Opinion ID: 4514311
Heading Depth: 3
Heading Rank: 1

Heading: Initial 2012 Loan

Text: Veritex first argues that the district court erred when it found Osborne did not intend to deceive the bank upon first applying for a loan when he did 25 Lamar, Archer & Cofrin, LLP v. Appling, 138 S. Ct. 1752, 1764 (2018). The Court in that case assessed § 523(a)(2)(B) in the context of what a “statement respecting the debtor’s financial condition” entailed. Id. at 1757. 26 See, e.g., Colombo Bank v. Sharp (In re Sharp), 340 F. App’x 899, 908 (4th Cir. 2009) (per curiam) (unpublished) (upholding bankruptcy court’s finding that the sophisticated creditor’s reliance was unreasonable because it relied on stale and irregular documents and made no independent inquiry of debtor’s title, despite primary purpose of title report to verify the borrower’s representations); In re Morris, 223 F.3d 548, 553–54 (7th Cir. 2000) (district court did not err in finding creditor did not reasonably rely after creditors all admitted to not believing representations in debtor’s affidavits but not investigating further); First Bank of Colorado Springs v. Mullet (In re Mullet), 817 F.2d 677, 678 (10th Cir. 1987) (no clear error in finding lack of reasonable reliance after debtor’s creditor report revealed inconsistencies and omissions that the creditor did not investigate) (abrogated on other grounds by Field v. Mans, 516 U.S. 59 (1995)). 9 Case: 19-10479 Document: 00515338394 Page: 10 Date Filed: 03/10/2020 No. 19-10479 not update his 2012 financial statement to reflect his personal guarantee of the lease with PMC. Regardless of whether the PMC lease was finalized when Osborne submitted his 2012 financial statement, Veritex contends, he had a continuing obligation to update it to reflect any material change. “Reckless disregard for the truth or falsity of a statement combined with the sheer magnitude of the resultant misrepresentation may combine to produce the inference of intent [to deceive].”27 In the context of fraudulent intent under § 523(a)(2)(B), we have held that “[i]f the bankruptcy judge finds one version of events more credible than other versions, this Court is in no position to dispute the finding.”28 The evidence showed that the financial statement Osborne submitted on August 3, 2012, was accurate as of that date. It became inaccurate when Osborne did not update the statement as required to reflect his guarantee of the PMC loan. The bankruptcy court found that Osborne “seemed to have a sense of detachment about his financial statements” and thus “his intent at that time [did not rise] to the level of either intent to deceive or even reckless disregard for the truth.” The bankruptcy court did not clearly err in its finding that Osborne acted without dishonest intent at the time of the initial loan. Because the record supports this finding, we need not address whether the bankruptcy court erred in finding that Veritex did not reasonably rely on Osborne’s 2012 statement.