GT DAVE v. Baessler, Adv. No. 11-01188 (July 19, 2018)

In this case, a California state court found the defendant, acting with the intent to deceive, made false representations that the plaintiff reasonably relied on to his detriment. Based on that finding, the state court entered judgment on several legal theories, including one theory that did not require proof of an intent to deceive. The plaintiff sought a summary judgment that the state court judgment was nondischargeable based the doctrine of collateral estoppel. The bankruptcy court granted the motion because the finding of intent to deceive was necessary to the judgment, was affirmed on appeal, and because applying collateral estoppel was consistent with the policy goals of the doctrine. It also found that the attorney’s fees and punitive damages awards were also nondischargeable because they were debts that arose from money obtained through fraud.

WL Cite: 2018 WL 3816773 (Bankr. W.D. Tex. July 19, 2018)