish § 523(a)(2) fraud.)

Ojeda v. Goldberg, 599 F.3d 712 (7th Cir. 2010) (elements of § 523(a)(2)(A) fraud including intent and reliance)
Matter of Maurice, 21 F.3d 767 (7th Cir. 1994) (defining fraud elements and reliance in bankruptcy context)
In re Catt, 368 F.3d 789 (7th Cir. 2004) (collateral estoppel effect in bankruptcy proceedings)
United States ex rel. Main v. Oakland City University, 426 F.3d 914 (7th Cir. 2005) (breach of contract vs. fraud distinction in conduct of obligations)