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<pre>                  United States Court of Appeals <br>                      For the First Circuit <br>                       ____________________ <br> <br> <br>No. 98-9004 <br> <br>                 SANFORD INSTITUTION FOR SAVINGS, <br> <br>                      Plaintiff, Appellant, <br> <br>                                v. <br> <br>                      MICHAEL A. GALLO, JR., <br> <br>                       Defendant, Appellee. <br> <br>                       ____________________ <br> <br>             APPEAL FROM THE UNITED STATES BANKRUPTCY <br> <br>              APPELLATE PANEL FOR THE FIRST CIRCUIT <br> <br>                 [Hon. William C. Hillman, Judge] <br>                  [Hon. Henry J. Boroff, Judge] <br> <br>                       ____________________ <br> <br>                              Before <br> <br>                     Torruella, Chief Judge, <br> <br>Rosenn, Senior Circuit Judge, <br> <br>                    and Stahl, Circuit Judge. <br> <br>                      _____________________ <br> <br>     Thomas C. Bradley, with whom Michael K. Martin and Petruccelli <br>& Martin were on brief, for appellant. <br>     James F. Molleur, with whom Woodman & Edmands, P.A. was on <br>brief, for appellee. <br> <br> <br>                       ____________________ <br> <br>                       September 4, 1998 <br>                       ____________________

          ROSENN, Senior Circuit Judge.  This appeal raises an <br>important question pertaining to the discharge in bankruptcy of a <br>debt for property that was obtained by fraud.  Title 11 U.S.C. <br> 523(a)(2)(A) provides that the debtor shall be denied a discharge <br>of any debt for money or an extension of credit to the extent <br>obtained by a false representation or actual fraud.  It is <br>undisputed that the debtor, Michael A. Gallo Jr., knowingly made <br>false representations to the Sanford Institution for Savings ("SIS" <br>or "the Bank") on the basis of which he obtained a standby letter <br>of credit from it for $250,000.  SIS objected to the discharge of <br>Gallo's debt stemming from SIS's payment honoring the letter of <br>credit.  Gallo,  however, contended that the United States Supreme <br>Court construed the statute in Field v. Mans, 516 U.S. 59 (1995), <br>as inapplicable when the victim does not justifiably rely on the <br>debtor's fraudulent representation. <br>          The bankruptcy court rejected the Bank's objection and <br>ordered the debt discharged.  SIS appealed to the circuit's <br>bankruptcy appellate panel which affirmed the decision of the <br>bankruptcy court by a two-to-one majority.  In re Gallo, 216 B.R. <br>306 (B.A.P. 1st Cir. 1998).  SIS timely appealed to the Court of <br>Appeals.  We reverse. <br>                                I. <br>          On June 19, 1996, Appellee Gallo filed a petition in <br>bankruptcy pursuant to Chapter 7 of the federal bankruptcy code in <br>the United States Bankruptcy Court for the District of Maine.  See11 U.S.C.  701-66 (West 1993) (codification of Chapter 7).   SIS, <br>the appellant, is a creditor of Gallo's, having obtained a default <br>judgment against him in state court in excess of $300,000.  In the <br>bankruptcy proceeding, pursuant to  523(a)(2)(A), SIS filed an <br>adversary action against Gallo seeking to have the debt declared <br>nondischargeable on the ground that Gallo had procured by fraud a <br>$250,000 letter of credit underlying the debt.  After a bench <br>trial, the bankruptcy court found that SIS was not justified in <br>relying on misrepresentations Gallo made to SIS and held the debt <br>dischargeable.  In re Gallo, 208 B.R. 756 (D. Maine 1997). <br>          The important facts are not in dispute.  See In re <br>Gallo, 208 B.R. at 757-58. In December 1989, Gallo, a longtime and <br>faithful customer of SIS,  requested a standby letter of credit <br>from SIS to be issued to People's Heritage Bank, which had agreed <br>to finance a hotel development project of Gallo's in Ogunquit, <br>Maine.  Gallo, a busy and respected real estate developer residing <br>in Sanford, Maine, had obtained numerous loans from SIS since the <br>1970s, including a $150,000 unsecured line of credit.  Gallo had <br>always timely repaid each loan and maintained an exemplary record <br>with SIS.  SIS President Rodney Normand handled many, if not all, <br>of Gallo's loans and submitted Gallo's letter of credit request to <br>the Bank's board of directors.  The board authorized the letter of <br>credit on the condition that Gallo give SIS a second mortgage on <br>his home (SIS already held a first mortgage), which he had owned <br>jointly with his wife, Gail Gallo, and a second mortgage on the <br>hotel property. <br>     In July 1989, unknown to SIS, Gallo had transferred his <br>interest in his home to his wife pursuant to a separation <br>agreement.  SIS was unaware of this transfer, although the mortgage <br>required notice to it from the mortgagors in such an event. <br>Approximately four days after requesting the letter of credit, <br>Gallo received and executed the required documents.  However, <br>outside the presence of SIS officials, Gallo had forged his wife's <br>signature to the underlying documents.  The bank required Gail <br>Gallo's signature because it believed that she, along with her <br>husband, jointly owned their home and had to consent to the <br>mortgage.  It is undisputed that Gail Gallo did not know of or <br>consent to the signing of her name to the security documents.  <br>Normand, the bank president, signed as a witness to Gail Gallo's <br>signature even though he did not personally see her sign the <br>documents.  In sum, Gallo falsely represented to the bank that he <br>and Gail Gallo still held an interest in the home and that she had <br>signed the supporting documents. <br>     SIS did not perform a title search for the Gallos' home <br>in this instance even though the bankruptcy court found that it was <br>the Bank's normal policy to do so with mortgage loans.  SIS did not <br>do so in this case because Normand considered Gallo to be an <br>honest, reliable, and trustworthy customer who had a long history <br>of scrupulously meeting his previous obligations to SIS.  Besides, <br>Gallo was in a great deal of haste in obtaining the letter of <br>credit because of pressure in meeting the closing date on the hotel <br>project. <br>     The hotel development project went awry.  On July 18, <br>1991, People's Heritage Bank presented the letter of credit to SIS <br>and requested payment of the full amount.  SIS honored its standby <br>letter of credit to Gallo and paid People's Heritage Bank $250,000 <br>on July 24, 1991.  SIS later obtained a default judgment against <br>Gallo in the amount of $301,594.22, including interest, attorneys' <br>fees, and costs.  The judgment has not been satisfied. <br>     Following trial, the bankruptcy court held that the debt <br>was dischargeable notwithstanding Gallo's fraud because the Bank <br>did not justifiably rely on his misrepresentations to it.  <br>Specifically, the court held that SIS did not justifiably rely on <br>Gallo's two false representations, i.e., that he owned his home or <br>that his wife had signed the loan documents.  The court reasoned <br>that "[w]hether SIS justifiably relied on the signed loan documents <br>is dependent upon whether or not SIS had an obligation to <br>investigate title to the property."  See 208 B.R. at 759.   The <br>court held that, because SIS was a "sophisticated" lender, it was <br>required to act in accordance with its normal policy and perform a <br>title search before it could rely on Gallo's statement that he had <br>an interest in the home.  See 208 B.R. at 758-59.  In affirming the <br>bankruptcy court's decision, the bankruptcy appellate panel <br>reasoned that if SIS had performed a title search, it would have <br>discovered that Gallo no longer owned an interest in the home.  <br>This would have put the bank on notice that something was wrong and <br>should have caused it to refuse Gallo's request for the letter of <br>credit.  See 216 B.R. at 310 n.4 <br>                               II. <br>     The adversary action is a core proceeding because it is <br>an objection to the discharge of a debt.  See 28 U.S.C. <br> 157(b)(2)(J).  Thus, the bankruptcy court had subject-matter <br>jurisdiction pursuant to 28 U.S.C.  157(a) and 1334(a).  The <br>bankruptcy appellate panel had appellate jurisdiction pursuant to <br>28 U.S.C.  158(b)(1).  This Court has appellate jurisdiction <br>pursuant to 28 U.S.C.  158(d) and 1291. <br>                               III. <br>     This case presents a sole legal issue:  namely, whether <br>the bankruptcy court properly applied to the facts the "justifiable <br>reliance" element of the fraud interpretation announced by the <br>Court in Fields v. Mans.  Thus, this Court exercises plenary <br>review.  See Monarch Life Ins. Co. v. Ropes & Gray, 65 F.3d 973, <br>978 (1st Cir. 1995). <br>     Title 11 U.S.C.  523(a)(2)(A) bars from discharge in <br>bankruptcy a debt for money, property, services, or an extension, <br>renewal, or refinancing of credit, obtained by false pretenses, a <br>false representation, or actual fraud.  In Field v. Mans, the <br>Supreme Court construed this provision to require the creditor to <br>prove that its reliance on the misrepresentation was justified in <br>order to avoid discharge.  516 U.S. at 61; accord Palmacci v. Umpierrez, 121 F.3d 781, 786 n.3 (1st Cir. 1997); Matter of Bero, <br>110 F.3d 462, 465 (7th Cir. 1997); In re Bilzerian, 100 F.3d 886, <br>892 (11th Cir. 1996), cert. denied, 118 S. Ct. 1559 (1998); In re <br>Apte, 96 F.3d 1319, 1322 (9th Cir 1996).  The Court rejected the <br>argument that the more demanding "reasonable reliance" standard <br>applied.  See id. at 70 (citing and adopting Restatement (Second) <br>of Torts  545A, cmt. b, which states that plaintiff's conduct does <br>not have to conform to "reasonable man standard"). <br>     The Court adopted the dominant common-law formulation of <br>the elements of fraudulent misrepresentation as set forth in the <br>Restatement (Second) of Torts  537-45 and Prosser and Keeton on <br>Torts  108, at 750-52.  In contrast to the reasonable reliance <br>standard, in order to show justifiable reliance, the creditor need <br>not prove that he acted consistent with ordinary prudence and care.  <br>"'The design of the law is to protect the weak and credulous from <br>the wiles and stratagems of the artful and cunning, as well as <br>those whose vigilance and security enable them to protect <br>themselves' and 'no rogue should enjoy his ill-gotten plunder for <br>the simple reason that his victim is by chance a fool.'"  Prosser <br> 108, at 751 (citations omitted). <br>     The rationale for placing this relatively low burden on <br>the victim of the misrepresentation is rooted in the common law <br>rule that the victim's contributory negligence is not a defense to <br>an intentional tort.  See Restatement (Second) of Torts  545A & <br>cmt. a; Prosser  108, at 750; accord Apte, 96 F.3d at 1323.  In <br>such circumstances, the equities weigh in favor of giving the <br>benefit of the doubt to the victim, careless as it may have been, <br>and even though it could have been more diligent and conducted an <br>investigation. This rationale was most clearly stated by Lord <br>Chelmsford in Directors of the Central R. Co. of Venezuela v. Kisch, 2 H.L. 99, 120 (1867): <br>     But it appears to me that when once it is <br>     established that there has been any fraudulent <br>     mis-representation or wilfull concealment by <br>     which a person has been induced to enter into <br>     a contract, it is no answer to this claim to <br>     be relieved from it to tell him that he might <br>     have known the truth by proper inquiry.  He <br>     has a right to retort upon his objector, 'You, <br>     at least, who have stated what is untrue, or <br>     have concealed the truth, for the purpose of <br>     drawing me into a contract, cannot accuse me <br>     of want of caution because I relied implicitly <br>     on your fairness and honesty.' <br> <br>     A party may justifiably rely on a misrepresentation even <br>when he could have ascertained its falsity by conducting an <br>investigation.  See Restatement (Second) of Torts  540, 541 cmt. <br>a (1976); Prosser  108, at 753; see also Field, 516 U.S. at 70.  <br>This rule applies whether the investigation would have been costly <br>and required extensive effort or could have been made without "any <br>considerable trouble or expense."  Restatement  540 cmt. a; <br>Prosser  108, at 753. This pragmatic rule of conduct is at the <br>heart of millions of commercial transactions conducted daily in <br>this nation which rely on the honesty and truthfulness of <br>representation made by the parties.  For example, it is common <br>knowledge that the stock exchanges of this nation depend upon and <br>are fueled by representations of the parties which are conducted <br>without preliminary investigations.  However, the reliance on <br>misrepresentations known by the victim to be false or obviously <br>false is not justified; falsity which could have been discovered by <br>senses during a cursory glance may not be relied upon.  Restatement <br> 540 cmt. a; see also id.  541 & cmt.; accord Prosser  108, at <br>750, 751. <br>     The illustration following Restatement  540 is <br>particularly instructive in this case: <br>          A, seeking to sell land to B, tells B that <br>          the land is free from all incumberances.  <br>          By walking across the street to the office <br>          of the register of deeds in the <br>          courthouse, B could easily learn that <br>          there is a recorded and unsatisfied <br>          mortgage on the land.  B does not do so <br>          and buys the land in reliance upon A's <br>          misrepresentation.  His reliance is <br>          justified. <br> <br>     Gallo reiterates the statement of the bankruptcy court <br>that SIS could not justifiably rely on his statements because it <br>could have conducted a routine title search and discovered that he <br>no longer owned the home he had pledged as security for the loan.  <br>The bankruptcy court equated a title search by a financial <br>institution with the "cursory investigation" referred to in <br>Restatement  541, cmt a.  Gallo contends that the "qualities" and <br>"characteristics" SIS possessed as a sophisticated financial <br>institution required it to suspect that Gallo was attempting to <br>commit fraud.   See Restatement  545A cmt. b. <br>     We disagree.  We conclude that the bankruptcy court and <br>bankruptcy appellate panel misapplied the justifiable reliance <br>standard.  In light of Gallo's extensive and trustworthy <br>relationship with SIS and representation that he owned an interest <br>in the home and that his wife had agreed to the mortgage, SIS was <br>not required to take the investigative step of obtaining a title <br>search to confirm those statements.  See Restatement  540, illus. <br>1.  The law is clear that SIS was entitled to rely on the <br>statements unless there were warning signs of their falsity, even <br>if obtaining a title search was easy and a matter of bank policy.  <br>Restatement  540, cmt. a.  In the absence of any warning signs <br>(i.e., obvious or known falsities, see Restatement  541) either in <br>the documents, in the nature of the transaction, or in Gallo's <br>conduct or statements, the Bank justifiably relied on his <br>representation.  Its qualities and characteristics as a <br>sophisticated lender did not require it to do a title search when <br>presented with a transaction that, on its face, appeared free of <br>fraud.  This was not the case here.  Gallo specifically represented <br>to SIS that he owned the home with his wife and that his wife had <br>agreed to the mortgage and signed the documents.  Those statements <br>were consistent with the documents and his conduct. <br>     The illustration in the Restatement  540 quoted above, <br>which was cited with approval by the Supreme Court, could not be <br>more on point.  In the example, a buyer of real property relies on <br>the seller's representation that the property is unencumbered by <br>liens.  The buyer could have investigated the claim and determined <br>its falsity by walking "across the street" and examining readily <br>available public records.  According to the Restatement, the <br>failure to conduct this simple and easily undertaken investigation <br>would not preclude a cause of action by the buyer against the <br>seller because reviewing even these easily obtained records is an <br>investigation and an investigation is not required when the <br>misrepresentation is intentional.  See Restatement  540 illus. 1.  <br>The illustration replicates the facts of this case almost <br>completely. <br>     Additionally, SIS had numerous other reasons to rely on <br>Gallo's statements aside from the regularity of the security <br>documents.  Prior to this incident, Gallo was reputed to be an <br>honest, trustworthy, and reliable businessman in the community and <br>was a long-time SIS customer who always paid off his previous loans <br>with the Bank.  He had a strong business and somewhat personal <br>relationship with Normand.  Further, Gallo's representations that <br>he owned the home he pledged as security and that his wife had <br>signed the loan documents were not implausible or obviously false, <br>especially in light of his previous mortgage.  Certainly, the <br>representations of a long-time customer with a reputation for <br>honesty and trustworthiness and an excellent track record of <br>consistent loan repayments was a basis on which to justify <br>reliance. <br>     The exercise of reasonable care would have required a <br>title search to determine whether Gallo still actually owned the <br>property he pledged as collateral.  SIS was likely negligent for <br>failing to do so.  Nonetheless, its lack of care does not exculpate <br>Gallo's fraud and dishonesty.  The court should not reward him for <br>his fraud because the Bank should have been more circumspect.  <br>SIS's negligence does not relieve Gallo of continued responsibility <br>for his intentional tort.  See Apte, 96 F.3d at 1323; Restatement <br> 545A.  The Supreme Court, the Restatement, and Prosser on Tortsare unmistakably clear that SIS was not required to make an <br>investigation and that it justifiably relied on Gallo's statements. <br>                               IV. <br>     For those reasons, we will reverse the bankruptcy <br>appellate panel and remand with instructions to vacate the <br>bankruptcy court decision and direct the bankruptcy court to enter <br>judgment for SIS barring the debt from discharge. <br> <br> <br> <br> <br> <br> <br> <br> <br> <br> <br> <br> <br> <br> <br>                                                  Dissent Follows

     STAHL, Circuit Judge, dissenting.  Unlike the majority, <br>I would leave intact the ruling of the bankruptcy court, affirmed <br>by the bankruptcy appellate panel, that SIS, acting through Roger <br>Normand, did not justifiably rely upon Gallo's false affixation of <br>his then-wife's signature to the loan documents.  But even if I <br>could agree that Normand's putative reliance was justifiable, I <br>would vacate and remand for fact-finding on an issue the lower <br>courts did not reach:  whether Normand relied in fact upon the <br>forged signature.  For both these reasons, I dissent from the <br>majority's reversal of the lower court's judgment. <br>                                I. <br>     As an initial matter, I disagree with the majority's <br>statement that "[t]his case presents a sole legal issue . . . [over <br>which] this Court exercises plenary review."  Ante at 5.  So long <br>as there is no indication that the lower courts misapprehended the <br>relevant legal principles (and my review of their opinions reveals <br>that they were fully aware of the applicable justifiable reliance <br>standard, as explicated by the Supreme Court in Field v. Mans, 516 <br>U.S. 59 (1995)), a finding that Normand's reliance, if any, was <br>unjustified is a paradigmatic fact-dominated mixed fact/law <br>determination that we should accept unless shown to be clearly <br>erroneous.  See In re Extradition of Howard, 996 F.2d 1320, 1328 <br>(1st Cir. 1993) (explaining this circuit's sliding scale approach <br>to mixed fact/law determinations); see also In re Apte, 96 F.3d <br>1319, 1324 (9th Cir. 1996) (reviewing for clear error a no- <br>justifiable-reliance determination made in a bankruptcy court <br>proceeding); cf., e.g., Henry v. Connolly, 910 F.2d 1000, 1003 (1st <br>Cir. 1990) (reviewing for clear error determination of no- <br>reasonable-reliance made on a misrepresentation claim brought under <br>Massachusetts law); Piekarski v. Home Owners Sav. Bank, F.S.B., 956 <br>F.2d 1484, 1493 (8th Cir. 1992) (reviewing for clear error <br>determination of justifiable reliance made on a misrepresentation <br>claim brought under Minnesota law); Offshore Prod. Contractors, <br>Inc. v. Republic Underwriters Ins. Co., 910 F.2d 224, 232 (5th <br>1990) (reviewing for clear error determination of justifiable <br>reliance made on a misrepresentation claim brought under Louisiana <br>law).  Thus, we are empowered to reverse only if, on our review of <br>the record as a whole, we have a "definite and firm conviction that <br>a mistake has been made."  Anderson v. City of Bessemer City, 470 <br>U.S. 564, 573 (1985) (citation and internal quotation marks <br>omitted). <br>     Perhaps because I see the standard-of-review question <br>differently than the majority, I also am at a loss to understand <br>its appellant-friendly recitation of the facts relevant to the <br>question we must answer.  Because the trial court, following a <br>bench trial, pretermitted the question of reliance in fact but <br>agreed with Gallo that any reliance by SIS was unjustifiable, we <br>are obliged to view the facts in the light most flattering to its <br>conclusion.  See La Esperanza de P.R. v. Prez Y CIA. de Puerto <br>Rico, Inc., 124 F.3d 10, 12 (1st Cir. 1997).  So viewed, the facts <br>on which we should base our judgment are as follows.     <br>     In his trial testimony, Normand admitted that, although <br>he telephoned Gallo on the afternoon of Wednesday, December 20, <br>1989, to inform Gallo that the Board had approved the request for <br>the letter of credit, he did not inform Gallo of the requirement of <br>a second mortgage on the Sanford home until the morning of Friday, <br>December 22, 1989, when Gallo arrived in his office to sign the <br>loan documents.  Normand did not explain why he chose to wait until <br>Friday to inform Gallo of the Board's unanticipated (by Normand and <br>Gallo) condition on the letter of credit.  Nor did Normand explain <br>his failure to ask Gallo and his wife to come in to sign the <br>documents, even though Normand thought at the time that Gallo and <br>his wife were co-owners of the Sanford home.   <br>     Normand further testified that, when he informed Gallo <br>that SIS's Board of Directors would require a second mortgage on <br>the Sanford home in order to issue the requested letter of credit, <br>Gallo told him that his wife "did not want or did not like a second <br>mortgage on the property and that he [sic] would object to having <br>it."  Despite this signal that Gallo's wife would object to the <br>Board's condition, Normand permitted Gallo to take the documents <br>from his office with the following promise:  "I will get her to <br>sign."  And later that same day, Normand uncritically accepted back <br>from Gallo the loan documents with what purported to be Gallo's <br>wife's unwitnessed signature.  Normand then signed his own name to <br>the blank witness line without so much as a telephone call to <br>Gallo's wife to confirm that she had indeed assented to the <br>mortgage.  Finally, despite the fact that the letter of credit <br>constituted what Normand described as "a very heavy loan for us," <br>Normand thereafter declined to follow customary SIS practice and do <br>a title search on the property -- a search that would have informed <br>SIS that Gallo was misrepresenting that he had an interest in the <br>property and surely would have caused SIS to question Gallo's wife <br>about whether she had, in fact, assented to the mortgage. <br>     In view of this evidence, I cannot say with a definite <br>and firm conviction that the trial court erred in concluding that <br>Normand proceeded in the face of what amounted to a warning that a <br>deception was underway.  And as the Supreme Court acknowledged <br>while explaining the justifiable reliance standard, such a warning <br>puts to its recipient a duty to investigate (at least cursorily) <br>before there may be justifiable reliance upon the <br>misrepresentation.  See Field, 516 U.S. at 71 (citing W. Prosser, <br>Law of Torts  108, at 718 (4th ed. 1971)).   <br>     Yet Normand failed to undertake either of the cursory <br>investigative routes obviously available to him at the time of <br>Gallo's highly irregular document submission; he neither telephoned <br>Gallo's wife to confirm her signature before witnessing it, nor <br>searched the title of the property in question.  In my opinion, <br>Normand's inaction constituted a breach of the duty to investigate.  <br>The trial court therefore did not err in concluding that Normand <br>(and, derivatively, SIS) assumed the risk arising from Gallo's <br>conduct.  See Restatement (Second) of Torts  545A, Cmt. b. (1976) <br>(when the recipient of a misrepresentation proceeds in the face of <br>facts making obvious the falsity of the representation, "his <br>conduct is more analogous to assumption of the risk than to <br>contributory negligence"). <br>                               II. <br>     Even if I agreed with the majority that Normand's <br>putative reliance on Gallo's wife's signature was justifiable as a <br>matter of law, I would remand for further fact-finding as to <br>whether Normand relied in fact upon the signature.  Cf. Field, 516 <br>U.S. at 76 (noting that "the greater the distance between the <br>reliance claimed and the limits of the reasonable, the greater the <br>doubt about reliance in fact").  Because the bankruptcy court <br>deemed any reliance in fact unjustifiable, it did not decide <br>whether there was such reliance.  Yet the facts just outlined <br>suggest, to say the least, that Normand did not view the second <br>mortgage as necessary.  Moreover, I believe it worthwhile to <br>emphasize one additional point not mentioned by the majority:  <br>although the other second mortgage required for the letter of <br>credit -- the second mortgage on the development -- was recorded in <br>due course, the mortgage on the Sanford home was not recorded until <br>1991, nearly two years after the letter of credit issued and a mere <br>one week after another creditor recorded a $1.2 million lien <br>against Gallo.  I regard this lapse, which Normand was unable to <br>explain at trial, as especially curious because it was the mortgage <br>on the Sanford home on which the Board had insisted (apparently <br>over Normand's disagreement).  One can only assume that the Board <br>insisted on the second mortgage on the home because it viewed the <br>second mortgage on the development as insufficient to protect its <br>interests in the event of a default and a calling of the letter of <br>credit. <br>                               III. <br>     Had the facts described above been adduced in a criminal <br>bank fraud trial, they surely would have been sufficient to justify <br>the giving of a willful blindness instruction.  These same facts <br>thus should be regarded as adequate to ground the trial court's <br>determination that Normand did not justifiably rely on Gallo's <br>forgery because Normand effectively ignored a warning that Gallo <br>had forged his wife's signature to the loan documents.  <br>Alternatively, these facts should be regarded as sufficient to <br>warrant a remand for inquiry into whether Normand relied in fact on <br>Gallo's forgery. <br>     I dissent.</pre>

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