     Case: 17-41004   Document: 00514589648     Page: 1   Date Filed: 08/07/2018




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

                                                                        FILED
                                                                     August 7, 2018
                                No. 17-41004
                                                                     Lyle W. Cayce
                                                                          Clerk
In the matter of: HUMBERTO SAENZ, JR., formerly doing business as Pizza
Patrón, Incorporated; formerly doing business as Estrella Ventures,
Incorporated, doing business as Pizza Patrón, also known as Humberto Saenz,
formerly doing business as Armar Enterprises; and DELMA JEAN SAENZ,
formerly known as Delma Jean Ortiz,

                        Debtors.

HUMBERTO SAENZ, JR., and ESTRELLA VENTURES, L.L.C.,

                        Appellants,

v.

JOSE MARIA GOMEZ,

                        Appellee.


                Appeals from the United States District Court
                     for the Southern District of Texas


Before STEWART, Chief Judge, and JONES and ENGELHARDT, Circuit
Judges.

EDITH H. JONES, Circuit Judge:
      Appellants Humberto Saenz, Jr. and Estrella Ventures, LLC appeal the
bankruptcy court’s decision, affirmed by the district court, holding them liable
for a $412,500.00 non-dischargeable judgment stemming from Appellee’s
fraudulent misrepresentation, breach of contract, and common law fraud
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claims. For the reasons explained below, we AFFIRM the district court’s
affirmance of the bankruptcy court’s judgment.
                                    I. Background
       On September 7, 2004, Appellant Humberto Saenz, Jr. (“Saenz”) entered
into a Franchise Development Agreement with Pizza Patrón, which granted
him the exclusive right to develop Pizza Patrón restaurants within a certain
development area. 1 Saenz signed the document in his capacity as President of
Estrella Ventures, LLC (“Estrella”), a company he created for the purpose of
operating Pizza Patrón franchises. The Franchise Development Agreement
prohibits voluntary transfers of the franchise without the prior written consent
of the franchisor, explicitly providing any such transfer “will be ineffective …
and will constitute a default” under the Agreement.
       By 2009, Saenz owned at least four Pizza Patrón locations, which he
financed with three loans from the International Bank of Commerce (“IBC”).
The three loans, in the principal amount of $480,500.00, were cross-
collateralized and secured by blanket liens over the accounts receivable,
inventory, equipment, furniture, and fixtures for three of the four locations,
including the Rio Grande City location. By November 2009, Saenz owed IBC
$335,880.00.
       Jose Maria Gomez, individually, and JMG Ventures, LLC (collectively,
“Gomez” and “Appellee”) approached Saenz about purchasing a Pizza Patrón
franchise in 2009.      Gomez was introduced to Saenz by a close friend, Jesús
Ortiz (“Ortiz”), Saenz’s brother-in-law and a manager at a separate Pizza
Patrón location, who told Gomez that Saenz was the corporate representative




       1 Although “development area” is not defined in the Franchise Development
Agreement, Saenz testified it is comprised of the territory from “Starr County, Roma, all the
way to Alamo and bordered with the actual Mexican border.”
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for Pizza Patrón in the South Texas region. Although Saenz denies it, Gomez
testified that Saenz made the same representation to him several times.
        Gomez and Saenz reached a preliminary agreement for Gomez to
purchase the Rio Grande City Pizza Patrón franchise for $350,000.00 in August
2009.       To facilitate the purchase, Gomez applied for a Small Business
Administration loan from Lone Star National Bank (“Lone Star”) for
$287,200.00. In connection with the loan application, Lone Star requested
certain documentation, which Gomez asked Saenz to provide.                               The
documentation included profit and loss income statements whose accuracy is
called into question based on discrepancies in the documentary evidence. 2 For
example, a Net Sales Report lists sales in an amount significantly lower than
the income statements, and the October and September income statements list
identical numbers for the cost of goods sold – a near impossibility.
Additionally, the income reported in the profit and loss statements does not
comport with the tax returns Saenz was required to provide for Estrella
Ventures.
        In order to obtain the loan from Lone Star, Gomez also had to provide a
Certification of No Change or Non-Material Change. In 2005, Saenz had
received a Certification of No Change or Non-Material Change in connection
with his original purchase of the Rio Grande City franchise. Although Saenz
denied sending the document, the Certification received by Lone Star was
dated November 10, 2009 and was signed by Charlotte Hargrove (“Hargrove”),
the authorized representative for Pizza Patrón, Inc. A comparison of this 2009
Certification with the previous 2005 Certification confirms the Certification


        2Saenz testified that he prepared the income statements with the help of Elizabeth
Gauna (“Gauna”), an IBC banker; Gauna denies Saenz ever approached her for help with
these statements. As the bankruptcy court noted, an Activity Summary created by Gauna
corroborates her version of events, which includes the fact that Saenz did not tell her or IBC
about the sale of the Rio Grande City location until October 29, 2009.
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provided to Lone Star was copied from the earlier document, with only the date
being altered. Indeed, Hargrove’s signature and handwriting are identical in
both documents, and even share the same copying imperfections.
       By October 2009, Gomez and Estrella Ventures entered into a Purchase-
Sale Agreement whereby Estrella Ventures agreed to sell all equipment and
inventory for the Rio Grande City location for $350,000.00, a purchase price
just over the amount Saenz owed IBC. 3 Neither Gomez nor Saenz obtained
written consent from Pizza Patrón approving the transfer. But the Rio Grande
City location had to continue making royalty payments to Pizza Patrón, so to
circumvent this obstacle Saenz asked Gomez for his account information at
Lone Star in order to send Pizza Patrón the money directly. Saenz then faxed
an authorization form to Pizza Patrón that contained Gomez’s account number
and wrote, “I need to change my acct. because existing bank is returning some
items.” Saenz admitted this was a lie and claimed he “wasn’t ready” for Pizza
Patrón to find out about the sale of the store to Gomez. 4
       Although Saenz testified that he received all but $20,000.00 of the
purchase price, Saenz told Gauna the sales proceeds only totaled $150,000.00.
This caused IBC to allow Saenz to keep the supposed remaining balance of
$66,777.00 after he paid down the loan on the store. Gauna testified she only
found out the purchase price was actually $350,000.00 a few weeks before trial,
and had she known the true amount of the purchase price, she would have paid
off the two remaining loans because of their cross-collateralized nature. Saenz


       3 The Purchase-Sale Agreement also contemplates that Estrella Ventures would
transfer the lease and franchise in exchange for a $9,000 transfer fee, but Gomez never paid
a $9,000 fee beyond the $350,000 purchase price.

       4 Gomez also testified that Saenz discouraged Gomez from attending any of the
training sessions at the Pizza Patrón headquarters in Dallas, even though Pizza Patrón’s
franchise agreement requires the franchisee and the store’s general manager attend training
before opening a store for business.

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ultimately defaulted on the two remaining loans, and as a result IBC lost
nearly $200,000.00.
       Gomez’s loan from Lone Star closed on February 8, 2010, and he took
possession of the Rio Grande City store the following month. During Gomez’s
tenure, the numerical grade the store received from Pizza Patrón corporate
improved significantly. 5       But in November 2010, Gomez learned he had
developed an eye abnormality whose condition was exacerbated by the heat in
the kitchen. Together with this health concern, the fact that the actual net
sales of the restaurant were in decline led Gomez to close the store in March
2011, after he had already lost approximately $70,000. When Gomez relayed
his decision to Saenz, Saenz told him he had already found a new tenant for
the building.
       Upon receiving the keys to the store from Gomez, Saenz delivered all of
the restaurant’s equipment to Lone Star, which put it up for auction. Saenz
told Rikk Grant (“Grant”), a project manager at Pizza Patrón corporate, that
the Rio Grande City stored closed on March 7, 2011 because of a failure in the
roof structure. Emails between Saenz and Grant show Saenz told Pizza Patrón
he had to close the store for roof and floor repairs; in truth, Saenz had cleared
out all of Gomez’s equipment and installed new equipment. Saenz was unable
to corroborate the alleged needed repairs and never informed Pizza Patrón of
the real reason the store closed and the equipment was replaced. Instead,
Saenz reopened the store for business under the Pizza Patrón name. 6




       5  Although the parties dispute the reason why Gomez did not personally attend any
of the corporate inspections of the Rio Grande City location, Gomez testified that Saenz
informed him franchise owners could not attend the inspections and that Saenz would attend
in his stead.
        6 After sales continued to decline, Saenz abandoned or sold the restaurant on October

8, 2012.

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       On September 11, 2011, Appellee filed suit against Appellants, alleging
causes of action for (1) fraudulent misrepresentation, (2) breach of contract,
(3) common law fraud, and (4) conversion. 7 After Saenz filed a Chapter 7
bankruptcy petition on August 27, 2013, the lawsuit was removed to
bankruptcy court on November 19, 2013, and Gomez commenced an adversary
proceeding seeking an exception to discharge under 11 U.S.C. § 523. The
bankruptcy court held a consolidated trial on Adversary Proceedings on
February 17, 2015, issued a Memorandum Opinion, and entered judgment on
July 22, 2015.      The bankruptcy court found in favor of Appellee on its
fraudulent misrepresentation/common law fraud claims, denied relief on the
breach of contract claim, and allowed exception from discharge.
       After entering judgment in the amount of $412,500.00 against
Appellants, Appellants appealed. On September 26, 2016, the district court
remanded the case to consider whether a bankruptcy court may issue a final
judgment that liquidates a state law claim excepted from discharge in the
underlying bankruptcy case. The bankruptcy court issued a Memorandum
Opinion Following Limited Remand on December 19, 2016, and after a
hearing, the district court entered its judgment affirming the bankruptcy court
on September 28, 2017. Appellants now appeal the district court’s affirmance
of the bankruptcy court judgment.
                                  II. Standard of Review
       We review a district court’s affirmance of a bankruptcy court’s decision
by applying the same standard of review to the bankruptcy court’s findings of
fact and conclusions of law that the district court applied. See Ad Hoc Grp. of


       7  Appellee’s Original Petition and First Amended Original Petition also named Lone
Star Bank, IBC, and Pizza Patrón, Inc. as defendants. Pizza Patrón was dismissed, the claims
against Lone Star Bank were severed with a judgment issued in its favor in a separate
adversary proceeding, and the bankruptcy court granted IBC’s motion for judgment on
partial findings.
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Vitro Noteholders v. Vitro S.A.B. de C.V. (In re Vitro S.A.B. de C.V.), 701 F.3d
1031, 1042 (5th Cir. 2012) (citing United States v. Martinez (In re Martinez),
564 F.3d 719, 725-26 (5th Cir. 2009)). A bankruptcy court’s findings of fact are
subject to review for clear error, and its conclusions of law are reviewed de
novo. See Gen. Elec. Capital Corp. v. Acosta (In re Acosta), 406 F.3d 367, 372
(5th Cir. 2005).
                              III. Jurisdiction
      Before reaching the substantive issues presented in this appeal, we
address whether the bankruptcy court had jurisdiction, in light of Stern v.
Marshall, 564 U.S. 462, 131 S. Ct. 2594 (2011), to issue a final judgment
liquidating a state law claim excepted from discharge in the underlying
bankruptcy case. See In re U.S. Brass Corp., 301 F.3d 296, 304-06 (5th Cir.
2002).   In its Memorandum Opinion Following Limited Remand, the
bankruptcy court found it had the jurisdiction and constitutional authority to
enter a final judgment liquidating a state law claim from discharge because
(1) the case involves “core” matters, thereby authorizing the bankruptcy judge
to hear, determine, and enter final judgment on a claim, see Exec. Benefits Ins.
Agency v. Arkison, 134 S. Ct. 2165, 2171 (2014); (2) bankruptcy courts have
both subject matter jurisdiction and the constitutional authority to liquidate
state law claims in dischargeability actions, see Morrison v. W. Builders of
Amarillo, Inc. (In re Morrison), 555 F.3d 473, 479 (5th Cir. 2009); and
(3) 11 U.S.C. §§ 523(a) and 157(b)(2)(I) allow the determination of the validity
and amount of a non-dischargeable debt where a debt is directly intertwined
with the determination of discharge. The bankruptcy court determined the
limitations on a bankruptcy court’s jurisdiction articulated in Stern are
inapplicable here. The bankruptcy court also concluded that even if liquidation
of the claims in this dischargeability proceeding was not a “core” matter, the
court had the authority to hear, determine, and enter its final order and

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judgment because it had Appellants’ implied consent.              See 28 U.S.C.
§ 157(c)(2); Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932, 1948 (2015).
The district court adopted the same analysis in its Order of Dismissal, stating
the bankruptcy court had jurisdiction to enter judgment and, alternatively,
determining the parties consented to jurisdiction.
      Because this court finds all parties consented to the bankruptcy court’s
issuance of the final judgment, we do not address Stern or consider a new rule
concerning a bankruptcy court’s constitutional authority to issue a final
judgment that liquidates a state law claim excepted from discharge.           See
Matter of Delta Produce, L.P., 845 F.3d 609, 616-17 (5th Cir. 2016); see also
Shamloo v. Miss. State Bd. of Trs. of Insts. of Higher Learning, 620 F.2d 516,
524 (5th Cir. 1980) (“[C]ases are to be decided on the narrowest legal grounds
available.”).   The Supreme Court has recognized “allowing bankruptcy
litigants to waive the right to Article III adjudication of Stern claims does not
usurp the constitutional prerogatives of Article III courts.” Sharif, 135 S. Ct.
at 1944-46. Such consent may be either express or implied, so long as it is
knowing and voluntary; the determination whether a party consented to the
bankruptcy court’s jurisdiction requires “a deeply factbound analysis of the
procedural history” in the proceeding. Id. at 1948-49. The bankruptcy court
undertook that analysis, relying on facts such as Appellants’ (1) submission of
a pre-trial statement in which they listed no jurisdictional issues;
(2) representation by experienced bankruptcy counsel; and (3) voluntary
participation in the proceedings, including seeking affirmative relief by filing
Rule 12(b)(6) motions and not expressing any limitations on its consent
throughout the trial. We have reviewed the aforementioned facts for clear
error and have carefully considered the arguments advanced by the parties in
their briefs, and find no error in the conclusion that all parties gave implied
consent, thus vesting the bankruptcy court with jurisdiction to issue a final

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judgment. See Matter of Delta Produce, L.P., 845 F.3d at 617 (holding the
bankruptcy court had jurisdiction to make a final judgment on a PACA claim
by virtue of the parties’ consent); Wellness Int’l Network, Ltd. v. Sharif,
617 F. App’x 589, 590-91 (7th Cir. 2015) (holding on remand from the Supreme
Court that the appellant forfeited a Stern claim because he raised it for the
first time when challenging the bankruptcy court order in his reply brief in the
district court).
                               IV. Discussion
      Appellants’ remaining challenges to the judgment are to the sufficiency
of the evidence supporting a finding of fraud. Appellants claim the bankruptcy
court reversibly erred in finding material representation, justifiable reliance,
and proximate causation were satisfied. Appellants also argue the bankruptcy
court erred in finding certain elements of § 523(a)(2)(A) non-dischargeability
were satisfied.
   A. Fraud
      Appellants contend the bankruptcy court erred in finding Saenz and
Estrella committed fraud on the basis Appellee did not satisfy all elements of
Texas common law fraud. The elements of common law fraud are:
      (1) that a material representation was made; (2) the
      representation was false; (3) when the representation was made,
      the speaker knew it was false or made it recklessly without any
      knowledge of the truth and as a positive assertion; (4) the speaker
      made the representation with the intent that the other party
      should act upon it; (5) the party acted in reliance on the
      representation; and (6) the party thereby suffered injury.

In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001).
      The parties’ positions are in stark contrast: Appellants claim “no
evidence” was presented on the reliance or material representation elements
and the facts presented are insufficient to support a finding of proximate cause,
whereas Appellee asserts the elements of justifiable reliance and proximate
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cause were clearly established and find support in the evidence. We accept the
bankruptcy court’s findings of fact as to each of these elements unless we are
left with the “definite and firm conviction that a mistake has been committed.”
Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 855 (1982).
      In reaching its findings on the common law fraud elements, the
bankruptcy court made several credibility determinations, considering Saenz’s
testimony and contrasting it to the testimony of Gomez and other witnesses.
Saenz’s version of events, often deemed “implausible,” differed in significant
respects from that of Gomez, and Gomez’s found support in other testimony
and evidence. See In re Anderson, 936 F.2d 199, 204 (5th Cir. 1991) (“The
bankruptcy court is in the best position to judge the credibility of any witness
who testifies under oath before it….”). The bankruptcy court noted that Saenz
“lied frequently whenever it suited him” and his testimony was littered with
discrepancies, which led the court to place little weight on his testimony. 8 By
contrast, Gomez’s version of events was “much more plausible” and there were
no discrepancies in Gauna’s testimony, which was “fully supported by the
documentary evidence.” Based on this careful weighing of witness testimony,
the bankruptcy court resolved two central factual disputes regarding material
misrepresentation. First, the September income statement Saenz provided to
Gomez, which was then provided to Loan Star, was false, as Saenz’s
explanations for the numerical discrepancies in the document were
problematic and unacceptable. Second, the court found Saenz represented to
Gomez he was an employee of Pizza Patrón corporate. The court thus credited
Gomez’s testimony, documentary evidence such as IBC reports, and Saenz’s
own conduct – namely, his lies concerning the royalty payment made from
Gomez’s account, his forging of a Certification of No Change, and his keeping


      8 Indeed, the bankruptcy court created a minute entry in the record, recommending
Saenz be criminally indicted on account of the egregious fraud he committed.
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Gomez away from training and franchise inspections. All these actions were
critical in persuading Gomez that Saenz was a member of Pizza Patrón
corporate.
      This court defers to the bankruptcy court’s determinations of witness
credibility. See Robertson v. Dennis (In re Dennis), 330 F.3d 696, 701 (5th Cir.
2003); see also Matter of Martin, 963 F.2d 809, 814 (5th Cir. 1992) (“If the
bankruptcy judge finds one version of events more credible than other versions,
this Court is in no position to dispute the finding.”). A careful review of the
record confirms that the bankruptcy court’s findings as to the two factual
disputes concerning Saenz’s misrepresentations are not clearly erroneous.
While Appellants insist “no evidence” was introduced that Saenz represented
he was a corporate representative of the franchisor, the record – replete with
Saenz’s own admissions of misstatements and testimony from witnesses Ortiz,
Gomez, and Gauna confirming the falsehoods – shows otherwise. Additionally,
there is ample evidence supporting the bankruptcy court’s conclusion that the
income statements were false and did not reflect the true financial condition of
the Rio Grande restaurant.
      Appellee was required to show he justifiably relied on the two
misrepresentations. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co.,
51 S.W.3d 573, 577 (Tex. 2001). The reliance element does not require a
plaintiff to demonstrate reasonableness, yet a person may not justifiably rely
on a representation if “there are ‘red flags’ indicating such reliance is
unwarranted.” AT&T Universal Card Serv. Inc. v. Mercer (In re Mercer),
246 F.3d 391, 418 (5th Cir. 2001) (citation omitted). Appellants argue red flags
existed in the form of Gomez’s subjective trust in Ortiz, Gomez’s past
experience in business matters, and the commercial nature of the franchise
transaction. The bankruptcy court commented on these circumstances, noting
the “question of justifiable reliance depends heavily on the relationship

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between the parties and their relative sophistication,” but ultimately found
Gomez’s reliance on Saenz’s misrepresentations was justifiable. Not only did
Saenz make credible representations, he also went to great lengths, including
falsifying bank documents, to prevent Gomez from questioning his authority
to effectuate the franchise transfer. Without any reason for Gomez to question
Saenz, his income statements, and his claim that he worked for Pizza Patrón
corporate, the bankruptcy court concluded the weight of the evidence
supported justifiable reliance. We do not have a definite and firm conviction
that a mistake has been committed in this respect.
      Appellants also challenge the bankruptcy court’s finding of proximate
causation, boldly stating “no evidence” was presented on this element of fraud.
Under Texas law, proximate cause requires cause in fact and foreseeability.
See In re Air Crash at Dallas/Fort Worth Airport, 720 F. Supp. 1258, 1279
(N.D. Tex. 1989) (citation omitted), aff’d, 919 F.2d 1079 (5th Cir. 1991), cert.
denied, 502 U.S. 899, 112 S. Ct. 276 (1991). Cause in fact is established if the
injury would not have occurred “but for” the wrongful act or omission. Id.
(citations omitted). Foreseeability “requires that the injury [complained of] be
of such a general character as might reasonably have been anticipated, and
that the injured party should be so situated with relation to the wrongful act
that injury to him . . . might reasonably have been foreseen.” Id. (citations
omitted); see also Bykowicz v. Pulte Home Corp., 950 F.2d 1046, 1054-55 (5th
Cir. 1992). The bankruptcy court found proximate cause satisfied because had
Gomez seen the true numbers instead of the false ones on the income
statement, he would not have closed the deal, and “it was clearly foreseeable
that providing a false income statement could induce someone to invest and
subsequently lose the investment.” The bankruptcy court also found Saenz’s
misrepresentation about his status at Pizza Patrón was a “critical factor” in
Gomez’s decision to purchase the restaurant, and “[i]t was foreseeable that a

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misrepresentation designed to induce Gomez into purchasing the restaurant
could result in injury.”
      According to Appellants, the proximate cause for Gomez’s damages was
not Saenz’s misrepresentations, which “at most, did nothing more than furnish
a condition that made Gomez’s injury possible,” but the failure of the business
itself. Yet, there would have been no purchase of the business or its subsequent
failure had it not been for Saenz’s misrepresentations, which induced Gomez
to purchase the Rio Grande location. The bankruptcy court made clear that
but for the misrepresentations regarding the inflated profits in the income
statements and Saenz’s corporate status with the franchisor, Gomez would not
have sought the loan with Lone Star or completed the purchase of the
restaurant. There is no error in the bankruptcy court’s conclusion Gomez’s
injuries were not only foreseeable, but directly attributable and proximately
caused by Saenz’s misrepresentations.
   B. Non-dischargeability
      In finding the judgment amount of $412,500.00 was excepted from
discharge, the bankruptcy court determined Appellee met all elements of
§ 523(a)(2)(A). 9   Section 523(a)(2)(A) of the Bankruptcy Code excepts from
discharge any 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 position.” 11 U.S.C. § 523(a)(2)(A) (alterations
added); See also 11 U.S.C. § 523(a)(2)(B). A creditor must prove its claim of
non-dischargeability by a preponderance of the evidence.               In re Mercer,
246 F.3d 391, 403 (5th Cir. 2001).        The elements of “actual fraud” under
§ 523(a)(2)(A) generally correspond with the elements of common law fraud in


      9The $412,500.00 amount reflects the sum of the actual damages ($330,000.00) plus
exemplary damages ($82,500.00).
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Texas, and include: (1) the debtor made a representation; (2) the debtor knew
the representation was false; (3) the representation was made with intent to
deceive the creditor; (4) the creditor actually and justifiably relied on the
representation; and (5) the creditor sustained a loss as a proximate result. Id.
at 403; see also In re Ritz, 832 F.3d 560, 565 (5th Cir. Aug. 10, 2016) (noting
that since Husky Int’l Elecs., Inc. v. Ritz, 136 S. Ct. 1581, 1586 (2016), the term
“actual fraud” in section 523(a)(2)(A) encompasses forms of fraud that can be
effected without false representation). For the reasons set forth above, Saenz’s
representations in the income statement and that he worked for Pizza Patrón,
both of which he knew were false, were made to induce Gomez to purchase the
restaurant, and proximately caused Gomez’s injury after Gomez justifiably
relied on them.       The bankruptcy court accordingly found all elements of
Appellee’s § 523(a)(2)(A) claim were satisfied. 10
       Appellants’ arguments concerning the bankruptcy court’s ruling on the
non-dischargeability claim are but one permissible – albeit stretched – view of
the evidence.     Appellants state the record is “devoid” of evidence Saenz’s
representations proximately caused Gomez damages, claiming Gomez’s loss
stemmed from the poor performance of the Rio Grande location and Pizza
Patrón’s authorization could have been secured after Gomez assumed control
of the restaurant. Appellants further argue there is no evidence to support the
conclusion Gomez’s reliance on Saenz’s representations was justified; they go
so far as to blame Gomez for not having been diligent.
       The bankruptcy court’s account of the evidence is not clearly erroneous
in light of the record viewed as a whole. See In re Acosta, 406 F.3d 367, 373
(5th Cir. 2005) (“As long as there are two permissible views of the evidence, we



       10 The bankruptcy court noted exceptions to discharge based on written financial
statements fall under § 523(a)(2)(B) and explicitly stated the income statements could not be
a basis for the § 523(a)(2)(A) claim.
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will not find the factfinder’s choice between competing views to be clearly
erroneous.”) (citation omitted). The bankruptcy court based its findings on
Saenz’s lack of credibility as compared to the more credible and consistent
testimony of Gomez and Gauna; the latter testimony was supported by
documentary evidence and lacked discrepancies.        For the same reasons
detailed above, we find the bankruptcy court reasonably concluded Appellee
met its burden of proof as to the two misrepresentations Saenz made prior to
the sale of the restaurant:    Saenz provided Gomez with a false income
statement and held himself out as an employee of Pizza Patrón corporate. Both
representations were made with the intent to induce Gomez to purchase the
restaurant, and either or both proximately caused Gomez injury. Without the
income statement, Gomez would not have felt secure in taking out a loan to
purchase the restaurant; and without Saenz’s claim he worked for Pizza Patrón
corporate, Gomez would not have believed he had the required authorization
to buy and operate the franchise. Gomez’s own experience in business matters
and financial acumen support the finding that his reliance was justified, as he
had no reason to question Saenz’s misrepresentations.
      The bankruptcy court’s findings of fact will not be set aside unless they
are clearly erroneous and this court is “left with the definite and firm
conviction that a mistake has been made.” Otto Candies, L.L.C. v. Nippon Kaiji
Kyokai Corp., 346 F.3d 530, 533 (5th Cir. 2003) (internal quotation marks and
citation omitted). A review of the record confirms the bankruptcy court’s
finding that Appellants’ actions satisfy the elements of Texas common law
fraud and 11 U.S.C. § 523(a)(2)(A). We cannot say the bankruptcy court clearly
erred in rendering its non-dischargeable judgment or that the district court
erred in affirming the bankruptcy court.
      AFFIRMED.


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