* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### OCT 7 2003 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

KATHY OWEN,

Plaintiff - Appellee,

v. FRANK C. MCKIBBEN,

Defendant - Appellant.

FRANK C. MCKIBBEN; FRANK C. MCKIBBEN, P.C.,

Debtors. No. 02-1411 (D.C. No. 01-B-1878) (D. Colo.)

ORDER AND JUDGMENT *

Before BRISCOE, McKAY , and MURPHY , Circuit Judges.

This appeal arises from Appellee Owen’s suit filed in state court against Appellant McKibben seeking damages based on claims of promissory estoppel, breach of contract, fraud, and breach of fiduciary duties. Before a determination2 The relevant portions of 11 U.S.C. § 523(a) provide that:

A discharge under section 727, 1141, 1228(a), 1228( b), or 1328(b) of this title does not discharge an individual debtor from any debt . . . (2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by– ( A) false pretenses, a false representation, or actual fraud, other than astatement respecting the debtor's or an insider's financial c ondition . . . (4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny . . . [or] (6) for willful and malicious injury by the debtor to another entity or to the property of another entity[.] 11 U.S.C. § 523(a)(2)(A), (a)(4), (a)(6) (1993).

-2- of liability, Appellant filed a voluntary petition for bankruptcy in the bankruptcy court. Subsequent to this filing, Appellee filed f or a determination of dischargeability. After a bench trial, the bankrup tcy court entered an order concluding that Appellant was indebted to Appellee in the amount of $110,897.80 and that this debt was non-dischargeable pursuant t o 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6). 2 The bankruptcy court also awarded Appellee costs and reasonable attorney fees. Appellant appealed to th e United States District Court for the District of Colorado. The district court r eversed the award of costs and attorney fees but affirmed the bankruptcy court in all other respects. Appellant appeals to this court. Appellee was a legal assistant/paralegal at Appella nt’s law firm for a total of nineteen years. After a dispute regarding healt hcare insurance, another law3 Appellee testified that the compensation package ag reed to in April 1987

included: 1) an immediate raise to $1800 per month with a rev iew in September 1987 and an additional raise; 2) healthcare insuran ce; 3) an automatic $100 monthly bonus regardless of billable hours; 4) a guaranteed 10% annual raise for life; 5) six weeks of vacation after ten years from her original date of employment; 6) continued use of an automobile with all expenses paid except gas and oi l; and 7) implementation of a pension or retirement plan. District Court Order at 4; Aplt. App., Vol. I, at 2 07-17. Appellee also testified that the September renegotiation consisted of “a ‘f orced savings’ plan or ‘nest egg’ consisting of the amount of untaken raises andbonuses” in lieu of a formal pension plan. District Court Order at 4; Aplt. App ., Vol. I-II, at 218-20. In contrast, Appellant testified that the compensation package included a raise to $1800 per month, healthcare insurance coverage by a dding an additional amount to her pay to cover the cost of adding Appellee to her husband’s insurance, periodic bonuses, the use of an automobile, and vac ation time as needed. Aplt. App., Vol. II, at 353-59. Appellant denies the exi stence of a September 1987 (continued...) -3- firm contacted Appellee and offered her a paralegal position. Appellee announced her intention to leave Appellant’s firm i n 1987 after which Appellant offered to renegotiate the terms of Appellee’s empl oyment. Appellee agreed to stay at Appellant’s firm, and the parties entered i nto a compensation agreement at this time. The parties’ versions of the compensati on package differ substantially. Additionally, Appellee alleged that the deal was mo dified in September 1987 through renegotiation. Appellant denies that this renegotiation ever took place. The debt in question involves non-performance of th e compensation package into which the parties entered in 1987 and the subsequent renegotiation. 33 (...continued)

renegotiation. Id. at 359-60. -4- Appellant terminated Appellee’s employment in Febru ary 1997 for reasons disputed by the parties but irrelevant to this appe al. According to Appellee, during a February 27, 1997, meeting at her home, sh e asked Appellant for an accounting of the monies he owed her. Appellee tes tified that Appellant denied there ever was an agreement and stated, “[If y]ou t ake me to court and sue me[,] I’ll file bankruptcy so fast . . . you won’t know w hat hit you.” Aplt. App., Vol. II, at 238-39. She also testified that Appellant said, “I never intended to stick to that agreement. I just did that to keep from losing you in the office.” Id. at 240. The main question on appeal is whether the bankrupt cy court correctly concluded that Appellant’s debt was non-dischargeab le. The six issues we are asked to review are the same as those addressed by the district court. “In reviewing a district court’s decision[, we apply] t he same standards of review which governed the district court.” In re Kirkland , 86 F.3d 172, 174 (10th Cir. 1996). We review the bankruptcy court’s conclusion s of law de novo and the underlying factual findings for clear error. Id. The issues are whether: (1) Appellant was prejudiced by the bankruptcy court’s failure to institute effective sanctions for Appellee’s failure to comply with dis covery; (2) the bankruptcy court considered inadmissible evidence and evidence never introduced at trial; (3)-5-

the finding of false pretenses is supported by the record; (4) the bankruptcy court erred in ruling that Appellant’s conduct constitute d a willful and malicious injury to Appellee; (5) the bankruptcy court erred in rais ing sua sponte the exception to discharge in 11 U.S.C. § 523(a)(4) based on Appellant’s ERISA defense; and (6) the bankruptcy court erred in assigning an arbitrary figure of a seven percent increase for yearly raises to calculate damages. The district court set forth all of the issues, fac ts, and law in a thoughtful and cogent opinion. We will not duplicate that det ailed analysis here. Therefore, after a thorough de novo review of the briefs and the record, we agree thatthe debt was non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6).
We AFFIRM the district court for substantially the same reas ons set forth in its August 5, 2002, Order. Entered for the Court

Monroe G. McKay Circuit Judge