By order of the Bankruptcy Appellat e Panel, the pr ece dential effect of this decision i s limited to the

ca s e a n d p a r t i es p u r

s u a n t t o 6 th C i r
. B

A P L B R 8 0 1 3 -1 (b). S

ee a l s o 6 th C i r
. B

A P L B R 8 0 1 0 -1 (c).

F ile Nam e: 08b0017n.06

BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT

I n re: CL AYTONB. SMI TH, ) ) Debtor. )

_____________________________________ ) ) No. 08-8021 ) CRAI G T. CONL EY, ) ) Plaintiff - Appellee , ) ) v. ) ) CL AYTONB. SMI TH, ) ) De fe nd ant - Ap pe lla

nt. ) )

Appea l from the United States B ankruptc y Court for the N orthern D istrict of Ohio, Easter n Division. Case No. 06- 60396; Adv. No. 07-6022. Submit ted: November

19, 2008
Dec ided and F iled: Dece mber 30, 2008
B e fo re : Mc I VO R, PA RSO NS, and STO SB ERG , B ank

ru ptc y Ap pe llate Pane l Judg e s.

____________________ CO UN SEL
O N B RI E F: Cr a ig T. Con le y , Canto n, Oh io, fo r A pp e lle e . Cl ay

ton B . Sm ith , M or g anto wn , We st Virg inia, pro se.- 2- ____________________ OP IN ION

____________________ MARCI A PHI L L I PS P ARSONS, Chi ef B ankruptc y App ell ate Pane l J udg e. The pr o s e debtor C l ayton B. Smith (“Debtor ”) a ppeals a n order of the ba nkruptcy court g rantingsummary jud g me nt t o c re ditor Cr a ig T. Con le y (“ Con le y ” ) i n a

no nd isc ha

rg e a bil ity a c tio n und e r 1 1 U .S. C. § 523(a) (2)( A). The bankruptc y court determined that a prior state cour t judgment f

or compe nsatory and punitive damag es base d on the Debtor’ s fra udulent transfe r of assets collater ally estopped the Debtor f rom relitig ating whether

the judg ment debt owed to Conley resulted fr o m fr aud. For the fo llo wi ngre a so ns , w e a ff ir m th e or de r o f t

he ba nk ru ptc y c ourt

.

I. ISS UE ON AP P EAL
Th e iss ue pr e sent ed to us by thi s a pp e a l is wh e the r t

he ba nk ru ptc y c ourt e rr e d w he n it g ra nte d Co nle y ’s mot ion

fo r s umm ary

jud g me nt o n h is n on dis c ha rg e a bil ity c la im.
II. JU RI SDI CT ION AND STANDARD OF RE VI EW We have jurisdiction to decide this appeal. The United States District Court for the Nor thern Di str ic t of

Oh io h a s a

uth or ize d a

pp e a ls t o th e Pane l, and nei th er party tim e ly e le c te d to have thi s appea l hear d by

the district court. 28 U.S.C. §§ 158(b)(6), ( c)( 1). A fina l order of the bankr uptcy court may be appe ale d as of rig ht pursuant to 28 U.S.C. § 158(a)(1) . An orde r g rantingsummary judgme nt is a final orde r. Menninge r v. Acc redited Home Lende rs ( In re M orgeson) , 371 B.R. 798, 800 (B .A.P. 6th Ci r. 2007).
We reviewthe bankr

uptcy court’s f

inal order

g rantingCon l ey ’s m o t ion for summary jud g me nt de novo

. Go ld v . F e dE xFr e igh t E

as t, I nc . ( In re R od rigue z) , 4 87 F .3 d 1 00 1, 10 07 (6 th Cir . 2 00 7) ; Lyon v. Contech Contr. Prods., Inc. ( In re Computrex

, Inc.) , 403 F.3d 807 ( 6th Cir. 2005). “U nder a de novo standard of revie w, t he reviewing court decides an issue independe ntly of, and without defe renc e to, the trial c ourt’s dete rmination.” In re M orgeson , 371 B.R. at 800.- 3- III . F AC TS AND P ROCEDURAL HIST ORY
I n 2002, the Debtor hired Conl ey , a li cense d attorney , to defe nd him in a state court c riminal pro c e e d in g f

o r p a s s in g b a d

c h e c k s
. D u r in g th e c o u r s e o f th a t c r im in a l a c ti o n , Co n le y ’s repr esentation of the Debtor e nded, and the Debtor was ultimately convicted. T he De btor then filed

a state c ourt

le g a l ma lpr a c tic e a c tio n a g a ins t Co nle y in 200 3. I n tu

rn , Co nle y

c omm e nc e d a

se pa rate action ag ainst the Debtor in state court to col l ec t u npaid attorne y fee s for ser

vices re ndere d in the criminal ac tion, and on Marc h 11, 2004, obtained a judg ment ag ainst the Debtor in the a mount of $2,890.
I n an ef

fort to collec t on his judgment, Conley filed a f raudule nt transfe r ac tion in st ate c ourt ag ainst the Debtor. A fter a t rial i n that action on J une 28, 2005, the s tate court found t hat: (1) the Debtor ha d only

two persona l assets, a Jeep and a Coney Cart; (2) the D ebtor tra

nsfer red title and

ow ne rs hip of

the Jee p to his mot

he r f or no c on sid e ra

tio n w hile c on tin

uin g to p os se ss a

nd us e it; (3 ) whe n s e rv e d w ithan O rd e r/ Wri t of Exe c uti on

fo r his Con e y Cart , th e De bto r r e fu se d to tur n it

over a nd fal s ely told the sheriff’ s deputy

that he did not have the proper ty in his possession; and (4 ) t he De bto r’ s te sti mony

that he di d no t f

ra ud ule ntl y tr ans fe r t he Jee p a nd did no t f ra ud ule ntl y
conce al the Coney

Cart was not c redible. The state cour t concluded tha

t the Debtor “intended to a nd did defr aud C onley

by transfe rringthe J eep . . . ( R.C. 1336.04)” and “ by conce aling the Coney

Cart

. . . (R.C. 1336.04).” The court awa rded Conley compensatory damag es aga inst the Debtor in the amount of the unpa id judgment, $2,067.40, a nd punitive damag es i n the amount of $1,500 for the De bto r’ s “ e g re g iou s f

ra ud ” (t he “ F ra ud ule nt T ra ns fer J ud g me nt” ). Th e De bto r u ns uc c e ssf ull y appea led t h e Fr au d ulent Transf er Judgment, a

nd it became final af

ter the O hio Supreme Court ultimately

dismiss ed the a

ppeal by order enter ed Apr il 18, 2007.
On Marc h 28, 2006, the Debtor filed a voluntary petition f or relief under chapte r 13 of the B ank ru ptc y Cod e . Co nle y

wa s li ste d o n Sc he du le F a s a c re dit or . A ft e r t

he De bto r c on ve rt e d h is

case to one under chapte r 7 of the Ba nkruptcy Code on October 16, 2006, th e c l er ko f t h e c ourt iss ue d a no t i c e s e t t inga F e br ua ry 9, 20 07 de a dli ne fo r f

ili ngc omp la int s to de te rm ine dis c ha rg e a bil ity of debts. The Debtor subse quently rec eived a

discharg e on F ebrua

ry 22, 2007.
Whil e his bankruptc y

case was pe nding, the debtor remove d his state court leg al malpra ctice action to bankr

uptcy court, but the ba

nkruptcy court subseque ntly

rema nded the a ction by

orderCitations t o the docke t are to th o s e en t ri es made in the ba nkruptcy court a dversa

ry 1 proce eding involving these parties or in the Debtor’ s bankruptc y case
. The Debtor’ s desig nation of rec ord filed on June 17, 2008 , i n cl uded all re cords in both the adve rsar y proce eding and the bankruptc y

case
.

- 4- e nte re d Jan

ua ry 31 , 20 07

. Th e De bto r d id n ot a pp e a l th a t or de r. Al tho ug h th e De bto r v olu nta ri ly dismiss ed the state cour

t malprac tice ac tion on October 15, 2007, the state cour t determined that the De bto r’ s p ur su it o f t

he le g a l ma lpr a c tic e c a se wa s f ri vo lou s and awa

rd e d Co nle y

a jud g me nt a g a ins t the Debtor

on Dec ember

14, 2007, for $90,458.48 in attorne y ’s fe es.
I nt h e m ea n t i m e, C o n l ey

i n i t i at edo nFe b ru ary

9 , 2 0 0 7 , t h e i n s t an t a d v e r s a ry p ro ce ed i n g,
se e kin g a determ in a tio n th a t th e F ra ud ule nt T ra ns fe r Jud g me nt w a s n on dis c ha rg e a ble purs ua

nt t o § 523(a) (2)( A) of the Ba nkruptcy Code. The De btor answe red the compl ai n t and asse rted a

c ounte rc la im a g a ins t Conle y and ano the r ind ivi du a l f or le g a l ma lpr a c tic e , a

pp are ntl y the same c la im he wa s ma

kin g in h is p e nd ingstate c ourt a c tio n. Con le y the n mo ve d f or summa ry jud g me nt a s to his nondischarg eability

claim, asser

ting that the F raudule nt Transf er J udg ment was res judicata on the § 523(a) (2)( A) discharg eability claim. Conley also soug ht dismissal o f t h e D ebtor’s counter claim on the g rounds that the statute of limitations had run.
I n response , the Debtor

asser ted that Conley ’s adve rsar y complaint was not timely filed, and that the Fr audulent Tra

nsfer J udg men t wa s invalid and did not “meet the sta ndard of [t he] Ba nkruptcy Court, in so determining a fraudulent transf er of an asse t.” (Doc ket 38 at 1.) 1 Additionally , the Debtor argued that his counter claim asser ted a c ause of

action for b re ac h of contra ct, rather than le g al malpra cti ce an d , consequently , was not subject to the same statute of limit ations raised by

Conley

. On J anuar

y 22, 2 0 0 8 , t h e Debtor filed a motion in his underly ing c hapter 7 case titled “Motion under § 362 ” in which he a sserted that beca use he was g rante d a discharg e on F ebrua ry 22, 2007, the state c ourt’s De cembe r 14, 2007 judg ment for $90,458.48 i n attorney fee s violated the discharg e injunction set forth in 11 U.S.C. § 524(a)

. On J une 2, 2008, the ba nkruptcy court e ntere d an orde r deny

ing the Debtor’ s motion, having c oncluded that the D ebtor wa ived this argu m ent beca use he did not previously asser t that the continuation of t hat proceeding was a violation of the automatic stay . The De btor did not appea l this order.- 5-

On Marc h 3, 200 8 , t h e bankruptc y court issued a

memorandum of opinion and or der, g ranting Conley ’s motion for summary judgme nt and dismissi ng the Debtor ’s counter claim. The court c oncluded that a ll of the nec essar y conditions for the a

pplication of collateral estoppel had bee n met and that, ther efor e, the Fr audulent Tra nsfer J udg ment was nondischa rg eable under the actua l fra ud provision of § 523(a) (2)( A). The bankru p t cy court a lso concluded that the Debtor’ s counter claim was a

non-cor e proc eedingover w hich it did not have jurisdiction. Subsequently , on Marc h 10, 2008, Conley filed a motion in the adve rsar y proce eding seeking a findingthat the Debtor is a vexatious litigator. Conley based this re quest upon the numerous c ourt filings by the Debtor

in the near ly

six y ear s of l itigation in both the s tate cour t and the bankr

uptcy court. The motion also sought an order requiring the Debtor to obtain approva l from the bankruptcy court befor e filing any

thing further in the bankruptc y court. On J une 2, 2008, the bankruptc y court g rante d Conley ’s m otion and im posed a “ pref iling bar ” on the De btor. The De btor did not appea l that order

. On M arc h 12, 2008, the Debtor filed a timely notice of appea l from the Mar ch 3, 2008 orde r. That orde r, in addition to gr anting C onley ’s motion for summary judgme nt and dismissi ng the Debtor’ s counterc laim, also denied the D ebtor’s motions for summary judgme nt, for a pr otective order , for r elief f

rom a state c ourt judg ment, and to compel discove ry . The De btor did not list any of these a dditional matters in his statement of issues or addr ess them in his bri ef. Similarly , the Debtor failed to list or addre ss the dismiss al of his counter claim. Acc ording ly , we c onsider all of these matter s, other than c onsideration of Conley ’s summary judgme nt motion, to be waived. See Brindley v. M

cCullen , 61 F.3d 507, 509 ( 6th Cir. 1995) (“We conside r iss u es n o t fully develope d and ar g ued to be wa ived.”)

. On the other

hand, while the D ebtor doe s argue in his brief that the bankruptc y court e rre d by rema nding the leg al malpra ctice a ction to state court, by denying his motion for viol ation of the discharg e injunction, and by deter mining that he is a vexatious li tigator, the De btor did not appea l these order s. Acc ording ly , we are without jurisdiction to addre ss them. Se e Su ha r v . B ur ns ( In re Bu rn s) , 322 F.3d 421, 429- 430 (6th Cir. 2003) (a ffirming BA P finding of no jurisdiction to consider

a pp e a l f ro m a dd iti on a l or de r no t tim e ly inc lud e d in no tic e of a pp e a l) ; In re Boy d , No. 08-8010, 2008 WL 4372948, *2 (B .A.P. 6th Ci r. Sept. 23, 2008) (no jurisdiction to consider a ppeal f rom additional- 6-

order s listed in noti ce of appea l that were not timely appeal ed ). As a re sult, the only issues

re ma ini ngfo r t

he Pane l’ s c on sid e ratio n a re wh eth er Co nley

tim e ly fi le d h is n on dis c ha

rg e a bil ity complaint and, if timely , whether the bankr

uptcy cou rt corr ectly

held that collater al estoppel prec luded re litigation of the D ebtor’s f raud.
IV . D ISC USS ION A. Timeliness of Complaint Although the De b t o r ar gu es i n this appeal that summary judgme nt should not have bee n g ra nte d in Con le y ’s fa

vo r b e c a us e the a dv e rs ary

c omp la int

wa s n ot t ime ly

fi le d, he do e s n ot i nd ic a te ho w the fi lin g wa s unti me ly . U nd e r F e de ra l Ru le of B ank ru ptc y Pr oc e dure 40 07 (c ), a

c omp la int

to de te rm ine the dis c ha

rg e a bil ity of thi s ty pe of de bt mus t be fi le d n o late r t ha n 6 0 d ay s a ft e r t

he fi rs t date se t for the mee ting of cre ditors. I

n this c ase, the cler

k of cour t set the first date f

or the mee ting of cr editors on Dec ember 1 1 , 2006, and the last da y to file complaints objecting to the discharg eability

of debts on F ebrua

ry 9, 200 7

. C o n l ey

timely filed his complaint on Fe bruar y 9, 2007.
I t is irreleva

nt that the Debtor’ s bankruptc y case was orig inally filed as a chapte r 13 and that
a mee ting of

cre ditors was held unde r t h at cha pter. Unde r F eder al Rule of B ankruptc y Procedur e 1019(2), a new tim e period for filing complaints to deter mine discharg eability

under Rule 4007( c)

c o mm e n c e d a f

te r th e c o n v e r s io n o f th e c a s e f r o m c h a p te r 1 3 to c h a

p te r 7. Se e Cla ssi c Au to Refi n i s h i n g

, Inc. v . Marino (

In re M arino) , 1 81 F .3 d 1 14 2, 11 45 (9 th C ir . 1 99 9) (whe n c a se is

conver ted to chapte r 7 proc eeding , new time limitation comes into being)

. The ba nkruptcy court a ssumed, based on the Debtor’s argument in his mot ion to dism iss the

c omp la int , th a t the De bto r co nte ste d the c omp la int ’s tim e lin e ss be c a us e he a pp are ntl y re c e ive d h is dis c ha rg e or de r b e fo re se rv ic e of pr oc e ss i n th e no nd isc ha

rg e a bil ity c omp la int . T he c ourt

no te d th a t, if that w e re the ba sis , th e De bto r f a ile d to re a d the re ve rs e sid e of the dis c ha

rg e or de r t

hat e xpre ssl y indicates that the discharg e is subject to any debts the bankr

uptcy court spec ifically

deter mines are nondischarg eable . I t is well settled that “[t] he timely fi ling of a complaint under

§ 523(a) (2), ( 4), (6) or (15) doe s not p re v en t t h e en t ry of a discha

rg e. The court c an g rant the discha rg e and subsequently

decla re that a par

ticular de bt was not discharg ed under one of those provisions.” Sm ith v. Bandy ( In re Bandy

) , 237 B.R. 661, 663 (B ankr. E.D . Tenn. 1999).- 7-

B. Collater al Estoppel The doc trine of c ollatera l estop p e l a p p li e s in disc harg eability

actions under

§ 523(a)

. See B ay Ar e a F ac tor s v . Ca lv e rt (

In re Cal v e rt) , 105 F .3 d 3 15 , 3 18 (6 th C ir . 1 99 7) ; Rally Hill Prods., Inc

. v. Bursack

( In re Bursac k) , 6 5 F. 3 d 5 1 , 5 3 (6 t h C i r. 1 9 9 5 ) ( ci t i n g Grogan v. Garne r , 498 U.S. 279, 284 n.11, 111 S. Ct. 654, 658 (1991))

. The fac t that ba nkruptcy courts have “ exclusive jurisdiction over discharg eability issues does not alter this rule.” Id

. Whil e the ba nk ru ptc y c ourt mus t make its own deter mination reg ardingthe dischar g eability of the debt, that deter mination may

be g overne d by fac tual issues that were actua lly and nec essar ily

decide d by

the state c ourt. Vogel v. Kalita ( In re Kalita) , 2 0 2 B. R

. 8 8 9 , 8 9 4 (B an kr. W

. D. M i ch

. 1 9 9 6 ) ( ci t i n g Grogan , 498 U.S. at 284 n.11)). State law dictate s whether a state court judgme nt should be aff orded c ollatera l estoppel eff ect. In

re Cal v e rt , 105 F.3d at 317. I n Ohio, collater al estoppel a pplies where : 1) [Th e re is a ] fi na l ju dg me nt o n th e me ri ts in the pr e vio us c a se a ft e r a fu ll a nd fa ir op po rt un ity to l iti g a te the iss ue ; 2) Th e iss ue [wa s] a c tua lly and dir e c tly lit ig a te d in the prior suit a

nd must have been nece ssary to the final judg ment; 3) The issue in the pr e se nt s uit

[is] id e nti c al to the i ssu e in t he pr ior su it; [an d] 4) Th e pa

rt y a g a ins t whom estoppel is soug ht was a party or i n privity with the party to the prior ac tion. Sill v. Sweeney

( In re Swee ney) , 2 7 6 B

. R

. 1 8 6 , 1 8 9 (B

. A. P

. 6 t h C i r. 2 0 0 2 ) ( qu o t i n g Gonzalez v. Mo ffi tt ( In re Mo ffi tt) , 252 B.R. 916, 921 (B .A.P. 6th Ci r. 2000))

. The re cord in this case establishes that the Fr audulent Transf er Judgment is a f

inal judgme nt on the merits re ndere d afte r a full and fair opportuni ty to liti g ate the issues, inc luding a trial at which the Debtor

fully participated. Additionally , the par ties to the adver sary

proce eding are the same a s those in the state cour

t liti g ation. There fore , the first and f ourth eleme nts of collater al estoppel under Oh io l aw h a ve be e n me t.
As to the second a

nd third elements re g ardingactua l and nec essar y litigation of identica l issues, it must be noted that pur suant to Ohio Revised Code § 1336.04(A)( 1) and ( A)(2) , a fr audulent conveyance can be established throug h proof of either a ctual fr aud, (A )(1) , o r co n s t ru ctive fr aud, (A)( 2). Upon its revie w of the state court rec ord, the bankruptc y court held that the issue litigate d and dete rmined in the s tate court was actual fraud rather than c onstructive fr aud, ther eby establishing the se c on d a

nd thi rd e le me nts of

c oll a te ra l e sto pp e l. Although the state cour

t does not specific ally identify 1336.04(A)( 1) in the judgme nt, the Court finds the judgme nt is for ac tual fra ud. Simpl y , t h e state cour t ma de sp e c if

ic fi nd ing s r e g ard ing[the De bto r’ s] int e nt: “ Smit h int e nd e d to a

nd did- 8-

defr aud Conley

. . . .” (Pl.’s Am. Mot. Summ. J ., Ex . B, Conclusions of L aw, pa ra. 1

- 2

. ) T h e s e f

i n d i n g s o f i n t e n t s p e a k t o a c tu a l f r a u d , n o tc o n s t r

u c t i v e
. C o n s e qu e n t l y, the C ourt finds that the issue of f raudule nt intent was litigate d in the prior suit and was ne cessa

ry for a finding o f ac t u al fr aud. I n concludingthat the state c ourt l i t i gat edac tu al fr au d , an d ac tu al fr au d

i s t h e s am e i s s u e i n v o l v edi n t h i s p ro ce ed i n g, the Court finds that both conditions two and three a re satisfied. (Doc ket 52 at 5.)
We find no err or in the bankr uptcy court’s r ulin g
. Se ction 523(a) (2)( A) provide s, in pertinent pa rt : (a) A dischar g e u n d er s ection 727 . . . of this t itle does not discharg e an individual debtor fr om any

debt–

. . . . (2) f

or money , proper

ty , service s or an extension, renewa l, or ref inancingof c r e d i t , t o t h e e x t e n to b t a i n e d b y– (A) f alse pre tenses, a f

alse re prese ntation, or ac tual fra ud . . .[.] Under this section, fraud is not limited to a fraudulent misrepr esentation and can e ncompass “a ny dece it, artifice, tr ick, or de sign involving direc t and active operation of the mind, use d to circumve nt and che at another .” Cash Am. Fin. Se rvs., Inc. v. Fox ( In re Fox ) , 370 B.R. 104, 116 (B .A.P. 6th Ci r. 2 0 0 7 ) ( qu o t i n g Mellon Bank, N.A. v . Vitanovich ( In re Vitanovic h) , 2 59 B .R. 87 3, 87 7 ( B .A .P. 6th Cir. 2001) ). “When a debtor intentionally eng ag es in a scheme to de prive or cheat a nother of proper ty or a le g al rig ht, that de btor has eng ag ed in a ctual fra ud and is not entitl ed to the fr esh start p r o v id e d b y th e B an kr

uptcy Code.” In re Vitanovic h , 259 B.R. at 877. B eca use the state c ourt lit ig a te d th e iss ue of

the De bto r’ s a c tua l f

ra ud in atte mpt ingto de pr ive Con le y of his le g a l r ig ht t o execute his judgme nt a g ainst the Debtor’ s assets, and the issue was ne cessa ry to Conley ’s state c ourt fra udulent transfe r ac tion, the bankruptcy court c orre ctly applied collateral estoppel in this i nstance

. Finally , the Debtor

argues that in order to pr evail under § 523(a) (2)( A), Conley

must prove that he obtained Conley ’s leg al servic es by fra ud. Acc ording to the Debtor,“ [b] eca use . . . he neve r de fr a ud e d Co nle y

int o g ivi ng his se rv ic e s by any ty pe of fr a ud [,] th a t de bt i s c le arl y

dis c ha rg e a ble

un de r 1 1 U .S. C. § 52 3[.]” (A pp e lla nt’ s B r. a t 11 -1 2. ) Up on ini tia l re vie w, thi s argume nt ha s so me f a c i a l a p p e a l s i n c e § 5 2 3 ( a ) ( 2 ) ( A ) , b y i t s t e r m s , e x c e p t s f

r o m d i s c h ar g e “ an y

d e b tf o r m o n e y, pr op e rt y , s e rv ic e s .
. . to t

he e xten t obtained

by

. . . f ra ud .” (E mph a sis add e d. ) H ow e ve r, c ourt s
c on sid e ri ngthi s p ro vis ion have no t re a d the wo rd

“ ob ta in” so lit e ra lly . T he Un ite d St a te s Su pr e me- 9-

C o urt conc luded in Cohen v. dela Cruz , 5 2 3 U

. S. 2 1 3 , 2 2 2 , 1 1 8 S. Ct

. 1 2 1 2 , 1 2 1 8 ( 1 9 9 8), that “§ 523(a )(2) (A) ba

rs the discha

rg e of a ll liabili ty

arising from fr aud.”
I n the spec ific conte x t of a fr au d ulent transfe r within the meaningof § 523(a )(2) (A), one court ha s observe d: Whil e the fac ts of t his case ma y n o t n e a tl y

f it a p ar a d ig mati c construction of obtaining pr operty

by false pr etense s, the rea lity of this case compels a fi n d i n g of n o n d i s c h ar g e a

b i l i t y. I t is too facile to say t h at t he prope rty “obtained by” the [debtors] was pr o p e rty th e y a lr e a dy p o s s e s s e d

. T h e f

o c u s o f Se c ti o n5 2 3 ( a ) ( 2 ) ( A )’s nondischarg eability

provisions must center on the har m cause d to the cre ditor. [The d e b t o r ] i n t e n t i o n a l l y

c o n v e y e d

h i s m a j o r a s s e ti no r d e r

t o m a k e i tu n a v a i l a

b l e to cre ditors. By

divesting himself of

bare leg al title while reta ining a ll other indicia of owner ship (possession, use, control) [the debtor] did in fact “ obtain” for himself and [hi s codebtor wife]

. . . proper ty which would otherwise have been a vailable f or [the debtors’] cre ditors. Stated differ ently , what the [debtors] “obtained” by the transf er w a s p r o p e rt y

free from creditors’ claims

. I ns o d o i n g, t h ey o b t ai n eds o m et h i n g from the ir c re ditor

s . Ge ntr yv . Ko v le r (

In re Kov le r) , 249 B.R. 238, 260 (B ankr. S.D.N.Y. 2000) (e mphasis in origina l). Se e als o M

c Cle lla n v . Ca ntr e ll , 217 F.3d 890, 895 (7th Cir. 2000) (court of appe als noted that if the de bto r h a d r e nd e re d a

de bt u nc oll e c tib le by

makin g an a c tua lly

fr a ud ule nt t ra ns fe r o f t he pr op e rt

y that secur ed it, his actua l f raud would g ive rise to a new debt, nondischarg eable beca use cre ated by fr a ud ); K- B Bl

dg

. Co. v
. Ba rb e r (In re Bar be r) , 281 B.R. 617, 625 (B ankr. W.D. Pa. 2002) ( debt

ow e d b y de bto r whic h a

ro se fr om j ud g me nt e nte re d in state c ourt

fr a ud ulent tr ans fe r a c tio n is excepted fr om discharg e under § 523(a) (2)( A)). Mor eover , pursuant to the Supreme Court’s decision in de la Cruz , § 523(a) (2)( A) e ncompasses not only the compensatory damag es portion of the Fr audulent Tra

nsfer J udg ment, but also its punit ive damag es compone nt. Se e Cohen v. de l a Cruz , 523 U.S. at 223. Acc ording ly , we r ejec t Debtor’s a rgu m ent that the bankr uptcy court e rre d in awar ding summar

y judgme nt in Conl ey ’s favor on his nondischarg eability claim.
V. CO NC LU SION
For the fore g oing r easons, the ba nkruptcy court’s or der is AF FI RMED.