Document: 523 U.S. 213118 S.Ct. 1212140 L.Ed.2d 341 Edward S. COHEN, Petitioner,v.Hilda De La CRUZ, et al. No. 96-1923. Supreme Court of the United States Argued Jan. 20, 1998. Decided March 24, Syllabus * After local rent control administrator ordered petitioner to refund $31,382.50 in excessive rents he had charged respondent tenants, sought discharge his debts under Chapter 7 Bankruptcy Code. The tenants filed an adversary proceeding, arguing that debt owed them was nondischargeable §523(a)(2)(A) Code, which excepts from "any . for money, property, services, or extension, renewal, refinancing credit, extent obtained by actual fraud.'' They also treble damages, attorney's fees, and costs New Jersey Consumer Fraud Act. ruled their favor, finding committed "actual fraud'' within meaning conduct violated law. court therefore awarded damages totaling $94,147.50, plus fees costs. District affirmed, as did Third Circuit, held resulting fraud are entirety §523(a)(2)(A), award (plus costs) this case nondischargeable. Held: Because all liability arising fraud, on account debtor's fall scope exception. most straightforward reading is it prevents debt'' respecting "money, credit'' debtor has fraudulently obtained. See Field v. Mans, 516 59, 61, 64, 116 437, 440-441, 133 351. First, obligation pay satisfies threshold condition constitute a "debt.'' That word defined "claim,'' §101(12), turn "right payment,'' §101(5)(A), said means enforceable obligation, Pennsylvania Dept. Public Welfare Davenport, 495 552, 559, 110 2126, 2131, 109 588. An debtor, creditor corresponding right payment. Moreover, phrase "to by'' modifies credit''-not debt''-so exception encompasses [etc.], [that etc., is] fraud. thereby makes clear share so gives rise debt. Once established specific money property been however, therefrom excepted discharge. rejects petitioner's argument "debt for'' necessarily limited value such restitutionary ceiling would be imposed at odds with parallel exceptions set forth §523(a), use mean result of,'' respect to,'' reason like. Court's reinforced exception's history. §523(a)'s various reflect Congress' conclusion creditors' interest recovering full payment these categories outweighs debtors' complete fresh start, see Grogan Garner, 498 279, 287, 111 654, 659-660, 112 755. But construction leave creditors short being made whole whenever loss exceeds debtor. Because, law, obtaining payments includes costs, entire $94,147.50 bankruptcy. Pp. ____-____. 106 F.3d 52 (C.A.3 1997), affirmed. O'CONNOR, J., delivered opinion unanimous Court. Donald B. Ayer, Washington, DC, petitioner. Gregory G. Diebold, City, NJ, respondents. Jeffrey A. Lamken, amicus curiae, special Justice O'CONNOR 1 Section 523(a)(2)(A) Code bankruptcy false pretenses, representation, 11 U.S.C. §523(a)(2)(A). issue whether bars fraudulent acquisition credit,'' only obtains through We hold falls 2 Petitioner owned several residential properties around Hoboken, Jersey, one subject ordinance. In 1989, Hoboken Rent Control Administrator determined charging above levels permitted ordinance, him affected who respondents Court, excess charged. not comply order. 3 subsequently relief seeking debts. proceeding against arose pursuant N.J. Stat. Ann. §§56:8-2, 56:8-19 (West 1989). 4 Following bench trial, tenants' favor. re Cohen, 185 B.R. 171 (1994); 180 (1995). found amounted "unconscionable commercial practice'' As result, reasonable Noting courts reached conflicting conclusions punitive (such here), sided those decisions holding obligations out conduct, including both compensatory damages.* B.R., 188-189. 191 599 (1996). 5 Appeals Circuit affirmed divided opinion. (1997). accepting Act, turned portion represents observed term "debt,'' plainly form damages. And by,'' reasoned, distinguishes between but instead nonfraudulent means. Id., 57. Here, concluded, resulted 59. Judge Greenberg dissented, concluding encompassed because they "do services "obtained.''' 60. 6 recognized, id., 56, its interpretation accord Eleventh conflict Ninth Circuit. Compare St. Laurent, 991 F.2d 672, 677-681 (C A 1993), Levy, 951 196, 198-199 (C.A.9 1991). have likewise differing George, 205 679, 682 (Bkrtcy.Ct.Conn.1997) (punitive dischargeable); Spicer, 155 795, 801 (Bkrtcy.Ct.DC) (same), aff'd, 57 1152 (C.A.D.C.1995), cert. denied, 1043, 701, 658, (1996); Winters, 159 789, 790 (Bkrtcy.Ct.E.D.Ky.1993) Bozzano, 173 990, 997-999 (Bkrtcy.Ct.M.D.N.C.1994) Sciscoe, 164 86, 89 (Bkrtcy.Ct.S.D.Ind.1993) (same); Brady, 154 82, 85 (Bkrtcy.Ct.W.D.Mo.1993) (same). noted without resolving 282, n. 2, 657, 755 (1991). granted certiorari address lower courts, 521 ----, 118 30, 138 1060 (1997), we now affirm. II long prohibited debtors discharging liabilities incurred embodying basic policy animating affording "honest unfortunate debtor.'' supra, S.Ct., 659-660 (internal quotation marks omitted); 290, 661; Brown Felsen, 442 127, 138, 99 2205, 2212-2213, 60 767 (1979). continues tradition, excepting 8 obtained, assessed 351 (1995) (describing barring "resulting from'' "traceable to'' fraud). "debt'' "liability claim,'' "claim'' said, "is nothing more nor less than obligation.'' 588 (1990). Those definitions "reflec[t] broad view class qualify "claim' giving "debt,''' 558, 2130-2131, encompass damages: "enforceable obligation'' payment.'' 9 does impose any limitation " [T]o credit case, received number years, His traceable sum-$94,147.50 costs-thus 10 dispute credit.'' He nonetheless contends include action. submits action essential premise Petitioner, sense, interprets for''-or alternatively, claim for''-in obtain,'' i.e. obtain fraud,'' thus imposing Petitioner's same provisions. 523(a) defines discharge, words introduce many them, viz., tax customs duty return filed,'' §523(a)(1)(B)(i), defalcation while acting fiduciary capacity, embezzlement, larceny,'' §523(a)(4), willful malicious injury another entity,'' §523(a)(6), death personal caused operation motor vehicle if unlawful intoxicated,'' §523(a)(9). None sense obtain''; little speak injury'' defalcation.'' Instead, used throughout like, American Heritage Dictionary 709 (3d ed.1992); Black's Law 644 (6th ed.1990), connoting broadly specified object, 563, 2133 (characterizing §523(a)(7), certain "for fine, penalty, forfeiture'' encompassing "debts "fine, forfeiture'''). 12 each §523(a) serves identical function introducing category presumption equivalent when repeated statute, e.g., Ratzlaf States, 510 135, 143, 114 655, 660, 126 615 (1994), particular resonance here. contrary submission, no moment immediate object commodity (money, etc.), some other description misconduct, §523(a)(4) ("debt [by a] fiduciary''). describes misconduct ("false fraud''), even first specifies obtained). §523(a)(9) framed way, initially specifying outcome ("death injury''), describing ("operation [while] intoxicated''). It provision follows When construed context statute whole, then, best read prohibit 13 history reinforces our Act 1898 "judgments actions frauds, pretenses representations,'' §17, 30 550, fits broadened 1903 "liabilities §5, 32 798, language that, fortiori, Brown, U.S., 2212-2213 (interpreting prohibiting "all specified'' therein); F.2d, 679 (noting "practice nondischargeable'' "if were themselves nondischargeable''). 1978 enacted "substantially similar'' provision, 129, 1, 2208, (1982 ed.). 14 slight amendment 1984, referred legislative "stylistic change,'' S.Rep. 98-65, p. 80 (1983), We, "will erode past practice absent indication Congress intended departure,'' 2133, change 1984 way signals intention narrow along lines suggested If, contends, wished limit representing restitutionary-as opposed punitive-recovery expect unmistakably intent distinguish among theories recovery manner. See, §523(a)(7) (barring forfeiture payable governmental unit,'' compensation pecuniary loss''). 15 further borne implications alternative construction. part "that outweigh[s] start.'' Grogan, 659-660. if, it, barred objective ensuring ill served. Limiting could prevent losses occasioned For instance, will grade shingles roof house paid accordingly, cost repairing water damage far exceed install shingles. Church, 69 425, 427 (Bkrtcy.Ct.N.D.Tex.1987). posits example lines, involving "a aircraft manufacturers steel bolts quality [and] $5,000'' bolts, "the causes multi-million dollar airplane crash.'' Brief Amicus Curiae 21. 16 acknowledges, gloss allow situations amount received, leaving whole. creditor's debtor-and hence dischargeable view-might brought about suit associated establishing §523(d) (allowing where requests dischargeability determination §523(a)(2) consumer ultimately dischargeable). sorts results square previously addressing different issues surrounding exception, "unlikely favored perpetrators start over protecting victims 17 short, text provisions historical pedigree general underlying support may Under consequently, Accordingly, affirm judgment Appeals. 18 ordered. syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Timber & Lumber Co., 200 321, 337, 26 50 L.Ed. 499. characterized nature, 188, assumed much deciding question, 52, 55, 1997). affect analysis, occasion revisit

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