Court Opinion

ID: 9896264
Source: CourtListenerOpinion
Date Created: 2023-11-09 21:00:57.195541+00
Date Added: 2024-06-11T09:14:31.716546
License: Public Domain

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                                            UNPUBLISHED

                               UNITED STATES COURT OF APPEALS
                                   FOR THE FOURTH CIRCUIT

                                              No. 22-2240

        KWANG YEALL CHOI,

                            Plaintiff - Appellant,

                     v.

        CHONG MIN HYON,

                            Debtor - Appellee.

        Appeal from the United States District Court for the Eastern District of Virginia, at
        Alexandria. Claude M. Hilton, Senior District Judge. (1:22-cv-00552-CMH-IDD)

        Submitted: October 16, 2023                                  Decided: November 8, 2023

        Before GREGORY, AGEE, and WYNN, Circuit Judges.

        Affirmed by unpublished per curiam opinion.

        ON BRIEF: (Michael) Hyunkweon Ryu, RYU & RYU, PLC, Vienna, Virginia, for
        Appellant. Weon Geun Kim, WEON G. KIM LAW OFFICE, McLean, Virginia, for
        Appellee.

        Unpublished opinions are not binding precedent in this circuit.
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        PER CURIAM:

               Kwang Yeall Choi appeals the district court’s orders affirming the bankruptcy

        court’s judgment and denying reconsideration. On appeal, Choi challenges the court’s

        rejection of his claims that Chong Min Hyon’s debt to him is nondischargeable under 11

        U.S.C. § 523(a)(2)(A), (6). Finding no reversible error, we affirm.

               “In reviewing the judgment of a district court sitting in review of a bankruptcy court,

        we apply the same standard of review that was applied by the district court.” Copley v.

        United States, 959 F.3d 118, 121 (4th Cir. 2020). Thus, “we review the bankruptcy court’s

        legal conclusions de novo, its factual findings for clear error, and any discretionary

        decisions for abuse of discretion.” Id.

               The Bankruptcy Code provides that a debtor may not receive a discharge of any

        debt for services “to the extent obtained by—false pretenses, a false representation, or

        actual fraud, other than a statement respecting the debtor’s or an insider’s financial

        condition.” 11 U.S.C. § 523(a)(2)(A). A creditor is “required to prove by a preponderance

        of the evidence that the [debtor] did engage in such misconduct.” In re Biondo, 180 F.3d

        126, 134 (4th Cir. 1999). We have held that a creditor “must prove four elements: (1) a

        fraudulent misrepresentation; (2) that induces another to act or refrain from acting;

        (3) causing harm to the plaintiff; and (4) the plaintiff’s justifiable reliance on the

        misrepresentation.” Id.

               Choi is correct that “[t]he term actual fraud in § 523(a)(2)(A) encompasses forms

        of fraud, like fraudulent conveyance schemes, that can be effected without a false

        representation.” Husky Int’l Elecs., Inc. v. Ritz, 578 U.S. 355, 359 (2016) (internal

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        quotation marks omitted). The Supreme Court explained that “[t]he word actual has a

        simple meaning in the context of common-law fraud: It denotes any fraud that involves

        moral turpitude or intentional wrong.” Id. at 360 (cleaned up). Thus, Hyon’s transfer of

        the $20,000 from the Interstate Arch bank account could qualify as a fraudulent

        conveyance. But we discern no clear error in the bankruptcy court’s finding that Hyon did

        not act with fraudulent intent. See Biondo, 180 F.3d at 134 (“[S]tate of mind is a question

        of fact to be determined in the first instance by the bankruptcy court that can be overturned

        on appeal only if the finding is clearly erroneous.”).

               Turning to Choi’s other claim on appeal, Section 523(a)(6) of the Bankruptcy Code

        excepts from discharge any debt attributable to “willful and malicious injury by the debtor

        to another entity or to the property of another entity.” 11 U.S.C. § 523(a)(6). The party

        challenging the dischargeability of a debt bears the burden of proving by a preponderance

        of the evidence that the debt is nondischargeable. Grogan v. Garner, 498 U.S. 279, 291

        (1991). The Supreme Court has held that “[t]he word ‘willful’ in (a)(6) modifies the word

        ‘injury,’ indicating that nondischargeability takes a deliberate or intentional injury, not

        merely a deliberate or intentional act that leads to injury.” Kawaauhau v. Geiger, 523 U.S.

        57, 61 (1998). Thus, “§ 523(a)(6) applies only to acts done with the actual intent to cause

        injury.” In re Duncan, 448 F.3d 725, 729 (4th Cir. 2006) (cleaned up). “[T]he mere fact

        that a debtor engaged in an intentional act does not necessarily mean that he acted willfully

        and maliciously for purposes of § 523(a)(6).” Id.

               The parties vigorously dispute whether Choi properly made the arguments he raises

        on appeal before the bankruptcy court and whether unpaid wages qualify as a financial

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        injury or property interest. We may affirm “on any ground apparent on the record.”

        Moore v. Frazier, 941 F.3d 717, 725 (4th Cir. 2019). And we conclude that the bankruptcy

        court’s factual findings show that Hyon did not willfully or maliciously cause Choi injury.

        See In re Stanley, 66 F.3d 664, 667 (4th Cir. 1995) (defining malicious in this context to

        be an “act done deliberately and intentionally in knowing disregard of the rights of another”

        (internal quotation marks omitted)). Thus, we conclude that the bankruptcy court properly

        rejected Choi’s arguments that Hyon’s debt to him is nondischargeable in bankruptcy.

               Accordingly, we affirm the district court’s orders affirming the bankruptcy court’s

        judgment. We dispense with oral argument because the facts and legal contentions are

        adequately presented in the materials before this court and argument would not aid the

        decisional process.

                                                                                        AFFIRMED

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