- Court: United States Supreme Court
- Area(s) of Law: Bankruptcy Law
- Date Filed: June 4, 2018
- Case #: 16-1215
- Judge(s)/Court Below: SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, GINSBURG, BREYER, AND KAGAN, JJ., joined, and in which THOMAS, ALITO, AND GORSUCH, JJ., joined as to all but Part III-B.
- Full Text Opinion
Respondent retained Petitioner, a law firm, to represent him in a pending litigation matter. After falling behind on his legal bills, Respondent made a verbal statement to Petitioner indicating that he could pay his invoice once he received his tax refund. However, Respondent used the refund for business expenses and later filed for bankruptcy. Petitioner sued, asserting that Respondent’s debt was non-dischargeable pursuant to 11 U.S.C. §523(a)(2)(A), which prohibits a debtor from discharging a debt arising from “a statement respecting the debtor’s . . . financial condition.” The bankruptcy court and the district court held in favor of Petitioner, but the Eleventh Circuit reversed. The Supreme Court granted certiorari to determine whether a statement regarding a single asset qualifies as “respecting the debtor’s financial condition” and must be in writing under 11 U.S.C. §523(a)(2)(B). The Court reasoned that the term “respecting” means “related to,” and therefore, an individual’s statement about a single asset can relate to their overall financial condition. Consequently, the Court held that a single-asset statement qualifies as “a statement respecting the debtor’s financial condition” and must be in writing to be non-dischargeable. Furthermore, the Court concluded that this interpretation aligned with the federal bankruptcy system’s primary purpose of aiding the unfortunate debtor. AFFIRMED.