                      UNITED STATES COURT OF APPEALS

                          FOR THE FIFTH CIRCUIT



                                No. 93-7045
                             Summary Calendar


IN THE MATTER OF:      JAMES S. YOUNG, DEBTOR.


JAMES S. YOUNG,
                                                                     Appellant,


                                   versus


NATIONAL UNION FIRE INSURANCE CO.
OF PITTSBURGH, PA.,
                                                                     Appellee.




           Appeal from the United States District Court
                For the Southern District of Texas

                  (             June 29, 1993              )


Before POLITZ, Chief Judge, DAVIS and JONES, Circuit Judges.

POLITZ, Chief Judge:

     James S. Young appeals the district court affirmance of the

bankruptcy court's ruling that his debt to National Union Fire

Insurance Co. of Pittsburgh, Pa. was nondischargeable.                National

Union   cross-appeals     the   vacating    and   remand   of   an    award   of

attorney's fees.      We affirm in part and reverse in part.
                                   Background

      Young's     indebtedness     to   National         Union    arises    from   his

investment in a Texas limited partnership known as Emerald Park

Apartments, Ltd. (the "Partnership").                  To purchase his interest,

Young    executed    a   promissory     note      to     the   Partnership    in   the

principal amount of $92,500.            To secure payment of their notes

Young and other Partnership investors applied to National Union for

a financial guarantee bond.

      National      Union    required   Young       to    execute    the    following

documents:      an "Investor Application -- Financial Guarantee Bond

for     Limited   Partnerships,"        an       "Indemnification       and    Pledge

Agreement," and a supplemental application which stated that there

had been no material adverse change in his financial condition and

that the financial information previously submitted remained true

and   correct.       Young    attached       a   financial       statement    to   his

application.      On the strength of this data, National Union issued

the requested bond.

      Young   defaulted      on   the   note.          National     Union   paid   the

defaulted note and looked to Young for indemnity, securing a state

court judgment against him.         Young filed for bankruptcy.

      National Union asked the bankruptcy court for an order that

Young's debt was nondischargeable under 11 U.S.C. § 523(a)(2)(B)

because it was based on a materially false written statement of

Young's financial condition.            Following a trial, the bankruptcy

court found the debt nondischargeable and awarded National Union

$6,125 in attorney's fees.         Young appealed to the district court,


                                         2
challenging    the   nondischargeability    determination   and   the

bankruptcy court's factual conclusions that he had made intentional

misrepresentations and that National Union reasonably had relied

upon them.    He also appealed the award of attorney's fees.      The

district court affirmed the nondischargeability and vacated and

remanded for additional findings on the attorney's fees. Young and

National Union appeal the district court's judgment.



                              Analysis

     Standard of Review

     A bankruptcy court's findings of fact are subject to the

clearly erroneous standard of review and will be reversed only if,

considering all the evidence, we are left with the definite and

firm conviction that a mistake has been made.1    Strict application

of this standard is particularly appropriate when the district

court has affirmed the bankruptcy court's findings.2          We are

particularly mindful of "the opportunity of the bankruptcy court to

judge the credibility of the witnesses."3     Conclusions of law, of

course, are reviewed de novo.4


     1
          In re Allison, 960 F.2d 481 (5th Cir. 1992).

     2
          Wilson v. Huffman (In re Missionary Baptist Found. of
Am.), 818 F.2d 1135 (5th Cir. 1987).

     3
          Bankr. Rule 8013.

     4
          Allison.


                                 3
      Nondischargeability

      A debt may be nondischargeable in bankruptcy under 11 U.S.C.

§ 523(a)(2)(B):

      (2)    . . . to the extent obtained by --
      (B)    use of a statement in writing --
             (i) that is materially false;
             (ii) respecting the debtor's or an insider's
             financial condition;
             (iii) on which the creditor to whom the debtor
             is liable for such money, property, services,
             or credit reasonably relied; and
             (iv) that the debtor caused to be made or
             published with intent to deceive[.]

The burden is on the creditor to prove, by a preponderance of the

evidence, that the debt is nondischargeable.5

      Admitting that much of the financial information submitted to

National Union was false, Young contends that he did not make those

false     representations.     He   testified        that    he    filled   out   an

application and submitted it to the Partnership, but someone else

substituted     false   information       in   the    application      which      was

submitted to National Union.6        He also contends that, although it

is   in   his   handwriting,   he   did    not    give     the    Partnership     the

financial statement included with the application; he claims a

complete lack of knowledge about how the financial statement got

into the packet of materials.

      The    bankruptcy   court,    after        hearing     several    hours     of

      5
             Grogan v. Garner, 498 U.S. 279 (1991).

      6
          He contends that, with the exception of the last page
containing his signature, the rest of the document received by
National Union was prepared by someone else and substituted for the
information he submitted.


                                      4
testimony, found:   "I find not credible Mr. Young's claim that he

did not do most of the pages which are in [the application], and

did not cause them to be delivered to National Union."           The

district court found that this finding was not clearly erroneous.

Our review of the trial testimony persuades that the bankruptcy

court's finding was not clearly erroneous.7 Having determined that

Young submitted false financial information, his "intent to deceive

may be inferred from use of a false financial statement to obtain

credit."8

     Young also challenges the bankruptcy court's finding that

National Union reasonably relied on his financial information.      We

recently have determined that the reasonableness of a creditor's

reliance, for purposes of section 523(a)(2)(B), is a question of

fact subject to review only for clear error.9   The bankruptcy court

received uncontroverted testimony that the relevant practice in the

industry was to rely solely on the documentation presented by the

     7
          Young contends that the bankruptcy court improperly
relied upon inconsistencies between his trial testimony and
testimony about the application documents given at a deposition in
1988.   In the 1988 deposition, Young offered explanations for
information on the application which he now disavows ever having
made. He asserts that because he was uncounseled when he gave the
deposition, the court should not have relied on that testimony.
There is no rubric requiring a court to ignore sworn prior
inconsistent testimony simply because it was uncounseled; we
decline to create one. The bankruptcy court, having heard all the
testimony, was in the best position to evaluate Young's credibility
and we find no clear error in that credibility assessment.

     8
            In re Pryor, 93 B.R. 517, 518 (Bankr. S.D.Tex. 1988).

     9
            In re Coston, 991 F.2d 257 (5th Cir. 1993) (en banc).


                                  5
applicant.    Whether a creditor's reliance is reasonable is to be

determined from the totality of the circumstances.10            The only

purportedly   questionable   circumstance    Young    points   to   is   the

existence of whiteouts and handwritten additions to the financial

statement, most of which was typed.       This is not such a "red flag"

as to invoke a duty to investigate.       All things considered, we are

not left with the definite and firm conviction that the bankruptcy

court made a mistake in finding that National Union reasonably

relied on the financial information in Young's application, or in

its ultimate conclusion that Young's debt was nondischargeable.

     Attorney's Fees

     The   bankruptcy   court   awarded    National    Union   $6,125     in

attorney's fees based upon the indemnity agreement provision that

the debtor would be liable therefor.        The district court vacated

that award and remanded for additional fact findings required by

New York law.11

     Under New York law, when a contract provides for attorney's

fees, "the court will order the losing party to pay whatever

amounts have been expended by the prevailing party, so long as

those amounts are not unreasonable."12       The court's determination

     10
           Coston.

     11
          The indemnity agreement provided that the rights and
liabilities of the parties thereunder were to be determined under
New York law.

     12
          F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d
1250, 1263 (2d Cir. 1987).


                                   6
whether the fees requested are reasonable is informed by various

factors, including: "the difficulty of the questions involved; the

skill required to handle the problem; the time and labor required;

the lawyer's experience, ability and reputation; the customary fee

charged by the Bar for similar services; and the amount involved."13

     National Union's attorneys estimated their expenses to be

$30,000.   They presented evidence of the time and various types of

work performed in this litigation, as well as evidence about their

general level of experience. Thereafter, the bankruptcy court made

the following findings:

          I'm taking an extremely conservative view of the
     attorneys' fees which might be appropriate in this case.

          Noting that the amount of time spent with regard to
     participation in this trial will clock in at a minimum of
     about ten hours, including the activity yesterday and
     today. And granting twenty-five hours for preparation,
     which I believe to be low, considering the extremely high
     degree of preparation exhibited by the plaintiffs in this
     case, but again taking a conservative view.

          And conservatively allowing $175 per hour. I am
     familiar with attorneys' rates in this region and in the
     bankruptcy field, and believe that to be a reasonable if
     somewhat low hourly fee to be awarded for the degree of
     competence, which was high, exhibited by plaintiff's
     counsel in this case.

           This yields a total amount of $6125.

We find that this reflects sufficient consideration of the factors

required under New York law.     In fact, the bankruptcy court's

approach mirrors the "lodestar" method approved in Krear -- "the

hours reasonably spent by counsel, as determined by the Court,

     13
          Id. (quoting In re Schaich, 391 N.Y.S.2d 135, 136 (2d
Dept.), appeal denied, 397 N.Y.S.2d 1026 (1977)).


                                 7
[are]     multiplied   by   the   reasonable   hourly   rate."14   The

determination that $6,125 is a reasonable attorney's fee was not

clearly erroneous.

     For the foregoing reasons, we AFFIRM the determination of

nondischargeability, REVERSE the order regarding attorney's fees,

and REINSTATE the bankruptcy court's award of attorney's fees in

the amount of $6,125.




     14
          Id. (quoting Zauderer v. Barcellona, 495 N.Y.S.2d 881,
882-83 (Civ.Ct. 1985)).


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