Field v. Mans, 516 U.S. 59, 19 (1995)

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Cite as: 516 U. S. 59 (1995)

Opinion of the Court

for the very purpose of insulating their own claims from discharge.13 The answer softens the ostensible anomaly.

VI

In this case, the Bankruptcy Court applied a reasonable person test entailing a duty to investigate. The court stated that

"the case law establishes an objective test, and that is what would be reasonable for a prudent man to do under those circumstances. At a minimum, a prudent man, I think, would have asked his attorney, could he transfer it without my consent? And the answer would have to be yes, and then the next question would be, well, let's see if he's done it? And those questions simply were not asked, and I don't think on balance that was reasonable reliance." App. 43-44.

Because the Bankruptcy Court's requirement of reasonableness clearly exceeds the demand of justifiable reliance that we hold to apply under § 523(a)(2)(A), we vacate the judgment and remand the case for proceedings consistent with this opinion.14

It is so ordered.

13 "It is a frequent practice for consumer finance companies to take a list from each loan applicant of other loans or debts that the applicant has outstanding. While the consumer finance companies use these statements in evaluating the credit risk, very often the statements are used as a basis for a false financial statement exception to discharge. The forms that the applicant fills out often have too little space for a complete list of debts. Frequently, a loan applicant is instructed by a loan officer to list only a few or only the most important of his debts. Then, at the bottom of the form, the phrase 'I have no other debts' is either printed on the form, or the applicant is instructed to write the phrase in his own handwriting." H. R. Rep. No. 95-595, pp. 130-131 (1977) (footnote omitted).

14 Justice Breyer would not remand, for essentially two reasons: in substance the Bankruptcy Court applied the right standard, looking to the individual capacity of Mr. Field in testing whether the Fields relied at all; and the Fields do not deserve a remand, having failed to get their own

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