Selenberg v. Bates

The Fifth Circuit affirmed the bankruptcy court's holding that a promissory note debtor gave to appellee was a nondischargeable debt under 11 U.S.C. 523(a)(2)(A). Appellee had retained debtor to represent her in bringing a malpractice claim against another attorney. Debtor failed to properly file the malpractice suit and the case was ultimately dismissed. The Fifth Circuit held that the promissory note that debtor executed had its intended effect of giving him more time to pay back appellee, and therefore debtor received an extension of credit from appellee when she agreed to accept the promissory note. The Fifth Circuit also held that debtor obtained the extension of credit from appellee by actual fraud because debtor made a false representation, intended to deceive appellee, and appellee sustained loss as a proximate result of debtor's false representation. View "Selenberg v. Bates" on Justia Law