Court Opinion

ID: 1837
Source: CourtListenerOpinion
Date Created: 2010-04-16 00:41:18+00
Date Added: 2024-06-11T15:02:53.094498
License: Public Domain

FILED
                            NOT FOR PUBLICATION                               APR 14 2010

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

In the Matter of:                      )     No. 07-56630
SCOTT P. HOLCOMB,                      )
                                       )     D.C. No. CV-07-00206-ODW
      Debtor.                          )
                                       )     MEMORANDUM*
                                       )
SCOTT P. HOLCOMB, doing                )
business as Holcomb Enterprises,       )
                                       )
      Appellant,                       )
                                       )
      v.                               )
                                       )
NEW CASTLE FINANCIAL                   )
GROUP, INC.,                           )
                                       )
      Appellee.                        )
                                       )

                   Appeal from the United States District Court
                       for the Central District of California
                   Otis D. Wright, II, District Judge, Presiding

                             Submitted April 6, 2010**
                               Pasadena, California

      *
       This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      **
      The panel unanimously finds this case suitable for decision without oral
argument. Fed. R. App. P. 34(a)(2).
Before:        FERNANDEZ, SILVERMAN, and GRABER, Circuit Judges.

      Scott P. Holcomb appeals the district court’s order affirming the bankruptcy

court’s decision that Holcomb was not entitled to discharge of his debt to New

Castle Financial Group, Inc. See 11 U.S.C. § 523(a)(2)(B). We affirm.

      (1)      Holcomb first asserts that the bankruptcy court erred when it

considered evidence that went to issues which were not properly before it because

they were not covered by the Pretrial Order. Pretrial orders do control the course

of proceedings,1 but they are not given a crabbed interpretation.2 The evidence in

question was actually listed in the Pretrial Order, was admissible on the issues of

reasonable reliance, intent, and credibility, and did not result in improper prejudice

to Holcomb. The bankruptcy court did not err.

      (2)      Holcomb then asserts that the evidence was insufficient to satisfy New

Castle’s burden to show by a preponderance of the evidence3 that he was not

entitled to his discharge. That, he says, is because the elements of 11 U.S.C. §

      1
          See El-Hakem v. BJY Inc., 415 F.3d 1068, 1077 (9th Cir. 2005).
      2
          See First Card v. Hunt (In re Hunt), 238 F.3d 1098, 1101–02 (9th Cir.
2001).
      3
       See Candland v. Ins. Co. of N. Am. (In re Candland), 90 F.3d 1466, 1469
(9th Cir. 1996); La Trattoria, Inc. v. Lansford (In re Lansford), 822 F.2d 902, 904
(9th Cir. 1987).

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523(a)(2)(B) were not shown.4 He claims that the bankruptcy court’s factual

determinations to the contrary were clearly erroneous. See Greene v. Savage (In re

Greene), 583 F.3d 614, 618 (9th Cir. 2009); Cooper v. Allustiarte (In re

Allustiarte), 786 F.2d 910, 917 (9th Cir. 1986). We disagree.

      On this record, the evidence was sufficient to support the findings that

Holcomb tendered a written financial statement to New Castle,5 respecting his

financial condition;6 that the statement was materially false;7 that under all of the

circumstances (including his failure to mention his just filed bankruptcy petition)

his intent was to deceive New Castle;8 and that New Castle reasonably relied9 upon

that statement when it advanced Holcomb credit. As to the latter element, we note

that while New Castle could undoubtedly have been more wary and done more

      4
          See In re Candland, 90 F.3d at 1469; In re Lansford, 822 F.2d at 904.
      5
          11 U.S.C. § 523(a)(2)(B).
      6
          Id. § 523(a)(2)(B)(ii).
      7
          Id. § 523(a)(2)(B)(i).
      8
       See Khalil v. Developers Sur. & Indem. Co. (In re Khalil), 578 F.3d 1167,
1169 (9th Cir. 2009); Cowen v. Kennedy (In re Kennedy), 108 F.3d 1015, 1018
(9th Cir. 1997); Pub. Fin. Corp. of Redlands v. Taylor (In re Taylor), 514 F.2d
1370, 1373–74 (9th Cir. 1975).
      9
      The totality of the circumstances supports that determination. See In re
Candland, 90 F.3d at 1471; see also Cashco Fin. Servs., Inc. v. McGee (In re
McGee), 359 B.R. 764, 774 (B.A.P. 9th Cir. 2006).

                                           3
investigation, Holcomb clearly knew that the information regarding his financial

condition was important to New Castle,10 and it was not at all obvious that

Holcomb was in great financial difficulty.11

      AFFIRMED.

      10
           See In re Lansford, 822 F.2d at 904.
      11
        In fact, there were no real difficulties with a prior transaction. Cf. Kentile
Floors, Inc. v. Winham, 440 F.2d 1128, 1131–32 (9th Cir. 1971) (more
investigation needed when creditor had a great deal of information suggesting
debtor distress).

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