Case Summary:
Plaintiffs Troy and Christa Morrison sought to except the debt owed them from discharge under 11 U.S.C. § 523(a)(2)(A). The Plaintiffs relied on a state court jury verdict and judgment entered against the Debtor. The Debtor failed to answer timely, and the Plaintiffs moved for default judgment. The Debtor argued that the state court findings failed to establish the elements of 11 U.S.C. § 523(a)(2)(A), and was therefore not entitled to preclusive effect. Treating the matter as cross motions for summary judgment, the Bankruptcy Court found that the standards for collateral estoppel and issue preclusion were satisfied because the state court verdict contained findings that tracked the elements of 11 U.S.C. § 523(a)(2)(A), and the state court judgment was a final judgment on the merits of the case. The Bankruptcy Court concluded that the Plaintiffs could not prevail under 11 U.S.C. § 523(a)(2)(A) because identical issues were litigated in state court and the jury found that the Debtor lacked the requisite intent to deceive. The Court granted summary judgment in favor of the Debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud

Key Terms:
Collateral Estoppel
Issue Preclusion
Default Judgment