McCrory v. Spigel

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APPEAL FROM THE BANKRUPTCY APPELLATE PANEL OF THE FIRST CIRCUIT

Glenn and Ann McCrory appeal from the judgment of the Bankruptcy Appellate Panel (BAP) reversing the bankruptcy court and holding that the debt owed them by Robert Spigel as a result of a Rhode Island Superior Court judgment was not exempt from discharge pursuant to 11 U.S.C. � 523(a)(2)(A). The McCrorys claim that the collateral estoppel effect of the Superior Court judgment creating the debt establishes that Spigel committed fraud in a transaction related to that debt, and hence that debt should be exempt from discharge. The BAP disagreed, concluding that the Superior Court did not find that Spigel engaged in fraud, thereby precluding reliance on collateral estoppel. We disagree with the BAP’s analysis because the Superior Court judgment reflected findings that Spigel engaged in fraudulent conduct. However, that judgment did not establish a sufficient link between Spigel’s fraudulent conduct and the debt Spigel owes the McCrorys to allow an exception to discharge under � 523(a)(2)(A) on the basis of collateral estoppel. Consequently, we affirm for a different reason.

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McCrory v. Spigel

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