In re Cardwell, 083112 FED5, 12-40070

Docket Nº:12-40070
Opinion Judge:PER CURIAM:
Party Name:In the Matter of: DONALD LEE CARDWELL, Debtor v. BILL GURLEY, Appellee DONALD LEE CARDWELL, Appellant
Judge Panel:Before REAVLEY, JOLLY, and DAVIS, Circuit Judges.
Case Date:August 31, 2012
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

In the Matter of: DONALD LEE CARDWELL, Debtor




No. 12-40070

United States Court of Appeals, Fifth Circuit

August 31, 2012

Appeal from the United States District Court for the Eastern District of Texas USDC No. 4:10-CV-706.

Before REAVLEY, JOLLY, and DAVIS, Circuit Judges.


Donald Lee Cardwell challenges the district court's summary judgment affirming the bankruptcy court's determination that his debt to Bill Gurley–arising out of a state-court judgment–was non-dischargeable under 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(4). Cardwell contends the district court erred because: he did not waive his arguments regarding collateral estoppel; and, the state court's findings of fact and conclusions of law (FOFCOL) did not support the non-dischargeability of the debt.

Cardwell and Gurley were business partners and co-owners of 121 Ventures, LLC, which was involved in, inter alia, real-estate development. Cardwell was the managing member and was trusted by Gurley to handle all of the LLC's day-to-day business. Cardwell made misrepresentations to Gurley in order to induce him to consent to various transactions that ultimately injured Gurley to the benefit of Cardwell. Gurley filed an action in state court and received a judgment for approximately $370, 830. Cardwell subsequently filed for bankruptcy and Gurley filed this action seeking to exempt the judgment debt from discharge. Giving preclusive effect to the FOFCOL of the state court, the bankruptcy court concluded the debt was non-dischargeable. The district court affirmed the bankruptcy court and this appeal followed.

Gurley contends Cardwell waived his arguments, in part, because he failed to submit the pleadings in the bankruptcy court as part of the appellate record. Cardwell maintains that this was due to a mistake in the clerk's office. But, our court need not resolve the waiver issue because the bankruptcy court correctly concluded the state-court FOFCOL establish the debt is non-dischargeable.

The parties concede that collateral estoppel should apply to prevent the re-litigation of the FOFCOL of the state court; they only disagree as to whether those findings support the discharge or the non-dischargeability of the debt. Our court reviews a grant of summary judgment de novo. In re National Gypsum, 208 F.3d 498, 504 (5th Cir. 2000).


To continue reading