In re Appling (Ch. 13 Case No. 13-30083, Adv. No. 13-03042)

The debtor retained the plaintiff law firm to represent him and his company in state court litigation.  After the debtor ran up a sizeable amount of legal fees, the plaintiff advised that it would withdraw its representation and begin collection activity.  The debtor promised to pay the fees when he received his income tax refund.  After receiving the tax refund, the debtor did not pay it to the plaintiff.  The plaintiff sued the debtor and obtained a state court judgment of $104,000.  The bankruptcy court held that the debtor had fraudulently misrepresented the amount of his anticipated refund and that he had not yet received it.  The court held that the debtor’s debt was nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A).

Tuesday, March 10, 2015