                                                        United States Court of Appeals
                                                                 Fifth Circuit
                                                              F I L E D
                   UNITED STATES COURT OF APPEALS
                            FIFTH CIRCUIT                   September 23, 2004

                                                          Charles R. Fulbruge III
                                                                  Clerk
                             No. 04-10388
                           Summary Calendar


                In The Matter Of: ROBERT W. CORNWELL,

                                                                 Debtor.
                      -------------------------

               ROBERT W. CORNWELL; HARRY JOEL STANLEY,

                                                           Appellants,

                                versus

                      DAVID LOESCH; GREG ERHARD,

                                                            Appellees.


           Appeal from the United States District Court
                for the Northern District of Texas
                         (3:03-CV-2826-P)


Before JONES, BARKSDALE, and PRADO, Circuit Judges.

PER CURIAM:*

     Robert W. Cornwell and Harry Joel Stanley appeal the district

court’s affirmance of the bankruptcy court’s nondischargeability

ruling.   The bankruptcy court did so because it gave preclusive

effect to a judgment from the United States District Court for the

District of Kansas.




     *
      Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
     In January 2002 the Kansas district court rendered judgment in

favor of    Loesch   and   Erhard,   Appellees    here,   “based   upon   the

findings of [Cornwell’s and Stanley’s] obtaining funds under false

pretenses, false representations and actual fraud in the amount of

$627,030.60". (Emphasis added.)          The judgment included a finding

that Cornwell and Stanley “have entered into a course of conduct in

this litigation of failing to comply with court orders, failing to

comply with discovery deadlines, failing to file required discovery

disclosures, and have pursued a policy of obfuscation, refusing to

cooperate in discovery and refusing to supply required disclosures

... despite repeated warnings by [the] United States Magistrate”.

     Loesch and Erhard took this judgment to their already-pending

adversary action in bankruptcy court that is the subject of this

appeal. The bankruptcy judge, finding no genuine issue of material

fact that there was a debt for money obtained by “false pretenses,

a false representation, or actual fraud”, 11 U.S.C. § 523(a)(2)(A)

(emphasis added), awarded summary judgment to Loesch and Erhard on

the nondischargeability of the debt.        The district court affirmed.

     Cornwell and Stanley contend: there was insufficient evidence

for the bankruptcy court to conclude that the issue before it was

“actually litigated” in federal court in Kansas; our precedent

holding    that   judgments   entered      as   sanctions   are    “actually

litigated” for purposes of collateral estoppel do not apply because

the judgment was not entered as a sanction.


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     “[I]ssue      preclusion      principles    apply   in    section   523(a)

discharge exception proceedings”.           E.g., Sheerin v. Davis (In re

Davis), 3 F.3d 113, 114 (5th Cir. 1993).            Of course, in order to

apply issue preclusion, a court must be given sufficient record

evidence of the prior proceeding to determine that the requirements

are met.     The parties agree that the three requirements for

collateral estoppel in federal court are:                  identity of issue

between two proceedings; issue was “actually litigated” in prior

proceeding; issue was necessarily determined in prior proceeding.

E.g., id.       They also agree that at issue is only the second

requirement:     issue actually litigated.

     Along this line, federal courts give state court judgments the

same preclusive effect that the state courts would.              Gober v. Terra

+ Corp. (In re Gober), 100 F.3d 1195, 1201 (5th Cir. 1996).                   In

appeals involving the effect of state court judgments, we have held

various    kinds    of   default     judgments    satisfied     the   “actually

litigated” requirement.      E.g., Garner v. Lehrer (In re Garner), 56

F.3d 677, 680 (5th Cir. 1995) (Texas post-answer default judgment);

Gober, 100 F.3d at 1204-05 (Texas post-answer default judgment,

after answer was struck); Caton v. Trudeau (In re Caton), 157 F.3d

1026, 1028-29 (5th Cir. 1998) (Illinois default judgment), cert.

denied, 526 U.S. 1068 (1999).           Gober discussed the fact that the

state   court    “struck   Gober’s     pleadings    only      after   Gober   had

repeatedly impeded the course of the proceedings by refusing to

                                        3
comply with discovery and by defying court orders”.         100 F.3d at

1205-06.     Cornwell and Stanley do not contend that this case —

involving the preclusive effect of a federal court judgment in

Kansas — requires a different rule.

     If there was evidence for the bankruptcy court to conclude

that the Kansas judgment was a post-answer default entered as a

sanction for discovery violations, it could conclude that the issue

was “actually litigated” and issue preclusion applied. As shown by

the above-quoted Kansas district court judgment, the bankruptcy

court did not err in concluding that the issue was a sanction which

made it “actually litigated” for estoppel purposes.                For the

reasons stated by the district court, Cornwell and Stanley’s

contention    (judgment   not   “actually   litigated”   because    Kansas

district court made passing reference to the preponderance of the

evidence) is without merit.

     Finally, Cornwell and Stanley assert that the Kansas judgment

was not a default judgment and, therefore, the preceding authority

is inapplicable.    This issue was not raised in district court; we

will not consider it here.      Moreover, that the Kansas judgment was

a default judgment was apparently conceded in bankruptcy court by

Cornwell and Stanley.

                                                            AFFIRMED




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