Latest Case: Dewitt v. Stewart (Bankruptcy)

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Dewitt v. Stewart

Docket: 18-9007

Opinion Date: February 3, 2020

Judge: Torruella

Areas of Law: Bankruptcy

In this bankruptcy case, the First Circuit vacated the decision of the Bankruptcy Appellate Panel (BAP) and remanded with instructions that the case be returned to the bankruptcy court, holding that the bankruptcy court misapplied the standard for fraudulent intent and that the BAP exceeded the bounds of appellate review by engaging in fact-finding when it reversed the bankruptcy court. After Edward Stewart filed relief Chapter 7 bankruptcy Joseph and Sheila DeWitt filed a proof of claim, indicating that they held an unsecured claim for $558,335. The DeWitts then commenced an adversary proceeding seeking to exempt their unsecured claim from discharge. The bankruptcy court concluded that the DeWitts' unsecured claim was dischargeable. The BAP reversed. The First Circuit vacated the BAP's reversal of the bankruptcy court's judgment, holding (1) the BAP erred when it reweighed the evidence and conducted its own fact-finding; and (2) the bankruptcy court erred when determining what is required to prove "intent to deceive."