          United States Court of Appeals
                        For the First Circuit

No. 16-9006

                       IN RE JOSEPH M. CURRAN,

                                Debtor.
                         ____________________

                          CAROLYN PRIVITERA,

                        Plaintiff, Appellant,

                                  v.

                          JOSEPH M. CURRAN,

                         Defendant, Appellee.


              APPEAL FROM THE BANKRUPTCY APPELLATE PANEL
                         FOR THE FIRST CIRCUIT


                                Before

                         Howard, Chief Judge,
                   Selya and Lynch, Circuit Judges.



     Paul W. Hughes, with whom Michael B. Kimberly, Karianne Jones,
Mayer Brown LLP, William C. Parks, and Parks Law Offices were on
brief, for appellant.
     Louis S. Haskell, with whom Joy D. Hotchkiss and Law Office
of Louis S. Haskell were on brief, for appellee.



                            April 20, 2017
            SELYA, Circuit Judge.            In this bankruptcy appeal, the

parties ask us to resolve an issue that has divided our sister

circuits: whether the phrase "statement . . . respecting the

debtor's    .   .   .    financial     condition,"       as    used    in   11    U.S.C.

§ 523(a)(2)(B), should be interpreted narrowly to refer only to

those   documents       that   speak     directly   to    the       debtor's     overall

financial condition or broadly to include those documents that

merely reference a single asset or liability. Compare, e.g., Bandi

v. Becnel (In re Bandi), 683 F.3d 671, 676 (5th Cir. 2012), and

Cadwell v. Joelson (In re Joelson), 427 F.3d 700, 714 (10th Cir.

2005) (employing narrow approach), with Appling v. Lamar, Archer

& Cofrin, LLP (In re Appling), 848 F.3d 953, 960 (11th Cir. 2017)

and Engler v. Van Steinburg (In re Van Steinburg), 744 F.2d 1060,

1061 (4th Cir. 1984) (employing broad approach). But courts should

not rush to decide unsettled issues when the exigencies of a

particular case do not require such definitive measures.                       Here, we

see no need to enter onto terra incognita but, rather, decide the

case on less controversial principles of pleading and materiality.

When all is said and done, we affirm.

I.   BACKGROUND

            We begin with a brief description of the legal foundation

on which this case rests. Chapter 7 liquidation proceedings enable

an individual debtor to gain a "fresh start" by granting him a

discharge   that        releases   him   from    almost       all   debt    previously


                                         - 2 -
incurred.    Grogan v. Garner, 498 U.S. 279, 283 (1991); Harrington

v. Simmons (In re Simmons), 810 F.3d 852, 855 (1st Cir. 2016).

Such a discharge is available, though, only to the "honest but

unfortunate debtor."         Premier Capital, LLC v. Crawford (In re

Crawford), 841 F.3d 1, 7 (1st Cir. 2016) (quoting Grogan, 498 U.S.

at 286-87).     To this end, the bankruptcy code exempts some debts

— especially those rooted in fraud and deceit — from discharge.

See 11 U.S.C. § 523(a). These exemptions are construed stringently

and creditors must show that a debt "comes squarely" within a

particular exemption.    McCrory v. Spigel (In re Spigel), 260 F.3d

27, 32 (1st Cir. 2001).

            This case, which deals with a creditor's attempt to avail

herself of two such exemptions, was resolved on what amounts to a

motion for judgment on the pleadings.          Accordingly, we rehearse

the facts as they appear in the plaintiff's complaint (and the

documents     incorporated    by   reference   therein)   and   draw   all

reasonable inferences in the plaintiff's favor.             See Shay v.

Walters, 702 F.3d 76, 78 (1st Cir. 2012).

            In November of 2007, the debtor, Joseph M. Curran, and

the plaintiff, Carolyn Privitera, were romantically involved.          In

need of funds, the debtor turned to the plaintiff, who promised to

loan him $30,000.    During negotiations, the plaintiff (represented

by counsel) asked the unrepresented debtor to draw up a list of

his property.    In response, the debtor gave her a list of property


                                   - 3 -
(the List), comprising property "belonging" to him "either by title

or by physical possession" and used in his landscaping business.

The plaintiff's attorney made only minor changes to the List before

converting it into what he unilaterally styled as a "List of

Collateral."    The attorney then prepared a loan agreement (the

Agreement) and attached the List as an exhibit.

            The List included sixteen different landscaping-related

items ranging from a variety of clippers and trimmers to two

trucks.     The purchase price of each item was listed beside the

item in a column labeled "cost."         Excluding the trucks, the total

cost of the remaining items was slightly over $22,000.              With the

trucks, the total cost of all the items ballooned to more than

$86,000. Unbeknownst to the plaintiff, the debtor was still making

installment payments on at least one of the trucks and that truck

remained titled to the lender.

            Article II of the Agreement specified that the debtor

would execute and deliver a security agreement and financing

statements "covering" the property included in the List.                    It

further   provided   that     the   debtor   would   record   and   file   all

documents    necessary   to   "perfect   and   protect"   the   plaintiff's

security interest. To ensure this protection, Article II empowered

the plaintiff to sign and file financing statements on the debtor's

behalf.




                                    - 4 -
             The Agreement was executed in November of 2007, and the

plaintiff transferred $30,000 to the debtor's bank account.              Even

so, no security agreement or financing statement was presented,

and neither the plaintiff nor the debtor took any steps to perfect

the plaintiff's security interest in the property. The loan proved

to be a poor investment: the debtor repaid less than $5,000 before

defaulting in 2012.

             The plaintiff sued the debtor in a Massachusetts state

court and, in March of 2014, secured a default judgment in the

amount of $137,030.78 (a sum that included damages, interest, and

costs).     Later that year, the debtor — without making any payment

on the judgment — filed for Chapter 7 bankruptcy protection.              See

11 U.S.C. §§ 701-784.

             In due course, the plaintiff commenced an adversary

proceeding in the bankruptcy court seeking an order declaring the

debt non-dischargeable.         She claimed that the List was a false

statement submitted to induce her to make the loan, thus bringing

the debt within the purview of 11 U.S.C. § 523(a)(2)(B), which

renders     non-dischargeable    debts    obtained    through   "use     of   a

statement    in   writing   —   (i)    that   is   materially   false;    (ii)

respecting the debtor's . . . financial condition; (iii) on which

the creditor . . . reasonably relied; and (iv) that the debtor

. . . published with intent to deceive."




                                      - 5 -
             The debtor answered the complaint and then moved to

dismiss for failure to state a claim.            The plaintiff not only

opposed this motion but also moved to amend her complaint to

include an alternative claim that the debt was non-dischargeable

under section 523(a)(2)(A).         That section exempts from discharge

debts obtained through "false pretenses, a false representation,

or actual fraud, other than a statement respecting the debtor's

. . . financial condition."         11 U.S.C. § 523(a)(2)(A); see Field

v. Mans, 516 U.S. 59, 64-69 (1995) (comparing section 523(a)(2)(A)

and section 523(a)(2)(B) claims).

             After   a   hearing,   the   bankruptcy   court   granted   the

debtor's motion to dismiss.           In a bench decision, the court

concluded that, with respect to the section 523(a)(2)(B) claim,

the plaintiff's failure to perfect any security interest in the

debtor's property rendered her reliance on the List unjustifiable.

At the same time, the court denied the plaintiff's motion to amend

as futile, noting that the proposed amended complaint did not

allege that the debtor had made any affirmative misrepresentations

and that the plaintiff's failure to perfect "would be fatal, in

any case."

             The plaintiff took a first-tier appeal to the Bankruptcy

Appellate Panel for the First Circuit (the BAP).               Because the

debtor had answered the complaint before moving to dismiss, the

BAP construed his motion as a motion for judgment on the pleadings.


                                    - 6 -
See Fed. R. Bankr. P. 7012(b) (incorporating Federal Rule of Civil

Procedure 12); Fed. R. Civ. P. 12(b) (stating that a motion to

dismiss for failure to state a claim must be filed before a

responsive pleading).   It proceeded to hold that the List was not

a "statement . . . respecting the debtor's . . . financial

condition" within the meaning of section 523(a)(2)(B) and that,

even if it was, the plaintiff did not plead sufficient facts to

show that the List was materially false.    See Privitera v. Curran

(In re Curran), 554 B.R. 272, 282-83 (B.A.P. 1st Cir. 2016).       At

the same time, the BAP affirmed the denial of the plaintiff's

motion to amend.   See id. at 287.    This timely second-tier appeal

followed.

II.    ANALYSIS
            In this circuit, appeals in bankruptcy cases proceed

through a two-tiered framework.      See In re Simmons, 810 F.3d at

856.    A party who loses in the bankruptcy court has a choice: he

may take his initial appeal either to the district court or to the

BAP.   See 28 U.S.C. § 158(a), (b).    The court of appeals offers a

second tier of appellate review.     See id. § 158(d)(1).   We afford

no particular deference to decisions of the first-tier appellate

tribunal (be it the district court or the BAP) and focus instead

on the bankruptcy court's decision.    See Wheeling & Lake Erie Ry.

Co. v. Keach (In re Montreal, Me. & Atl. Ry., Ltd.), 799 F.3d 1,

5 (1st Cir. 2015).



                               - 7 -
             Here, the plaintiff's challenge is twofold.        First, she

asserts that the bankruptcy court erred when it dismissed her

complaint.      Second,   she   asserts   that    the    bankruptcy   court

compounded this initial error by refusing to allow her to add a

section 523(a)(2)(A) claim to her complaint.             We address these

assertions sequentially.

             In litigating adversary proceedings in bankruptcy, the

standards embedded in Federal Rule of Civil Procedure 12 apply.

See Fed. R. Bankr. P. 7012; see also Rok Builders, LLC v. 2010-1

SFG Venture LLC (In re Moultonborough Hotel Grp., LLC), 726 F.3d

1, 4 (1st Cir. 2013) (explaining that "[t]he legal standards

traditionally applicable to . . . motions to dismiss apply without

change in bankruptcy proceedings").       The bankruptcy court and the

BAP expressed divergent views about whether the debtor's motion

should be treated as a motion to dismiss or a motion for judgment

on the pleadings.      Here, however, those divergent views do not

matter: when — as in this instance — a motion for judgment on the

pleadings serves "as a vehicle to test the plausibility of a

complaint," it is treated like a motion to dismiss under Rule

12(b)(6).     Shay, 702 F.3d at 82 (quoting Grajales v. P.R. Ports

Auth., 682 F.3d 40, 44 (1st Cir. 2012)).         Regardless of the label,

we review the bankruptcy court's dismissal of the complaint de

novo, accepting all well-pleaded facts as true and drawing all

reasonable inferences in the pleader's favor.           See id. at 79.


                                  - 8 -
             In order to survive dismissal, a complaint need not set

forth "detailed factual allegations," Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007), but it must "contain sufficient factual

matter . . . to state a claim to relief that is plausible on its

face," Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation

omitted).     If the facts articulated in the complaint are "too

meager, vague, or conclusory to remove the possibility of relief

from the realm of mere conjecture," the complaint is vulnerable to

a motion to dismiss.     SEC v. Tambone, 597 F.3d 436, 442 (1st Cir.

2010) (en banc).

             This sort of plausibility review requires courts to

undertake a two-step pavane.      See Shay, 702 F.3d at 82.   First,

the court must set aside the complaint's conclusory averments.

See id.     Second, it must evaluate whether the remaining factual

content supports a "reasonable inference that the defendant is

liable for the misconduct alleged."      Id. (quoting Grajales, 682

F.3d at 45); see Banco Santander de P.R. v. Lopez-Stubbe (In re

Colonial Mortg. Bankers Corp.), 324 F.3d 12, 15 (1st Cir. 2003)

(similar).     In conducting this tamisage, the court "need not give

weight to bare conclusions, unembellished by pertinent facts."

Shay, 702 F.3d at 82-83.

             Much of the briefing in this case focuses on whether the

List is a statement respecting the debtor's financial condition.

Here, though, that issue need not be resolved because — even if we


                                 - 9 -
assume, for argument's sake, that the List constitutes a statement

of financial condition — the judgment below must be affirmed.           The

critical datum is that the plaintiff has failed plausibly to allege

that the List was materially false.1         We explain briefly.

          Material falsity is an element of a claim under section

523(a)(2)(B).    See   11    U.S.C.    §   523(a)(2)(B)(i);   Abramov    v.

Movshovich (In re Movshovich), 521 B.R. 42, 61 (Bankr. D. Mass.

2014).   To make out a claim that a statement is materially false

within the purview of section 523(a)(2)(B), a plaintiff must

plausibly allege that the statement misrepresented the kind of

information that "would normally affect the decision to grant

credit" and thus portrayed a substantially untruthful picture of

the debtor's financial condition.          Bethpage Fed. Credit Union v.

Furio (In re Furio), 77 F.3d 622, 625 (2d Cir. 1996) (citation

omitted); see In re Movshovich, 521 B.R. at 61.          A statement may

be   rendered   materially     false       either   by   an   affirmative

misrepresentation, see, e.g., In re Movshovich, 521 B.R. at 62, or

by omission, see, e.g., Leominster Hous. Auth. v. Dunbar (In re

Dunbar), 474 B.R. 14, 21 (Bankr. D. Mass. 2012).          To sink to the

level of a misstatement by omission, the party privy to the omitted


     1 To be sure, we do not    rely on the reasoning of either the
bankruptcy court or the BAP.     But that shift in focus presents no
obstacle. We are not wed to a   lower court's reasoning but, rather,
may affirm the dismissal of a   claim on any ground made manifest by
the record. See MacDonald v.    Town of Eastham, 745 F.3d 8, 11 (1st
Cir. 2014).


                                 - 10 -
information must have been obligated to furnish it.                       See id.

(collecting cases).

              Viewed against this backdrop, the plaintiff's complaint

needed plausibly to plead either that the debtor affirmatively

misrepresented the status of the items enumerated in the List or

that he omitted information he was obligated to furnish.                  In this

case,   the      complaint      does     not    identify       any    affirmative

misrepresentations.      Instead, it alleges only that the plaintiff

expected the debtor to supply a list of property "belonging to

[him], either by title or by physical possession."                   In response,

the debtor gave her exactly what she had requested: a list of items

that he either owned or possessed.              He added the cost (that is,

the purchase price) of each of the items.                The plaintiff does not

claim that the substance of the List was in any way untrue, nor

does    she     claim   that     the      debtor        made   any    affirmative

misrepresentations      about    the     nature    of    his   interest   in   the

enumerated items.

              Stripped to its essence, then, the plaintiff's case

rests on a claim that it is what the debtor did not say that

created a materially false impression.             She points specifically to

his failure to disclose that at least one of the trucks was

encumbered.     But a failure to speak becomes a misrepresentation by

omission only if the context requires the debtor to speak (that

is, to provide the missing information).                See id.   Here, however,


                                       - 11 -
the complaint contains no facts indicating that the debtor was

obliged to tell the plaintiff that the trucks were encumbered.

          To begin, the plaintiff does not assert that the debtor

agreed to identify only unencumbered property when compiling the

List.   As we already have explained, her complaint relates that

she asked him to prepare a list of property that he either owned

or possessed.    Including encumbered property on the List was

entirely consistent with her request.

          Moreover,    when   the    debtor   signed   the   Agreement,   he

vouchsafed only that he would not further encumber the enumerated

items. In this respect, the Agreement states that the debtor would

not "create, incur, assume, or suffer to exist" any encumbrances

"upon the use of [his] property or assets."            Giving these terms

their natural meaning, they refer only to future encumbrances, not

to preexisting ones.   See LifeWise Master Funding v. Telebank, 374

F.3d 917, 920 & n.4 (10th Cir. 2004) (interpreting promise that

funding recipient would not "create, incur, assume or suffer to

exist any Lien" on described property as prohibiting recipient

from allowing any future liens).

          By the same token, the plaintiff's complaint does not

aver that the debtor promised to provide a list of items sufficient

to secure the loan fully.     Without such a promise, the debtor may

reasonably have believed that the unencumbered property on the

List (which cost around $22,000 when purchased), together with


                                    - 12 -
whatever equity he had in any encumbered property,2 was sufficient

for   the   plaintiff's      purposes,    so    no   further    information       was

required.

            That the plaintiff's attorney subsequently titled the

list "List of Collateral," annexed it to the Agreement, and had

the debtor initial it did not — as the plaintiff suggests —

transmogrify the debtor's representations into misrepresentations.

Importantly,    the     plaintiff's        complaint        presents      no    facts

indicating    that    the    parties    reached      a    meeting   of    the   minds

regarding either the purpose of the List or the implications of

its recharacterization.          Nor does the complaint supply facts

suggesting that the plaintiff believed the listed items to be

unencumbered.        After    all,     encumbered        property   can   serve    as

collateral up to the value of the debtor's retained equity.                      See,

e.g., Prudential Ins. Co. v. SW Bos. Hotel Venture, LLC (In re SW

Bos. Hotel Venture, LLC), 748 F.3d 393, 398 (1st Cir. 2014);

Harley-Davidson Motor Co. v. Bank of New Eng.-Old Colony, N.A.,

897 F.2d 611, 613 (1st Cir. 1990).                   In the absence of facts

indicating that the parties had reached a different understanding,

the plaintiff's assertion that the debtor misled her gains no

traction.




      2The complaint is silent as to what equity, if any, the
debtor had in one of the trucks. As to the other, it alleges that
his equity was only $100.


                                       - 13 -
           Striving to blunt the force of this reasoning, the

plaintiff insists that it should have been clear to the debtor

that he was expected to disclose any preexisting encumbrances.         In

support, she cites a compendium of cases acknowledging that the

existence of encumbrances is often salient information. See, e.g.,

In re Van Steinburg, 744 F.2d at 1061.           But she cites no case

holding that a debtor is required to disclose prior encumbrances

simply because he has been asked to provide a list of property

that he owns and/or possesses,3 and we are aware of none.

           The short of it is that, without pleaded facts adequate

to   support   a   reasonable   inference   of   material   falsity,   the

plaintiff's section 523(a)(2)(B) claim does not cross the line

from possible to plausible.      The plausibility requirement demands

something more than facts showing that a claim is conceivable.

See Iqbal, 556 U.S. at 678; Schatz v. Repub. State Leadership




      3Many of the cases cited by the plaintiff consider the
discharge   of  debts   incurred   through  affirmatively   false
representations regarding a particular item's true ownership
status. See, e.g., Voyatzoglou v. Hambley (In re Hambley), 329
B.R. 382, 390-91, 399 (Bankr. E.D.N.Y. 2005); Hudson Valley Water
Res., Inc. v. Boice (In re Boice), 149 B.R. 40, 43, 45 (Bankr.
S.D.N.Y. 1992).    As we already have explained, the plaintiff
alleges no facts indicating that the debtor made affirmatively
false statements about his ownership interest in the listed
property.



                                  - 14 -
Comm., 669 F.3d 50, 55 (1st Cir. 2012).            The section 523(a)(2)(B)

claim was, therefore, properly dismissed.4

              This   leaves   only   the      plaintiff's   claim   that   the

bankruptcy court abused its discretion when it denied her motion

to amend her complaint to add a section 523(a)(2)(A) claim.

Federal Rule of Bankruptcy Procedure 7015 incorporates Federal

Rule of Civil Procedure 15 as the mechanism for adjudicating

motions to amend a pleading in the bankruptcy context.               Rule 15

specifies that, with exceptions not relevant here, a party may

amend her complaint only by leave of court.             See Fed. R. Civ. P.

15(a)(2).

              Courts are instructed to "freely give leave when justice

so requires."        Id.   This permissiveness, though, extends only so

far.       See Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 58 (1st

Cir. 2006) (observing that courts need not "mindlessly grant every

request for leave to amend").         A court may deny leave to amend for


       4
       In a last-ditch attempt to snatch victory from the jaws of
defeat, the plaintiff invokes the tenet that a party to a
transaction must disclose "matters known to him that he knows to
be necessary to prevent his partial or ambiguous statement of the
facts from being misleading."      Restatement (Second) of Torts
§ 551(2)(b). No argument premised on section 551(2)(b) was raised
below — and arguments advanced for the first time on appeal are
deemed waived. See B&T Masonry Constr. Co. v. Pub. Serv. Mutual
Ins. Co., 382 F.3d 36, 40 (1st Cir. 2004); see also Teamsters,
Chauffeurs, Warehousemen & Helpers Union v. Superline Transp. Co.,
953 F.2d 17, 21 (1st Cir. 1992) ("If any principle is settled in
this circuit, it is that, absent the most extraordinary
circumstances, legal theories not raised squarely in the lower
court cannot be broached for the first time on appeal.").


                                     - 15 -
a variety of reasons, including "futility, bad faith, undue delay,

or a dilatory motive on the movant's part."       Hatch v. Dep't for

Children, Youth & Their Families, 274 F.3d 12, 19 (1st Cir. 2001).

            We review a bankruptcy court's denial of leave to amend

for abuse of discretion.   See Zullo v. Lombardo (In re Lombardo),

755 F.3d 1, 3 (1st Cir. 2014).       That review is satisfied if we

discern some "arguably adequate basis" for the district court's

decision.   Hatch, 274 F.3d at 19.

            In the case at hand, the bankruptcy court denied the

plaintiff's motion for leave to amend on futility grounds.      Where,

as here, a party seeks leave to amend before any discovery has

occurred, a reviewing court assays futility with reference to the

Rule 12(b)(6) pleading criteria.     See id.   An attempt to amend is

regarded as futile if the proposed amended complaint fails to state

a plausible claim for relief.   See id.; see also Tambone, 597 F.3d

at 442.

            In her proposed amended complaint, the plaintiff claims

that the debt is exempt from discharge under section 523(a)(2)(A),

as well as section 523(a)(2)(B).     The former section exempts from

discharge    debts   obtained   by   "false    pretenses,   a     false

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

plaintiff appears to contend that because the debtor did not

disclose that at least one of the trucks was encumbered, he




                                - 16 -
obtained the loan through either false pretenses or a false

representation.     This contention lacks force.

          Unlike section 523(a)(2)(B) — which delineates every

element of a claim under it — section 523(a)(2)(A) incorporates

common law principles.      See Field, 516 U.S. at 69.           To state a

plausible section 523(a)(2)(A) claim, a complaint must include

facts reasonably indicating that:

          1) the debtor made a knowingly false
          representation or one made in reckless
          disregard of the truth, 2) the debtor intended
          to deceive, 3) the debtor intended to induce
          the creditor to rely upon the false statement,
          4) the creditor actually relied upon the false
          statement, 5) the creditor's reliance was
          justifiable, and 6) the reliance upon the
          false statement caused damage.

Sharfarz v. Goguen (In re Goguen), 691 F.3d 62, 66 (1st Cir. 2012)

(quoting In re Spigel, 260 F.3d at 32). The first element includes

false pretenses, which arise when the circumstances "imply a

particular set of facts, and one party knows the facts to be

otherwise"    but   does   not    correct       the   counter-party's     false

impression.   Old Republic Nat'l Title Ins. Co. v. Levasseur (In re

Levasseur), 737 F.3d 814, 818 (1st Cir. 2013) (citation omitted).


          The circumstances here do not imply a particular set of

facts that the debtor knew to be untrue.               The debtor was never

asked about whether or to what extent the listed items were

encumbered,   and    the   mere   fact     of    an   encumbrance   was    not

inconsistent with their use as collateral.              See, e.g., In re SW


                                  - 17 -
Bos. Hotel Venture, 748 F.3d at 398; Harley-Davidson, 897 F.2d at

613.    Seen in this light, the plaintiff's section 523(a)(2)(A)

claim fails for much the same reason that her section 523(a)(2)(B)

claim fails: she has not pleaded facts sufficient to make out a

plausible   claim   that   the   debtor    either   operated   under   false

pretenses or made a false representation.           Indeed, she relies on

the same facts she provided to support her section 523(a)(2)(B)

claim, insisting that because the debtor did not tell her about

the encumbrances, the List was false or, at least, actionably

misleading.    These facts did not bear the weight of her section

523(a)(2)(B) claim, and they are likewise too flimsy to bear the

weight of her section 523(a)(2)(A) claim.           The List was exactly

what it purported to be: a description of items that the debtor

used in the course of his business and their cost when he purchased

them.

            To say more would be to paint the lily.       We conclude, as

did the BAP, that an adequate basis existed for the bankruptcy

court's denial of the plaintiff's motion to amend: the new claim,

like the old claim, would have been futile.           It follows that the

bankruptcy court did not abuse its discretion in denying the motion

for leave to amend.

III. CONCLUSION

            We need go no further. For the reasons elucidated above,

the judgment is


Affirmed.


                                  - 18 -
