In re Bright
| Decision Date | 24 January 1986 |
| Docket Number | Related Case: 85-00089.,Bankruptcy No. 85-0119 |
| Citation | 57 BR 233 |
| Parties | In re Cassondra Leah BRIGHT, Debtor. THORP CREDIT INC. OF OHIO, Plaintiff, v. Cassondra Leah BRIGHT, Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Ohio |
John C. Intagliata, Toledo, Ohio, for plaintiff.
Harold M. Fitkin, Toledo, Ohio, for defendant-debtor.
This cause comes before the Court for Trial on the Complaint to Determine Dischargeability. The Court has heard the evidence offered by the parties and the arguments made by counsel. Although the parties have been afforded the opportunity to file post-trial arguments, they have not done so. The Court has reviewed the evidence and arguments as well as the entire record in this case. Based upon that review and for the following reasons the Court finds that Judgment should be granted to the Defendant.
The facts in this case are not subject to serious dispute. On or about September 21, 1984, the Defendant-Debtor applied for a loan from the Plaintiff in the amount of One Thousand Five Hundred and no/100 Dollars ($1,500.00). On her loan application she listed six other entities as creditors to whom she had outstanding debts. At the time of her application the total amount of those debts was approximately One Thousand Six Hundred Fifty-seven and no/100 Dollars ($1,657.00). A review of the credit report that was obtained by the Plaintiff at the time of the application reflected that the Debtor actually had seven outstanding debts. However, two of those debts were to the same creditor, that being the First National Bank. The Debtor's Application reflects an outstanding balance of Two Hundred Fifty-seven and no/100 Dollars ($257.00) owed to First National Bank. The credit report shows a balance of Three Hundred One and no/100 Dollars ($301.00) on one obligation and Seven Hundred Thirty and no/100 Dollars ($730.00) on the second. Although the record is not clear, it appears that the second of these two obligations may have been secured by a 1977 Pontiac automobile which belonged to the debtor.
The testimony reflects that at the time the Debtor submitted her application, the Plaintiff asked the Debtor to offer some collateral in return for the loan. In response to that request the Debtor listed the 1977 Pontiac as well as a "bedroom outfit, dining table". She valued the automobile at approximately Six Hundred and no/100 Dollars ($600.00) and the furniture at approximately One Thousand Three Hundred and no/100 Dollars ($1,300.00). It does not appear that the Plaintiff requested the Debtor to produce the title to the automobile or inquired as to the existence of any liens against it. It also does not appear that the Plaintiff made any attempt to verify the value of the furniture or the nature of the Debtor's interest in such property.
On January 22, 1985, the Debtor filed her voluntary Chapter 7 Petition with this Court. The schedules filed with that Petition listed the Plaintiff as the only creditor holding security. The only collateral listed as subject to that security interest was the furniture. No reference to the automobile is made. On February 19, 1985, the Debtor filed her Statement of Intentions with respect to secured property. On that statement she indicated her intent to surrender the property to the Plaintiff. The Plaintiff filed an Application to Abandon the property on April 19, 1985. That Application was granted on May 7, 1985. Although the Order of Abandonment indicated that the property had no value to the estate, there was no finding made as to the reason for the absence of such value.
On September 18, 1985, the Debtor amended her Statement of Intentions to reflect that her prior indication of intent to surrender was erroneously made. The error resulted from the fact that the Debtor did not have a present interest in the property, and that her only interest in that property resulted from a future right to its possession. The precise nature of that interest and the event which would give rise to those rights is unclear. She also indicates in her Amended Statement that because of the fact that she has not acquired sufficient rights in the property at the time the loan application was submitted, she was unable to convey a security interest in the property.
As a result of the Debtor's Amended Statement of Intentions and the declaration contained therein, the Plaintiff filed this Adversary Complaint. The Plaintiff seeks to have the outstanding debt of One Thousand Nine Hundred Twenty and no/100 Dollars ($1,920.00) declared to be nondischargeable. Specifically, the Plaintiff alleges that the listing of collateral in which the Debtor did not have a present interest constitutes the use of a fraudulent financial statement for the purpose of obtaining credit. This allegation is made in light of the fact that it appears the operation of Ohio Revised Code Section 1309.15 will preclude the furniture from inclusion in the Plaintiff's security interest.
While it appears as though the foregoing facts are not in dispute, the parties are not in agreement as to the issue of whether or not the Debtor disclosed, at the time she completed her loan application, the nature of her interest in the furniture. The Debtor testified that she disclosed the circumstances of her interests in the furnishings, and that the Plaintiff accepted the property as collateral despite her disclosure. The Plaintiff testified that no such disclosure was made.
The provisions of 11 U.S.C. Section 523(a)(2) state in pertinent part:
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