In Re Frederick George Larson, Debtor.shirley Larson, Francis B. Mathews, Plaintiffs-appellees, v. Frederick G. Larson, Defendant-appellant, 892 F.2d 1046 (9th Cir. 1989)

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US Court of Appeals for the Ninth Circuit - 892 F.2d 1046 (9th Cir. 1989)

Argued and Submitted May 9, 1989. Decided Dec. 15, 1989



We affirm. Although a lien created by a divorce decree is a judicial lien and therefore dischargeable, see In re Pederson, 875 F.2d 781, 782 (9th Cir. 1989), a lien obtained by fraud is not. 11 U.S.C. § 523(a) (2) (A).

The district court found Frederick Larson's sole purpose in stipulating to the promissory note secured by the deed of trust on his residence "was to avoid by any means available the payment due Shirley [Larson]." Memorandum of Opinion at 5. The court also found Frederick Larson's conduct, including his failure to make any effort to comply with the court order based on his stipulation prior to filing for bankruptcy protection only 23 days after executing the agreement, "clearly demonstrated that he never intended to execute the note secured by the deed of trust." Id. at 6. The court also found "Shirley and her counsel reasonably relied upon [Larson's] agreement, stipulation, and court's order." Id.

There is no clear error in these findings, see Edelson v. Commissioner, 829 F.2d 828, 832 (9th Cir. 1987), and the facts they reflect satisfied the first six elements of a claim for fraudulent misrepresentation under section 523(a) (2) (A). See In re Rubin, 875 F.2d 755, 759 (9th Cir. 1989). The final element was also satisfied; Shirley Larson stands to lose the $10,250 due her under the divorce decree, plus interest, for a total of $14,800, as a consequence of Frederick Larson's misrepresentations. See id.

We also affirm the award of attorney's fees. "It is clear that bad faith supporting an award of attorneys' fees may be found in conduct that led to the lawsuit...." International Union of Petroleum & Indus. Workers v. Western Indus. Maintenance, Inc., 707 F.2d 425, 428 (9th Cir. 1983); see also Hall v. Cole, 412 U.S. 1, 4-5 (1973).



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3