Judge Pamela Chen
The Baraneks bought a home in 1987. Creditor Mark sought divorce in 2003. Under an Oct. 7, 2004, stipulation (Stipulation) he transferred the home to Karin in satisfaction of equitable distribution. Karin later sold the home to her parents. Mark tried to vacate the Stipulation. On Nov. 16, 2011—in Karin's Chapter 11 bankruptcy case—Mark claimed that any debt from his May 2007 suit to rescind the home's sale was subject to 11 USC §§523(a)(2) and 548. Mark appealed bankruptcy court's July 2012 ruling that, for §523(a)(2) purposes, he did not rely on alleged omissions about Karin's continued employment as an "escort"—paid for sexual activities—from divorce documents when he accepted the Stipulation. Affirming bankruptcy court, district court granted Karin judgment and sanctioned Mark $7,167 for his "objectively frivolous" action. Mark stipulated to the home's transfer not because he incorrectly believed that debtor Karin discontinued her employment as an escort, dissolved a corporation, and/or did not have other money judgments to which she was entitled, but rather because the Stipulation allowed him to satisfy all equitable distribution claims in the divorce action while disposing of an asset the couple could no longer afford.
