In re Monteagudo, 071813 FED5, 13-20044

Docket Nº:13-20044
Opinion Judge:PER CURIAM
Party Name:In the Matter of: GENE MICHAEL MONTEAGUDO, Debtor JASON D. ANDERSON, Appellant
Judge Panel:Before REAVLEY, JOLLY, and DAVIS, Circuit Judges.
Case Date:July 18, 2013
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

In the Matter of: GENE MICHAEL MONTEAGUDO, Debtor


No. 13-20044

United States Court of Appeals, Fifth Circuit

July 18, 2013

Appeals from the United States District Court for the Southern District of Texas USDC No. 4:12-CV-2481

Before REAVLEY, JOLLY, and DAVIS, Circuit Judges.


Appellant Jason D. Anderson ("Anderson"), an attorney, appeals an order of the District Court affirming an order of the bankruptcy court imposing certain sanctions on Anderson for his refusal to comply with directives to refrain from routinely violating Rule 9 of the Federal Rules of Civil Procedure by persistently refusing to plead fraud with particularity. For substantially the same reasons set forth in the district court's careful opinion of January 23, 2013, we AFFIRM.


At the time of the events relevant to this appeal, Anderson worked as an associate at Weinstein & Riley, P.S., a Seattle-based firm that represented Discover Bank (the issuer of the Discover Card) in various bankruptcy matters. Anderson appeared regularly before the bankruptcy court for Discover in § 523 proceedings seeking to deny the discharge of credit card debt pursuant to 11 U.S.C. § 523(a)(2). Section 523 provides an exception to the discharge of debt in chapter 7 bankruptcy if the debtor obtained the debt by "false pretenses, false representations, or actual fraud." 11 U.S.C. § 523(a)(2)(A). Because fraud is an element of a § 523(a)(2)(A) action, Anderson was required to plead fraud in these actions.1

In this case, Monteagudo, filed for chapter 7 bankruptcy in January 2012, seeking to discharge all debts, including charges made on his Discover card. In March, Anderson filed a complaint on behalf of Discover alleging that Monteagudo fraudulently charged $6, 000 to his Discover card and that, pursuant to § 523(a)(2)(A), this amount was nondischargeable. Despite the plain language in Rule 9 of the Federal Rules of Civil Procedure, requiring a party alleging fraud to "state with particularity the circumstances constituting fraud or mistake, "2 Anderson's complaint alleged no facts to support his fraud claim.

The presiding bankruptcy court judge (Judge Isgur) had dealt with Anderson as Discover's counsel in previous § 523(a)(2)(A) complaints. Indeed, Judge Isgur first confronted Anderson about his failure to allege facts as required by Rule 9 during a hearing in a separate case, In re Fuentes, 3 in May of 2012. During that hearing, Anderson argued that Rule 9(b) should not be interpreted to require the moving party to plead fraud with particularity as a matter of course; rather, the rule to plead with particularity becomes obligatory only after objection by opposing counsel. Judge Isgur rejected...

To continue reading