Late-discovered fraud discharged?
Posted: Thu Sep 25, 2014 10:58 am
I agree with Mark that anyone who relies on merely a verbal statement and fails to check with the country recorder regarding the status of a parcel of real estate isn't likely to get very far trying to persuading a court to find fraud.
Peter M. Lively, J.D., M.B.A.
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On Wednesday, September 24, 2014 11:49 PM, "Michael Avanesian michael@avanesianlaw.com [cdcbaa]" wrote:
In re Santos, 112 BR 1001 was cited for the proposition that equitable tolling does not apply to 523(a)(3). Citing pages 1006 to 1007. But what about equitable estoppel which is discussed further in?
Equitable estoppel requires reasonable reliance on a defendant's words or conduct in forebearing suit within the applicable limitations period. The doctrine of equitable estoppel, contrary to the doctrine of equitable tolling, is not dependant on the language of the limitations period. Rather, the application of estoppel is independent of the language of the statute and takes its life from the principle that no person will be permitted to profit from his or her wrongdoing in a court of justice. Id.
The strict application of equitable estoppel will not significantly impair the purposes of the bar dates because the expansion of the time period and any resultant delay and uncertainty would be caused by the debtor's words or conduct.
IN RE LOMBARD FLATS, LLC, Dist. Court, ND California 2014 and In re Raanan, 181 BR 480 - Bankr. Court, CD California 1995. My favorite quote is: This defense "is a rule of justice which, in its proper field, prevails over all other rules."
Is there a case out there that specifically deals with A defrauds B. A files for bk, tells B about the bk, and continues to commit fraud to prevent B from knowing he has a claim, then discharges the fraud?
Maybe the answer is that to the extent any fraud was committed postpetition to prevent B from knowing about the prepetition fraud is now a postpetition fraud which can be the cause of action?
Sincerely,
Michael Avanesian
On Tue, Sep 23, 2014 at 11:38 PM, jesseelaw@aol.com [cdcbaa] wrote:
>
>
>I am uncomfortable with any evildoer being able to commit fraud and get
away with it under the bankruptcy code too, but that does not mean it cannot
happen. Equity does not trump the plain meaning of the code and
rules.
>
>John M. Lamie v. United States Trustee 124 540 U.S. 526
(2004) stands for the proposition that the Courts should look to the plainlanguage of the bankruptcy code. This reinforced the same principles set
forth by the 9th circuit BAP in Schnuck v. Santos (In Re Santos),
112 B.R. 1001, 1006 (9th Cir. BAP 1990). The Santos Court rejected
the concept of equitable tolling "Any equitable doctrines must be applied in a
manner consistent with the plain language of the rules and the purposes served
by those rules and with a mind to the strict construction of the rules
consistently followed in the Ninth Circuit." It held the doctrine of
equitable tolling is precluded because of the plain language of Rules 4004(a)
and 4007(c). The running of this period is not dependant on thediscovery or accrual of a cause of action as it would be in a statute whichtolling is more appropriately applied. In addition to being contrary
to the language of the rules, the application of equitable tolling could dosignificant harm to the purposes underlying the rules. The fresh
start, prompt administration, finality and certainty purposes of the bar dates
would be significantly impaired by allowing the application of a doctrine, such
as equitable tolling., which could feasibly allow a creditor to bring a
dischargeability action years after the time period should have passed.... Id at
1006 -1007.
> ..
>
>Mark T.
Jessee
>Law Offices of Mark T. Jessee
>"A Debt Relief Agency"
>50 W.
Hillcrest Drive, Suite 200
>Thousand Oaks, CA 91360
>(805) 497-5868 (805)
497-5864 (Facsimile)
>
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>In a message dated 9/23/2014 10:11:06 P.M. Pacific Daylight Time, cdcbaa@yahoogroups.com writes:
>
>>I am uncomfortable with the result. A defrauds B and continues to hide the fraud from B. A files for bankruptcy, tells B all about it. B later finds out that A committed fraud. You're saying since there was actual knowledge of the bk, the fraud claim was discharged.
>>
>>
>>Is there a case that specifically addresses this issue?
>>
>>
>>Sincerely,
>>Michael Avanesian
>>
>>On Tue, Sep 23, 2014 at 9:03 PM, jesseelaw@aol.com [cdcbaa] wrote:
>>
>>
>>>
>>>
>>>The iphone was banished...!
>>>
>>>To finish my thought, Section 523(a)(19)(A)(i) could theoretically apply if there was somehow a violation of any federal or state security law or related regulation or if the facts show section 523(a)(19)(A)(ii) applies because the deceitful actions of the debtor were undertaken in connection with the purchase or sale of a security. John's facts looked more like embezzlement and breach of fiduciary duty after the fact than relating to the inducement of the investment, but John you can analyze the Santo holding with your facts and see if it gives you anything to run with.
>>>
>>>Mark Jessee
>>>
>>>In a message dated 9/23/2014 8:46:28 P.M. Pacific Daylight Time, cdcbaa@yahoogroups.com writes:
>>>Section 523(a)(19) could theoreticallydoes not apply I suppose if there was somehow a violation of any federal or state security law or
>>>>related regulation. It section ii does not apply because the deceitful actions of the debtor were not undertaken in connection with the purchase or sale of a security.
>>
The post was migrated from Yahoo.