United States Court of Appeals
                        For the First Circuit

No. 13-9001

                        IN RE DAVID O'DONNELL,

                               Debtor.


                         THOMAS A. TOYE III,

                              Appellee,

                                  v.

                           DAVID O'DONNELL,

                              Appellant.


              APPEAL FROM THE BANKRUPTCY APPELLATE PANEL
                         FOR THE FIRST CIRCUIT


                                Before

                    Torruella, Selya and Thompson,
                            Circuit Judges.


     James F. Molleur, with whom Molleur Law Office was on brief,
for appellant.
     Kelly W. McDonald, with whom Murray, Plumb & Murray was on
brief, for appellee.



                           August 26, 2013
      THOMPSON, Circuit Judge.

                                      Overview

      David O'Donnell wants what every debtor in bankruptcy wants —

a fresh start.      You see, a debtor generally gets a discharge from

debts owed at the time he files his bankruptcy petition.                    See 11

U.S.C. § 727(b). But this fresh-start opportunity is only for "the

honest but unfortunate debtor."             Grogan v. Garner, 

,

286-87 (1991) (internal quotation marks omitted).                 And that is why

Congress enacted a number of exceptions to discharge.                    One makes

debts   for      money    procured     by     use     of   a   written   statement

nondischargeable — provided that that statement was "materially

false," related to the "debtor's . . . financial condition," and

"reasonably relied" on by the creditor, and provided also "that the

debtor caused [it] to be made or published with intent to deceive

. . . ."      11 U.S.C. § 523(a)(2)(B).               An honest but unfortunate

debtor O'Donnell is not — or so a bankruptcy judge, relying on this

exception, ruled after a trial in a proceeding between O'Donnell

and   one   of   his     creditors,   Thomas        Toye   III.   The    bankruptcy

appellate panel ("BAP," for short) later affirmed.                  Now O'Donnell

asks us to hold that the bankruptcy judge got it all wrong.                   What

follows is our explanation of why this ruling must stand.




                                        -2-
                          How the Case Got Here1

                                Fishy Financials

     O'Donnell is an experienced real estate developer, jumping

into the field in the late 1990s.            Eventually he teamed up with

Rudy Ferrante (a childhood friend), and the two began acquiring

real estate together, apparently through "LLCs" (limited-liability

companies, for the uninitiated).         The pair were quite busy in the

late 2000s, doing multiple deals. We discuss three — including the

one that landed O'Donnell in this mess — to give a sense of what

the trial was about.           All three occurred within months of each

other and featured Kevin Smith in a starring role.                A longtime

acquaintance of Ferrante (they had once worked together as brokers

at the Lenders Network), Smith's supposed forte is real-estate

financing.

     The first deal involved team O'Donnell/Ferrante's bid to

refinance    a    piece   of    commercial   property   already    in   their

portfolio.       The second involved their attempt to acquire more



     1
       The facts recounted are either undisputed or based on the
bankruptcy judge's not-clearly-erroneous findings.      The parties
spar over the effect of certain documents marked for identification
at trial but not introduced, though they agree that the bankruptcy
judge did not rely on them. We do not rely on them either. But
O'Donnell did testify — without objection — from his personal
knowledge about the documents, and under these circumstances, that
testimony is fair game for us to consider. See United States v.
Rodríguez-Durán, 

, 774-75 (1st Cir. 2007) (concluding
that a witness's testimony touching on the content of a document
marked as an exhibit but not admitted into evidence sufficed to
support the lower court's decision).

                                      -3-
commercial property.   For the first transaction, O'Donnell and

Ferrante asked Smith to prepare the financial paperwork.    For the

second, O'Donnell asked Smith to help arrange the financing.     "I

didn't ask him to help do the paperwork," O'Donnell added, that

just came "with the job."   Smith said yes both times.   And, among

other things, he ended up preparing various financial documents,

including O'Donnell's personal financial statements ("PFSs," from

here on out).

     O'Donnell was no stranger to PFSs.    He knew from past deals

that lenders wanted them, usually along with personal guaranties.

And he gave Smith some pertinent financial information to prepare

PFSs for both undertakings.     Smith got other important data from

documents he had gathered.      O'Donnell had what seemed to be a

hands-off attitude when it came to putting financials together,

"delegating" the bulk of the paperwork to Smith and relying on him

"to know what to do and how to do it" — an arrangement O'Donnell

was "very comfortable with."     Smith sent O'Donnell's PFS to the

lender in the first deal.     How the lender in the second deal got

O'Donnell's PFS is unclear on this record.

     Now we come to the transaction that sparked this litigation.

Hard on the heels of these two earlier deals, O'Donnell and

Ferrante, through an LLC called Alder Street Properties, LLC,

agreed to buy some more property from another party.     As part of

this transaction, they had to come up with a $350,000 down payment


                                 -4-
at closing.   Once again, they recruited Smith to help secure the

financing.      And   Smith   asked   Thomas   Toye   to   loan   the

O'Donnell/Ferrante LLC the money.       A highflyer in the local-

business community who had known Smith for years (Smith had hooked

him up three or four times with similar loan deals before), Toye

said yes, but he wanted (among other things) O'Donnell's and

Ferrante's personal guaranties for the loan's repayment.           No

problem, O'Donnell and Ferrante essentially said.

     So Smith set about preparing PFSs for both.           O'Donnell

collected documents showing what stocks he owned and how much money

he had in the bank and gave them to Smith.      No one disputes the

accuracy of this financial information.   Smith also managed to get

other relevant data from other documents (credit reports, mortgage

statements, tax-assessment records, etc.) he already had on file or

had dug up through public-record searches he had conducted for this

deal. He cannot definitively say how he got some of the documents,

however.   Nor can he say for sure whether he sent O'Donnell a copy

of the PFS, whether he reviewed every aspect of the PFS with him,

or whether he saw him sign the PFS.   But he does remember emailing

a signed copy of O'Donnell's PFS, along with Ferrante's, to Toye.

For his part, O'Donnell insists that he never reviewed the PFS,

that the signature on the PFS is not his, and that he never

authorized anyone to send the PFS to Toye.       What everyone now

agrees on, however, is that O'Donnell's PFS was "materially false,"


                                -5-
containing serious misrepresentations and omissions regarding his

income and assets.

      Wowed by O'Donnell's (supposed) net worth, Toye lent the

O'Donnell/Ferrante LLC the $350,000, receiving a promissory note in

that amount (at 13.50% interest) from the LLC secured by a mortgage

on   some   property     and    by    O'Donnell's     and    Ferrante's   personal

guaranties.      Unfortunately, the LLC did not pay the loan as

required.      And Toye ended up turning to O'Donnell, who, also

unfortunately, defaulted on his personal-guaranty obligations.

                               A Wave of Litigation

      Unwilling to take this lying down, Toye sued O'Donnell in

state court on the personal guaranty. O'Donnell (supposedly) first

saw the false PFS here, in state court.                  Eventually that court

granted Toye summary judgment and entered a $417,974 judgment

against O'Donnell.

      Later, O'Donnell sought bankruptcy protection under Chapter 7

of   the    Bankruptcy    Code.        Toye      responded   by   initiating   this

adversary     proceeding       in    the   bankruptcy    court,    alleging    most

relevantly here that O'Donnell's debt to him was nondischargeable

per section 523(a)(2)(B).            Under this provision (the reader will

recall), if a statement about a debtor's "financial condition" is

in a "writing" that is "materially false" and is "reasonably

relied" on by the creditor, and if the debtor "caused [that

statement] to be made or published with intent to deceive," then


                                           -6-
the debt cannot be discharged.             Of course, Toye had to prove

nondischargeability by a preponderance of the evidence. See, e.g.,

Sharfarz v. Goguen (In re Goguen), 

, 68 (1st Cir. 2012).

     Highlighting only what is needed to understand the issues

before us, we note that the parties basically stipulated to

everything pretrial except whether O'Donnell had "caused [the PFS]

to be made or published with intent to deceive."             At trial, Toye,

Smith, and O'Donnell took the stand.             And after hearing their

testimony and examining the exhibits, the bankruptcy judge refused

to discharge O'Donnell's debt to Toye.

     The    judge   began    his   reasoning   this   way:      Contrary   to

O'Donnell's contention, Smith had acted as his — not Toye's — agent

for this transaction.       O'Donnell needed a $350,000 loan, and Smith

said he could make it happen.        "O'Donnell said to Smith, go ahead

and give [Toye] what he needs" to make the loan, the judge wrote,

so Smith prepared the PFS "on the authority and at the instruction

of" O'Donnell, "and no one else."          In other words, O'Donnell (to

quote the judge again) "set" the wheels "in motion" for Smith to

prepare and send the PFS to Toye.

     True, O'Donnell did not "review and sign" the PFS, the judge

added.     But, the judge ruled, nondischargeability under section

523(a)(2)(B) lies "whether the debtor intentionally did exactly

what was done" or whether he was "reckless[ly]" indifferent to "the

propositions asserted in the [PFS]."           And here, according to the


                                     -7-
judge, the evidence showed that O'Donnell "willfully turned a blind

eye" to what the PFS said.2    And, the judge concluded, O'Donnell

did "not car[e]" what the PFS said, only that it said whatever Toye

needed to hear to make the loan.

     An unhappy O'Donnell appealed.      But the BAP affirmed the

judgment, ruling (pertinently for our situation) that the evidence

amply demonstrated that Smith was O'Donnell's agent and that by

having his agent prepare and send the PFS O'Donnell had (in the

lingo of section 523(a)(2)(B)) "caused [the PFS] to be made or

published . . . ."   Turning to the question of intent, the BAP said

that a debtor's reckless indifference to the accuracy of the

submitted PFS satisfies the intent-to-deceive element of section

523(a)(2)(B).    And, the BAP stressed, the evidence of O'Donnell's

turning a blind eye here proved his intent to deceive.

         Which brings us to today, with a still unhappy O'Donnell

asking us to undo this result.

                        Our Take on the Case

                     Background Legal Principles

     Before we go any further, a few reminders are in order.     We

are the second set of reviewers here — the BAP was the first,

obviously.    But we give the BAP's decision no special deference.


     2
       For those curious about the fate of O'Donnell's cohort, we
see that the same bankruptcy judge had (in an earlier proceeding)
also declared Ferrante's debt to Toye nondischargeable under
section 523(a)(2)(B). There is nothing indicating that Ferrante
appealed that ruling.

                                 -8-
See, e.g., 

.              Rather, we focus on the

bankruptcy     judge's    ruling,      giving   clear-error    review    to

factfindings and fresh review to legal conclusions.                

there are a couple of plausible ways to view the

evidence, the judge's preference for one over the other cannot be

clear error.    See, e.g., Berliner v. Pappalardo (In re Sullivan),

, 70 (1st Cir. 2012).            And to find clear error, a

finding must hit us as more than probably wrong — it must prompt "a

strong, unyielding belief, based on the whole of the record," that

the judge made a mistake.    Islamic Inv. Co. of the Gulf (Bah.) Ltd.

v. Harper (In re Grand Jury Investigation), 

, 24 (1st

Cir. 2008); accord 

.        The case for deferring

to the bankruptcy judge's factfinding is "particularly strong" when

intent is at issue — since an intent finding depends heavily on the

debtor's   credibility,    and   the    bankruptcy   judge    is   uniquely

qualified to make that call. See, e.g., Palmacci v. Umpierrez, 

, 785 (1st Cir. 1997).         And finally, because a principal

goal of the Bankruptcy Code is to provide deserving debtors with a

fresh start, we read exceptions to dischargeability narrowly. See,

e.g., 

.          Consequently, a person in Toye's

position must show that his claim fits snugly within an exception

contained in the Code.     See, e.g., 

the issues in play.




                                    -9-
                                Issues Presented

      As framed by the parties, the case turns entirely on the final

element of section 523(a)(2)(B):             whether O'Donnell "caused [the

"writing," i.e., the PFS] to be made or published with intent to

deceive."     See § 523(a)(2)(B)(iv).3             The gist of O'Donnell's

argument is straightforward enough:              Despite what the bankruptcy

judge thought, one cannot conclude that O'Donnell "caused" the PFS

— which he neither reviewed nor signed — "to be made or published,"

because Smith was functioning as Toye's agent.               And with this PFS

the   work   of   a   runaway    Smith,   one    also   cannot   conclude   that

O'Donnell    intended    to     deceive   Toye   with   a   shady   PFS.    Toye

disagrees, naturally.         And we do too.




      3
       Relying on Kaspar v. Bellco First Fed. Credit Union (In re
Kaspar), 

(10th Cir. 1997), among other sources,
O'Donnell floats the suggestion that the PFS is not a "writing"
under section 523(a)(2)(B). 

(holding that "a
computer generated statement of financial condition given in an
application for credit neither seen nor signed by the debtor" is
not "'a writing' within the meaning of § 523(a)(2)(B)"); see also
Collier on Bankruptcy ¶ 523.08[2][a] (Alan N. Resnick & Henry J.
Sommer eds., 16th ed. 2013) (discussing "[e]lement [n]o. 1 under
[s]ection 523(a)(2)(B)" — "[s]tatement in [w]riting" — and noting
that "the statement, to be 'in writing,' must have been either
written by the debtor, signed by the debtor, or written by someone
else but adopted and used by the debtor"). But he stipulated below
that the dispute pivots "on the fourth prong of [s]ection
523(a)(2)(B)" — i.e., the made-or-published-with-intent-to-deceive
prong — so his Kaspar-based argument is off the table. See, e.g.,
Rodríguez v. Señor Frog's de la Isla, Inc., 

, 34-35 (1st
Cir. 2011) (discussing a stipulation's effect on litigation).

                                      -10-
                              Analysis

     Take the agency issue.   To give his claim about Smith's being

Toye's agent an aura of plausibility, O'Donnell plays up how Smith

and Toye had known each other for years and how Smith had made Toye

money three or four times by helping him lend others money before

this deal went south.   But the problem for O'Donnell is that other

evidence cuts against him.    Recall how Smith had helped O'Donnell

and Ferrante on some deals right before the deal at issue, then how

the duo had enlisted his help in getting the $350,000 loan, and

finally how they had relied on him to prepare the necessary

documents for all three transactions.     The bankruptcy judge chose

to accept this evidence in deeming Smith O'Donnell's agent on this

loan. And the judge's view seems entirely plausible, certainly not

"wrong with the force of a 5 week old, unrefrigerated, dead fish,"

which is what O'Donnell had to — but did not — show to get

anywhere.   See S Indus., Inc. v. Centra 2000, Inc., 

,

627 (7th Cir. 2001).    Ultimately, then, we are in no position to

undo the judge's agency determination. See 

.

     Wait a second, O'Donnell says.      Smith had "acted on his own"

in drafting up the false PFS, which means that the bankruptcy judge

clearly stumbled in finding that O'Donnell had "caused" that

document "to be made or published" to Toye — at least that is what

O'Donnell writes.   But what dooms this theory is that the judge

expressly found that Smith had acted on O'Donnell's "authority" and


                                -11-
"instruction."    And our patient review of the record leaves us

convinced that the judge's view of the evidence is a permissible

one:   Keep in mind that O'Donnell is a savvy businessman.   He knew

that Toye needed a personal guaranty.   He knew too that that would

require a PFS without (he must have known) omissions. So O'Donnell

gave Smith some financial information for the PFS, tasking him with

doing whatever was necessary to get the loan done (more on this in

a moment). And he knew from past experience that that would result

in Smith's preparing the PFS and sending it to Toye — or so at

least a factfinder could infer.   Ever mindful that the clear-error

standard leaves us no room to second-guess the trier's choices

among plausible inferences, we easily reject O'Donnell's Smith-

went-rogue thesis, which necessarily means that the rest of his

argument on this score fails.     See Anderson v. City of Bessemer

City, 

, 575 (1985) (holding that if, on whole-record

review, the lower court's "account of the evidence is plausible,"

then we "may not reverse it even though convinced that had [we]

been sitting as the trier of fact, [we] would have weighed the

evidence differently").

       That leaves the "intent to deceive" issue, with O'Donnell

protesting that the bankruptcy judge rested the intent-to-deceive

findings on air, basically.   He reminds us, for starters, that he

had neither reviewed nor signed the false PFS before Smith emailed

it to Toye.   Yes, but intent to deceive under section 523(a)(2)(B)


                                -12-
may    be    demonstrated    by   the   debtor's   knowledge   of,   reckless

indifference to, or reckless disregard for the written statement's

falsity.       See, e.g., Nat'l Union Fire Ins. Co. of Pittsburgh v.

Bonnanzio (In re Bonnanzio), 

, 301 (2d Cir. 1996); Ins.

Co. of N. Am. v. Cohn (In re Cohn), 

, 1118-19 (3d Cir.

1995) (citing additional cases from the 6th, 10th, and 11th

Circuits); Morrison         v. W. Builders of Amarillo, Inc. (In re

Morrison), 

, 482 (5th Cir. 2009).4           Our caselaw holds

that recklessness can suffice to prove the intent element under

section 523(a)(2)(A) — section 523(a)(2)(B)'s statutory sidekick,

see Field v. Mans, 

, 66 (1995) — which (at the risk of

oversimplification) makes nondischargeable any debt for money

obtained by fraud, "other than a statement respecting the debtor's

. . . financial condition."          

, 788-89

(quoting § 523(a)(2)(A)).          And today we join our sibling circuits

and hold that recklessness can suffice under section 523(a)(2)(B)

too.       Anyway, recklessness is where O'Donnell gets tripped up.       We

explain.

       Because it would be a rare debtor who would concede that

"deception was his purpose," courts can take account of the

totality of the circumstances, including (as we just said) a

debtor's recklessness.            

; see also 4

Collier on Bankruptcy, supra, ¶ 523.08[2][e][ii].          And that review


       4
           That is six circuits, for those keeping count.

                                        -13-
reveals plenty of evidence from which a factfinder could infer

recklessness on O'Donnell's part.

     Once again, O'Donnell is no babe in the woods when it comes to

real-estate financing.    Far from it.   He knew that Toye wanted a

personal guaranty.    And because a guaranty is only worth something

if the lender knows the borrower's financial status, he knew (and

this is easily inferable) that Toye would want a comprehensive PFS

providing the truth, the whole truth, and nothing but the truth —

otherwise, why ask for one?     "[G]o ahead and give [Toye] what he

needs," were O'Donnell's marching orders to Smith, the judge found,

which suggests that O'Donnell took a hands-off approach to the PFS

(just like he had before).    True, he did give Smith some financial

items.   But, as his lawyer candidly conceded at oral argument,

O'Donnell did not give Smith enough data to produce a complete PFS,

which meant (and this is easily inferable too) that Smith had to

come up with the missing information.    Also, a trier could draw a

strong inference — as this one did — that O'Donnell knew that Toye

had gotten the PFS.    O'Donnell knew this (at least inferentially)

probably by the time Toye had approved the loan, and certainly by

the time Toye had dispersed the loan proceeds (remember, Toye

wanted O'Donnell's PFS before making the loan).   And yet O'Donnell

never even tried to check his agent's work at any point, bolstering

the judge's finding that he had "willfully turned a blind eye,"

"not caring" what the PFS said — though he clearly cared a lot


                                 -14-
about getting his hands on Toye's money, which he "happily" took

after "set[ting]" the false PFS "in motion."

     Searching for a way out, O'Donnell complains that there is

zero evidence of his giving Smith carte blanche, which, he argues,

undercuts the intent-to-deceive findings.         Hardly.   A factfinder

could infer — as this one apparently did — that O'Donnell's

directing Smith to do the paperwork and then not ever asking to see

it shows a carte-blanche attitude. O'Donnell also grumbles that he

gave Smith accurate information, which, he maintains, cripples the

intent-to-deceive findings. Not at all. What O'Donnell ignores is

that his disclosure was so lacking in required information that

Smith could not do a complete PFS.             That is the rub.     And a

factfinder could infer — like this one basically did — that someone

with O'Donnell's résumé should have known that and did know that.

     The   bottom   line   here   is   this:    Given   these   particular

circumstances, and knowing how famously deferential clear-error

review is, see, e.g., 

, especially when it

comes to intent findings, see, e.g., 

, we

simply are in no position to upset the bankruptcy judge's intent

conclusion.   See FDIC v. Reisman (In re Reisman), 

, 38

(Bankr. S.D.N.Y. 1993) (rejecting a debtor's ostrich tactics, the

court found an intent to deceive where the debtor knew that the

bank required a PFS as a condition of a loan and that his

accountant had submitted the PFS to the bank, and yet "did not


                                   -15-
review [the PFS] or inquire as to [its] accuracy"); see also

Citizens Bank of Washington Cnty. v. Wright (In re Wright), 

, 660-61 (Bankr. M.D. Ga. 2003) (finding a "claim of

ignorance" concerning the falsity of financial papers "unpersuasive

because,    if   true,   it   was    by   [d]ebtor's   own   design"   and   so

constituted recklessness on the debtor's part); First Commercial

Bank v. Robinson (In re Robinson), 

, 578 (N.D. Ala.

1996) (similar).     And that is that.

                                    Summing Up

     We see no clear error in the bankruptcy judge's conclusion

that Toye had satisfied his burden of proving that O'Donnell's debt

is not dischargeable under section 523(a)(2)(B).             Consequently, we

uphold the judge's decision and the BAP's affirmance of that

decision.

     Affirmed, with Toye awarded his costs on appeal.




                                       -16-