Nauss v. Davis

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
IN RE:
PAXTON DAVIS and KATHARINE
DAVIS,
Debtors.
Case No. 25-10188-T
Chapter 7
TONYA K. NAUSS,
Plaintiff,
v.
PAXTON DAVIS,
Defendant.
Adv. No. 25-01007-T
MEMORANDUM OPINION
THIS MATTER comes before the Court pursuant to Plaintiff’s Amended Motion for
Summary Judgment (the “Motion”), 1 filed by Tonya K. Nauss (“Plaintiff”). Presently at issue is
whether a debt is dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) and (a)(4). 2 The following
findings of fact and conclusions of law are made pursuant to Federal Rule of Civil Procedure 52,
made applicable to this bankruptcy proceeding by Federal Rule of Bankruptcy Procedure 7052.
Jurisdiction
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b), and venue is
proper pursuant to 28 U.S.C. § 1409. Reference to the Court of this matter is proper pursuant to
1 ECF No. 24.
2 Unless otherwise noted, all statutory references are to sections of the United States
Bankruptcy Code, 11 U.S.C. § 101 et seq.
Filed/Docketed
Jun 04, 2026
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28 U.S.C. § 157(a). Determination as to the dischargeability of a debt is a “core” proceeding as
that term is defined by 28 U.S.C. § 157(b)(2)(I).
Summary Judgment Standard
The United States Court of Appeals for the Tenth Circuit has held that:
Summary judgment is appropriate when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “An issue is ‘genuine’ if there is sufficient evidence on
each side so that a rational trier of fact could resolve the issue either way.” Adler v.
Wal–Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). “An issue of fact is
‘material’ if under the substantive law it is essential to the proper disposition of the
claim.” Id. Put differently, “[t]he question . . . is whether the evidence presents a
sufficient disagreement to require submission to a jury or whether it is so one-sided
that one party must prevail as a matter of law.” Shero v. City of Grove, 510 F.3d
1196, 1200 (10th Cir. 2007) (quotation omitted). “On summary judgment the
inferences to be drawn from the underlying facts must be viewed in the light most
favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (quotation
omitted). 3
When the nonmoving party fails to respond to a movant’s assertion of fact, the Court may
“consider the fact undisputed for purposes of the motion.” 4 Nonetheless, the Court must
“examin[e] the moving party’s submission to determine if it has met its initial burden of
demonstrating that no material issues of fact remain for trial and the moving party is entitled to
judgment as a matter of law.” 5
3 Becker v. Bateman, 709 F.3d 1019, 1022 (10th Cir. 2013).
4 Fed. R. Civ. P. 56(e)(2), made applicable to this proceeding by Fed. R. Bankr. P. 7056.
See also Bankr. N.D. Okla. Local Rule 7056-1(B) (“All properly supported material facts set forth
in the movant’s statement shall be deemed admitted for the purpose of summary judgment unless
specifically controverted by a statement of the non-movant that is supported by evidentiary
material.”).
5 Reed v. Bennett, 312 F.3d 1190, 1195 (10th Cir. 2002).
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Background
In March 2024, Plaintiff contracted with Defendant Paxton Davis, d/b/a Re Home Building
and Construction, LLC (“Defendant”) via an Invoice Construction Agreement (the “Agreement”)
for the performance of certain remodeling and construction work on Plaintiff’s residence. Despite
Plaintiff paying Defendant $60,000.00, the work was not completed in accordance with the
Agreement. As a result, Plaintiff filed this adversary proceeding, seeking both a judgment for
$60,000.00 and a determination that the debt is excepted from discharge in Defendant’s bankruptcy
case pursuant to § 523(a)(2)(A) and (a)(4).
Findings of Fact
There is no genuine dispute as to the following facts: 6
1. 	On March 4, 2024, Plaintiff paid Defendant $50,000.00 to remodel, build, and
renovate Plaintiff’s residence (the “Project”). 7
2. 	On May 20, 2024, Plaintiff paid Defendant an additional $10,000.00 for the
Project. 8
3. 	On February 13, 2025, Defendant filed a Chapter 7 Voluntary Petition in this Court,
Case Number 25-10188-T. 9
4. 	On May 1, 2025, Plaintiff filed this adversary proceeding. 10
6 These facts were alleged by Plaintiff in the Motion, ECF No. 24. Defendant failed to
respond to the Motion. As such, these facts are deemed admitted for purposes of the pending
summary judgment motion. See Bankr. N.D. Okla. LR 7056-1(B).
7 ECF No. 24 at 31-32.
8 Id. at 33.
9 Case No. 25-10188, at ECF No. 1.
10 ECF No. 1.
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5. 	Plaintiff served Defendant with Interrogatories, Requests for Admission, and
Requests for Production of Documents via first class mail on June 27, 2025. 11
6. 	To date, Defendant has failed to respond to Plaintiff’s discovery requests or
Plaintiff’s Motion. Therefore, the following facts are admitted: 12
7. 	Defendant told Plaintiff “no permits” were necessary to complete the Project.
8. 	Work on the Project was stopped because permits were necessary.
9. 	Defendant did not pay subcontractors or independent contractors all funds owed to
them for the Project.
10. 	Defendant did not purchase all supplies and materials necessary to complete the
Project.
11. 	Plaintiff paid all amounts owed for completion of the Project.
12. 	Defendant did not complete the Project.
13. 	Funds paid to Defendant by Plaintiff for the Project were not used on the Project.
14. 	Defendant did not hold the funds paid by Plaintiff in a separate account or in trust
for the completion of the Project.
15. 	Defendant held himself out to Plaintiff as an experienced, competent and capable
professional home repair specialist.
16. 	Defendant promised Plaintiff to oversee and manage construction of the Project.
11 See ECF No. 24 at 20-21.
12 “A matter is admitted unless, within 30 days after being served, the party to whom the
request is directed serves on the requesting party a written answer or objection addressed to the
matter and signed by the party or its attorney.” Fed. R. Civ. P. 36(a)(3), made applicable to this
proceeding by Fed. R. Bankr. P. 7036; see Bergemann v. United States, 820 F.2d 1117, 1120 (10th
Cir. 1987) (citing first Rainbolt v. Johnson, 669 F.2d 767, 768 (D.C. Cir. 1981); and then Luick v.
Graybar Elec. Co., 473 F.2d 1360, 1362 (8th Cir. 1973)).
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17. 	Defendant 	promised 	to 	provide 	Plaintiff 	with 	copies 	of 	all 	invoices 	from
subcontractors and vendors.
18. 	The invoices provided by Defendant to Plaintiff represented the services and
materials actually provided on and for the Project.
19. 	Defendant represented to Plaintiff the Project would be completed in a good and
workmanlike manner.
20. 	Defendant represented to Plaintiff that the Project would be completed in
compliance with all applicable laws, rules, regulations, and standards.
21. 	Defendant represented to Plaintiff he would supervise and coordinate all work on
the Project.
22. 	Defendant represented to Plaintiff the Project would be completed on the financial
terms and conditions set forth in the Agreement.
23. 	The Project has the following negligent and/or defective workmanship:
a. 	Failure to follow plans and specifications;
b. 	Using inferior materials;
c. 	Improperly installed French drains;
d. 	Improperly installed roofing;
e. 	Improperly installed and insufficient framing brackets; and
f. 	Improperly installed decking.
24. 	The statements Defendant made to Plaintiff regarding the Project were made with
the intent for her to rely on his statements.
25. 	Plaintiff relied upon his statements.
26. 	Defendant had a fiduciary duty to Plaintiff under Oklahoma law.
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27. 	Defendant breached his fiduciary duty to Plaintiff.
28. 	Plaintiff filed the instant Amended Motion for Summary Judgment on March 17,
2026. 13
To the extent the Conclusions of Law contain any items that should more appropriately be
considered Findings of Fact, they are incorporated herein by this reference.
Conclusions of Law
The issue before the Court is whether a debt should be excepted from discharge under
§ 523(a)(2)(A) and (a)(4) of the Bankruptcy Code. Exceptions to discharge are to be narrowly
construed with any doubts resolved in the debtor’s favor. 14 Under § 523, a creditor seeking to
except its claim from discharge must prove the claim is nondischargeable by a preponderance of
the evidence. 15
A. 	Section 523(a)(2)(A): False Pretenses, False Representation, or Actual Fraud
Section 523(a)(2)(A) excepts from discharge a debt “for money, property, services, or an
extension, renewal, or refinancing of credit, to the extent obtained by—false pretenses, a false
representation, or actual fraud[.]” Thus, a claim pursuant to § 523(a)(2)(A) may rest on any of the
three aforementioned types of fraud, each of which must be analyzed separately depending on the
facts of the specific case. 16 However, each type of fraud must involve “moral turpitude or
intentional wrong, and does not extend to fraud implied in law which may arise in the absence of
13 ECF No. 24.
14 See Glencove Holdings, LLC v. Bloom (In re Bloom), No. 22-1005, 2022 WL 2679049,
at *5 (10th Cir. July 12, 2022); DSC Nat’l Props., LLC v. Johnson (In re Johnson), 477 B.R. 156,
168 (10th Cir. BAP 2012).
15 Grogan v. Garner, 498 U.S. 279, 287 (1991).
16 Husky Int’l Elecs., Inc. v. Ritz, 578 U.S. 355, 360 (2016) (“It is therefore sensible to start
with the presumption that Congress did not intend ‘actual fraud’ to mean the same thing as ‘a false
representation[.]’”).
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bad faith or immorality.” 17 In other words, the debtor must have acted with subjective intent to
deceive, which may be inferred from the totality of the circumstances. 18
A false representation for purposes of § 523(a)(2)(A) is an explicit, definable statement
resulting 	in 	a 	misrepresentation. 19 	A 	false 	pretense, 	on 	the 	other 	hand, 	is 	an 	implied
misrepresentation, which includes a material omission or conduct intended to create and foster a
false impression. 20 To establish a claim under § 523(a)(2)(A) for false pretenses or false
representation, a plaintiff must prove the following: “1) the debtor made a false representation; 2)
the debtor made the representation with the intent to deceive the creditor; 3) the creditor relied on
the representation; 4) the creditor’s reliance was justifiable; and 5) the debtor’s representation
caused the creditor to sustain a loss.” 21 Actual fraud entails “any deceit, artifice, trick, or design
involving direct or indirect operation of the mind, used to circumvent or cheat another.” 22 To
establish a claim for actual fraud, “a creditor must establish that (1) a fraud occurred, (2) the debtor
intended to defraud, and (3) the fraud created the debt that is the subject of the dispute.” 23
The Court is unable to conclude that Plaintiff is entitled to judgment as a matter of law on
her § 523(a)(2)(A) claim. Plaintiff has shown Defendant made representations to her which were
17 In re Van De Water, 180 B.R. 283, 288 (Bankr. D.N.M. 1995) (citation omitted); see
also Ritz, 578 U.S. at 360.
18 In re Johnson, 477 B.R. at 169; Skyline Air Ops, Inc. v. Conkle (In re Conkle), No. 23-
01053, 2024 WL 1460286, at *6 (Bankr. W.D. Okla. Apr. 3, 2024).
19 Argento v. Cahill (In re Cahill), No. 15-72418, 2017 WL 713565, at *6 (Bankr. E.D.N.Y.
Feb. 22, 2017).
20 William W. Barney, M.D. P.C. Ret. Fund v. Perkins (In re Perkins), 298 B.R. 778, 788
(Bankr. D. Utah 2003).
21 Okla. Heritage Bank v. Ward (In re Ward), 589 B.R. 424, 428 (Bankr. W.D. Okla. 2018)
(citing Johnson v. Riebesell (In re Riebesell), 586 F.3d 782, 789 (10th Cir. 2009)); Scheideler v.
Berken, No. 16-cv-02310, 2017 WL 3315550, at *3 (D. Colo. Aug. 3, 2017).
22 Bank of Cordell v. Sturgeon (In re Sturgeon), 496 B.R. 215, 223 n.14 (10th Cir. BAP
2013) (quoting McClellan v. Cantrell, 217 F.3d 890, 893 (7th Cir. 2000)).
23 In re Ward, 589 B.R. at 428 (quoting Fifth Third Mortg. Co. v. Kaufman, 2017 WL
4021230, at *14 (N.D. Ill. July 25, 2017)).
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eventually 	proven 	to 	be 	false; 	Plaintiff 	relied 	on 	said 	representations; 	and 	Defendant’s
representations caused Plaintiff to sustain a monetary loss. However, there are no allegations or
evidence from which the Court can discern that Defendant’s actions were done with the intent to
deceive. Crucially, “a misrepresentation is fraudulent only if the maker ‘knows or believes that the
matter is not what he represents it to be.’” 24 Merely failing to fulfill a promise does not constitute
fraud for purposes of § 523(a)(2)(A) unless it was made knowing that it would not be
accomplished. 25 At most, the facts as presented in the Motion demonstrate Defendant made a
number of promises that he did not or was not able to keep. The facts as alleged in the Motion do
not suggest Defendant knew at the time he made said promises that he would not fulfill them, or
that he made them with the intent to deceive Plaintiff. Moreover, there are no allegations stating
Plaintiff’s reliance on Defendant’s various statements was justifiable under the circumstances.
Therefore, the Court finds summary judgment as to Plaintiff’s § 523(a)(2)(A) claim to be
inappropriate. 26
24 Chevy Chase Bank FSB v. Kukuk (In re Kukuk), 225 B.R. 778, 787 (10th Cir. BAP 1998)
(quoting Restatement (Second) of Torts § 526(a) (1977)).
25 Bank One Columbus, N.A. v. Schad (In re Kountry Korner Store), 221 B.R. 265, 272
(Bankr. N.D. Okla. 1998) (fraud “must be clearly distinguished from the mere failure to perform
a promise, which is not fraud but breach of contract.”); Jack Master, Inc. v. Collins (In re Collins),
28 B.R. 244 (Bankr. W.D. Okla. 1983); Trinkets & Tea, LLC v. Hunt (In re Hunt), 605 B.R. 758,
777 (Bankr. N.D. Tex. 2019).
26 See Redmond v. Kester (In re Kester), 339 B.R. 764, 767 (Bankr. D. Kan. 2005) (“If the
nonmoving party fails to respond, the [bankruptcy court] may not grant the motion without first
examining the moving party’s submission to determine if it has met its initial burden of
demonstrating that no material issues of fact remain for trial and the moving party is entitled to
judgment as a matter of law.”) (quoting Murray v. City of Tahlequah, Okla., 312 F.3d 1196, 1200
(10th Cir. 2002)).
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B. 	Section 523(a)(4): Fraud or Defalcation While Acting in a Fiduciary Capacity
Section 523(a)(4) excepts from discharge debts “for fraud or defalcation while acting in a
fiduciary capacity, embezzlement, or larceny.” 27 To prove a claim for fraud or defalcation while
acting in a fiduciary capacity, “‘a plaintiff must [show] that: (1) a fiduciary relationship existed
between the debtor and the creditor, and (2) the debt owed to the creditor is attributable to a fraud
or defalcation committed by the debtor in the course of the fiduciary relationship.’” 28 The fiduciary
relationship necessary to satisfy the first element is one that arises from an express or technical
trust established or imposed prior to the allegedly tortious conduct creating the debt. 29 A trust
imposed by state statute constitutes a technical trust and may give rise to a fiduciary relationship. 30
As to the second element, fraud is defined as “positive fraud, or fraud in fact, involving moral
turpitude or intentional wrong . . . and not implied fraud, or fraud in law, which may exist without
the imputation of bad faith or immorality.” 31 Defalcation, on the other hand, does not require a
showing of bad faith, moral turpitude, or immoral conduct; instead, it requires a finding “that the
debtor acted with wrongful intent, or, at a minimum, with a conscious disregard of his or her
fiduciary duties.” 32
27 Neither the Complaint nor the Motion refer to embezzlement or larceny. As such, the
Court focuses its discussion on fraud or defalcation while acting in a fiduciary capacity.
28 In re Ward, 589 B.R. at 429-30 (quoting Barenberg v. Burton (In re Burton), 463 B.R.
142 (Table), 2010 WL 3422584, at *5 (10th Cir. BAP Aug. 31, 2010)).
29 Fowler Bros. v. Young (In re Young), 91 F.3d 1367, 1371 (10th Cir. 1996) (“Thus, an
express or technical trust must be present for a fiduciary relationship to exist under § 523(a)(4));
White v. White (In re White), No. 20-01061, 2021 WL 450992, at *7 (Bankr. W.D. Okla. Feb. 8,
2021). 30 Duncan v. Neal (In re Neal), 324 B.R. 365, 370 (Bankr. W.D. Okla. 2005) (citing Emps.
Workers Comp. Ass’n v. Kelley (In re Kelley), 215 B.R. 468, 473 (10th Cir. BAP 1997)).
31 Bullock v. BankChampaign, N.A., 569 U.S. 267, 273 (2013).
32 Okla. DHS Child Support Servs. v. Bryan (In re Bryan), 612 B.R. 618, 627 (Bankr. N.D.
Okla. 2020) (quoting Jantz v. Karch (In re Karch), 499 B.R. 903, 906 (10th Cir. BAP 2013)); see
Bullock, 569 U.S. at 273-74 (“Where actual knowledge of wrongdoing is lacking, we consider
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As with Plaintiff’s § 523(a)(2)(A) claim, the Court cannot reach the conclusion that
Plaintiff is entitled to summary judgment on her § 523(a)(4) claim. Defendant admitted to owing
Plaintiff a fiduciary duty. However, the Oklahoma statutes upon which Plaintiff bases said
fiduciary duty
do not impose a fiduciary duty on a contractor to account (i.e., explain the
disposition of) to a homeowner for all construction funds paid to him. Rather, the
contractor’s fiduciary duty, as prescribed by the statutes that created the trust, is to
pay lienable claims. A contractor who fails to pay suppliers of labor or materials is
not guilty of breach of a fiduciary duty to the homeowner unless the unpaid laborers
file timely liens which are not satisfied by the contractor. 33
There are no allegations or evidence upon which the Court may surmise that such lienable claims
exist. 34 Thus, the fiduciary duty necessary for Plaintiff’s § 523(a)(4) claim cannot, as a matter of
law, be based on the statutes cited in the Motion. Moreover, there is nothing to support a
determination that Defendant’s actions constituted fraud or defalcation given the absence of
allegations or evidence regarding Defendant’s intent. Therefore, the Court finds Plaintiff is also
not entitled to judgment as a matter of law on her § 523(a)(4) claim.
Conclusion
For the reasons set forth above, the Motion is DENIED WITHOUT PREJUDICE. The
Court finds Plaintiff has not met her burden under § 523(a)(2)(A) or (a)(4) to show her debt is
nondischargeable, and she is not entitled to judgment as a matter of law.
Dated this 4th of June, 2026.
conduct as equivalent if the fiduciary ‘consciously disregards’ (or is willfully blind to) ‘a
substantial and unjustifiable risk’ that his conduct will turn out to violate a fiduciary duty.”).
33 In re Neal, 324 B.R. at 373 (referencing Okla. Stat. tit. 42, §§ 152, 153); see King v.
Cobbs (In re Cobbs), No. 17-1013, 2017 WL 4158341, at *3 (Bankr. W.D. Okla. Sept. 18, 2017).
34 Id. at 372 (explaining that a lienable claim “is a claim that is capable of becoming a lien
on the building or improvement being constructed” and that Oklahoma law requires that such a
lien be filed “in the county clerk’s office within 90 days after the material or labor was furnished.”).
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