### IN THE UNI TED STATES COURT OFAPPEALS FOR THE FIF TH CIRCUIT

No. 12-40070 Summary Calendar

In the Matter of: DONALD LEE CARDWELL,
Debtor

------------------------ ------------------------ ------------------------ DONALD LEE CARDWELL, Appellant

v. BILL GURLEY, Appellee

Appeal from the United States District Court for the Eastern District of Texas USDC No. 4:10-CV-706

Before REAVLEY, JOLLY, and DAVIS, Circuit Judges. PER CURIAM: * Donald Lee Cardwell challenges the district court’s summary judgment affirming the bankruptcy court’s determination th at hi s debt to Bill Gurley–arising out of a state-court judgment–was non-dischargeable under 11 U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D August 31, 20 12 Lyle W . Cayce Clerk

Purs uant to 5 T H C IR

. R. 47.5 , the court hasd ete rm inedthat this op inion sho uld not * be publ ish ed and is not pr ece dent excep t unde r the lim ite d cir cum st ance s se t forth in 5 T H C IR

. R. 47.5 .4. Case: 12-40070 Document: 00511972497 Page: 1 Date Filed: 08/31/2012No. 12-40070

U.S.C. §§ 523(a)(2)(A) and 523(a)(4). Cardwell contends the district court erred because: he did not waive his arguments regarding collateral estoppel; and, the state court’s findings of fact and conclusions of law (FOFCOL) did n o t support the non-dischargeability of the debt. Cardwell and Gurley were business partners an d c o-owners of 121 Ventures, LLC, which was involved in, inter alia , real-es t at e development. Cardwell was the managing member and was trusted by Gurley to handle all of the LLC’s day-to-day business. Cardwell made misrepresentations to Gurley in order to induce him to consent to various transactions that u l timately injured Gurley to the benefit of Cardwell. Gurley filed an acti on in state court and received a judgment for approximately $370,830. Cardwell subsequently filed for bankruptcy and Gurley filed this action seeking to exempt the judgment debt from discharge. Giving preclusive effect to the FOFCOL of the state court, the bankruptcy court concluded the debt was non-dischargeable. The district court affirmed the bankruptcy court and this appeal followed. Gurl ey contends Cardwell waived his arguments, in p art , b ec au s e he f ail e d to submit the pleadings in the bankruptcy court as part of the appellate record. Cardwell maintains that this was due to a mistake in the clerk’s office. But, our court need not resolve the waiver issue because the bankruptcy court correctly concluded the state-court FOFCOL establish the debt is non-dischargeable. The parties concede that collateral estoppel should apply to prevent the re-litigation of the FOFCOL of the state court; they only disagree as to whether those findings support the discharge or the non-dischargeability of the debt. Our court reviews a grant of summary judgment de novo . In re Nation a l G y p s um , 208 F.3d 498, 504 (5th Cir. 2000). Under § 523(a)(2 ) (A) , a d ebtor is not discharged from “any debt

. . . for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by false-pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial
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condition.” Though our court’s precedent has previously distinguished between “false pretenses,” “false representations,” and “actual fraud,” Cardwell contends

our court in In re Acosta , 406 F.3d 367 (5th Cir

. 2005), set out a five-element “actual fraud” test applicable to any claims under § 523(a)(2)(A). Id. at 372. Our court has not d e t e r m i ned whether the five-element test applies to all actions under § 523(a)(2)(A), and it need not do so here because the debt at issue is not dischargeable even under the more stringent Acosta test. For a debt to be non-dischargeable u n d er this standard, a creditor must show: “(1) that the debtor made a representation; (2) that the debtor knew the representation was false; (3) that the representation was made with the intent to deceive the creditor; (4) that the creditor actually and justifiably relied on the representation; and (5) that the creditor sustained a loss as a proximate result of its reliance.” Id

. Cardwell conte n d s th e F OFCOL lack specific language stating the court found “fraud” and an “intent to deceive,” but these contentions are unavailing. Th e s t ate court found, inter alia , the following: Cardwell persuade d Gurley to consen t to the transaction by stating he would “manage [a new] development to fruition” using the land acquired in the transaction; Cardwell “had no inte n t ion” (emphasis added) of developing this new property; but, Gurley believed him and agreed to the proposal; Gurley had been doing business with Cardwell over ten years and had developed “the utmost trust and confidence” in him; Gurley would not have agreed to the transaction h a d C ardwell not made

“ m at e rially false and misleading” statements and promises; Cardwell subsequently sold the new property far below market value without informing

or receiving consent from Gurley; and, C ardwell’s behavior caused damage to Gurley in excess of $300,000. Even ignoring the myriad of other misrepresentations and breaches by Cardwell, these findings are sufficient to meet the elements of the Acosta test for non-dischargeability. Specifically , the finding that Cardwell made a 3 Case: 12-40070 Document: 00511972497 Page: 3 Date Filed: 08/31/2012No. 12-40070

promise–with no intention of following through on th at promise–in order to persuade Gurley to consent to the transaction satisfies elements two and three of the Acosta test, which are the primary element s i n c o nt ention. As a result, the debt is not dischargeable under § 523(a)(2)(A). Because we affirm under § 523(a)(2)(A), it is un n e cessary to reach the contentions pertaining to other provisions of §523 relied u p on as separate grounds for non-dischargeability. AFFIRMED.

4 Case: 12-40070 Document: 00511972497 Page: 4 Date Filed: 08/31/2012