                                                          [DO NOT PUBLISH]


             IN THE UNITED STATES COURT OF APPEALS
                                                                    FILED
                     FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                       ________________________ ELEVENTH CIRCUIT
                                                             AUG 21, 2007
                              No. 07-10828                 THOMAS K. KAHN
                          Non-Argument Calendar                CLERK
                        ________________________

                      D. C. Docket No. 03-02830-CV-S
                        BKCY No. 02-02514-TOM7

In Re: EDWARD KIRKSEY WOOD, JR.,
       JO ANN CARLE WOOD,

                                                                Debtors.
__________________________________________________

E. TED TAYLOR,

                                                            Plaintiff-Appellant,

                                   versus

EDWARD KIRKSEY WOOD, JR.,

                                                           Defendant-Appellee.

                        ________________________

                 Appeal from the United States District Court
                    for the Northern District of Alabama
                       _________________________

                             (August 21, 2007)

Before BLACK, WILSON and PRYOR, Circuit Judges.
PER CURIAM:

      Creditor Ted Taylor appeals the district court’s reversal of the bankruptcy

court’s order in this case. The bankruptcy court found Edward Kirksey Wood

liable for a nondischargeable debt for obtaining Taylor’s signature on a loan

guaranty by false pretenses, pursuant to 11 U.S.C. § 523(a)(2)(A). The district

court found the bankruptcy court’s factual findings did not support a legal finding

that the debt was nondischargeable.

      On appeal, Taylor argues that Wood’s debt to him is nondischargeable

because Wood failed to discover and disclose to him material facts about another

partner’s limited guaranty on a loan for which Taylor signed an unlimited

guaranty. Taylor acknowledges that a creditor must show an intent to deceive to

find a debt nondischargeable based on false pretenses but asserts the bankruptcy

court’s factual findings impliedly found Wood intended to deceive because he

knowingly or recklessly failed to discover the truth.

      We review the bankruptcy court’s judgment independently of the district

court’s. In re Int’l Pharmacy & Discount II, Inc., 443 F.3d 767, 770 (11th Cir.

2005). We review determinations of law made by the bankruptcy court or district

court de novo and the bankruptcy court’s findings of fact for clear error. Id.

“[F]indings of fact are not clearly erroneous unless, in light of all the evidence, we



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are left with the definite and firm conviction that a mistake has been made.” Id.

      “[C]ourts generally construe the statutory exceptions to discharge in

bankruptcy liberally in favor of the debtor, and recognize that the reasons for

denying a discharge . . . must be real and substantial, not merely technical and

conjectural.” In re Miller, 39 F.3d 301, 304 (11th Cir. 1994) (internal citations and

quotations omitted). However, “the opportunity for a completely unencumbered

new beginning” is limited to the honest debtor. Grogan v. Garner, 498 U.S. 279,

286-87, 111 S. Ct. 654, 659 (1991). Section 523 of the Bankruptcy Code outlines

the exceptions to discharge in bankruptcy. See 11 U.S.C. § 523. The objecting

creditor bears the burden of proving the § 523(a) dischargeability exceptions by a

preponderance of the evidence. Grogan, 498 U.S. at 291, 111 S. Ct. at 661.

      Section 523(a)(2)(A) excludes from discharge debts obtained through “false

pretenses, a false representation, or actual fraud.” 11 U.S.C. § 523(a)(2)(A). We

have noted that § 523(a)(2)(A) has generally been interpreted to require the

traditional elements of common law fraud. In re Bilzerain, 153 F.3d 1278, 1281

(11th Cir. 1998). The elements of a claim under § 523(a)(2)(A) are: (1) the debtor

made a false representation with the intention of deceiving the creditor; (2) the

creditor relied on the false representation; (3) the reliance was justified; and (4) the

creditor sustained a loss as a result of the false representation. Id.



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      In In re Gilmore, 221 B.R. 864, 872 (Bankr. N.D. Ala. 1998), the

bankruptcy court discussed the meaning of false pretenses in § 523(a)(2)(A) and

noted the following:

      The concept of false pretenses is especially broad. It includes any
      intentional fraud or deceit practiced by whatever method in whatever
      manner. False pretenses may be implied from conduct or may consist
      of concealment or non-disclosure where there is a duty to speak, and
      may consist of any acts, work, symbol, or token calculated and
      intended to deceive. . . . It is a series of events, activities or
      communications which, when considered collectively, create a false
      and misleading set of circumstances, or a false and misleading
      understanding of a transaction, by which a creditor is wrongfully
      induced by a debtor to transfer property or extend credit to the
      debtor. . . . Silence or concealment as to a material fact can constitute
      false pretenses.

Gilmore, 221 B.R. at 872 (internal citations and quotations omitted). Additionally,

false pretenses contemplate a misrepresentation that is intentional or made with

reckless indifference to the truth. In re Booth, 174 B.R. 619, 623 (Bankr. N.D.

Ala. 1994).

      In this case, the bankruptcy court’s factual findings do not support the legal

conclusion that Wood engaged in false pretenses under § 523(a)(2)(A). The

bankruptcy court found that Wood should have discovered and corrected Taylor’s

mistaken impression concerning another partner’s limited guaranty on the loan but

that Wood believed that partner’s guaranty was unlimited and may not have

discovered the truth until after Taylor signed the unlimited guaranty. The

                                          4
bankruptcy court failed to find that Wood recklessly disregarded the truth, noting

only that he was in the best position to learn the truth about the other partner’s

limited guaranty. We do not find this factual finding clearly erroneous. The

district court correctly applied the law to the bankruptcy court’s factual findings to

determine that those findings could not legally support the conclusion that Wood

engaged in false pretenses to obtain a debt. Therefore, we affirm the district court.

      AFFIRMED.




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