Court Opinion

ID: 6499351
Source: CourtListenerOpinion
Date Created: 2022-07-12 16:00:30.019451+00
Date Added: 2024-06-11T09:12:20.884914
License: Public Domain

Appellate Case: 22-1005            Document: 010110709338     Date Filed: 07/12/2022   Page: 1
                                                                                       FILED
                                                                           United States Court of Appeals
                           UNITED STATES COURT OF APPEALS                          Tenth Circuit

                                 FOR THE TENTH CIRCUIT                             July 12, 2022
                             _________________________________
                                                                              Christopher M. Wolpert
                                                                                  Clerk of Court
  In re: STEVEN W. BLOOM,

         Debtor.

  ------------------------------

  GLENCOVE HOLDINGS, LLC,

         Plaintiff - Appellee,

  v.                                                               No. 22-1005
                                                               (BAP No. 20-043-CO)
  STEVEN W. BLOOM,                                          (Bankruptcy Appellate Panel)

         Defendant - Appellant.
                        _________________________________

                                 ORDER AND JUDGMENT*
                             _________________________________

 Before HARTZ, BALDOCK, and McHUGH, Circuit Judges.
                   _________________________________

        Steven W. Bloom, an aircraft sales consultant and the debtor in this matter,

 appeals from a United States Bankruptcy Appellate Panel of the Tenth Circuit

 (“BAP”) opinion affirming the bankruptcy court’s decision allowing Glencove

        *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
 ordered submitted without oral argument. This order and judgment is not binding
 precedent, except under the doctrines of law of the case, res judicata, and collateral
 estoppel. It may be cited, however, for its persuasive value consistent with
 Federal Rule of Appellate Procedure 32.1 and Tenth Circuit Rule 32.1.
Appellate Case: 22-1005      Document: 010110709338        Date Filed: 07/12/2022   Page: 2

 Holdings, LLC’s (“Glencove”) claim as a valid debt against Mr. Bloom and holding

 the debt was not dischargeable. Mr. Bloom contends the bankruptcy court erred by

 holding Colorado’s economic loss rule did not bar Glencove’s tort claims and

 improperly concluding the debt was excepted from discharge under 11 U.S.C.

 § 523(a)(2)(A) and (a)(6). Exercising jurisdiction under 28 U.S.C. § 158(d), we

 affirm the bankruptcy court’s decision.1

                                   I.    BACKGROUND

        Mr. Bloom is the sole member and manager of Bloom Business Jets, LLC

 (“BBJ”). BBJ, through Mr. Bloom, entered an Agent Agreement to represent Jennifer

 and Huw Pierce (the “Pierces”) in their effort to purchase a pre-owned private jet

 through Glencove, a limited liability company owned and managed by the Pierces.2

 As part of the Agent Agreement, BBJ agreed to locate a private jet and act as

 Glencove’s agent in the purchase of the jet, and Glencove agreed to pay BBJ a fee for

 its services. Colorado law governs the Agent Agreement. At all relevant times,

 Mr. Bloom acted on behalf of BBJ to represent Glencove in the purchase of the

 private jet.

        The parties identified a private jet Glencove was interested in purchasing,

 Mr. Bloom recommended a target price of $3,600,000 for the jet, and Glencove

        1
            Judge Hartz joins this order and judgment, except for Part II.B.2.
        2
        The Pierces formed Glencove the day after the Agent Agreement was
 executed, but the parties agree on appeal that BBJ and Glencove were the parties to
 the Agent Agreement.
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 agreed. With Glencove’s authorization, Mr. Bloom began negotiating with the seller,

 beginning with an offer of about $3,300,000. After receiving Glencove’s initial offer,

 the seller counteroffered with a price of $3,400,000, which was significantly lower

 than Mr. Bloom expected. At this point, Mr. Bloom began lying to Glencove. He told

 Glencove the seller counteroffered to sell the jet for $3,775,000. In response,

 Glencove authorized a counteroffer of $3,550,000. Mr. Bloom then represented to

 Glencove that he was negotiating with the seller to sell the jet for $3,550,000. This,

 of course, was not true because the seller had already counteroffered to sell the jet for

 less than that amount. In the end, Glencove agreed to pay $3,550,000 for the jet.

 Meanwhile, Mr. Bloom negotiated with the seller, and they agreed to a sale price of

 $3,300,000. Mr. Bloom did not tell Glencove about these negotiations or the lower

 sale price.

        Before finalizing the purchase, Haggan Aviation (“Haggan”) conducted an

 inspection of the jet and found more than $67,000 worth of airworthy items that

 needed to be repaired. Glencove signed a conditional acceptance, agreeing to accept

 the jet subject to the seller fixing the airworthy items. The seller initially refused to

 perform any of the repairs and would only sell the jet in as-is condition. Mr. Bloom

 then convinced Haggan to reduce the number of airworthy items that needed to be

 repaired, which significantly reduced the total estimate. Mr. Bloom did not apprise

 Glencove of any of these developments. Instead, he represented that the seller would

 pay for all the repairs in the original estimate even though only a portion of those

 repairs were completed prior to the sale.

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       Mr. Bloom then created Big Horn Exploration, LLC (“Big Horn”), which

 purchased the jet from the seller for $3,300,000. Immediately thereafter, Big Horn

 sold the jet to Glencove for $3,550,000. As a result of Mr. Bloom’s lies, Glencove

 paid an additional $250,000 for the jet, and that amount was distributed between

 Mr. Bloom’s attorney, an aircraft finance company, and BBJ. The bankruptcy court

 did not find Mr. Bloom personally received any of the money.

       Glencove then hired BBJ to manage the jet’s operations. BBJ eventually filed

 a state court lawsuit against Glencove for a dispute arising out of the management

 agreement. Discovery in that matter revealed the fraud committed during the sale,

 and Glencove brought counterclaims against Mr. Bloom and others who were

 involved. Mr. Bloom filed for bankruptcy, and Glencove brought an adversary

 proceeding asserting its tort claims as a debt against Mr. Bloom. We refer to the debt

 Glencove asserted as the Glencove Claim. In the adversary proceeding, Glencove

 brought claims for the nondischargeability of the Glencove Claim.

        The bankruptcy court held a trial on the tort claims and allowed the Glencove

 Claim in the amount of $458,470 for fraud by false representation and fraudulent

 concealment. The bankruptcy court also concluded the Glencove Claim was not

 dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) and (a)(6). Mr. Bloom appealed

 to the BAP, arguing in part that (1) the bankruptcy court should not have allowed the

 Glencove Claim because Colorado’s economic loss rule bars the fraud and fraudulent

 concealment claims and (2) the Glencove Claim is dischargeable. The BAP affirmed

 the bankruptcy court’s ruling. Mr. Bloom now appeals to this court.

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                                    II.     DISCUSSION

       When a party appeals a decision by the BAP, “we treat the BAP as a

 subordinate appellate tribunal whose rulings are not entitled to any deference,” so

 “we review only the [b]ankruptcy [c]ourt’s decision.” In re Tung Thanh Nguyen, 783

 F.3d 769, 772 (10th Cir. 2015) (quotation marks omitted). “We review matters of law

 de novo, and we review factual findings made by the bankruptcy court for clear

 error.” Id. (quotation marks omitted).

       On appeal, Mr. Bloom contends the bankruptcy court erred when it determined

 the Glencove Claim was valid. He says Colorado’s economic loss rule bars Glencove

 from recovering on its fraud and fraudulent concealment claims against him. He also

 argues the bankruptcy court erred by concluding the debt is not dischargeable. We

 address each argument in turn.

                               A.         Economic Loss Rule

       Mr. Bloom argues primarily that the bankruptcy court erred by allowing the

 Glencove Claim because Colorado’s economic loss rule prevents Glencove from

 recovering on its state fraud and fraudulent concealment claims against him. See

 Grogan v. Garner, 498 U.S. 279, 183 (1991) (“The validity of a creditor’s claim is

 determined by rules of state law.”). Whether the economic loss rule bars a tort claim

 “is an issue of law we review de novo.” Haynes Trane Serv. Agency, Inc. v. Am.

 Standard, Inc., 573 F.3d 947, 962 (10th Cir. 2009) (quotation marks omitted).

       Colorado’s economic loss rule provides that “a party suffering only economic

 loss from the breach of an express or implied contractual duty may not assert a tort

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 claim for such a breach absent an independent duty of care under tort law.” Alma v.

 AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000). To determine whether the

 economic loss rule bars a tort claim in Colorado, courts consider “the source of the

 duty that forms the basis of the action.” Id. at 1262. If the contract is the source of the

 duty, then the economic loss rule bars tort claims for purely economic loss. Id.

 Otherwise, the economic loss rule does not bar the claim. Id. The Colorado Supreme

 Court also explained, “certain common law claims that sound in tort and are

 expressly designed to remedy economic loss,” such as common law fraud or

 negligent misrepresentation, “may exist independent of a breach of contract claim.”

 Id. at 1263. Such claims are outside the scope of the economic loss rule. Id.

        After Alma, some divisions of the Colorado Court of Appeals held the

 economic loss rule barred post-contractual fraud claims related to the performance of

 the contract. See Top Rail Ranch Estates, LLC v. Walker, 327 P.3d 321, 328–29

 (Colo. App. 2014); Former TCHR, LLC v. First Hand Mgmt. LLC, 317 P.3d 1226,

 1232–33 (Colo. App. 2012); Hamon Contractors, Inc. v. Carter & Burgess, Inc., 229

 P.3d 282, 291–95 (Colo. App. 2009). These divisions reasoned that all contracts

 contain the implied covenant of good faith and fair dealing, and the implied covenant

 of good faith and fair dealing includes the duty not to commit fraud. See Top Rail

 Ranch Estates, 327 P.3d at 329; Former TCHR, 317 P.3d at 1233; Hamon

 Contractors, 229 P.3d at 292–93. Accordingly, the courts concluded the duty to not

 commit post-contractual fraud did not arise independent of the contract. See Top Rail

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 Ranch Estates, 327 P.3d at 329; Former TCHR, 317 P.3d at 1233; Hamon

 Contractors, 229 P.3d at 293–95.

         Recently, however, the Colorado Supreme Court suggested this is not the

 proper understanding of the economic loss rule. In Bermel v. BlueRadios, Inc., the

 Colorado Supreme Court explained it had previously applied the economic loss rule

 only “to bar common law tort claims of negligence or negligent misrepresentation.”

 440 P.3d 1150, 1155 (Colo. 2019). The Bermel court also clarified in a footnote that

 “the economic loss rule generally should not be available to shield intentional

 tortfeasors from liability for misconduct that happens also to breach a contractual

 obligation.” Id. at 1154 n.6

         Mr. Bloom asks us to apply the analysis in Top Rail Ranch Estates, Former

 TCHR, and Hamon Contractors, and to ignore the contrary language in Bermel.

 Accordingly, Mr. Bloom contends the economic loss rule bars Glencove’s fraud by

 false representations and fraudulent concealment claims against him because (1) he is

 a member of BBJ who acted on behalf of BBJ, an entity that had a contractual

 relationship with Glencove when the fraud occurred; (2) the Agent Agreement

 included the implied covenant of good faith and fair dealing, which required BBJ not

 to act fraudulently; and (3) Glencove experienced only economic damages. Thus,

 according to Mr. Bloom, these claims arise from a breach of an implied contractual

 duty that resulted only in economic loss, which bars Glencove from recovering in

 tort.

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       As an initial matter, we note Mr. Bloom does not personally have a contractual

 relationship with Glencove because BBJ, not Mr. Bloom, entered the agreement with

 Glencove. This means Mr. Bloom did not owe any contractual duties to Glencove,

 and Glencove cannot bring any contract claims against Mr. Bloom. See Rhino Fund,

 LLLP v. Hutchins, 215 P.3d 1186, 1195 (Colo. App. 2008) (holding the economic

 loss rule does not apply because the plaintiff had not entered into the contract and

 had no contractual remedies). As such, the economic loss rule would not normally

 apply to bar any tort claims against Mr. Bloom. Id. However, “[w]hen the economic

 loss rule bars a claim against a corporate entity, it may also bar claims against that

 entity’s officers and directors, even if the officers and directors were not parties to

 the contract at issue,” when “the officers’ and directors’ duties, rights, obligations, or

 liabilities arise from the contract between the corporate entity and another.” Former

 TCHR, 317 P.3d at 1232; see also Parr v. Triple L & J Corp., 107 P.3d 1104, 1108

 (Colo. App. 2004) (applying the economic loss rule to the sole shareholder of the

 corporate party to the contract). Because Mr. Bloom is the sole member of BBJ, we

 must therefore determine the source of Mr. Bloom’s duty not to act fraudulently. For

 the reasons below, we hold the duty not to commit fraud arises from the common

 law, independent of the Agent Agreement.

       As a matter of state law, we must attempt to determine how the Colorado

 Supreme Court would rule on this issue. Wade v. EMCASCO Ins. Co., 483 F.3d 657,

                                             8
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 666 (10th Cir. 2007).3 As noted, the Colorado Supreme Court looks to whether the

 tort claim arises from a duty independent of the contract, and if not, then the

 economic loss rule applies. Alma, 10 P.3d at 1263. As an example, the Colorado

 Supreme Court said intentional tort claims such as common law fraud generally arise

 from duties independent of contracts and are outside the economic loss rule. Id.;

 Bermel, 440 P.3d at 1154 n.6; but see Dream Finders Homes LLC v. Weyerhaeuser

 NR Co., 506 P.3d 108, 124–26 (Colo. App. 2021) (concluding the economic loss rule

 bars a fraud claim where the contract expressly waives the damages sought via the

 fraud claim). The common law fraud and fraudulent concealment claims are both tort

 claims that arise independent of a contract, so they would not be barred by the

 economic loss rule.

       Mr. Bloom does not agree that the Bermel footnote limiting the application of

 the economic loss rule is binding. Instead, he contends the footnote is only dicta and

 urges us to rely on the pre-Bermel Colorado Court of Appeals opinions that held the

 economic loss rule bars post-contractual fraud claims. Even if the footnote in Bermel

       3
          Mr. Bloom moved to certify the question of whether the economic loss rule
 bars claims for intentional torts to the Colorado Supreme Court. We have discretion
 to certify a question of state law to a state supreme court when state law permits and
 the question “(1) may be determinative of the case at hand and (2) is sufficiently
 novel that we feel uncomfortable attempting to decide it without further guidance.”
 Pino v. United States, 507 F.3d 1233, 1236 (10th Cir. 2007). Here, the Colorado
 Supreme Court has provided guidance about how the economic loss rule applies in
 Alma v. AZCO Constr., Inc., 10 P.3d 1256 (Colo. 2000), and more recently in Bermel
 v. BlueRadios, Inc., 440 P.3d 1150 (Colo. 2019). Taking these cases into
 consideration, this question is not so novel that we feel uncomfortable deciding it
 without further guidance. Therefore, we deny the motion to certify.
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  discussing the application of the economic loss doctrine to intentional torts is dicta,

  see Dream Finders, 506 P.3d at 122 (referring to the footnote as “dicta”), we may

  consider Colorado Supreme Court dicta because it “represents the court’s own

  comment on the development of Colorado law,” Valley Forge Ins. Co. v. Health Care

  Mgmt. Partners, Ltd., 616 F.3d 1086, 1093 (10th Cir. 2010).

        Importantly, Mr. Bloom’s interpretation of the economic loss rule directly

  conflicts with the Colorado Supreme Court’s comment on the development of

  Colorado law. In Mr. Bloom’s view, all post-contractual fraud claims would be

  barred by the economic loss rule because all contracts in Colorado include the

  implied covenant of good faith and fair dealing. See Colo. Rev. Stat. § 4-1-304

  (“Every contract or duty within this title imposes an obligation of good faith in its

  performance and enforcement.”). Thus, the economic loss rule would always be

  available to shield intentional tortfeasors from liability for post-contract misconduct

  that breaches the implied covenant of good faith and fair dealing. The Colorado

  Supreme Court, however, explained “the economic loss rule generally should not be

  available to shield intentional tortfeasors from liability for misconduct that happens

  also to breach a contractual obligation.” Bermel, 440 P.3d at 1154 n.6. This language

  is not up for debate; it clearly suggests the Colorado Supreme Court would disagree

  with Mr. Bloom’s understanding of the economic loss rule.

        In applying the Colorado Supreme Court’s understanding of the economic loss

  rule, as we must, we conclude the economic loss rule does not bar Glencove’s fraud

  and fraudulent concealment claims against Mr. Bloom. The claims are both

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  intentional torts that arise from the common law—that is, they arise from duties

  independent of the Agent Agreement. Alma, 10 P.3d at 1263. Without an express

  waiver of damages from fraud, the economic loss rule does not bar these intentional

  tort claims. See id.; Dream Finders, 506 P.3d at 122 (recognizing Bermel did not

  create a bright line rule prohibiting the economic loss rule from barring all

  intentional torts). Here, there is no such waiver within the Agent Agreement. Thus,

  the bankruptcy court did not err by holding Mr. Bloom’s duty not to commit fraud

  arose independent of the Agent Agreement and allowing the Glencove Claim as a

  valid debt.

                              B.     Exceptions to Discharge
        Having concluded the bankruptcy court did not err in allowing the Glencove

  Claim as a valid debt, we turn now to the dischargeability of that debt. See In re

  Thompson, 555 B.R. 1, 8 (B.A.P. 10th Cir. 2016) (explaining a court must first

  determine whether the debt is valid then determine whether it is dischargeable). The

  Bankruptcy Code was enacted to give debtors a fresh start. In re Merrill, 252 B.R.

  497, 503 (B.A.P. 10th Cir. 2000). Accordingly, “most debts are dischargeable in

  bankruptcy.” Id. However, 11 U.S.C. § 523 lists the circumstances in which a debt is

  not dischargeable. The bankruptcy court held the Glencove Claim was excepted from

  discharge under § 523(a)(2)(A) and (a)(6). Mr. Bloom argues this was in error.

        “We review a bankruptcy court’s construction of the Bankruptcy Code de

  novo.” In re McDaniel, 973 F.3d 1083, 1092 (10th Cir. 2020) (quotation marks

  omitted). We review factual findings related to the dischargeability of a debt for clear

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  error. In re Young, 91 F.3d 1367, 1370 (10th Cir. 1996). To promote the policy of

  providing debtors with a fresh start, “exceptions to discharge are to be narrowly

  construed, and . . . doubt is to be resolved in the debtor’s favor.” In re Kaspar, 125

  F.3d 1358, 1361 (10th Cir. 1997).

  1.     11 U.S.C. § 523(a)(2)(A)
         Section 523(a)(2)(A) excepts from discharge a debt

         for money, property, services, or an extension, renewal, or refinancing of
         credit, 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.
  We have held a claim is not dischargeable pursuant to this subsection when (1) “[t]he

  debtor made a false representation,” (2) “the debtor made the representation with the

  intent to deceive the creditor,” (3) “the creditor relied on the representation,” (4) “the

  creditor’s reliance was reasonable,” and (5) “the debtor’s representation caused the

  creditor to sustain a loss.” Young, 91 F.3d at 1373. Mr. Bloom contends the language of

  the statute also requires the debtor to have personally obtained money, property, services,

  or credit from the false pretenses, false representation, or actual fraud. Mr. Bloom further

  argues the bankruptcy court’s findings do not satisfy that requirement because the court

  did not find he personally obtained money from the fraud. We begin by addressing

  Mr. Bloom’s argument.

         Courts have identified three views about whether the debtor must have

  personally obtained the money, property, or services to except the debt from

  discharge under § 523(a)(2)(A). In re Wade, 43 B.R. 976, 980–82 (Bankr. D. Colo.

  1984), abrogated on other grounds by Cohen v. de la Cruz, 523 U.S. 213 (1998), as
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  recognized by In re Denbleyker, 251 B.R. 891 (2000). First, some courts have

  suggested the debtor must personally receive the money, property, or services for the

  debt to be excepted from discharge under § 523(a)(2)(A). Id. at 980–81 (citing

  Rudstrom v. Sheridan, 142 N.W. 313, 314 (Minn. 1913)). However, we have found

  no courts that applied this narrow interpretation of the statute.4 See In re Ritz, 567

  B.R. 715, 763 (Bankr. S.D. Tex. 2017) (“There are no circuit courts that have

  adopted the first view.”). Second, some courts apply the “receipt of benefits” test

  which requires the debtor to have received a benefit from the money, property,

  services, or credit to render the debt nondischargeable. Wade, 43 B.R. at 981 (citing

  Hyland v. Finch, 178 N.Y.S. 114, 115 (1919)). Third, some courts have held that the

  debtor need not have personally obtained or benefited from the money or property

  obtained by fraud. Id. (citing In re Kunkle, 40 F.2d 563, 563–64 (E.D. Mich. 1930)).

  Mr. Bloom argues we should adopt the first view.

        Importantly, the Supreme Court has provided some guidance for interpreting

  § 523(a)(2)(A) in Cohen v. de la Cruz, 523 U.S. 213 (1998). There, the Supreme

  Court considered whether § 523(a)(2)(A) bars the discharge of treble damages

  awarded against the debtor for fraud or whether the exception to discharge is limited

        4
          Courts have determined this view in Rudstrom v. Sheridan, 142 N.W. 313,
  314 (Minn. 1913), was merely dicta and was not the holding of the court. See, e.g., In
  re Bilzerian, 100 F.3d 886, 890 n.3 (11th Cir. 1996); In re Ward, 115 B.R. 532, 538
  (W.D. Mich. 1990); In re Wade, 43 B.R. 976, 980–81 (Bankr. D. Colo. 1984),
  abrogated on other grounds by Cohen v. de la Cruz, 523 U.S. 213 (1998), as
  recognized by In re Denbleyker, 251 B.R. 891 (2000).
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  to the value of the money, property, services, or credit the debtor actually obtained

  through fraud. Id. at 215. In analyzing the statute, the Court explained “the phrase ‘to

  the extent obtained by’ . . . does not impose any limitation on the extent to which

  ‘any debt’ arising from fraud is excepted from discharge.” Id. at 218 (quoting 11

  U.S.C. § 523(a)(2)(A)). The Cohen Court held § 523(a)(2)(A) prevents the discharge

  of all liability arising from the fraud, including treble damages which do not

  represent money the debtor obtained. Id. at 215.

        Prior to the Cohen decision, the circuit courts that reached the issue required

  the debtor to have received a benefit from the fraud to render the claim

  nondischargeable under the subsection. Muegler v. Bening, 413 F.3d 980, 983 (9th

  Cir. 2005) (collecting pre-Cohen cases applying the receipt-of-benefits requirement

  from the Ninth, Eleventh, and Fifth Circuits). With the language in Cohen, however,

  the Supreme Court applied a broader interpretation of § 523(a)(2)(A) such that the

  “obtained by” language amounts to a causation requirement. Denbleyker, 251 B.R. at

  896–97 (concluding the Cohen analysis treated the phrase “obtained by” as if it was

  referring simply to causation); see also Husky Int’l Elecs., Inc. v. Ritz, 578 U.S. 356,

  365 (2016) (holding any debts traceable to a fraudulent conveyance is

  nondischargeable under § 523(a)(2)(A) even though the debtor did not receive the

  funds in the fraudulent conveyance). That is, it requires only that the debt be

  traceable to fraud. Husky Int’l Elecs., 578 U.S. at 365; see also Denbleyker, 251 B.R.

  at 896–97.

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        Since Cohen, an increasing number of courts have applied the third view—that

  the debtor need not have personally obtained or benefited from the money or property

  obtained by fraud. Denbleyker, 251 B.R. at 897–99; Muegler, 413 F.3d at 983–84

  (holding the receipt-of-benefits element under § 523(a)(2)(A) no longer applies after

  Cohen); In re M.M. Winkler & Assocs., 239 F.3d 746, 749–51 (5th Cir. 2001)

  (considering Supreme Court precedent and clarifying that § 523(a)(2)(A) does not

  require a “receipt of benefit” to except a debt from discharge); In re Pleasants, 219

  F.3d 372, 375 (4th Cir. 2000) (applying Cohen and holding § 523(a)(2)(A) applies

  even when “no portion of a creditor’s claim was literally transferred to the fraudulent

  debtor”); In re Speisman, 495 B.R. 398, 403 (Bankr. N.D. Ill. 2013) (collecting cases

  holding § 523(a)(2)(A) does not require the debtor to have received a benefit); cf. In

  re Rountree, 330 B.R. 166, 170–75 (E.D. Va. 2004) (holding the creditor must have

  lost some money, property, or services as a result of the fraud to satisfy the

  requirements of § 523(a)(2)(A)). We have yet to decide which approach applies.

        With the broad interpretation in Cohen, the Supreme Court has suggested

  § 523(a)(2)(A) does not require that the debtor personally obtain money, property, or

  services to render the debt nondischargeable. This leaves open the question of

  whether the debtor needs to have received a benefit from the fraud to be excepted

  from discharge or whether the creditor must show only that the debt arose from the

  debtor’s fraud. We need not decide this question, however, because even if we apply

  the receipt-of-benefits requirement, the bankruptcy court’s findings support the

  nondischargeability of the Glencove Claim under § 523(a)(2)(A). Specifically, the

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  bankruptcy court found Mr. Bloom is the sole member of BBJ and BBJ obtained

  money from Mr. Bloom’s fraud. Mr. Bloom thus received a benefit from the fraud.

  See In re Grasso, 497 B.R. 434, 443 (Bankr. E.D. Pa. 2013) (concluding the debtor

  received a benefit from the alleged fraud because he was a managing member and

  held an ownership interest in the entity that received the proceeds of the loan); In re

  Holwerda, 29 B.R. 486, 489 (Bankr. M.D. Fla. 1983) (explaining the defendant

  received a benefit from the fraud because he was a principal of the corporation that

  received the loan). Therefore, even if the receipt-of-benefits requirement applies, that

  requirement has been met.

        Moreover, the bankruptcy court did not commit clear error by finding the

  Glencove Claim meets the other elements of § 523(a)(2)(A) because there was

  evidence in the record supporting those findings. See Young, 91 F.3d at 1373 (listing

  the elements required for nondischargeability under § 523(a)(2)(A)). Specifically,

  there was evidence that Mr. Bloom made a false representation with the intent to

  deceive Glencove when he lied about the negotiations with the seller and the amount

  of the sale price. There was also evidence that BBJ, through Mr. Bloom, acted as an

  agent for Glencove pursuant to the Agent Agreement, and Glencove reasonably relied

  on its agent’s representations about the negotiations. Evidence also supported a

  finding that Mr. Bloom’s lies caused Glencove to sustain a loss of at least the

  difference between the seller’s price and the price Glencove agreed to pay as well as

  the difference between the amount of repairs that Glencove believed would be

  completed and the amount of repairs that were completed. Thus, Glencove has shown

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  the necessary elements, and the bankruptcy court did not err by holding the Glencove

  Claim was nondischargeable under § 523(a)(2)(A).

  2.    11 U.S.C. § 523(a)(6)
        The bankruptcy court also concluded the Glencove Claim was not

  dischargeable under 11 U.S.C. § 523(a)(6). Section 523(a)(6) excepts from discharge

  a debt “for willful and malicious injury by the debtor to another entity or to the

  property of another entity.” Mr. Bloom argues this subsection does not apply because

  (1) § 523(a)(6) cannot apply when the more specific exception to discharge in

  § 523(a)(2)(A) applies and (2) the Glencove Claim does not meet the willful-injury or

  malicious-injury requirements for nondischargeability under § 523(a)(6).

        While there are meaningful distinctions between § 523(a)(2)(A) and

  § 523(a)(6), a debt that is nondischargeable under one subsection may also be

  nondischargeable under the other so long as all the requirements are met under both

  subsections. Husky Int’l Elecs., 578 U.S. at 363–64. Thus, to determine

  nondischargeability under § 523(a)(6) we must review whether Mr. Bloom caused

  both a willful and malicious injury. See In re Moore, 357 F.3d 1125, 1129 (10th Cir.

  2004) (noting nondischargeability under § 523(a)(6) requires both willful injury and

  malicious injury).

        “Willful injury may be established by direct evidence of specific intent to

  harm a creditor or the creditor’s property.” In re Longley, 235 B.R. 651, 657 (B.A.P.

  10th Cir. 1999). The Supreme Court suggested the willfulness requirement is more

  akin to intentional torts than negligent or reckless torts or a “knowing breach of

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  contract.” Kawaauhau v. Geiger, 523 U.S. 57, 61–62 (1998). Mr. Bloom, therefore,

  argues the willful-injury requirement cannot be met because Colorado’s economic

  loss rule bars any tort claims against him arising out of the Agent Agreement. We

  already concluded Colorado’s economic loss rule does not apply, so Mr. Bloom’s

  argument against the willful-injury finding cannot succeed. Moreover, the bankruptcy

  court did not clearly err by finding a willful injury because there is evidence that

  Mr. Bloom deceived Glencove with the intent to make Glencove pay an extra

  $250,000 for the private jet.

        Next, malicious injury requires “evidence of the debtor’s motives.” In re

  Smith, 618 B.R. 901, 919 (B.A.P. 10th Cir. 2020) (quotation marks omitted). To be

  malicious, the debtor must have “acted with a culpable state of mind vis-à-vis the

  actual injury caused the creditor.” Id. (quotation marks omitted). The malicious

  element requires that the action be “wrongful and without just cause or excuse.” Id.

  Mr. Bloom, however, argues there is no malicious injury here because there is no

  evidence that he had personal animus against Glencove or the Pierces. This argument

  was not raised before the bankruptcy court or the BAP, so the argument is forfeited,

  and we would normally decline to address it. In re Williams, 49 F. App’x 845, 849

  (10th Cir. 2002) (unpublished) (applying the preservation rule to a bankruptcy

  appeal); see also United States v. Leffler, 942 F.3d 1192, 1196 (10th Cir. 2019)

  (describing the principles of forfeiture and waiver). Even considering it on appeal,

  however, Mr. Bloom cannot succeed because personal animus is not a requirement

  for malicious injury. Smith, 618 B.R. at 919 (describing the requirements for

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  malicious injury); see also Ball v. A.O. Smith Corp., 451 F.3d 66, 69 (2d Cir. 2006)

  (explaining malicious injury means “wrongful and without just cause or excuse, even

  in the absence of personal hatred, spite, or ill-will” (quoting In re Stelluti, 94 F.3d 84,

  87 (2d Cir. 1996))).

         The bankruptcy court did not commit clear error in finding malicious injury

  because evidence in the record suggests Mr. Bloom deceived Glencove in order to

  benefit himself and his colleagues through BBJ. This does not constitute a just cause

  or excuse and supports a finding that Mr. Bloom “acted with a culpable state of mind

  vis-à-vis the actual injury caused” to Glencove. Smith, 618 B.R. at 919. Therefore,

  the bankruptcy court did not err by concluding the Glencove Claim was

  nondischargeable under § 523(a)(6).

                                   III.   CONCLUSION
         Because the bankruptcy court did not err by allowing the Glencove Claim and

  concluding it was not dischargeable, we AFFIRM the bankruptcy court’s decision in

  this matter. We also DENY Mr. Bloom’s Motion for Certification of Question of

  State Law.

                                               Entered for the Court

                                               Carolyn B. McHugh
                                               Circuit Judge

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