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In re Jeffery R. and Nancy L. Livingston

United States District Court, W.D. Virginia, Abingdon Division

January 4, 2016

JEFFERY R. LIVINGSTON, Defendant-Appellant. MARC BOUGIE, Plaintiff Adversary Proceeding No. 14-07044 No. 1:15CV00036


JAMES P. JONES, District Judge.

In this bankruptcy appeal, I hold that the bankruptcy court applied the wrong test to determine whether a debt owed to a creditor is nondischargeable due to the debtor's listing of an incorrect address for the creditor on the schedule of debts. Because the debtor's reason for listing the wrong address is a question of fact, I will remand for further proceedings.


The following undisputed facts are taken from the record of the adversary proceeding before the bankruptcy court. The creditor and appellee, Marc Bougie, made an unsecured loan to the debtor and appellant, Jeffery R. Livingston, in the amount of $100, 000. The loan agreement provided that Bougie could demand repayment at any time and that the amount owed upon repayment would be $150, 000. Bougie became dissatisfied with Livingston's business decisions and demanded repayment. When repayment was not made, Bougie filed suit in state court seeking damages for breach of contract as well as punitive damages.

While the state court action was pending, Livingston filed for Chapter 7 bankruptcy. He included the $150, 000 debt to Bougie on the schedule of debts he filed with the bankruptcy clerk. Instead of Bougie's actual mailing address, however, Livingston listed the address of attorney George R. Brittan II, who had represented either Livingston or a company wholly owned by Livingston in the state court litigation. The record provided to this court does not contain any evidence as to why Livingston stated the wrong address for Bougie.

Because the schedule contained an incorrect mailing address for Bougie, he did not receive notice of the bankruptcy prior to the deadline for filing a proof of claim, otherwise known as the claims bar date. After the claims bar date had passed, Bougie's counsel in the state court case received communication from Livingston's counsel indicating that Livingston would no longer respond to any discovery requests because Livingston had filed for bankruptcy. Bougie then initiated an adversary proceeding in the bankruptcy court by filing a Complaint seeking a declaration that the debt Livingston owed to Bougie was nondischargeable.

After the claims bar date but before the trustee had finished collecting assets, Livingston filed a proof of claim on Bougie's behalf. As of the date of oral argument before this court, the trustee still had not completed the collection of assets. Although this is not a no-asset case, the parties agree that there are insufficient assets to make any distributions to unsecured creditors.

Bougie's Complaint asserted several grounds for nondischargeability of the debt, only one of which is before this court. Both Bougie and Livingston moved for summary judgment. Livingston sought summary judgment on all counts of Bougie's complaint, but Bougie sought summary judgment only as to Counts III and IV, which pertained to the erroneous address and lack of notice. Count IV alleged that the debt was not dischargeable because it was not properly listed or scheduled in time to allow Bougie to file a timely proof of claim, and Bougie had no actual notice of the bankruptcy prior to the claims bar date. The bankruptcy court issued an oral ruling in favor of Bougie on Bougie's Motion for Summary Judgment with respect to Count IV of the Complaint, declared that Bougie had a nondischargeable debt in the amount of $150, 000, and entered a final, appealable judgment in that amount. The bankruptcy court took the remaining summary judgment motions under advisement.

Livingston appealed the bankruptcy court's ruling to this court. The issues have been fully briefed and orally argued. For the foregoing reasons, I will vacate the decision of the bankruptcy court and remand for further proceedings.


Pursuant to 28 U.S.C. ยง 158(a), I have jurisdiction over this appeal from the final judgment of the bankruptcy court. A bankruptcy court's conclusions of law are reviewed de novo. Stancill v. Harford Sands Inc. (In re Harford Sands, Inc.), 372 F.3d 637, 639 (4th Cir. 2004).


Section 523(a) of the Bankruptcy Code provides, in relevant part:

(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an ...

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