this court has recognized that the husky case disk made a clear distinction with respect to the interpretation of the quote actual fraud i do five twenty three of the bankruptcy code this is not just an bombing his financial advisors in deciding whether or not to advance money to dr baird bomb for his i'm college the practice in dallas and surrounding territory those representations and misrepresentations or false pretenses created in dr o'grady a false impression about what the money was going to be used for what the collateral was going to be for that money what the status of the practice was which is called texas hematology oncology centers and relied upon that information including the financial status of texas hematology oncology center and dr  two zero seven five two two the court in that case said in talking about husky that a false pretense is a written or oral misrepresentation or conduct and that's distinct or conduct which creates or fosters in the proposed lender dr o'grady or creditor a false impression and can include a material omission false pretenses can also be defined as any series of events when considered collectively to create a contrived and misleading understanding of the transaction in which a creditor is wrongfully induced to extend money  that would be correct ok said that we don't that element whether you had an intent to deceive well for you to be a fraud victim to make discharge unavailable under five twenty three you've got to  establish that he hadn't intended to see under five twenty three we have to establish actual fraud right on by the husky court which doesn't include intent to deceive it includes some broader things activity which would suggest it as you say and the types of misrepresentations or missions to make statements with regard to a judgement two weeks before the closing a turnover of the stock in t hawk to hock was the vehicle where the money was generated depend is money back and to hog it seized by turnover order two weeks before the closing and some of the material we gave you your orders that if you  the top which a transcript rages and then there's numbers at the bottom which have to do with the though so bit by bit is so your your argument turns crucially on us interpret ing husky international to require actual fraud and therefore you're saying a cost is c and to requirement has been superseded actually what i'm saying to you is that you can you can rule for us our favor in revers to requirement no matter what and in a simple way of looking at this the bankruptcy court heard the testimony of the two doctors found your client to be not credible and believed berman just in as much as he may have been dumb but he didn't have an intent to defraud he'd relied on miller to clear things up and miller may have swindled everybody but he burned bomb had a you know he's a doctor he's not a businessman and therefore he didn't intend to defraud and that would be the end of the story and in this you can show that that's implausible from the record presented to magazine court my wrong legally or are you saying that the record does demonstrate that's although fraud connotes deception or trickery trickery the term is difficult to define more precisely and then it says fraud being so various in its nature and so extensive in its application to human concerns it would be difficult to enumerate all the instances in which courts of equity were great relief under this head there is no need to adopt a definition for all times in all circumstances here because from the beginning of english bankruptcy practice courts  legislatures have used the term fraud to describe a debtor's transfer of assets that like rits like roots a scheme impairs a creditor's ability to collect the debt and reduces this court knows that better was transferring assets for less than full value for the fraudulent transfer of away from the debtor to new entities that he controlled i'm saying something a little different than that judge higginson underlying that actual fraud is different than fraud i'm saying that the judge handles ruling and the district court's ruling were clearly wrong based on the evidence when you look at the totality of the evidence you can see that he couldn't infer could reference the record here would be to start at document four sixty seven going through four sixty eight it's got fifty four fifty five at the top of the pages this is dr beer and bomb testified story line twenty do you recall that there was a judgment entered against you in march of two thousand and seven in favor of mr martin do you recall that yes sir and that was for one point three million dollars i believe so yes sir and after that and that's after the financial he could have if he wanted to under state law how can we just infer from this there was an agency relationship look at page seventy in that same material storing a line seventeen and you and this is dr barry mawn and you understood that mr miller was doing that work for you was trying to get t how can you some money to pay your judgment and to refinance to hock that's correct and you testified earlier going back to your question judge pickens and about how do we know he had  judgment that you didn't even disclose and so that i'm asking him about that here and you testified earlier you were going to use some of this money to pay off the judgment and you did that that's correct and you used dr grady's money with some tax money some part of each of all the pay off the judgment didn't you and he says mr miller knew that upfront that we needed the money for the judgment and additional monies the judgment to see i don't know if i made a very compelling case that he had the intent to defraud yeah but the district court trial judge didn't come to that inference you've got to now make the case that it can we have in spite of a clearer standard review there's no way burned bonds answers that miller was going to handle the lien miller was going to clear up the judgment that sounds like it you're relying on law that imputes miller's fraud to dr bernbach is that essential or not i don't think so you know it's ok not including this material judgment of one point three million dollars and the stock seizure on his financial statements and he knew it before the closing by at least two weeks that's not miller that is material one point three a lot talking about materiality if you go to the last having this clerk a doctor a great testifies that had he known about the judgment he would not have closed because he wouldn't advance money to anybody who wasn't paying the and that's it two or three and two of them were in school two or three to four of the documents right by that but the trial judge sort of in the oral reasons says i don't really believe o'grady he gives a million dollars to a stranger with the security being art that he's never seen so he did make a credibility finding discrediting sort of the larger statement of a great fair say not no i don't think that's not ok i don't think he discredited  what he said in his findings of fact or his explanation of his judgment was that we didn't prove materiality he didn't say i don't believe dr o'grady wouldn't sign he said you didn't prove materiality nudity prior to that but he makes any connection with a connection with the agreement the agreement before the million dollars was secured by some artwork is that right it was supposed to be secured by some artwork and there's a security well that's what the agreement provides yes or yes and it also provided that none of that work was to be solvent that's right and that there was no lanes on it and dr and in fact it was there was a lien on it already  she's just selling some of it to somebody else what was not disclosed to talk that was not disclosed and closed within thirteen days of dr o'grady's sale and the lawyer that documented the deal was chosen by the financial advisors and if you and surely and was not succeeding and they knew what belong in financial packages and why those were there and how important those were to the lenders to look at and that he purposefully did while he followed the advice of his advisors that's his choice y be in public record doesn't mean that he would even know how to find that most of my clients don't know how to find that and then the second one with respect to whether or not dr bierbaum had the intent that only would go to the actual fraud still  the issue for this court to decide is dead judge hale presided over a three day trial and his court clearly error when he found that dr barron does not say dr o'grady from his failure to prove all the requisite elements for objection to discharge in the bankruptcy case all that the supreme court and husky did was find and hold that you do not require that section five twenty three a two day of the bankruptcy code does not require an affirmative representation to for exception to discharge the court said you could have other fraudulent undocked such as the fraudulent transfers in that case to satisfy that statutory provision and in fact on re man to this court the decision of the three judge panel was we still have to find fraud we still have to have fraudulent in the record that was before the court adri man was insufficient to determine court and make those determinations for me man it must be referred to the texas law or frog court stated specifically that under texas law in ted as a fact questions specifically to be decided by the trier of fact in this case but what if byrne bomb admits that a false representation was made by a lien so  them where berman's own testimony is that a false statement was made to dr grady in connection with the deal dealing with two subsections of the bankruptcy yes with respect to the money judgment that comes up under section five twenty three a to be the use of a written financial state yes and the question becomes was the omission of that judgment on his written financial statement material was it made intentionally with the intent to deceive dr o'grady right so the non disclosure equals intent to deceive but as to the as to am i wrong as to the lien portion it's the same question if we're not focusing on materiality is was there an intent to see even my question to you is when he quotes the testimony of your client saying i knew that was a false statement it was made to security advisor and in fact received an award and that federal arbitration that is evidence that contradicts the agency they are solely relying upon what dr baron bob they have said i just want to make sure i understand so you're admitting to one falsity but the explanation is it's more like a plate language so if something happens to be false in a particular as regards a particular agreement then it's excusable because it's a borland pla language it that's what that's what was found below when you're saying that's correct no that's not that's not what i'm saying i wasn't the finding below the slave at that site you interpret that wasn't the finding below but well that was just warner plate language it was false but it was more liberally we all right but but the court went on to find that one of the is not material based on the artwork at issue and to the court went on to say that it was not a justifiable reliance there was nothing about boilerplate about it just being while a play language i wasn't part of the just i don't think that's in judge hale all right and it was immaterial because there was no have it has to be art that had liens financial statements and judge and judge hale correctly applied both standards on both of those issues i want to talk about the artwork because you're saying that it was immaterial because it didn't apply to all of the artwork  i'm pledging art and i have three million four million dollars worth of art i'm borrowing a million mr miller is also wanting arranging for another wound from another company for another million dollars factory judge fairly say one of the reasons i find a lot of this incredible is there's no description of any of this art on the art purchase agreement there's one thousand two hundred pieces and fo well he lost money because the judge said there was no fraud and no intent to do say in that right that's one of the reasons he lost money you are correct he lost money because if he had perfected his o y on that artwork here's a million dollars on monday monday afternoon i have you see someone on file i would they the senior creditor let's all lean on all that ar and i could follow that art everywhere what whether it was lonely again to the houston people whether it was so that was the reason that there was no main on the  o'grady in a totally unrelated transaction after about the same time sends four hundred thousand dollars to the girlfriend of mr noel at the spur of the moment because he was promised a high yield investment and dr o'grady never it ever lar what that investment was what it was supposed to big it was referred to as team two and that shows the type of cite case law in the five twenty three context that quinlivan case and wrinkle or that therefore miller's frauds can be attributed to your client you didn't cite or respond to those two cases would you do that now i believe the  as evidenced by the fact that dr o'grady says mr miller for not telling me about that for not doing your due diligence forgetting me end of this transaction well and dr heels ruling to me makes sense then a swindler if swindler if if miller is the swindler of both doctors but you didn't cite or respond to the case law that they offered that miller here is an agent hence general proposition that if mitt if miller is dr barry bonds agent then bear mom can't say well i counted on miller to correct my false statements which seem to me to be essential to the d going to pay you back when the evidence a trial is i'm going to be borrowing a million dollars we're going to get the ark are you going to get a million one hundred fifty thousand dollars back in ninety days and had promised dr barry obama can do this colo ball financing i can raise twenty million dollars to take care of not just this one million dollar judgment issue but all of your other issues with siem don't we don't accept the death from discharge unless it's because of money or property received by the fraud fraud fraudulent  it doesn't matter if you use fraud to induce me to make the loan as long as i tend to pay it back fraud in my mind give me this million dollars i'm going to take it and turn this business around and then i'll be able to pay you back i just need to trick you into giving it to me you're out i think they tax a standard for fraud as you gotta have and you've got to have misrepresentations or misstatements you have to have this  first let me respond that the fraudulent two here he said he was using the funds for t hot to put it and then he testifies and used it to pay a judgment that he didn't even disclose existed so we have a false statement made at the very beginning with respect to the what i'm going to do with the money when i get it in husky this is from huddleston but it was in husky that they're referring to false pretenses can also be defined as any series of events when considered collectively to create a contrived and misleading understanding of a transaction in which a creditor is wrongfully induced to extend money so it has nothing to do with whether or not i intended it's a series of events and here we've got false financial statements we've got liens that exist that are not disclosed but most important we've got a judgment in place with a turnover order two weeks before the closing that i don't even know if it was doctored or not two weeks before but your mom says he knew about it and that's why i needed the money to pay it off of safety and didn't disclose any of that to dr upgrade then there's a question that came up that dude miller and she like representing at five hundred of the tree of the docket entries here which is page eighty seven in this book under tape two i asked him about miller and schuller and you were not communicating to dr o'grady about the turnover because you had that discussion with miller about we should commit whether you should communicate with dr gray he told you don't do that and he says himan and you followed that instruction answer they were the brokers they were the ones representing me that's your mom that's not me saying those were his agents that's barry bonds saying they represented him joint representation or they were representing dr bierbaum and they made false representations by failure to disclose material and then why is that material because of grady testified that had he known about like his argument to the bankruptcy judge yes i do you made the agency argument yes i did and i would say with respect to that and the judge hale did not make a finding one way or the other that's those representations are not our representation which just isn't true agency anyway you're the one to me was helpful you cited the quinlivan case there we re mandated to have that fact finding me and that may be one of the things you do i don't think that you need to do that i think here it is clear that there is no evidence other than miller i'm sure were acting on behalf of dr baron bomb there's no evidence other than there was a judgment in return or that was not disclosed it intentionally not disclosed and here dr berman says i discussed disclosing it with miller and surely and they told me not to so for him to say i'm relying on them wholly and i went on in this transcript to say you could if you could pick up true what happened was is that mom but it ends up with miller's girlfriend ends up in a bank account that is controlled by miller's girlfriend you can't see that on the wire transfer when we subpoena the bank records that's where he knew that he did not do that i'm not going to tell you that dr o'grady couldn't have done more course he could have done sell any of it and with respect to the not disclosing the tag deal and then most important is judgment having a judgment and having a turn over the judgment by itself is just bad to turn over a little news sheet and the fact that you're going to use in a case in the eastern district of sherman sherman division eastern district of texas in fact me in march of this year this is another case called mandeville the court said huskie addressed the issue whether actual fraud requires a misrepresentation in reaching its conclusion the supreme court has observed that fraud connotes deception and trickery generally into the quote there's no intent stated there and i think this