TIMOTHY A. BARNES, Bankruptcy Judge.
The matter before the court arises out of two complaints filed by Brian T. Sullivan ("Sullivan"), each seeking a determination of dischargeability of debt under 11 U.S.C. § 523(a)(2)(A): (1) against debtor Michele A. Glenn ("Michele") in adversary case no. 11ap01455 (the "Michele Adversary"); and (2) against debtor Michael R. Glenn, Jr. ("Michael," and together with
This Memorandum Decision constitutes the court's findings of fact and conclusions of law in accordance with Rule 7052 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). Separate Orders will be entered pursuant to Bankruptcy Rule 9021.
The federal district courts have "original and exclusive jurisdiction" of all cases under title 11 of the United States Code (the "Bankruptcy Code"). 28 U.S.C. § 1334(a). The federal district courts also have "original but not exclusive jurisdiction" of all civil proceedings arising under title 11 of the United States Code, or arising in or related to cases under title 11. 28 U.S.C. § 1334(b). District courts may, however, refer these cases to the bankruptcy judges for their districts. 28 U.S.C. § 157(a). In accordance with section 157(a), the District Court for the Northern District of Illinois has referred all of its bankruptcy cases to the Bankruptcy Court for the Northern District of Illinois. N.D. Ill. Internal Operating Procedure 15(a).
A bankruptcy judge to whom a case has been referred may enter final judgment on any core proceeding arising under the Bankruptcy Code or arising in a case under title 11. 28 U.S.C. § 157(b)(1). A proceeding for determination of the dischargeability of a particular debt arises in a case under title 11 and is specified as a core proceeding. 28 U.S.C. § 157(b)(2)(I); Birriel v. Odeh (In re Odeh), 431 B.R. 807, 810 (Bankr. N.D.Ill.2010) (Wedoff, J.); Baermann v. Ryan (In re Ryan), 408 B.R. 143, 151 (Bankr. N.D. Ill.2009) (Squires, J.).
Accordingly, final judgment is within the scope of the court's authority.
In considering the relief sought by Sullivan, the court has considered the evidence and argument presented by the parties at the four-day trial that took place from July 15, 2013 through July 18, 2013 (the "Trial").
The court has considered the procedural history and previous court filings in the Michele Adversary, including:
Though the foregoing items do not constitute an exhaustive list of the filings in the Adversary Proceedings, the court has taken judicial notice of the contents of the dockets in this matter. See Levine v. Egidi, No. 93C188, 1993 WL 69146, at *2 (N.D.Ill. Mar. 8, 1993); Inskeep v. Grosso (In re Fin. Partners), 116 B.R. 629, 635 (Bankr. N.D.Ill.1989) (Sonderby, J.) (authorizing a bankruptcy court to take judicial notice of its own docket).
This case involves the failure of the Glenns' real estate business around 2007, when many such businesses were beginning to fail, and a loan that would prove to be an unsuccessful investment for Sullivan.
Michael and Michele Glenn are husband and wife and previously owned several entities that engaged in real estate development. In the fall of 2007, Michael sought a short-term loan for the business. He engaged the services of Karen Chung ("Chung"), who had previously procured loans for his business, to obtain a $250,000 loan. Chung approached Sullivan, her friend and someone with whom she had some business dealings, and eventually convinced him to provide the loan (the "Sullivan Loan").
Prior to making the loan, Sullivan met with Michael, Chung and Chung's employee, Adrian Lopez ("Lopez"). Michele did not attend the meeting. The central issue in this case concerns representations that were made at the meeting specifically in relation to a $1 million line of credit for the Debtors' companies, ostensibly to be obtained
The issues also turn in part on a promissory note Sullivan required Michael, Michele and Chung to sign in connection with the Sullivan Loan, thereby agreeing to be personally liable on the loan. While Sullivan received a note bearing the signature of all three parties, Michele contends that the signature purported to be hers on the note is not authentic and not authorized.
In the Adversary Proceedings, Sullivan seeks a determination that the Sullivan Loan is not dischargeable pursuant to section 523(a)(2)(A) of the Bankruptcy Code because the debt was procured through fraud, false representation and false pretenses. There are essentially three issues before the court: (1) whether Chung's fraud should be imputed to the Debtors; (2) whether either of the Debtors independently committed fraud in connection with the loan; and (3) if Michael committed fraud or has Chung's fraud imputed to him, whether such fraud should be imputed to Michele.
From the review and consideration of the procedural background, as well as the evidence presented at the Trial, the court determines the salient facts to be as follows, and so finds that:
The party seeking to establish an exception to the discharge of a debt bears the burden of proof. Goldberg Sees., Inc. v. Scarlata (In re Scarlata), 979 F.2d 521, 524 (7th Cir. 1992); Zamora v. Jacobs (In re Jacobs), 448 B.R. 453 (Bankr.N.D.Ill. 2011) (Sonderby, J.). A creditor must meet this burden by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991); see also In re McFarland, 84 F.3d 943, 946 (7th Cir.1996), cert. denied, 519 U.S. 931, 117 S.Ct. 302, 136 L.Ed.2d 220 (1996). To further the policy of providing a debtor a fresh start, exceptions to the discharge of a debt are to be construed strictly against a creditor and liberally in favor of a debtor. See In re Crosswhite, 148 F.3d 879, 881 (7th Cir.1998); Meyer v. Rigdon, 36 F.3d 1375, 1385 (7th Cir.1994).
Section 523 enumerates specific, limited exceptions to the dischargeability of debts. Section 523(a)(2)(A) provides, in relevant part, that an individual debtor is not discharged from any debt:
11 U.S.C. § 523(a)(2)(A).
First, a plaintiff must establish that the debtor owes him a debt. See Zirkel v. Tomlinson (In re Tomlinson), Nos. 96 B 27172, 96 A 1539, 1999 WL 294879, at *7 (Bankr.N.D.Ill. May 10, 1999) (Katz, J.). Second, a plaintiff must show that the debt falls within one of the specified grounds under section 523(a)(2)(A). Wachovia Sec, LLC v. Jahelka (In re Jahelka), 442 B.R. 663, 668 (Bankr.N.D.Ill.2010) (Goldgar, J.). Three separate grounds for holding a debt to be nondischargeable are included under section 523(a)(2)(A): false pretenses, false representation and actual fraud. Id.; see also Deady v. Hanson (In re Hanson), 432 B.R. 758 (Bankr.N.D.Ill. 2010) (Squires, J.); Bletnitsky v. Jairath (In re Jairath), 259 B.R. 308, 314 (Bankr. N.D.Ill.2001) (Goldgar, J.).
The Complaints allege claims under section 523(a)(2)(A) based on false representations, false pretenses and actual fraud under different theories of liability. The complaint in the Michele Adversary contains four counts, each pled in the alternative. Count I alleges that the debt was obtained by false statements, false pretenses and actual fraud of Chung and Lopez as Michele's purported agents. Count II alleges that Michele gave express or implied authority to her husband or another third party to execute the Glenn Note on her behalf. Count III states that Michele ratified her agreement to the Sullivan Loan and the Glenn Note, or is otherwise estopped from disaffirming such agreement.
To except a debt from discharge under section 523(a)(2)(A) based on false pretenses or a false representation, the creditor must establish the following elements: (1) the debtor made a false representation or omission of fact; (2) which the debtor (a) knew was false or made with reckless disregard for its truth and (b) made with an intent to deceive; and (3) upon which the creditor justifiably relied. Reeves v. Davis (In re Davis), 638 F.3d 549, 553 (7th Cir.2011); see also Ojeda v. Goldberg, 599 F.3d 712, 716-17 (7th Cir. 2010); In re Bero, 110 F.3d 462, 465 (7th Cir.1997); Jahelka, 442 B.R. at 668-69. A creditor must establish all three elements to support a finding of false pretense or false representation. Ryan, 408 B.R. at 156; see also Rae v. Scarpello (In re Scarpello), 272 B.R. 691, 700 (Bankr.N.D.Ill. 2002) (Squires, J.). Failure to establish any one fact is outcome determinative. Hanson, 432 B.R. at 771 (citing Jairath, 259 B.R. at 314).
Under section 523(a)(2)(A), a false representation is an express misrepresentation that can be demonstrated either by a spoken or written statement or through conduct. See Scarpello, 272 B.R. at 700; In re Philopulos, 313 B.R. 271, 281 (Bankr.N.D.Ill.2004) (Schmetterer, J.); New Austin Roosevelt Currency Exch., Inc. v. Sanchez (In re Sanchez), 277 B.R. 904, 908 (Bankr.N.D.Ill.2002) (Schmetterer, J.). As a spoken or written statement is not required for a false representation, "[a] debtor's silence regarding a material fact can constitute a false representation under § 523(a)(2)(A)." Hanson, 432 B.R. at 772 (internal quotation omitted); see also Scarpello, 272 B.R. at 700. "A debtor's failure to disclose pertinent information may be a false representation where the circumstances imply a specific set of facts and disclosure is necessary to correct what would otherwise be a false impression." Ryan, 408 B.R. at 157 (citing Trizna & Lepri v. Malcolm (In re Malcolm), 145 B.R. 259, 263 (Bankr.N.D.Ill.1992) (Wedoff, J.)).
In contrast, "[f]alse pretenses in the context of section 523(a)(2)(A) include implied misrepresentations or conduct intended to create or foster a false impression." Media House Productions, Inc. v. Amari (In re Amari), 483 B.R. 836, 846 (Bankr.N.D.Ill.2012) (Schmetterer, J.) (citing Sterna v. Paneras (In re Paneras), 195 B.R. 395, 406 (Bankr.N.D.Ill.1996) (Squires, J.)). The implication arises when a debtor, with the intent to mislead a creditor, engages in "a series of events, activities or communications which, when considered collectively, create a false and misleading set of circumstances, ... or understanding of a transaction, in which [the] creditor is wrongfully induced by [the] debtor to transfer property or extend
A false pretense does not necessarily require overt misrepresentations. Paneras, 195 B.R. at 406. "Instead, omissions or a failure to disclose on the part of the debtor can constitute misrepresentations where the circumstances are such that omissions or failure to disclose create a false impression which is known by the debtor." Id.; see also Hanson, 432 B.R. at 771 (finding that a false pretense is "established or fostered willfully, knowingly and by design; it is not the result of inadvertence").
An element common to a false representation and false pretenses is reliance. The United States Supreme Court has clarified that section 523(a)(2)(A) requires only a showing of "justifiable" reliance. See Field v. Mans, 516 U.S. 59, 73-75, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995); see also Mayer v. Spanel Int'l Ltd., 51 F.3d 670, 673 (7th Cir.1995). Justifiable reliance is a less demanding standard than reasonable reliance and "does not mean that [the creditor's] conduct must conform to the standard of the reasonable man." Paneras, 195 B.R. at 406 (quoting Field, 516 U.S. at 71, 116 S.Ct. 437). Rather, justifiable reliance "requires only that the creditor did not `blindly [rely] upon a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity to make a cursory examination or investigation.'" Ojeda, 599 F.3d at 717 (quoting Field, 516 U.S. at 71, 116 S.Ct. 437).
Whether a party justifiably relies on a misrepresentation is "determined by looking at the circumstances of a particular case and the characteristics of a particular plaintiff." Id.; see also Bombardier Capital, Inc. v. Dobek (In re Dobek), 278 B.R. 496, 508 (Bankr.N.D.Ill.2002) (Schmetterer, J.). "[A] person is justified in relying on a representation of fact `although he might have ascertained the falsity of the representation had he made an investigation.'" Mercantile Bank v. Canovas, 237 B.R. 423, 429 (Bank.N.D.Ill.1998) (Lefkow. J.) (quoting Field, 516 U.S. at 70, 116 S.Ct. 437). "However, a plaintiff may not bury his head in the sand and willfully ignore obvious falsehoods." Johnston v. Campbell (In re Campbell), 372 B.R. 886, 892 (Bankr.C.D.Ill.2007) (internal quotations omitted).
Several courts in this Circuit have determined that "[t]o satisfy the reliance element of § 523(a)(2)(A), the creditor must show that the debtor made a material misrepresentation that was the cause-in-fact of the debt that the creditor wants excepted from discharge." Scarpello, 272 B.R. at 700; see also In re Mayer, 51 F.3d 670, 676 (7th Cir.1995) ("reliance means the conjunction of a material misrepresentation with causation in fact"); Hanson, 432 B.R. at 773. Accordingly, these courts have required the plaintiff to show that the debtor's conduct proximately caused the plaintiffs loss, thus malting proximate cause an additional requirement under section 523(a)(2)(A). See In re Luster, 50 Fed.Appx. 781, 784 (7th Cir.2002); In re Tomlinson, 1999 WL 294879, at *7; Microtech Int'l v. Horwitz (In re Horwitz), 100 B.R. 395, 397-398 (Bankr.N.D.Ill.1989) (Katz, J.).
A different analysis is used when a creditor alleges actual fraud. In order to except a debt from discharge on the basis of actual fraud, a creditor must establish that (1) a fraud occurred, (2) the debtor intended to defraud, and (3) the fraud created the debt that is the subject of the discharge dispute. Jahelka, 442
Unlike false pretenses and false representations, "actual fraud" does not require proof of a misrepresentation or reliance. McClellan, 217 F.3d at 892; see also Jahelka, 442 B.R. at 669; Hanson, 432 B.R. at 771. While there is no definite rule defining fraud, "it includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated." McClellan, 217 F.3d at 893 (internal quotations omitted).
Scienter, or intent to deceive, is also a required element under section 523(a)(2)(A) whether the claim is for a false representation, false pretenses, or actual fraud. Mayer v. Spanel Int'l, Ltd. (In re Mayer), 51 F.3d 670, 673 (7th Cir.1995), cert. denied, 516 U.S. 1008, 116 S.Ct. 563, 133 L.Ed.2d 488 (1995); Pearson v. Howard (In re Howard), 339 B.R. 913, 919 (Bankr.N.D.Ill.2006) (Schwartz, J.). Intent to deceive is measured by the debtor's subjective intention at the time of the representations or other purportedly fraudulent conduct. See Scarpello, 272 B.R. at 700; see also CFC Wireforms v. Monroe (In re Monroe), 304 B.R. 349, 356 (Bankr. N.D.Ill.2004) (Schmetterer, J.). Subsequent acts of fraud or omissions do not demonstrate that the debtor had the requisite intent at the time the representations were made. Standard Bank & Trust Co. v. Iaquinta (In re Iaquinta), 95 B.R. 576, 578 (Bankr.N.D.Ill.1989) (Squires, J.).
An intent to deceive may be established through direct evidence or inference. Monroe, 304 B.R. at 356 (citing In re Sheridan, 57 F.3d 627 (7th Cir. 1995)). Because direct proof of fraudulent intent is often unavailable, fraudulent intent "may be determined from the totality of the circumstances of a case and may be inferred when the facts and circumstances present a picture of deceptive conduct on the debtor's part." Cent. Credit Union of III. v. Logan (In re Logan), 327 B.R. 907, 911 (Bankr.N.D.Ill.2005) (Cox, J.) (internal quotations omitted); see also Hanson, 432 B.R. at 773. Thus, "[w]here a person knowingly or recklessly makes false representations which the person knows or should know will induce another to act, the finder of fact may logically infer an intent to deceive." Jairath, 259 B.R. at 315.
Even in cases where all of the foregoing can be established, section 523(a)(2)(A) provides a safe harbor for statements relating to a debtor's or an insider's financial condition. 11 U.S.C. § 523(a)(2)(A). Specifically, this section provides that "a statement respecting the debtor's or an insider's financial condition" does not give rise to a finding of nondischargeability thereunder. Id. When read in conjunction with section 523(a)(2)(B), it is clear that such statements are only safe harbored if not in writing. Statements in writing are not safe harbored. 11 U.S.C. § 523(a)(2)(B); see also Bednarsz v. Brzakala (In re Brzakala), 305 B.R. 705, 709 (Bankr.N.D.Ill. 2004) (Goldgar, J.).
Thus, any oral statements made by a debtor concerning the debtor's or an insider's financial condition do not form a basis for nondischargeability. See Amari, 483 B.R. at 848-49; see also In re Bryson, 187 B.R. 939, 960 (Bankr.N.D.Ill.1995) (Schmetterer, J.) ("[I]t is improper to apply
In Stelmokas v. Kodzius, the Seventh Circuit Court of Appeals noted "that a majority of the bankruptcy courts in this circuit have opted for the narrow construction" of what constitutes a statement respecting the debtor's financial condition under section 523(a)(2)(A), but did not decide the issue. 460 Fed.Appx. 600, 604 (7th Cir.2012) (citing cases). The narrow view is that the "statement must paint a picture about the debtor's overall financial health, while the broad view encompasses statements of that nature along with any other that conveys significant information about debtor's finances." Id. at 603. The narrow construction limits the safe harbor to, for example, "statements concerning a debtor's (or insider's) overall net worth or earning capacity, or statements describing the overall economic condition of the entity." Goldberg & Assocs., Ltd. v. Holstein (In re Holstein), 272 B.R. 463, 481 (Bankr. N.D.Ill.2001) (Sonderby, J.). Another circuit has further-reasoned that because oral communication "is often informal and spontaneous ... it is logical to give more leeway (and more dischargeability) to a debtor who errs in stating his or her overall position orally...." Cadwell v. Joelson, 427 F.3d 700, 707 (10th Cir.2005).
None of the parties have raised the issue of whether this court has constitutional authority to enter a final judgment on all counts of the Complaints in light of the United States Supreme Court's decision in Stern v. Marshall, 564 U.S. ___, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). This court has an independent duty to determine whether it has such authority. Rutkowski v. Adas (In re Adas), 488 B.R. 358, 379 (Bankr.N.D.Ill.2013) (Hollis, J.).
All of the counts in the Complaints are based on section 523(a)(2)(A) of the Bankruptcy Code. Section 523 is unequivocally a bankruptcy cause of action. While such actions may turn on state law, determining the scope of the debtor's discharge is a fundamental part of the bankruptcy process. See Deitz v. Ford (In re Deitz), 469 B.R. 11, 20 (9th Cir. BAP 2012). As observed by one bankruptcy court, "there can be little doubt that [a bankruptcy court], as an Article I tribunal, has the constitutional authority to hear and finally determine what claims are non-dischargeable in a bankruptcy case." Farooqi v. Carroll (In re Carroll), 464 B.R. 293, 312 (Bankr.N.D.Tex.2011); see also Deitz, 469 B.R. at 20; White Eagle, Inc. v. Boricich (In re Boricich), 464 B.R. 335, 337 (Bankr. N.D.Ill.2011) (Schmetterer, J.).
Thus, even in light of the Seventh Circuit's later opinions regarding Stern, see Wellness Int'l Network, Ltd. v. Sharif, 727 F.3d 751 (7th Cir.2013) and Ortiz v. Aurora Health Care, Inc. (In re Ortiz), 665 F.3d 906 (7th Cir.2011), the court concludes that it has constitutional authority to enter a final judgment in the Adversary Proceedings.
Before determining the issue of dischargeability, it must first be established that the Glenns in fact owe the underlying obligation. In other words, there must first be a debt to discharge. With respect to Michael, this conclusion is simple, as the parties do not dispute that he is liable on the Sullivan Loan. With respect to Michele, on the other hand, the parties disagree as to whether she is liable on the debt, as the Debtors contend that Michele was not a party to the transaction, did not sign the Glenn Note or authorize anyone to sign on her behalf, and did not ratify
Sullivan has provided ample evidence refuting Michele's claim that she did not sign the Glenn Note. Sullivan produced several notarized documents in connection with the Glenn Companies bearing Michele's signature. See PX 49 (quit claim deed); PX 50 (specific power of attorney from Michele to Michael); PX 59 (specific power of attorney from Michele to Michael); PX 60 (specific power of attorney from Michele to Michael); PX 61 (warranty deed), PX 62 (limited power of attorney from Michele to Michael) (collectively, the "Notarized Documents"). These documents are of significance here because Michele's signature on the Glenn Note appears to be similar to the signature on the Notarized Documents. Sullivan called two notaries public—Lisa M. Unzueta and Robert Romero—who testified that while they could not recall notarizing the documents bearing their signatures as notaries public, their signatures on such documents were authentic and that they would not have notarized a document containing a signature that was not made by the individual whose signature was being witnessed. Michele, however, testified that the signature bearing her name on the Notarized Documents was not hers, and that she did not know who signed her name on those documents.
At the Trial, the Debtors sought to counter Sullivan's notarial evidence through Michele's and Michael's direct testimony in relation to the execution of the Glenn Note by testifying that Michele's signature on the Glenn Note is not authentic. Sullivan objected, arguing that Illinois law provides that notarized documents preclude a challenge to the authenticity of the signature thereon by an interested party to the transaction. See Resolution Trust Corp. v. Hardisty, 269 Ill.App.3d 613, 207 Ill.Dec. 62, 646 N.E.2d 628, 631 (1995). The court allowed the presentation of the evidence, subject to a later ruling on Sullivan's objection, on which it reserved judgment. The court now sustains Sullivan's objection in that regard.
In Illinois, the act of notarization tends to prove the authenticity of the witness' signature. In re Koziol, 236 Ill.App.3d 478, 177 Ill.Dec. 279, 603 N.E.2d 60, 63 (1992). The certificate of acknowledgment by a notary is "prima facie proof of the execution of the instrument." Krueger v. Dorr, 22 Ill.App.2d 513, 161 N.E.2d 433, 440 (1959). Where an instrument has been acknowledged by a notary, it may not be impeached except for fraud and imposition, and it is the party seeking to impeach such an acknowledgement that must do so by providing clear and convincing evidence coming from a disinterested witness. Hardisty, 207 Ill.Dec. 62, 646 N.E.2d at 631.
The testimony of the Glenns, who are interested parties, is unsupported otherwise and does not overcome acknowledgment of the notaries on any of the notarized documents by clear and convincing evidence. Absent such testimony, there is no credible evidence of fraud or imposition as there is no evidence that anyone else other than Michele signed her name on these documents. Based on the foregoing, the court finds that the notarizations on the Notarized Documents prove the authenticity of Michele's signature on such documents.
Even absent such a ruling, the court has little difficulty concluding that Michele's signature on the Sullivan Loan is either Michele's authentic signature or was signed at her behest. In this regard, neither Michele's testimony that she did not
Even if the court were to conclude that Michele's signature on the Glenn Note is not actually hers, based on the relevant facts, the court would conclude that her husband (or someone acting at the request of Michele or her husband) signed the note under her express or implied authority. The email containing the Glenn Note was sent from Michael's email account, which indicates that Michael was involved in securing Michele's signature on the Glenn Note. As discussed above, Michael's testimony regarding the circumstances governing that email's sending was entirely lacking in credibility. The Glenns testified that in the past, Michael signed his wife's name on documents. Under such circumstances, if Michael signed Michele's name on the Glenn Note (or directed someone else to sign her name), his actions would have been made with Michele's actual or implied authorization. There is simply no credible evidence that suggests that Michele's signature on the Glenn Note is a forgery. Sullivan has established that Michele's purported signature on the Glenn Note is legally hers, thus making her liable on the debt.
As noted above, having established that there is in fact a debt of each Debtor which might indeed be discharged, the court must now ask if such debt should be determined to be nondischargeable. Given that Sullivan predicates his Complaints on section 523(a)(2), this means that the court must find the existence of false pretenses, false representation(s), or actual fraud, 11 U.S.C. § 523(a)(2)(A), and find that such fraud is attributable directly or indirectly to the Debtors. See Jahelka, 442 B.R. at 668.
There is no dispute that the Sullivan Loan was procured through the fraud of Karen Chung, as this has been stipulated to by the parties and determined by Judge Doyle in the Chung Adversary. The question remains, however, whether that fraud should be imputed to the Glenns, and/or whether there exists an independent fraud to which the Glenns should be held accountable. The court will discuss each of Sullivan's theories in this regard, in turn.
Sullivan contends that because it has been established that the Sullivan Loan
Courts in this Circuit have observed that section 523(a)(2) "does not except from discharge every debt somehow connected with a fraud." Jahelka, 442 B.R. at 669; see also Schatz v. Livermore (In re Livermore), Nos. 12 B 30720, 12 A 1689, 2013 WL 1316549, at *6 (Bankr.N.D.Ill. Apr. 3, 2013) (Goldgar, J.); WISH Acquisition, LLC v. Salvino (In re Salvino), 373 B.R. 578, 588 (Bankr.N.D.Ill.2007) (Wedoff, J.) (citing In re Rountree, 478 F.3d 215, 219 (4th Cir.2007) (finding that "[a] plain reading of [§ 523(a)(2)(A)] demonstrates that Congress excepted from discharge not simply any debt incurred as a result of fraud but only debts in which the debtor used fraudulent means to obtain money....") (emphasis added)).
In similar fashion, the Ninth Circuit has recently determined that the exception to discharge in section 523(a)(19) applies only to debtors who have themselves violated the securities laws that caused the debt. In re Sherman, 658 F.3d 1009, 1014-15 (9th Cir.2011). In making that determination, the panel observed that in ensuring that the "honest but unfortunate debtor" receives a fresh start, exceptions to discharge of a debt under section 523(a)(2)(A) and (a)(4) are applied only in those cases where the debtor committed the fraud.
Sullivan argues that a debt created by one party's fraud makes the same debt nondischargeable as to all those liable for the debt. Such an approach is contrary to the Seventh Circuit's tests for dischargeability under section 523(a)(2)(A). Taken to its extremes, Sullivan's argument would act as an absolute rule, barring discharge despite a debtor's innocence relating to the fraud. As discussed above, however, the standards established in this Circuit do not limit the determination to testing whether the debt was procured through fraud in general alone; rather, the requirement under section 523(a)(2)(A) is that the debtor himself acted with the requisite intent in procuring the debt by false pretenses, false representation, or actual fraud.
There is in fact ample case law concerning dischargeability of debt procured through a third party's fraud, rather than that of the debtor, but that case law also puts paid to Sullivan's argument. Under that body of law, courts have found the debt nondischargeable as to an innocent debtor if the plaintiff establishes that the fraudulent acts of a partner or agent of the debtor can be imputed to the debtor. See, e.g., Casablanca Lofts LLC v. Abrham, 436 B.R. 530, 537 (N.D.Ill.2010) (imputing the fraud of a partner to the debtor); Love v. Smith (In re Smith), 98 B.R. 423, 426 (Bankr.C.D.Ill.1989) (imputing the fraud of an agent to the debtor). Sullivan's interpretation of the statute would render this Circuit's law regarding the application of agency and partnership principles in the context of section 523(a)(2)(A) meaningless, as under his theory, all fraud-related debt would be nondischargeable as to any innocent debtor.
Stated another way, what Sullivan wishes this court to adopt is a bright-line rule that a debt arising out of fraud is nondischargeable as to any party obligated on the debt, regardless of that party's complicity in the fraud. A party's innocence would be irrelevant. Not only does such a rule violate the fundamental precept of bankruptcy, to afford relief to the "honest but unfortunate debtor," Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 78 L.Ed. 1230 (1934); see also Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367, 127 S.Ct. 1105, 166 L.Ed.2d 956 (2007); Grogan, 498 U.S. at 284 n. 11, 111 S.Ct. 654; Jendusa-Nicolai v. Larsen, 677 F.3d 320, 324 (7th Cir.2012); Stamat v. Neary, 635 F.3d 974, 978 (7th Cir.2011), but it runs contrary to the established case law in this arena noted above. This court has been unable to find a single court that has strictly applied section 523(a)(2) to a debtor found innocent of the fraud in question.
In Stamat, the Seventh Circuit noted in the context of section 727 that "[t]he Bankruptcy Code provides that a bankruptcy court `shall grant the debtor a discharge,' but then lists several exceptions that deny the privilege of discharge to dishonest debtors." Id. at 978. This same principle has been relied on by the Seventh Circuit in considering exceptions to discharge under section 523. In re Hudgens, 149 Fed. Appx. 480, 483 (7th Cir.2005).
The Supreme Court in Grogan inquired as to the nature of the fraud exception in section 523, and after examining its prior inquiry in Brown v. Felsen, 442 U.S. 127, 129-130, 99 S.Ct. 2205, 60 L.Ed.2d 767 (1979), concluded that Congress' change of the term "judgment" to "liability" in section 523 was to include in the exception from discharge not just those debts for which a judgment of fraud had been obtained against the debtor, but to not allow "debtors facing fraud judgments to have those judgments discharged." Grogan, 498 U.S. at 290, 111 S.Ct. 654. In other words, Congress expanded the fraud exception from entered judgments alone to circumstances in which a judgment would be entered but had not yet been entered. Implicit in this conclusion is that it is the debtor who must face the fraud judgment, not simply some third party on a debt for which the debtor is also obligated. The Supreme Court made this clear when it referred to such debtors as the "perpetrators of fraud." Id. at 279, 287, 111 S.Ct. 654.
If the court were to conclude that an innocent debtor—one against whom a judgment would not be entered—is somehow now captured by section 523, that would be an extraordinary expansion of the scope of section 523 over that evidenced
This comports with the basic standards as well. As noted above, it is undisputed that a factor of nondischargeability under section 523(a)(2) is intent to deceive. As the Seventh Circuit in Hudgens made clear, absence of such an intent to deceive is a bar to finding a debt nondischargeable. Hudgens, 149 Fed.Appx. at 487. It is entirely possible, as this case demonstrates, that there can be two parties obligated on a debt—one of whom has requisite intent and one of whom lacks it. Without another reason to hold the party without intent liable for the fraud, the absence of intent must defeat a section 523(a)(2) claim.
It is therefore this court's conclusion that, should it find Michael or Michele innocent of the fraud in question and should it find no other reason to hold either or both of the Debtors to that fraud, the debt in question is dischargeable as to the innocent debtor.
The court therefore rejects Sullivan's "plain meaning" argument and will apply the well-established standards for dischargeability of debt. This does not suggest that Chung's fraud is irrelevant, as a creditor can rely on agency principles to impute an agent's fraud to a debtor. This theory alleged by Sullivan is discussed below.
In Count II of the complaint in the Michael Adversary, Sullivan argues that Michael directly committed fraud, which renders the Sullivan Loan nondischargeable in his bankruptcy case. In Count IV of the complaint in the Michele Adversary, Sullivan contends that Michael's alleged fraud should be imputed to Michele, thereby making the loan nondischargeable in her bankruptcy case as well. Sullivan alleges three instances of fraud by Michael: (i) Michael represented the signature of Michele on the Glenn Note as being authentic when it was in fact forged; (ii) Michael knew or should have known that the LaSalle Loan did not exist but failed to correct the misrepresentations of Chung and Lopez; and (iii) Michael failed to disclose the intended use of the loan proceeds. The burden is on Sullivan to show that Michael directly or indirectly committed the fraud. Sullivan has failed to meet that burden.
a. The Alleged Forgery
As to Michele's signature, Sullivan makes two opposing arguments. In the complaint in the Michele Adversary, Sullivan contends that Michele's signature on the Glenn Note is either hers or was made by an authorized representative. In contrast, the complaint in the Michael Adversary asserts that Michele's signature is a forgery and constitutes part of the claim under section 523(a)(2)(A). The parties have stipulated that Michele's signature on the Glenn Note was a condition precedent to the Sullivan Loan, and the court finds that by emailing the note bearing his signature and that of his wife to Sullivan, Michael represented that both signatures were valid. Because the court has already concluded that the signature on the Glenn Note belongs to Michele, Sullivan prevails on his argument that Michele's signature is legally hers, which forecloses his forgery claim.
While the Debtors apparently attempted to mislead the court with respect to the authenticity (or the authorization) of Michele's signature on the Glenn Note, such actions occurred years after the execution of the Glenn Note and the representations made in connection therewith, and are thus not relevant to the determination of dischargeability. See Iaquinta, 95 B.R. at
Thus, Sullivan has not shown and cannot as a matter of law show that Michael falsely represented the signature of Michele on the Glenn Note as being legally hers.
Second, Sullivan argues that Michael knew or must have known that the LaSalle Loan did not exist at the time that Sullivan made the loan because the financial condition of the Glenn Companies was such that it would have been impossible to obtain a $1 million line of credit on behalf of the Glenn Companies. Sullivan contends therefore that Michael should have corrected Chung and Lopez when they claimed that LaSalle Bank had approved the fictitious line of credit.
In support of this contention, Sullivan points to his reliance on the existence of the LaSalle Loan. Indeed, at the October 2007 meeting, Sullivan spent little time discussing the financial condition of Michael or his companies, and seemed to be primarily concerned with whether the LaSalle Loan was approved. In response, Michael testified that he believed Chung when she claimed that she was successful in obtaining a line of credit for his business. He claims that he did not learn that the line of credit had not been approved until January of 2008, and that in the fall of 2009, he was shocked when he learned from Sullivan that at the time of the October 2007 meeting Chung had not even applied for the line of credit.
The problem with Sullivan's argument in this regard is that it is based entirely on conjecture. There is simply no evidence that Michael was aware of Chung's He or even had reason to suspect that the line of credit was not obtained.
Contrary to its finding as to the testimony regarding Michele's signature on the Glenn Note, the court finds Michael's testimony regarding his lack of knowledge of Chung's fraud to be credible. Chung was previously successful in procuring loans for the Glenn Companies and even agreed to be personally liable on the Sullivan Loan, which Michael reasonably assumed she would not have done had the line of credit not been approved. Chung was friends with Sullivan and had worked with Michael for a number of years in procuring loans for his business—and there is no indication that she had previously lied to Michael or Sullivan.
Sullivan contends that Michael must have known that the LaSalle Loan did not exist because the Glenn Companies faced a "dire" financial condition. This argument is unpersuasive. Sullivan has not demonstrated that the financial condition of the Glenn Companies was so dire that a $1 million line of credit was inconceivable. The evidence merely showed that, as with countless other real estate companies at this time, the Glenn Companies were experiencing what appeared to be cash flow problems. The Debtors demonstrated that the Glenn Companies had a history of such financing, including that obtained on occasion through Chung's efforts. Though the use of such expensive, short term financing to overcome cash flow issues is of dubious business sense, its use is not conclusive of fraud. Where it otherwise, the entire payday loan industry would be criminal.
Further, while the court finds that Michael did not make any misrepresentations concerning the financial condition of his companies, as discussed above, any statements or omissions relating to the financial condition of Michael or his companies
Under these circumstances, the court cannot conclude that Michael was aware or should have been aware of the lies of Chung and Lopez regarding the LaSalle Loan. Thus, he could not have corrected Chung or Lopez when they lied about obtaining the LaSalle Loan. Sullivan has therefore failed to show that Michael knew, or that he should have known, that the LaSalle Loan did not exist at the time of the October 2007 meeting. The court concludes that like Sullivan, Michael was deceived by Chung and Lopez.
Finally, Sullivan argues that Michael defrauded him by failing to disclose the intended use of the Sullivan Loan proceeds, and that he would not have loaned the money to Michael if he knew that it would not be used in construction work. The parties have stipulated that Michael stated at the October 31, 2007 meeting that his companies needed the loan for working capital, and that a portion of the loan would be used to finish grading and asphalt paving work. Sullivan now appears to allege, however, that the main purpose of the loan was for asphalt work, and argues that the loan was actually used to repay existing debt of 5M. At the Trial, Michael testified that he represented to Sullivan that he needed the loan for working capital, denying that he ever represented the main purpose of the loan to be for asphalt work. Sullivan's shift in emphasis runs contrary to his prior stipulation.
It is evident that the parties did not discuss the purpose of the loan with much specificity during their one and only brief meeting, but the parties have stipulated that it was intended to be used for working capital and some asphalt work. While the actual use of the entirety of the loan proceeds is not clear from the factual record, the court is satisfied by Michael's credible testimony that it was indeed used for working capital, with a portion going toward asphalt work. Thus, the loan was used for the stated purpose. Moreover, it is clear that the parties had a general understanding that the loan would be used in the business operations of one or more of the Glenn Companies, and that is how the loan was in fact used.
Even if Michael had spent the loan proceeds on a project other than the one he proposed at the October 2007 meeting, this alone would not persuade the court that a misrepresentation occurred. For such a misrepresentation to have occurred, a promise must be made with the present intent not to perform, and Sullivan has failed to show that such intent exists here. See Chriswell v. Alomari (In re Alomari), 486 B.R. 904, 912 (Bankr. N.D.Ill.2013) (Schmetterer, J.). There is simply no showing that Michael lied about the intended use of the loan proceeds or that Sullivan relied on a representation that the loan would be used for specific construction work.
As noted above, Sullivan makes much ado about the Sullivan Loan proceeds being
Altogether, Sullivan has failed to establish the existence of deceit, trickery, false representation, or omission of fact by Michael, and his claim would fail on this basis alone as failure to establish any element of a section 523(a)(2)(A) claim warrants denial of the claim. However, there is also no sufficient showing of a requisite intent by either of the Debtors to deceive Sullivan, nor can intent be inferred based on the totality of the circumstances. The uncontroverted evidence is that both Sullivan and Michael were deceived by Chung with respect to the existence of the LaSalle Loan, which Michael and Sullivan believed would be available to repay the Sullivan Loan.
With respect to the fraud prong of section 523(a)(2)(A), while it is established that Chung committed fraud and that this fraud created the debt at issue, Sullivan did not show that the Debtors participated in the fraud, intended to defraud Sullivan, or that they were even aware of Chung's fraud. Similarly, the elements for false representation and false pretenses are lacking here. The Debtors did not make a false representation or omission of fact which they knew was false (or made with reckless disregard for its truth), with an intent to deceive, upon which Sullivan justifiably relied. Under these circumstances, the court finds that the Glenns did not obtain the Sullivan Loan through a false representation, false pretenses, or actual fraud under section 523(a)(2)(A) of the Bankruptcy Code.
In sum, the court finds that Sullivan has not established by a preponderance of the evidence that Michael or Michele obtained the Sullivan Loan from him by means of fraud, false pretenses, or a false representation.
While the court finds that neither Debtor committed fraud directly or indirectly, this finding does not preclude Sullivan's agency theory of liability, which would render the debt nondischargeable if Sullivan can establish the existence of an agency relationship linking the Debtors to Chung or Nomadic Consulting. Sullivan argues that Chung was an agent of both of the Debtors, and that Michael was an agent of Michele. The court must independently consider these claims.
An agency is a "consensual fiduciary relationship between two legal entities whereby the principal has the right to control the conduct of the agent and the agent has the power to effect the legal relations of the principal." In re Stoecker, 202 B.R. 429, 456 (Bankr.N.D.Ill.1996) (Squires, J.), aff'd Case No. 97 C 414, 1998 WL 641363 (N.D.Ill. Sept. 11, 1998), rev'd on other grounds by 179 F.3d 546 (7th Cir.1999), aff'd sub nom. Raleigh v. Ill. Dept. of Revenue, 530 U.S. 15, 120 S.Ct. 1951, 147 L.Ed.2d 13 (2000), (citing Greenfield Direct Response, Inc. v. ADCO List Management (In re Greenfield Direct Response, Inc.), 171 B.R. 848, 855 (Bankr. N.D.Ill.1994) (citations omitted)).
The Illinois courts have recently spoken to the nature of agency under Illinois law, as follows:
Curto v. Illini Manors, Inc., 405 Ill.App.3d 888, 346 Ill.Dec. 229, 940 N.E.2d 229 (2010) (internal citations omitted). Absent express or implied authority (also referred to as actual or apparent authority), the principal may also be liable if the principal ratifies the agent's actions. Stoecker, 202 B.R. at 456 (citing Anetsberger v. Metropolitan Life Ins. Co., 14 F.3d 1226, 1234 (7th Cir.1994)).
The foregoing presumes, of course, that a principal/agent relationship exists, which the Glenns contest. This places the burden squarely on Sullivan, as, under Illinois law, "`[t]he burden of proving the existence of an agency relationship and the scope of authority is on the party seeking to charge the alleged principal.'" Daniels v. Corrigan, 382 Ill.App.3d 66, 320 Ill.Dec. 124, 886 N.E.2d 1193, 1204 (2010) (quoting Anderson v. Boy Scouts of America, Inc., 226 Ill.App.3d 440, 168 Ill.Dec. 492, 589 N.E.2d 892 (1992)); see also Powell v. Dean Foods Co., 2013 IL App (1st) 082513-B, ___ Ill.Dec. ___, ___ N.E.2d ___, ___, 2013 WL 3296568, at *31 (2013).
The key consideration in determining whether an agency relationship exists is whether the principal had the right to control the activities of the agent. Stoecker, 202 B.R. at 456 (citing Oberlin v. Marlin Am. Corp., 596 F.2d 1322, 1326 (7th Cir.1979)). Although existence of an agency relationship is a question of fact, it may be inferred from facts of a particular case. Id. (citing Greenfield, 171 B.R. at 855); Lawlor v. North Am. Corp. of III., 2012 IL 112530, 368 Ill.Dec. 1, 14, 983 N.E.2d 414 (2012) ("The determination of whether a person is an agent or independent contractor rests upon the facts and circumstances of each case."); Pekin Ins. Co. v. Equilon Enters. LLC, 2012 IL App (1st) 111529, 366 Ill.Dec. 780, 792, 980 N.E.2d 1139 (2012).
An agency relationship can be inferred from circumstantial evidence, including the situation occupied by the parties,
However, when a question exists whether a person is an agent or an independent contractor—as is the case with Chung—"[c]ourts should also consider the following ...: (1) the question of hiring; (2) the right to discharge; (3) the manner of direction of the servant; (4) the right to terminate the relationship; and (5) the character of the supervision of the work done." Id.
The Illinois courts have described an independent contractor as follows:
Pekin, 366 Ill.Dec. at 792, 980 N.E.2d 1139 (citations omitted).
What is notably absent from the foregoing discussion is the matter on which the parties spent an inordinate amount of time at trial: the form of written agreement, if any, between the parties. Much time was spent on the nature of the parties' relationships based upon a putative, unsigned engagement agreement between Nomadic Consulting and the Glenn Companies (the actual record could not be located).
As adduced through the testimony of Michael, Chung and Sullivan, had there been a signed agreement, such agreement would state that Chung is an independent contractor. Chung testified that she used agreements containing the independent contractor language routinely and expected that she used just such a form of the agreement with Michael or the Glenn Companies. She explained that this was her practice and that she had done so on other transactions with the Glenn Companies. Michael testified that any agreement entered into by the parties would in fact contain such independent contractor language. Chung's and Michael's testimony was credible in this regard. The court therefore has no reason to doubt such testimony, and accepts it as true.
Sullivan, it happens, testified that he is the original draftsperson of the form engagement agreement used by Chung—at a time when the relationship between Sullivan and Chung remained good, of course. This, in fact, is where much of the parties' time was misspent. Sullivan attempted to use his role as the original draftsperson to persuade the court how to interpret the provision (should, of course, such an agreement
Sullivan appears to be advancing a theory under which he, as the original draftsperson but a non-party to the transaction, can dictate the effect of the provision. The Glenns appear to be advancing the theory that any ambiguity in the provision should be read against Sullivan, as the drafter of the provision. In this regard, much of the time spent on this agreement by both of the parties was wasted, as both of the parties are mistaken in their understanding of Illinois agency law.
First, Sullivan misunderstands what it takes to be an agent under Illinois law. As noted above, it is the nature of control that most directly defines whether a relationship is that of principal and agent. Oberlin, 596 F.2d at 1326; see also Stoecker, 202 B.R. at 456; Lawlor, 368 Ill.Dec. at 14, 983 N.E.2d 414. Absent that, it is the hiring, firing, direction, termination and supervision that bears on the investigation. Lawlor, 368 Ill.Dec. at 14, 983 N.E.2d 414. Nothing in the foregoing analysis of Illinois law stands for the proposition that the labels used in an agreement are relevant.
Second, to the extent probative at all, Sullivan's argument regarding Illinois agency law puts paid to his argument regarding the use of this provision. Sullivan testified that an independent contractor ceases being an independent contract and would instead be an agent if the nature of the work changes. Thus, under Sullivan's stated understanding, a party is either an independent contractor or an agent, and the triggering factor is the nature of the actions performed. Through his testimony, Sullivan made clear that the roles are mutually exclusive in his mind. Given such understanding, Sullivan's use of the term "independent contractor" in the agreement excludes agency. Were such labels persuasive, such a clear label would lend to the Glenns' point, not Sullivan's.
Third, and following closely on the heels of the preceding point, Sullivan's testimony regarding his motivation for drafting this provision was simply not credible. The term independent contractor appears to be used in the agreement precisely for the
Last, notwithstanding Sullivan's motivation for drafting this provision, there is little effect of Sullivan's contrivance, as neither party is correct if they believe Sullivan, who is not a party to the engagement agreement, is afforded any presumptions regarding the drafting of the independent contract provision. This is not a matter of contract interpretation between parties, and no presumptions arise.
As previously noted, neither position need be adopted here, as the contents or interpretation of the engagement agreement provision is not controlling. The court accepts that the intention of the engagement letter, by its express terms, was to create an independent contractor relationship. The language of the agreement is plain and unequivocal in this regard.
That said, an independent contractor is not excluded from becoming an agent. Lawlor, 368 Ill.Dec. at 14, 983 N.E.2d 414 ("That someone is an independent contractor, however, does not bar the attachment of vicarious liability for his actions if he is also an agent.") (emphasis added). Lawlor makes clear that it is not the nature of the purported agent's actions that are the subject of the inquiry. An agent and an independent contractor may be indistinguishable at this level. Instead, it is the nature of the relationship of and interactions between the alleged agent and principal that must be examined.
In this instance, Sullivan paid very little attention at the Trial and in his pleadings addressing the relationship of and interactions between Chung and Michael. As the party bearing the burden of proof, Dean Foods, ___ Ill.Dec. ___, ___ N.E.2d at ___, Sullivan must do more. No evidence was adduced regarding how Chung was hired, when she could be discharged and the right to terminate the relationship. The draft engagement agreement that was produced addresses some of this, but to the extent that the unsigned agreement is in any way relevant, the relevant parameters contained within it are not inconsistent with the agreement's express designation of Chung as an independent contractor.
Of course, the engagement agreement is unsigned, so it is actually of little probative value except as to what form of agreement the parties may have entered into.
As to Michele, Sullivan failed to connect her directly to Chung in any way, let alone a meaningful way. No evidence was introduced as to any agency relationship between Chung and Michele. Michele had no business dealings with Chung and she was apparently not a party to the missing engagement agreement. Michele appeared to have only known Chung on a very limited social basis. Under Illinois law, it is not the nature of the task to be performed that defines agency. It is how the agent is engaged and feed and how the agent is directed and supervised. Lawlor, 368 Ill.Dec. 1, 14, 983 N.E.2d 414. Nothing in this regard points to any such factors, as they pertain to Michele and Chung. As the party seeking to ascribe an agency relationship to Chung and Michele, Sullivan bears the burden of proof, and has failed to carry that burden.
For these reasons, the court cannot conclude that Sullivan, as the party seeking to bind the Glenns to the acts of Chung, has earned his burden. Chung was not Michael's or Michele's agent in this transaction.
As to an agency relationship between Michele and Michael, it first must be noted that, having failed to establish an agency relationship between Michael and Chung, Sullivan's attempt to connect Michele to Chung through Michael as Michele's alleged agent is futile. Further, as Sullivan has failed to show that Michael directly committed any fraudulent act, again, attempting to establish an agency relationship between Michael and Michele is also pointless. What remains is the possibility that an agency relationship bears on whether Michael (or someone at his behest) signed Michele's name to the Glenn Note on her behalf.
As discussed above, the court has every reason to believe that this may have occurred, as it had occurred in previous transactions. Having, however, already determined that the signature is legally Michele's, but that the circumstances of Michele's signature do not independently constitute grounds for a finding of nondischargeability, there remains no reason to pursue this further.
Sullivan also contends that Michael's alleged fraud should be imputed to Michele on a partnership theory. For the
As noted above, Counts II and III of the complaint in the Michele Adversary are dismissed for failure to state a claim pursuant to FRBP 7012(b) and FRCP 12(b)(6). As to the remaining counts and for the foregoing reasons, Sullivan has not proven his cause of action under section 523(a)(2)(A) and each of the Debtors' debt on the Sullivan Loan is therefore fully dischargeable. Accordingly, judgment will be entered in favor of Michele on Counts I and IV of the complaint in the Michele Adversary and in favor of Michael on Counts I and II of the complaint in the Michael Adversary.
Separate Orders will be issued concurrent with this Memorandum Decision.
This matter comes before the court on the complaint (the "Complaint") to determine dischargeability of debt under section 523(a)(2)(A) of title 11 of the United States Code filed by Brian T. Sullivan ("Sullivan") against debtor Michele A. Glenn (the "Debtor") [Docket No. 1] in the above-captioned adversary proceeding; the court having jurisdiction over the subject matter and all necessary parties appearing at the four-day trial that took place from July 15, 2013 through July 18, 2013 (the "Trial"); the court having considered the testimony and the evidence presented by all parties and the arguments of all parties in their filings and at the Trial; and in accordance with the Memorandum Decision of the court in this matter issued on November 15, 2013, wherein the court found that Sullivan has not proven his cause of action;
NOW, THEREFORE, IT IS HEREBY ORDERED:
This matter comes before the court on the complaint (the "Complaint") to determine dischargeability of debt under section
NOW, THEREFORE, IT IS HEREBY ORDERED:
