- Basketball coach and a referee met during a game.
- The two fell in love and a romantic relationship ensured.
- Referee loaned the Coach $40,000.
- Romance ended under bad terms.
- Coach (debtor) files Chapter 13
- Referee cries “foul” and objects to Chapter 13 claiming debtor was excepted from discharge.
Findings of Fact
- Bankruptcy case basic proofs were based on two emails from the Coach (debtor) to the referee disclosing more than $64,000 in debt.
- E-mails did not disclose an additional $56,000 in student loans.
- Referee (Plaintiff) argued that the failure of the Coach to disclose the additional debt constituted fraud based on material facts that were left out of the email.
- Referee (Plaintiff) argued that she relied on email.
Final Ruling by Bankruptcy Court:
- Judge conducted a trial and discharged the debt for lack of reliance on a false statement.
- Judge further stated that, even had the referee known about the other debt, “it would not have swayed her one bit”.
- The Judge recognized the difference between relationships and debts arising from affairs of the heart
- Judge ended his opinion that the coach could repay the debt voluntarily out of the goodness of her heart.
Think twice when loaning money when your heart rules rather than a business deal. Love can blind you into making a bad business decision.