Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-14-40760/USCOURTS-ca5-14-40760-0/pdf.json

Parties Involved:
Hadley Cohen

Melinda K. Cohen

Third Coast Bank, SSB
Appellee

Document Text:

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-40760

In the Matter of: HADLEY COHEN; MELINDA K. COHEN, 

 Debtors

------------------------------

HADLEY COHEN, 

 Appellant

v.

THIRD COAST BANK, SSB, 

 Appellee

Appeal from the United States District Court

for the Eastern District of Texas

USDC No. 1:13-CV-610

Before REAVLEY, SMITH, and GRAVES, Circuit Judges.

PER CURIAM:*

The judgment of the district court is affirmed for the following reasons.

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

April 8, 2015

Lyle W. Cayce

Clerk

 

Case: 14-40760 Document: 00512998076 Page: 1 Date Filed: 04/08/2015
No. 14-40760

Appellant concedes that his representations to the bank of his assets and 

liabilities were false. The bankruptcy court trying the case found that the bank 

justifiably relied on the false representation to its damages, as found.

Plaintiff argues that the finding of reliance was clear error because the 

bank had knowledge of the risk of accepting the representations without 

conducting an investigation that would reveal the falsehood. This court will 

not impose on banking officials this requirement. Under all of these 

circumstances and the customary practice of lending institutions, it is 

necessary for them to be able to accept what Plaintiff signed as true. The 

finding stands.

The Plaintiff also seizes on the language in the statute § 523(a)(2)(A), 

excluding discharge for “a statement respecting the debtor’s or an insider’s 

financial condition.” Because the borrowing base certificates are statements of 

financial condition, the argument is that for Plaintiff to be discharged the court 

has to go to the following statutory requirement and require a finding of 

reasonable reliance. He misreads Bandi v. Becanel where this court 

distinguished statements that are only about general conditions of the 

borrower from specific falsifications on the ability to repay the lender, 

misstatements of inventory and denial of other secured creditors with priority 

– as was true here – that are not dischargeable.

AFFIRMED.

2

Case: 14-40760 Document: 00512998076 Page: 2 Date Filed: 04/08/2015