Lupe Development Partners LLC v. Deutsch

Debts Not Dischargeable; State Court's Findings, SUF Satisfy 523(a)(2)(A)

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MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND DENYING A DISCHARGE TO THE DEBTOR UNDER SECTION 523(a)(2)(A) OF THE BANKRUPTCY CODE

*1Pending before this Court is the motion for summary judgment filed by Lupe Development Partners, LLC (“Lupe”) and Steven Minn (“Minn,” together with Lupe, the “Plaintiffs”), the Plaintiffs in the above-captioned adversary proceeding (the “Adversary Proceeding”), seeking a determination that Fred Deutsch’s (“Deutsch,” or the “Debtor”) debts to the Plaintiffs are excepted from discharge under section 523(a)(2)(A) of the Bankruptcy Code (the “Motion,” ECF Doc. # 19). The Motion is supported by a declaration by Minn (the “Minn Declaration,” ECF Doc. # 19-2),1 and the Plaintiffs’ Statement of Undisputed Facts Pursuant to Local Rule 7056-1 (the “Plaintiffs’ SUF,” ECF Doc. # 20).The Adversary Proceeding arises from fraud perpetrated by Deutsch in connection with the parties’ plan to develop a property in Minneapolis, Minnesota (the “Minnesota Property,” or the “Property”). The Plaintiffs initially contracted with Deutsch to assist him to develop the Property, and Minn agreed to personally guaranty a loan to facilitate the purchase of the Property. But as a result of Deutsch’s defaults in connection with the development project, the Plaintiffs eventually sued Deutsch for damages (the “Minnesota Action”) in Minnesota State Court (the “State Court”). The State Court entered a default judgment (the “Default Judgment”) against Deutsch in the amount of $344,363.23 in favor of Lupe and $1,594,633.90 in favor of Minn.Importantly here, the State Court made findings of fact and conclusions of law in the Default Judgment that Deutsch engaged in fraudulent conduct (the “State Court Findings,” ECF Doc. # 19-2 at 18-30). The Plaintiffs thereafter joined in an involuntary petition naming

Lupe Development Partners LLC v. Deutsch

Debts Not Dischargeable; State Court's Findings, SUF Satisfy 523(a)(2)(A)

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