           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                          October 21, 2009

                                     No. 09-30400                      Charles R. Fulbruge III
                                   Summary Calendar                            Clerk



In the Matter of: NICHOLAS W. GAUTHIER; JENNIFER F. GAUTHIER

                                                   Debtors

TOWER CREDIT, INC.

                                                   Appellant
v.

NICHOLAS W. GAUTHIER; JENNIFER F. GAUTHIER

                                                   Appellees




               Appeal from the United States District Court for the
                          Middle District of Louisiana
                                No. 3:08-CV-609


Before KING, STEWART, and HAYNES, Circuit Judges.
PER CURIAM:*
       Debtors Nicholas W. Gauthier and Jennifer F. Gauthier filed for Chapter
13 bankruptcy.        Tower Credit, Inc., one of Nicholas Gauthier’s creditors,
instituted an adversary proceeding against the Gauthiers objecting to the



       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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.
                                  No. 09-30400

dischargeability of a debt based on alleged fraud by Nicholas. The Gauthiers
moved to dismiss the complaint against Jennifer Gauthier on the ground that
the debt should be discharged as to her because she had no knowledge of or
involvement in the alleged fraud. The bankruptcy court granted the motion to
dismiss. Tower Credit appealed to the district court, which affirmed. Tower
Credit now appeals the district court’s affirmance of the bankruptcy court’s
order. For the following reasons, we AFFIRM.
            I. FACTUAL AND PROCEDURAL BACKGROUND
      Nicholas W. Gauthier and Jennifer F. Gauthier (the Gauthiers), husband
and wife, filed for Chapter 13 bankruptcy on March 5, 2008. In the bankruptcy
petition, the Gauthiers named Tower Credit, Inc. as a creditor.           Shortly
thereafter, Tower Credit instituted an adversary proceeding against both the
Gauthiers   objecting   under 11    U.S.C. §     523(a)(2)(A) and    (B) to   the
dischargeability of a debt that Nicholas had undertaken before marrying
Jennifer.   Allegedly, Nicholas made fraudulent misrepresentations on his
application for the loan, and Tower Credit relied on those misrepresentations in
extending credit to Nicholas. Nicholas applied for the loan on March 13, 2006,
prior to his marriage to Jennifer. There is no suggestion that Jennifer had any
knowledge of or involvement in Nicholas’s alleged fraud. As a result, the
Gauthiers moved to dismiss the complaint against Jennifer for failure to state
a claim.
      The bankruptcy court granted the Gauthiers’ Rule 12(b)(6) motion to
dismiss as to Jennifer, reasoning that “intent, for dischargeability[] purposes[,]
cannot be imputed from one spouse to another outside of a business
relationship,” and therefore Tower Credit failed to state a claim against
Jennifer. On appeal, the district court affirmed, concluding that Tower Credit
did not allege that Jennifer had any knowledge of or involvement in the fraud
and that no law imputed Nicholas’s alleged fraud to her based solely on their

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marital relationship; therefore, the loan to Tower Credit was dischargeable as
to her. Tower Credit appealed to this court.
                             II. STANDARD OF REVIEW
       When a court of appeals “review[s] the decision of a district court, sitting
as an appellate court, [it] appl[ies] the same standards of review to the
bankruptcy court’s findings of fact and conclusions of law as applied by the
district court.” Caillouet v. First Bank & Trust (In re Entringer Bakeries, Inc.),
548 F.3d 344, 348 (5th Cir. 2008) (per curiam) (quotation marks omitted). We
review the bankruptcy court’s fact findings for clear error and its legal
conclusions de novo. U.S. Dep’t of Educ. v. Gerhardt (In re Gerhardt), 348 F.3d
89, 91 (5th Cir. 2003). We also review “[t]he grant of a Rule 12(b)(6) motion to
dismiss” de novo. Martin K. Eby Constr. Co., Inc. v. Dallas Area Rapid Transit,
369 F.3d 464, 467 (5th Cir. 2004). We must “accept all well-pleaded facts as
true, viewing them in the light most favorable to the plaintiff.”                     Jones v.
Greninger, 188 F.3d 322, 324 (5th Cir. 1999) (per curiam). “Thus, the court
should not dismiss a claim unless the plaintiff would not be entitled to relief
under any set of facts or any possible theory that it could prove consistent with
the allegations in the complaint.” Dallas Area Rapid Transit, 369 F.3d at 467
(quoting id.) (internal modifications omitted).
                                    III. DISCUSSION
       Tower Credit objects to the dischargeability of the debt under 11 U.S.C.
§ 523(a)(2)(A) and (B).1 As the creditor claiming nondischargeability, Tower
Credit has the burden of proving, by a preponderance of the evidence, that the
debt is exempt from discharge. Gen. Elec. Capital Corp. v. Acosta (In re Acosta),



       1
         Under the bankruptcy code, an individual debtor may not receive a discharge for any
debt “obtained by . . . false pretenses, a false representation, or actual fraud” or by use of an
intentional, materially false written statement regarding the debtor’s financial condition, on
which the creditor relies. 11 U.S.C. § 523(a)(2)(A)–(B).

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                                 No. 09-30400

406 F.3d 367, 372 (5th Cir. 2005). “Exceptions to dischargeability should be
construed in favor of the debtor[; h]owever, this principle cannot be used to
overcome the plain language of the bankruptcy code.” Tummel & Carroll v.
Quinlivan (In re Quinlivan), 434 F.3d 314, 318 (5th Cir. 2005) (citations
omitted). Under these two sections, “a debt may be nondischargeable when the
debtor personally commits fraud or when actual fraud is imputed to the debtor
under agency principles.” Owens v. Miller (In re Miller), 276 F.3d 424, 429 (8th
Cir. 2002) (citing Strang v. Bradner, 114 U.S. 555, 561 (1885)); see also Hoffend
v. Villa (In re Villa), 261 F.3d 1148, 1152 (11th Cir. 2001) (same). Tower Credit
does not allege that Jennifer personally committed fraud but rather argues that
Nicholas’s alleged fraud should be imputed to her, preventing discharge as to
Jennifer under § 523(a)(2).
      In its brief, Tower Credit argues that the language of § 523(a) speaks only
in terms of which debts—rather than individual debtors—may be discharged,
and therefore the bankruptcy court may not enter an order of discharge as to
Jennifer alone. For this proposition, Tower Credit relies on language from
Cohen v. De La Cruz, 523 U.S. 213 (1998), and Grogan v. Garner, 498 U.S. 279
(1991), that the bankruptcy code “prevents the discharge of all liability arising
from fraud.” Cohen, 523 U.S. at 215. However, neither Cohen nor Grogan dealt
with the issue of imputation of fraud to an innocent spouse, but rather addressed
situations where a single debtor fraudulently obtained credit; thus, neither can
be read to support Tower Credit’s position.
      We impute fraud to debtors “only if the fraudulent representations were
made by a formal partner or agent.” Quinlivan, 434 F.3d at 319. In In re
Allison, we established that, in the case of husband-and-wife debtors, the
marital relationship alone is not enough to impute one spouse’s fraud to the
other for nondischargeability purposes. Allison v. Roberts (In re Allison), 960
F.2d 481, 485–86 (5th Cir. 1992) (granting discharge to debtor–wife but not

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debtor–husband where “no evidence in the record link[ed] [the wife] to false or
fraudulent acts or plans”).2 Where we have imputed fraud from one spouse to
another, we have relied on agency theory, and done so only where the spouses
were “involved in a business or scheme.” Id. at 485 (discussing Luce v. First
Equip. Leasing Corp. (In re Luce), 960 F.2d 1277 (5th Cir. 1992) (per curiam)
(refusing to discharge debt as to wife where both spouses were involved in a
partnership)); cf. First Tex. Sav. Ass’n v. Reed (In re Reed), 700 F.2d 986, 993
(5th Cir. 1983) (affirming discharge of debtor–wife under 11 U.S.C. § 727 where
lower court found wife did not intend to defraud because “the Code does not
allow attribution of intent from spouse to spouse”). Other jurisdictions follow the
same rule. See Tsurukawa v. Nikon Precision, Inc. (In re Tsurukawa), 258 B.R.
192, 198 (B.A.P. 9th Cir. 2001) (“[T]he marital status alone does not create an
agency relationship.”); In re Tara of North Hills, 116 B.R. 455, 462 (E.D.N.C.
1989), aff’d, 904 F.2d 701 (4th Cir. 1990) (“[A] wife is not the agent of her
husband strictly by force of the marital relationship.”); see also Lawrence
Ponoroff, Vicarious Thrills: The Case for Application of Agency Rules in
Bankruptcy Dischargeability Litigation, 70 T UL. L. R EV. 2515, 2552 (1996)
(noting that “as a matter of substantive nonbankruptcy law, it is axiomatic that
the marital relationship does not alone give rise to either a legal partnership or
an agency”). Tower Credit has not alleged any set of facts or any possible theory



       2
          Tower Credit argues that Deodati v. M.M. Winkler & Assocs. (In re M.M. Winkler &
Assocs., 239 F.3d 746 (5th Cir. 2001), impliedly overruled Allison. Winkler stated that
“whether the debt arises from fraud is the only consideration material to nondischargeability”
and that “the plain meaning of [§ 523(a)(2)] is that debtors cannot discharge any debts that
arise from fraud so long as they are liable to the creditor for the fraud.” 239 F.3d at 749.
However, Winkler dealt with the imputation of fraud between business partners—not
spouses—and did not purport to overrule Allison. Because “[i]t is well-established that one
panel of our court will not overturn another absent an intervening precedent by our court
sitting en banc or a Supreme Court precedent,” FDIC v. Dawson, 4 F.3d 1303, 1307 (5th Cir.
1993), we decline to read Winkler as overruling Allison, particularly in light of the factual
distinctions between the two cases.

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that would entitle it to relief against Jennifer; in fact, Tower Credit admits that
Nicholas incurred the debt prior to his marriage to Jennifer and does not dispute
Jennifer’s lack of knowledge or involvement in Nicholas’s alleged fraud.
      Finally, Tower Credit argues that a discharge of the debt as to Jennifer
will effectively preclude any recovery from Nicholas, as the discharge will protect
the Gauthiers’ community property and Nicholas allegedly has limited separate
property. Tower Credit claims that a bankruptcy discharge that protects one
spouse necessarily protects the entire after-acquired community property estate
under 11 U.S.C. § 524(a)(3), and Tower Credit will therefore be unable to garnish
Nicholas’s wages, which are community property under Louisiana law. Even if
Tower Credit’s legal argument were correct, which is questionable, it does not
affect the dischargeability of the debt as to Jennifer. Tower Credit’s ability to
recover from Nicholas or the after-acquired community property estate is not
before us, and we decline to rule on it.
      Tower Credit has failed to allege facts that could entitle it to relief;
therefore, the bankruptcy court properly granted the Gauthiers’ Rule 12(b)(6)
motion to dismiss the complaint as to Jennifer.
                              IV. CONCLUSION
      For the reasons stated above, we AFFIRM.




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