Source: https://supreme.justia.com/cases/federal/us/516/59/
Timestamp: 2019-04-24 11:52:25+00:00

Document:
Mter respondent Mans filed for relief under Chapter 11 of the Bankruptcy Code, petitioners William and Norinne Field alleged, in effect, that letters Mans had written to them constituted fraudulent representations on which they relied in continuing to extend credit to a corporation controlled by Mans, and that, accordingly, Mans's obligation to them as guarantor of the corporation's debt should be excepted from discharge under 11 U. S. C. § 523(a)(2)(A) as a debt resulting from fraud. The Bankruptcy Court found that Mans's letters constituted false representations, but followed Circuit precedent in requiring that the Fields show their reasonable reliance on the letters. Finding the Fields unreasonable in relying without further enquiry on Mans's misrepresentations, the court held Mans's debt dischargeable. The District Court and the Court of Appeals affirmed.
Held: The standard for excepting a debt from discharge as a fraudulent representation within the meaning of § 523(a)(2)(A) is not reasonable reliance but the less demanding one of justifiable reliance on the representation. Pp.64-77.
(a) Section 523(a)(2)(A) had an antecedent in the 1903 amendments to the Bankruptcy Act of 1898, and has changed only slightly since 1903, from "false pretenses or false representations" to "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition." Section 523(a)(2)(B), which applies to false financial statements in writing, also grew out of a 1903 amendment to the Bankruptcy Act of 1898, but it changed more significantly over the years. One of these changes occurred in 1978, when Congress added a new element of reasonable reliance. Pp. 64-66.
to confine the requirement to the specified instance. Assuming this argument to be sound, it would prove at most that the reasonableness standard was not intended, but would not reveal the correct standard. Here, however, there is reason to reject the negative pregnant argument even as far as it goes. If the argument proves anything here, it proves too much: this reasoning would also strip § 523(a)(2)(A) of any requirement to establish causation and scienter, an odd result that defies common sense. Moreover, the argument ignores the fact that § 523(a)(2)(A) refers to common-law torts and § 523(a)(2)(B) does not. The terms used in paragraph (A) imply elements that the common law has defined them to include, whereas the terms in paragraph (B) are statutory creations. Pp. 66-69.
(c) This Court has an established practice of finding Congress's meaning in the generally shared common law where, as here, common-law terms are used without further specification. Since the District Court treated Mans's conduct as amounting to fraud, the enquiry here is into the common-law understanding of "actual fraud" in 1978, when it was added to § 523(a)(2)(A). The Restatement (Second) of Torts states that justifiable, rather than reasonable, reliance is the applicable standard. The Restatement rejects a general, reasonable person standard in favor of an individual standard that turns on the particular circumstances, and it provides that a person is justified in relying on a factual representation without conducting an investigation, so long as the falsity of the representation would not be patent upon cursory examination. Scholarly treatises on torts, as well as state cases, similarly applied a justifiable reliance standard. The foregoing analysis does not relegate the negative pregnant to the rubbish heap, but merely indicates that its force is weakest when it suggests foolish results at odds with other textual pointers. The Court's reading also does not leave reasonableness irrelevant, for the greater the distance between the reliance claimed and the limits of the reasonable, the greater the doubt about reliance in fact. Pp. 69-76.
(d) It may be asked whether it makes sense to protect creditors who were not quite reasonable in relying on a fraudulent representation, but to apply a different rule when fraud is carried to the point of a written financial statement. This ostensible anomaly may be explained by Congress's apparent concerns about creditors' misuse of financial statements. Pp. 76-77.
(e) The Bankruptcy Court's reasonable person test entailing a duty to investigate clearly exceeds the demands of the justifiable reliance standard that applies under § 523(a)(2)(A). P. 77.
36 F.3d 1089, vacated and remanded.
SOUTER, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and STEVENS, O'CONNOR, KENNEDY, THOMAS, and GINSBURG, JJ., joined. GINSBURG, J., filed a concurring opinion, post, p. 78. BREYER, J., filed a dissenting opinion, in which SCALIA, J., joined, post, p. 79.
Christopher J. Seufert argued the cause for petitioners.
With him on the brief was William J. Schultz.
The Bankruptcy Code's provisions for discharge stop short of certain debts resulting from "false pretenses, a false representation, or actual fraud." 11 U. s. c. § 523(a)(2)(A). In this case we consider the level of a creditor's reliance on a fraudulent misrepresentation necessary to place a debt thus beyond release. While the Court of Appeals followed a rule requiring reasonable reliance on the statement, we hold the standard to be the less demanding one of justifiable reliance and accordingly vacate and remand.
*Gary Klein filed a brief for the National Association of Consumer Bankruptcy Attorneys for the United States as amicus curiae urging affirmance.
sent to any conveyance of the encumbered real estate during the term of the secured indebtedness, failing which the entire unpaid balance on the note would become payable upon a sale unauthorized.
On October 8, 1987, Mans's corporation triggered application of the clause by conveying the property to a newly formed partnership without the Fields' knowledge or consent. The next day, Mans wrote to the Fields asking them not for consent to the conveyance but for a waiver of their rights under the due-on-sale clause, saying that he sought to avoid any claim that the clause might apply to arrangements to add a new principal to his land development organization. The letter failed to mention that Mans had already caused the property to be conveyed. The Fields responded with an offer to waive if Mans paid them $10,500. Mans answered with a lower bid, to pay only $500, and again failed to disclose the conveyance. There were no further written communications.
1 Although we observe the distinction between Mans and his corporations, the record before us does not indicate that the parties thought anything should turn on treating them separately. As the case comes to us, Mans is presented as the originator of both debt and misrepresentation.
to their detriment in extending credit.2 The court followed Circuit precedent, however, see In re Burgess, 955 F.2d 134 (CA1 1992), in requiring the Fields to make a further showing of reasonable reliance, defined as "what would be reasonable for a prudent man to do under those circumstances." App. 43-44. The court held that a reasonable person would have checked for any conveyance after the exchange of letters, and that the Fields had unreasonably ignored further reason to investigate in 1988, when Mr. Field's boss told him of a third party claiming to be the owner of the property.3 Having found the Fields unreasonable in relying without further enquiry on Mans's implicit misrepresentation about the state of the title, the court held Mans's debt dischargeable.
The District Court affirmed, likewise following Circuit precedent in holding that § 523(a)(2)(A) requires reasonable reliance to exempt a debt from discharge, and finding the Bankruptcy Court's judgment supported by adequate indication in the record that the Fields had relied without sufficient reason. The Court of Appeals for the First Circuit affirmed judgment for the Bankruptcy Court's reasons. Judgt. order reported at 36 F.3d 1089 (1994).
2 Here, Mans argues that neither he nor his corporation obtained any extension of credit at the time of the alleged fraud or thereafter. Since this issue was never raised previously and is not fairly subsumed within the question on which we granted certiorari, we do not reach it.
3 Mr. Field testified in the Bankruptcy Court proceeding that he asked Mans in 1988 about the report of a conveyance and that Mans indicated he had not conveyed the property, App. 14-15, but Mr. Field later testified that he had not confronted Mans on the issue, id., at 26-27. The Bankruptcy Court made no finding about any such conversation.
4 Compare In re Ophaug, 827 F.2d 340 (CA8 1987); In re Mayer, 51 F. 3d 670 (CA7 1995); In re Allison, 960 F.2d 481 (CA5 1992), with In re Burgess, 955 F.2d 134 (CA11992); In re Mullet, 817 F.2d 677 (CAlO 1987).
"(iv) that the debtor caused to be made or published with intent to deceive."
would still be required to pay them. Act of Feb. 5, 1903, ch. 487, 32 Stat. 798. This language inserted in § 17(a)(2) was changed only slightly between 1903 and 1978,5 at which time the section was recodified as § 523(a)(2)(A) and amended to read as quoted above. Thus, since 1903 the statutory language at issue here merely progressed from "false pretenses or false representations" to "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition."
5 The one intervening change to the quoted language was that "obtaining property" became "obtaining money or property." Act of June 22, 1938, 52 Stat. 851.
"are liabilities for obtaining money or property by false pretenses or false representations, or for obtaining money or property on credit or obtaining an extension or renewal of credit in reliance upon a materially false statement in writing respecting [the bankrupt's] financial condition made or published or caused to be made or published in any manner whatsoever with intent to deceive." Act of July 12, 1960, Pub. L. 86-621, 74 Stat. 409.
gress rewrote the provision as set out above and recodified it as § 523(a)(2)(B). Though the forms of the 1960 and 1978 provisions are quite different, the only distinction relevant here is that the 1978 version added a new element of reasonable reliance.
The sum of all this history is two close statutory companions barring discharge. One applies expressly when the debt follows a transfer of value or extension of credit induced by falsity or fraud (not going to financial condition), the other when the debt follows a transfer or extension induced by a materially false and intentionally deceptive written statement of financial condition upon which the creditor reasonably relied.
(2)(B) alone supports an inference that, in § 523(a)(2)(A), Congress did not intend to require reasonable reliance, over and above actual reliance. But this argument is unsound.
The argument relies on the apparent negative pregnant, under the rule of construction that an express statutory requirement here, contrasted with statutory silence there, shows an intent to confine the requirement to the specified instance. See Gozlon-Peretz v. United States, 498 U. S. 395, 404 (1991) (" '[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion''') (quoting Russello v. United States, 464 U. S. 16, 23 (1983)). Thus the failure of § 523(a)(2)(A) to require the reasonableness of reliance demanded by § 523(a)(2)(B) shows that (A) lacks such a requirement. Without more, the inference might be a helpful one. But there is more here, showing why the negative pregnant argument should not be elevated to the level of interpretive trump card.
First, assuming the argument to be sound, the most it would prove is that the reasonableness standard was not intended. But our job does not end with rejecting reasonableness as the standard. We have to discover the correct standard, and where there are multiple contenders remaining (as there are here), the inference from the negative pregnant does not finish the job.
of fraud. Section 523(a)(2)(B) expressly requires not only reasonable reliance but also reliance itself; and not only a representation but also one that is material; and not only one that is material but also one that is meant to deceive. Section 523(a)(2)(A) speaks in the language neither of reliance nor of materiality nor of intentionality. If the contrast is enough to preclude a reasonableness requirement, it will do as well to show that the debtor need not have misrepresented intentionally, the statement need not have been material, and the creditor need not have relied. But common sense would balk. 7 If Congress really had wished to bar discharge to a debtor who made unintentional and wholly immaterial misrepresentations having no effect on a creditor's decision, it could have provided that. It would, however, take a very clear provision to convince anyone of anything so odd, and nothing so odd has ever been apparent to the courts that have previously construed this statute, routinely requiring intent, reliance, and materiality before applying § 523(a)(2)(A). See, e. g., In re Phillips, 804 F.2d 930 (CA6 1986); In re Martin, 963 F.2d 809 (CA5 1992); In re Menna, 16 F.3d 7 (CA1 1994).
7 The fact that § 523(a)(2) uses the term "obtained by" does not avoid this problem, for two reasons. First, "obtained by" applies to both §§ 523(a)(2)(A) and (B); if it supplies the elements of materiality, intent to deceive, and actual reliance it renders § 523(a)(2)(B)'s inclusion of materiality and intent to deceive redundant. More to the point, it renders Congress's addition of the requirements of actual reliance and intent to deceive to the precursor of § 523(a)(2)(B) (§ 17(a)(2) of the 1898 Act) in 1960 nonsensical, since that provision also had the "obtained by" language. Second, it seems impossible to construe "obtained by" as encompassing a requirement of intent to deceive; one can obtain credit by a misrepresentation even if one has no intention of doing so (for example, by unintentionally writing that one has an annual income of $100,000, rather than $10,000, in applying for a loan).
tween the substantive terms in §§ 523(a)(2)(A) and (B): the former refer to common-law torts, and the latter do not. The principal phrase in the predecessor of § 523(a)(2)(B) was "obtained property ... upon a materially false statement in writing," Act of Feb. 5, 1903, ch. 487, 32 Stat. 797; in the current § 523(a)(2)(B) it is value "obtained by ... use of a statement in writing." Neither phrase is apparently traceable to another context where it might have been construed to include elements that need not be set out separately. If other elements are to be added to "statement in writing," the statutory language must add them (and of course it would need to add them to keep this exception to dischargeability from swallowing most of the rule). The operative terms in § 523(a)(2)(A), on the other hand, "false pretenses, a false representation, or actual fraud," carry the acquired meaning of terms of art. They are common-law terms, and, as we will shortly see in the case of "actual fraud," which concerns us here, they imply elements that the common law has defined them to include. See Durland v. United States, 161 U. S. 306, 312 (1896); James-Dickinson Farm Mortgage Co. v. Harry, 273 U. S. 119, 121 (1927). Congress could have enumerated their elements, but Congress's contrary drafting choice did not deprive them of a significance richer than the bare statement of their terms.
particular level of reliance required by § 523(a)(2)(A), and there is no reason to doubt Congress's intent to adopt a common-law understanding of the terms it used.
8 Although we do not mean to suggest that the requisite level of reliance would differ if there should be a case of false pretense or representation but not of fraud, there is no need to settle that here.
9We construe the terms in § 523(a)(2)(A) to incorporate the general common law of torts, the dominant consensus of common-law jurisdictions, rather than the law of any particular State. See Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 323, n. 3 (1992); Community for Creative Non-Violence v. Reid, 490 U. S. 730, 740 (1989).
"required to use his senses, and cannot recover if he blindly relies upon a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity to make a cursory examination or investigation. Thus, if one induces another to buy a horse by representing it to be sound, the purchaser cannot recover even though the horse has but one eye, if the horse is shown to the purchaser before he buys it and the slightest inspection would have disclosed the defect. On the other hand, the rule stated in this Section applies only when the recipient of the misrepresentation is capable of appreciating its falsity at the time by the use of his senses. Thus a defect that any experienced horseman would at once recognize at first glance may not be patent to a person who has had no experience with horses." Id., § 541, Comment a.
A missing eye in a "sound" horse is one thing; long teeth in a "young" one, perhaps, another.
Torts § 108, p. 718 (4th ed. 1971) (footnotes omitted); accord, W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts § 108, p. 752 (5th ed. 1984) (Prosser & Keeton). Prosser represents common-law authority as rejecting the reasonable person standard here, stating that "the matter seems to turn upon an individual standard of the plaintiff's own capacity and the knowledge which he has, or which may fairly be charged against him from the facts within his observation in the light of his individual case." Prosser, supra, § 108, at 717; accord, Prosser & Keeton § 108, at 751; see also 1 F. Harper & F. James, Law of Torts § 7.12, pp. 581-583 (1956) (rejecting reasonableness standard in misrepresentation cases in favor of justifiability and stating that "by the distinct tendency of modern cases, the plaintiff is entitled to rely upon representations of fact of such a character as to require some kind of investigation or examination on his part to discover their falsity, and a defendant who has been guilty of conscious misrepresentation can not offer as a defense the plaintiff's failure to make the investigation or examination to verify the same") (footnote omitted); accord, 2 F. Harper, F. James, & O. Gray, Law of Torts § 7.12, pp. 455-458 (2d ed. 1986).
is given information that would excite suspicions of reasonably prudent man, he has a duty to investigate).
11 See Beavers v. Lamplighters Realty, Inc., 556 P. 2d 1328, 1331 (Okla.
able, reliance. See In re Vann, 67 F.3d 277 (CAll 1995); In re Kirsh, 973 F.2d 1454 (CA9 1992).
v. Owens, 263 N. C. 754,758-759, 140 S. E. 2d 311, 314 (1965) (referring to reasonable reliance, but applying standard as preventing seller from saying that buyer ought not to have been so gullible as to trust him, unless the circumstances are such that buyer appears to have known the truth); Steiner v. Roberts, 72 Ohio L. Abs. 391, 396, 131 N. E. 2d 238, 242 (App. 1955) (applying standard from Restatement (First)); Furtado v. Gemmell, 242 Ore. 177, 182, 408 P. 2d 733, 735 (1965) (holding that a representee has some duty, although less than a duty to exercise reasonable care, to protect his interest); Emery v. Third National Bank of Pittsburgh, 314 Pa. 544, 547-548, 171 A. 881, 882 (1934) (stating that a representee must be "'justified in relying'" on the misrepresentation); Parks v. Morris Homes Corp., 245 S. C. 461, 466-467, 141 S. E. 2d 129, 132 (1965) (referring to reasonable prudence and diligence, but defining it as depending on intelligence, age, experience, mental and physical condition of the parties, their respective knowledge, and their means of knowledge); Scherf v. Myers, 258 N. W. 2d 831, 835 (S. D. 1977) (stating that justifiable reliance applies in analogous situation of indemnity based on fraud); Chiles v. Kail, 34 Wash. 2d 600, 606,208 P. 2d 1198, 1201-1202 (1949) (stating that test is not what a reasonable and prudent man would have done but whether plaintiff, in the condition he was in, had a right to rely); First National Bank in Oshkosh v. Scieszinski, 25 Wis. 2d 569, 575-576, 131 N. W. 2d 308, 312 (1964) (requiring justifiable reliance with no general duty to investigate).
guage at work in the statute here. See Alaska Airlines, Inc. v. Brock, 480 U. S. 678, 690-691 (1987).
As for the reasonableness of reliance, our reading of the Act does not leave reasonableness irrelevant, for the greater the distance between the reliance claimed and the limits of the reasonable, the greater the doubt about reliance in fact. N aifs may recover, at common law and in bankruptcy, but lots of creditors are not at all naive. The subjectiveness of justifiability cuts both ways, and reasonableness goes to the probability of actual reliance.
for the very purpose of insulating their own claims from discharge. 13 The answer softens the ostensible anomaly.
"the case law establishes an objective test, and that is what would be reasonable for a prudent man to do under those circumstances. At a minimum, a prudent man, I think, would have asked his attorney, could he transfer it without my consent? And the answer would have to be yes, and then the next question would be, well, let's see if he's done it? And those questions simply were not asked, and I don't think on balance that was reasonable reliance." App. 43-44.
13 "It is a frequent practice for consumer finance companies to take a list from each loan applicant of other loans or debts that the applicant has outstanding. While the consumer finance companies use these statements in evaluating the credit risk, very often the statements are used as a basis for a false financial statement exception to discharge. The forms that the applicant fills out often have too little space for a complete list of debts. Frequently, a loan applicant is instructed by a loan officer to list only a few or only the most important of his debts. Then, at the bottom of the form, the phrase 'I have no other debts' is either printed on the form, or the applicant is instructed to write the phrase in his own handwriting." H. R. Rep. No. 95-595, pp. 130-131 (1977) (footnote omitted).
I concur in the Court's opinion and write separately to highlight a causation issue still open for determination on remand: Was the debt in question, as the statute expressly requires, "obtained by" the alleged fraud? See 11 U. S. C. § 523(a)(2)(A); ante, at 63, n. 3. Mans ultimately urges that the promissory note to the Fields is, in any event, a dischargeable debt because it was not "obtained by" the allegedly fraudulent letters Mans's attorney wrote to the Fields' attorney months after the debt was incurred. The Fields maintain that they relied on the letters to their detriment, in effect according Mans an extension of credit instead of invoking the due-on-sale clause.
terminology right below and having no real prospect of anything but needless expense even if there is a remand. The first reason takes a bit of kind reading, since the Bankruptcy Judge spoke in terms of an objective standard and expressly found that the Fields had in fact relied, however imprudently. The second may indicate that we would have been justified in denying certiorari, but after taking the case and declaring the correct standard in response to the Fields' argument in this Court, we think they are entitled to decide how Pyrrhic a victory to declare.
"QUESTION: ... Suppose the debtor here had simply transferred thee] property without saying one word to the creditor .... [W]ould [the debt] then be dischargeable? There would be no representation at all, just in violation of the agreement the debtor sells the property .... Dischargeable, right?
"MR. SEUFERT: While [those are] not the facts of this case, I would agree with you, it would be dischargeable." Id., at 8-9.
It bears consideration whether a debt that would have been dischargeable had the debtor simply transferred the property, in violation of the due-on-sale clause with never a word to the creditor, nonetheless should survive bankruptcy because the debtor wrote to the creditor of the prospect, albeit not the actuality, of the transfer. Because this Court is not positioned to provide a first view on questions of this order, I express no opinion on the appropriate resolution of the unsettled causation ("obtained by") issue.
JUSTICE BREYER, with whom JUSTICE SCALIA joins, dissenting.
*Mans appeared pro se in the lower courts; he was represented by counsel in this Court.
have relied upon it similarly. See W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts § 108, pp. 749-753 (5th ed. 1984) (hereinafter Prosser & Keeton). And, I agree that the Bankruptcy Court used the wrong words when it described the "reliance" standard as "an objective test" that asks "what would be reasonable for a prudent man to do under [the] circumstances." App. 43-44. I disagree, however, with the Court's result in this case.
First, the Bankruptcy Court, while using the wrong words, did the right thing. That court essentially found that in mid-1987, Mr. Field and his wife sold their inn for about $500,000 to Mr. Mans, a developer. To secure the $187,000 that Mans still owed them, the Fields kept a mortgage, which had a term that accelerated the debt should Mans transfer the property to anyone else without their permission. A few months later, Mans wrote to the Fields saying that he wanted to transfer the inn to a development partnership which Mans had formed with a new partner, Mr. De Felice. Mans observed that because the Fields had transferred the inn to a corporation, the stock of which was wholly owned by Mans, Mans could effectively accomplish the transfer to the new partnership by simply conveying the stock of the holding company to the partnership, thereby avoiding the "debt acceleration" clause. But, Mans said, he would prefer to transfer the inn outright, and therefore was seeking their permission to do so without accelerating the debt. The Fields did not give permission. Mans transferred the inn anyway. Nothing more was heard of the matter until 1991, when real estate values fell, Mans went bankrupt, and the Fields brought this lawsuit in an effort to prevent the $150,000 they were then owed from disappearing in the bankruptcy.
he did rely," a primary purpose of the "justifiable reliance" requirement. See id., § 108, at 750-751.
Second, the Bankruptcy Court's use of what turned out to be the wrong words ("reasonable" and "prudent man" rather than "justifiable") is not grounds for reversal, for no one brought the "correct" terminology to the lower courts' attention. The Fields did not argue in the Bankruptcy Court, or in their briefs to the District Court or the Court of Appeals, or in their petition for certiorari, that there was any difference between "reasonable reliance" and "justifiable reliance." To the contrary, the Fields took the view (which the Court now unanimously rejects) that actual reliance alonewhether or not it meets any objective standard-is sufficient for recovery. Indeed, it appears that the Fields did not even mention the word "justifiable" below, but, rather, used the term "reasonable" throughout to refer to any kind of objective standard. The first time the word "justifiable" appears in this case seems to be in the Fields' brief on the merits in this Court where they point to the Restatement's use of the term "justifiable," Restatement (Second) of Torts § 540 (1976), and argue that "[j]ustifiable reliance does not require that the recipient of misrepresentation investigate the underlying assertion." Brief for Petitioners 20 (emphasis in original). But see Prosser & Keeton § 108, at 752.
used a "prudent person" standard or imposed a general duty to investigate, and (2) used a plaintiff-specific standard while disavowing a general duty to investigate. Ante, at 72-75, nn. 10-12. But, courts in the first category did not always use the words "reasonable reliance" to describe their standard. See, e. g., Horner v. Ahern, 207 Va. 860, 863-864, 153 S. E. 2d 216, 219 (1967). Indeed, sometimes they used the word "justifiable." See, e. g., Cudemo v. Al & Lou Construction Co., 54 App. Div. 2d 995, 996, 387 N. Y. S. 2d 929, 930 (1976). Nor did courts in the second category always use the words "justifiable reliance" to describe their standard. See, e. g., Barnes v. Lopez, 25 Ariz. App. 477, 480, 544 P. 2d 694, 697 (1976). Indeed, sometimes they used the words "reasonable reliance." See, e. g., Johnson v. Owens, 263 N. C. 754, 758-759, 140 S. E. 2d 311, 314 (1965). The relevant historical controversy in the law of fraud has focused not so much on labels as on the nature of the duty to investigate (e. g., whether the duty is applicable normally or only in special, suspicious circumstances) and on the extent to which the law looks to the circumstances and capacities of a particular plaintiff. See Prosser & Keeton § 108. The Bankruptcy Court, as I have just pointed out, followed modern fraud law in both respects.
gests that appellate courts can, or should, insist that lower courts use commentator-approved technical terminology when the parties have not argued for its use and when that use seems most unlikely to have made any difference. Doing so simply generates unnecessary appeals, creating additional delay and expense in a system that could use less of both.

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