A creditor lost a § 523(a)(2)(B) nondischargeability complaint and then had to pay the debtor $70,000 in attorney fees under §523(d) because the nondischargability claim was not "substantially justified."
The creditor had purchased the claim from a mortgage originator and claimed the debtor had lied in his financial statement. But, there was no evidence that the original creditor had actually relied on the statements. Also, the claim failed under the California antideficiency laws (it was for a sold-out second deed of trust). The Court granted judgment in favor of the Defendant on the antideficiency law and denied the request for fees. After a motion to reconsider was filed, the BK Court reconsidered the request for fees and awarded fees.
A very good analysis by the Court on the shifting of the burdens.
In re Montano 12-1579 (9th Cir. 2013) Published
No comments:
Post a Comment