               United States Bankruptcy Appellate Panel
                           FOR THE EIGHTH CIRCUIT


                                      No. 12-6018


In re:                                     *
                                           *
Marsha Steger;                             *
Ray R. Steger,                             *
                                           *
         Debtors.                          *
                                           *
Montgomery Bank, N.A.,                     * Appeal from the United States
                                           * Bankruptcy Court for the
         Plaintiff-Appellant,              * Eastern District of Missouri
                                           *
               v.                          *
                                           *
Marsha Steger,                             *
                                           *
         Defendant-Appellee.               *


                                Submitted: May 24, 2012
                                    Filed: June 14, 2012


Before KRESSEL, Chief Judge, FEDERMAN, and NAIL, Bankruptcy Judges.


NAIL, Bankruptcy Judge.

      Montgomery Bank, N.A. ("Bank") appeals the February 22, 2012 judgment of
the bankruptcy court1 dismissing Bank's complaint against Debtor Marsha Steger
("Debtor"). We affirm.




         1
       The Honorable Barry S. Schermer, Chief Judge, United States Bankruptcy
Court for the Eastern District of Missouri.
                                   BACKGROUND

      Debtor and James Clay Waller ("Waller") were the only members of Triple C
Development, LLC ("Triple C"). Debtor handled the books; presumably, Waller
handled everything else.

      In February 2008, Triple C borrowed $140,000.00 from Bank to construct a
duplex on a lot on Cape Rock Drive in Cape Girardeau, Missouri. In connection
therewith, Triple C executed a construction loan agreement, a promissory note, and
a deed of trust. Debtor personally guaranteed the loan. In February 2009, Debtor and
her husband, Ray Steger, both guaranteed the loan.

     Pursuant to the construction loan agreement, Triple C presented lien waivers,
and Bank advanced the loan proceeds. In July 2009, after the loan was fully
advanced, Bank discovered the proceeds had been used, not to construct the duplex
on Cape Rock Drive, but to construct a different duplex on a different lot owned by
Clay Waller and Jacque Waller.

      In September 2009, Bank demanded payment of the $130,102.87 it was then
owed. Triple C paid Bank $85,000.00 and entered into a change in terms agreement
to pay Bank the remaining $45,102.87 plus interest, attorney's fees, and costs of
collection by December 30, 2009. When Triple C failed to make the promised
payment, Bank exercised its rights under the deed of trust and caused the lot on Cape
Rock Drive to be sold. After the sale, Bank was still owed $39,559.98.

       Debtor and her husband filed for relief under chapter 7 of the bankruptcy code
in August 2011. Bank timely filed a complaint against Debtor and her husband to
determine the dischargeability of its claim under 11 U.S.C. § 523(a)(2)(A), (4), and
(6).2 In its complaint, Bank alleged, inter alia, Debtor "made false and fraudulent
representations to [Bank] . . . that the proceeds being advanced were for construction
of a duplex on [Cape Rock Drive] . . . when the proceeds were in fact not used to
construct a duplex on [Cape Rock Drive]."



      2
          Bank voluntarily dismissed its complaint against Debtor's husband.
                                          -2-
       The matter was tried on February 14, 2012. At trial, Bank abandoned its claim
under § 523(a)(4). After hearing the testimony of Bank's manager and Debtor and
receiving a number of exhibits, the bankruptcy court ruled from the bench and
memorialized its decision in a judgment dismissing Bank's complaint. Bank timely
filed a notice of appeal.

                             STANDARD OF REVIEW

       We review for clear error the bankruptcy court's determination of whether the
requisite elements of a claim of nondischargeability under § 523(a)(2)(A) have been
satisfied. R & R Ready Mix v. Freier (In re Freier), 604 F.3d 583, 587 (8th Cir.
2010). We also review for clear error the bankruptcy court's determination of
whether a debtor acted willfully and maliciously within the meaning of § 523(a)(6).
Waugh v. Eldridge (In re Waugh), 95 F.3d 706, 710 (8th Cir. 1996). "A finding is
clearly erroneous if, after reviewing the entire evidence, we are 'left with the definite
and firm conviction that a mistake has been committed.'" Freier, 604 F.3d at 587
(quoting Anderson v. Bessemer City, 470 U.S. 564, 573 (1985)). "Oral findings and
conclusions under [Fed.R.Civ.P.] 52(a) 'must be liberally construed and found to be
in consonance with the judgment if the judgment has support in the record evidence.'"
Fonder v. United States, 974 F.2d 996, 999-1000 (8th Cir. 1992) (quoting Jiles v.
Ingram, 944 F.2d 409, 414 (8th Cir. 1991) (citations omitted)).3

                                    DISCUSSION

                               11 U.S.C. § 523(a)(2)(A)

        Section 523(a)(2)(A) excepts from discharge a debt "for money, property,
services, or an extension, renewal, or refinancing of credit, to the extent obtained by
. . . false pretenses, a false representation, or actual fraud, other than a statement
respecting the debtor's or an insider's financial condition." To prevail under
§ 523(a)(2)(A), a creditor must prove each of the following elements by a
preponderance of the evidence:



      3
          Rule 52 applies in adversary proceedings. Fed.R.Bankr.P. 7052.
                                          -3-
             1. The debtor made a representation.

             2. The debtor knew the representation was false at the time
             it was made.

             3. The representation was deliberately made for the
             purpose of deceiving the creditor.

             4. The creditor justifiably relied on the representation.

             5. The creditor sustained the alleged loss as the proximate
             result of the representation having been made.

Freier, 604 F.3d at 587 (citations therein omitted).

       The bankruptcy court found no evidence Debtor made a false statement to Bank
prior to Bank's advancing the funds to Triple C. The record supports this finding.
Bank's manager testified Debtor presented "some" of the lien waivers, but Bank did
not identify them or offer them as exhibits, leaving the bankruptcy court with no
rational basis for finding Debtor made any representation with respect to any
particular lien waiver. Further, Debtor was not personally present–and thus could not
have made any representation to Bank–on any of the occasions when Bank's manager
inspected what he erroneously believed to be the duplex for which the loan proceeds
were intended. Debtor also testified she did not learn the loan proceeds were being
used to build a different duplex until sometime after the loan had been fully
disbursed, and Bank's manager testified he had no firsthand knowledge that Debtor
knew the loan proceeds were not being used for their intended purpose. Even if the
record might also support a finding to the contrary–and we are not suggesting it
does–the bankruptcy court's finding is not clearly erroneous. Anderson, 470 U.S. at
574 ("Where there are two permissible views of the evidence, the factfinder's choice
between them cannot be clearly erroneous.") (citations therein omitted).

       Bank raises a number of arguments for the first time on appeal: that "[b]y
failing to make some effort to repay the loan or otherwise remedy the situation,
[Debtor] ratified the false representations she claimed she did not know were false at




                                         -4-
the time";4 that Waller's allegedly fraudulent conduct may be imputed to Debtor; and
that Debtor's actions constituted a reckless disregard for the truth. Because Bank did
not raise these issues before the bankruptcy court, we will not consider them on
appeal.5 Edwards v. Edmondson (In re Edwards), 446 B.R. 276, 279-80 (B.A.P. 8th
Cir. 2011) (citations therein), aff'd, No. 11-2147, ___ Fed. Appx. ___, 2012 WL
1570850 (8th Cir. May 7, 2012).

                                 11 U.S.C. § 523(a)(6)

          Section 523(a)(6) excepts from discharge a debt "for willful and malicious
injury by the debtor to another entity or to the property of another entity[.]" Such a
debt must be the result of an injury that is both a "willful injury" and a "malicious
injury." Blocker v. Patch (In re Patch), 526 F.3d 1176, 1180 (8th Cir. 2008). A
willful injury is one that results from the commission of an intentional tort. Geiger
v. Kawaauhau (In re Geiger), 113 F.3d 848, 853 (8th Cir. 1997), aff'd, 523 U.S. 57
(1998). A malicious injury is one that results from conduct "targeted at the creditor
. . . at least in the sense that the conduct is certain or almost certain to cause financial
harm." Barclays American/Business Credit, Inc. v. Long (In re Long), 774 F.2d 875,
881 (8th Cir. 1985).

       The bankruptcy court found there was no evidence of a tort, much less an
intentional tort. Having reviewed the entire record, we cannot say the bankruptcy
court's finding is clearly erroneous. Bank did not identify–and indeed has yet to
identify–a tort on which its § 523(a)(6) claim might be predicated. Debtor simply

       4
       Bank cited no authority in support of this rather curious proposition, which is
in any event premised on a misstatement of the record. Once Waller's alleged fraud
was discovered, Debtor in fact contributed $35,000.00 of her personal funds and
signed a $50,000.00 note to evidence a loan that Waller negotiated with one of his
other business associates to enable Triple C to repay $85,000.00 of the loan. Debtor
also entered into the change in terms agreement to pay the remaining $45,102.87
Triple C owed to Bank.
       5
        Bank's complaint is the only source for identifying Bank's arguments before
the bankruptcy court: Bank did not file a pre-trial brief; it waived an opening
statement; it did not offer a closing argument; and when given the opportunity to have
the bankruptcy court consider additional findings of fact, its counsel stated, "I think
those findings are fine, Your Honor."
                                            -5-
failed to repay a debt in full. Were that sufficient for a debt to be excepted from
discharge under § 523(a)(6), it is unlikely any debt could ever be discharged in
bankruptcy.

                                 CONCLUSION

      For the foregoing reasons, we affirm the bankruptcy court's judgment
dismissing Montgomery Bank, N.A.'s complaint against Debtor Marsha Steger.




                                        -6-
