Cite as: 516 U. S. 59 (1995)
Breyer, J., dissenting
has to be an extension of credit in connection with the fraud. It has to be obtained by the fraud . . . .").*
At oral argument, the following exchange between the Court and the Fields' attorney occurred:
"QUESTION: . . . Suppose the debtor here had simply transferred th[e] property without saying one word to the creditor. . . . [W]ould [the debt] then be dischargeable? There would be no representation at all, just in violation of the agreement the debtor sells the property . . . . Dischargeable, right?
"MR. SEUFERT: While [those are] not the facts of this case, I would agree with you, it would be dischargeable." Id., at 8-9.
It bears consideration whether a debt that would have been dischargeable had the debtor simply transferred the property, in violation of the due-on-sale clause with never a word to the creditor, nonetheless should survive bankruptcy because the debtor wrote to the creditor of the prospect, albeit not the actuality, of the transfer. Because this Court is not positioned to provide a first view on questions of this order, I express no opinion on the appropriate resolution of the unsettled causation ("obtained by") issue.
Justice Breyer, with whom Justice Scalia joins, dissenting.
I agree with the Court's holding that "actual fraud" under 11 U. S. C. § 523(a)(2)(A) incorporates the common-law elements of intentional misrepresentation. I also agree that to recover under a common-law fraud theory, plaintiffs must do more than show that they actually relied upon the defendant's misrepresentation—they must show that the reliance was "justifiable" in the circumstances, but they need not go so far as to show that a "reasonably prudent" person would
*Mans appeared pro se in the lower courts; he was represented by counsel in this Court.
79
Page: Index Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: October 4, 2007