Hasenberg et al v. Fralick

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
DARRELL H. FRALICK
:
v. 	: Civil Action No. DKC 2006-0441
:
JOHN HASENBERG, et al.
:
MEMORANDUM OPINION
This 	case 	is 	before 	the 	court 	on 	appeal 	from 	the 	orders 	of
Bankruptcy Judge Paul Mannes in Adversary No. 05-1237-PM which (1)
denied 	the 	motion 	of 	Debtor 	Darrell 	Fralick 	for 	a 	continuance 	of
the trial date, (2) denied Debtor’s motion for a new trial, and (3)
determined that a portion of a judgment against him in the Superior
Court of the District of Columbia was not dischargeable pursuant to
11 U.S.C. § 523(a)(2). 	Oral argument is deemed unnecessary because
the 	facts 	and 	legal 	arguments 	are 	presented 	adequately 	in 	the
briefs 	and 	record, 	and 	the 	decisional 	process 	would 	not 	be
significantly aided by oral argument. 	See Bankr. Rule 8012. 	For
the 	reasons 	that 	follow, 	the 	court 	will 	affirm 	the 	bankruptcy
court’s orders.
I. Background
The 	following 	facts 	are 	undisputed. 	John 	and 	Kimberly
Hasenberg (“the Hasenbergs”) obtained a judgment against Debtor in
the Superior Court of the District of Columbia on August 6, 2004,
for 	violation 	of 	16 	DCMR 	§ 	800.1 	(licensing 	of 	home 	improvement
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1 	The 	basis 	of 	the 	lawsuit 	was 	that 	Debtor 	explicitly 	and
implicitly told the Hasenbergs that the renovations to their home
would be performed pursuant to applicable building codes and would
be of a certain quality and workmanship, and that the work he did
failed 	to 	meet 	those 	standards. 	The 	suit 	also 	was 	based 	on 	the
Debtor’s 	misrepresentation 	as 	a 	licensed 	home 	improvement
contractor.
2 	The 	total 	amount 	of 	the 	judgment 	obtained 	in 	the 	Superior
Court case was $90,809.99.
3 The record does not show when Mr. Zakaroff was disbarred.
2
contractors) 	and 	violation 	of 	Consumer 	Protection 	Procedures 	Act
(“CPPA”), 	D.C.Code 	§ 	28-3901 	et 	seq.1 	The 	Hasenbergs 	won 	a
judgment 	in 	their 	favor 	(“D.C. 	judgment”) 	that 	consisted 	of 	a
$25,000 refund of the home improvement contract price paid by the
Hasenbergs to Debtor, a trebling of this damage claim, and attorney
fees as allowed under the CPPA. 2
On December 6, 2004, Debtor filed a voluntary petition under
Chapter 7 of the United States Bankruptcy Code 	On March 4, 2005,
the 	Hasenbergs 	filed 	an 	adversary 	proceeding 	against 	Debtor 	in
order to determine the dischargeability of the D.C. judgment. 	On
June 17, 2005, the bankruptcy court entered a scheduling order and
set the adversary proceeding for trial on November 29, 2005.
Debtor originally was represented by Robert Joel Zakroff. 	Mr.
Zakroff 	was 	disbarred 	and 	was 	no 	longer 	able 	to 	practice 	in 	the
bankruptcy 	court. 3 	On 	July 	1, 	2005, 	and 	July 	15, 	2005, 	the
bankruptcy court issued a “Notice to Debtor(s) Whose Attorney has
been 	Disbarred 	from 	the 	Practice 	of 	Law 	from 	this 	Court.” 	On
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October 	6, 	2005, 	the 	bankruptcy 	court 	again 	issued 	this 	notice.
The notice states that the recipient “is notified that unless new
counsel 	enters 	an 	appearance 	on 	your 	behalf 	within 	fourteen 	(14)
days 	from 	the 	date 	of 	this 	Notice, 	all 	proceedings 	before 	this
Court in which you are a party shall be treated as being conducted
by 	you 	on 	your 	own 	behalf, 	without 	counsel, 	until 	and 	unless 	the
appearance of new counsel is entered.” 	(Paper 1, exs. 27-30).
Meanwhile, 	the 	Hasenbergs 	had 	their 	own 	questions 	as 	to
whether their counsel, Alan S. Kerxton, would continue to represent
them. 	On November 23, 2005, Mr. Kerxton filed a motion for leave
to withdraw as counsel, explaining that the Hasenbergs decided to
proceed 	without 	counsel 	for 	economic 	reasons 	and 	that 	they
consented to this motion. 	On November 28, 2005, one day before the
trial 	date 	and 	prior 	to 	Mr. 	Kerxton’s 	appearance 	being 	stricken,
Mr. 	Kerxton 	filed 	a 	motion 	for 	continuance 	of 	trial 	date. 	Mr.
Kerxton stated that the Hasenbergs decided that it would be “unwise
to represent themselves” and that they requested a continuance in
order 	to 	make 	arrangements 	to 	retain 	new 	counsel 	and 	give 	new
counsel 	adequate 	time 	to 	prepare. 	Later 	that 	day, 	Mr. 	Kerxton
filed 	an 	amended 	motion 	in 	which 	he 	stated 	that 	“[p]rior 	counsel
for the Debtor has advised counsel for the Plaintiffs that (i) the
Debtor 	is 	out 	of 	town 	doing 	emergency 	repair 	work 	in 	New 	Orleans
and will not be available for trial on November 29, 2005, and (ii)
that he is in the process of retaining substitute counsel (Jeffrey
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Orenstein) to represent him and such counsel joins in the Motion to
Continue the Trial Date.” 	(Paper 1, ex. 10).
The 	bankruptcy 	court 	denied 	the 	motion 	before 	the 	start 	of
trial on November 29, 2005, because the motion was untimely:
As 	you 	can 	see, 	we 	have 	an 	empty 	courtroom.
This 	entire 	day 	was 	set 	aside 	to 	try 	this
case. 	. 	. 	We 	set 	this 	on 	June 	17. 	It 	was 	a
scheduling order. 	As much as I would like to
accommodate 	everybody, 	I 	think 	that 	with 	as
busy 	as 	we 	are, 	we 	need 	to 	conserve 	the 	time
that we have.
(Paper 	1, 	Tr. 	4). 	Subsequently, 	the 	Hasenbergs 	decided 	not 	to
represent themselves, and so the trial proceeded with Mr. Kerxton
representing 	them. 	Debtor 	did 	not 	appear 	and 	no 	one 	appeared 	on
behalf of Debtor to support the continuance motion or to represent
him at the trial.
During the trial, John Hasenberg gave the following testimony.
He stated that when he hired Debtor to do work on his home, Debtor
told 	the 	Hasenbergs 	that 	he 	had 	a 	license 	to 	do 	the 	home
improvement work:
Q. 	In 	the 	course 	of 	your 	meetings 	did 	the
discussion about having a contractor’s license
come up?
A. Yes.
Q. Would you describe how that came up?
A. We were going through the scope of the work
and I remember we were standing in the kitchen
and 	I 	asked 	him, 	“Do 	you 	have 	all 	the 	proper
licenses to do this work?” and he said yes. I
accepted that.
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Q. Was that important to you?
A. Yes, very important.
Q. Why?
A. 	I 	just 	wouldn’t 	trust 	someone 	who 	wasn’t
licensed to do this kind of work.
Q. Do you have licenses in your field?
A. 	Absolutely. 	As 	a 	financial 	consultant 	I
have 	to 	have 	licenses 	to 	do 	any 	work 	with 	my
clients. 	I 	have 	a 	Series 	7 	license, 	a 	Series
66 license, and insurance license. Any time I
want to sell products or counsel my clients, I
have to be licensed to do that.
(Paper 1, Tr. 9:7-10:2). 	Mr. Hasenberg stated that the Hasenbergs
discovered Debtor did not have a license after they filed a lawsuit
against 	him 	in 	the 	Superior 	Court 	of 	the 	District 	of 	Columbia.
During a deposition that Mr. Hasenberg attended, Debtor stated that
he 	had 	a 	home 	improvement 	license 	in 	Maryland 	but 	it 	expired 	in
1992. 	Id. at 10-11.
After Mr. Hasenberg’s testimony, Judge Mannes found that Mr.
Hasenberg had:
certainly 	made 	a 	prima 	facie 	case 	as 	to 	the
fraud 	and 	that 	he 	was 	defrauded 	by 	Mr.
Fralick. 	The 	issue 	that 	I 	have 	though 	is
under 	Section 	523(a)(2)(A), 	what 	I 	would
declare 	nondischargeable 	would 	be 	- 	- 	“A
discharge under Section 727 does not discharge
an individual debtor from any debt for money,
property, 	services, 	or 	an 	extension, 	renewal
or a refinancing of credit to the extent” - -
and 	I 	find 	as 	a 	fact 	that 	all 	this 	was
obtained 	by 	false 	pretenses 	or 	false
representation or actual fraud.
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(Paper 1, Tr. 17:15-17:23). 	The bankruptcy court tentatively fixed
damages at $39,817.40.
In 	a 	Memorandum 	of 	Decision 	signed 	January 	17, 	2006, 	the
bankruptcy court stated that it
found as a fact that the Debtor had knowingly
and 	deliberately 	misstated 	his 	status 	as 	a
licensed 	home 	improvement 	contractor 	and
otherwise defrauded the Plaintiffs. 	The court
found 	that 	the 	Plaintiffs 	would 	never 	have
entered 	into 	a 	[re]modeling 	contracting 	with
him 	had 	they 	been 	advised 	of 	his 	true 	status
as 	an 	unlicenced 	contractor. 	The 	court
likewise found that Plaintiffs incurred damage
that 	was 	attributable 	to 	Debtor’s 	fraudulent
conduct. 	Based 	upon 	these 	factual 	findings,
at 	the 	conclusion 	of 	the 	trial, 	the 	court
found 	that 	Plaintiffs 	had 	met 	their 	burden
under § 523(a)(2)(A).
(Paper 1, ex. 22, at 1-2). 	The bankruptcy court also amended its
earlier findings to add $15,809.99 in attorneys’ fees.
On 	December 	9, 	2005, 	Debtor 	filed 	a 	pro 	se 	motion 	seeking 	a
new 	trial. 	He 	attached 	to 	the 	motion 	an 	affidavit 	in 	which 	he
stated:
I was unable to attend the trial in the above
captioned 	matter 	because 	I 	was 	working 	for
FEMA as a result of the devastation caused by
the 	series 	of 	Hurricanes 	that 	hit 	the 	United
States. 	Through my previous attorney, Robert
Zakoff, 	The 	Plaintiff’s 	attorney 	moved 	for 	a
continuance which I understand was denied. 	I
have 	contacted 	Jeffrey 	Orenstein 	who 	has
agreed to represent me. 	However, I was unable
to get the money to him before the trial. 	The
retainer is sitting in my previous attorney’s
account 	ready 	to 	be 	paid 	over 	to 	Mr.
Orenstein.
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(Paper 	1, 	ex. 	17). 	He 	stated 	as 	grounds 	for 	a 	new 	trial 	that 	he
“was 	acting 	to 	protect 	the 	mental 	and 	physical 	well 	being 	of
citizens of the United States.” 	Id.
II. 	Standard of Review
On appeal from the bankruptcy court, the district court acts
as an appellate court and reviews the bankruptcy court’s findings
of fact for clear error and conclusions of law de novo. 	See In re
Johnson, 	960 	F.2d 	396, 	399 	(4th 	Cir. 	1992); 	Travelers 	Ins. 	Co. 	v.
Bryson Prop., XVIII (In re Bryson Prop., XVIII), 961 F.2d 496, 499
(4 th 	Cir. 	1992), 	cert. 	denied 	sub 	nom., 	Bryson 	Prop., 	XVIII 	v.
Travelers Ins. Co., 506 U.S. 866 (1992). 	The parties agree that an
abuse of discretion standard applies to requested continuances and
to requests for a new trial. 	See In re La Sierra Financial Servs.,
Inc., 	290 	B.R. 	718, 	726 	(9 th 	Cir. 	2002)(continuances); 	In 	re
Kellogg, 197 F.3d 1116, 1119 (11 th Cir. 1999)(continuances); In re
R.D.F. Devs., Inc., 239 B.R. 336, 338 (6 th Cir. 1999)(continuances);
In 	re 	Lynch, 	430 	F.3d 	600, 	603 	(2 nd 	Cir. 	2005)(requests 	for 	a 	new
trial); In re Hixon, 295 B.R. 866, 870 (8 th Cir. 2003)(requests for
a new trial).
III. Analysis
Debtor presents the following issues on appeal:
1. 	Whether, 	under 	the 	unusual 	facts 	of 	this
case, 	the 	Bankruptcy 	Court 	abused 	its
discretion 	in 	denying 	the 	Motion 	to 	Continue
the Trial Date.
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2. 	Whether, 	under 	the 	unusual 	facts 	of 	this
case, 	the 	Bankruptcy 	Court 	abused 	its
discretion 	in 	denying 	the 	Motion 	for 	a 	New
Trial.
3. 	Whether, 	the 	Bankruptcy 	Court 	erred, 	as 	a
matter 	of 	law, 	in 	determining 	that 	the 	debt
owed 	to 	the 	Plaintiff 	Appellee 	was 	not
dischargeable.
A. Order Denying Motion to Continue
Debtor contends that he had compelling reasons that supported
his motion for continuance of the trial: (1) Debtor was serving his
country “[a]t the time of one of the worst natural disasters in the
history 	of 	this 	Country;” 	(2) 	Debtor’s 	counsel 	was 	disbarred 	and
(3) Debtor believed that by Plaintiffs’ filing their amended motion
to continue, the case would be continued. 	(Paper 9, at 5).
The 	bankruptcy 	court 	denied 	the 	motion 	for 	a 	continuance,
which 	was 	filed 	one 	day 	before 	the 	trial, 	because 	the 	motion 	was
untimely. 	The court did not abuse its discretion. 	See also United
States v. Cassidy, 48 Fed.Appx. 428, 434 (4 th Cir. 2002)(finding no
abuse of discretion where the request for a continuance, made less
than 	fourteen 	days 	before 	trial, 	was 	denied 	as 	untimely); 	United
States 	v. 	Frazier, 	No. 	97-50001998, 	WL 	852962 	at 	*2 	(4 th 	Cir.
1998)(affirming the district court’s denial of a continuance filed
one 	day 	before 	the 	sentencing 	hearing). 	Debtor 	cites 	service 	of
his country as a compelling reason but he fails to explain why he
was unable to file a motion to continue in a timely manner in light
of the fact that the trial date was set on June 17, 2005. 	Debtor
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also does not state when he began doing the reconstruction work and
specifically why the work prevented him from returning to this area
for the trial. 	With respect to his argument that his attorney was
disbarred, 	the 	record 	shows 	that 	Debtor 	was 	notified 	as 	early 	as
July 	2005 	that 	his 	attorney 	was 	disbarred, 	and 	Debtor 	does 	not
claim that he did not receive these notices. 	Thus, Plaintiff had
more than four months to obtain new counsel. 	From the record, it
appears 	that 	Debtor 	was 	in 	the 	process 	of 	arranging 	for 	new
counsel, 	however, 	neither 	Debtor 	nor 	the 	attorney 	who 	planned 	to
represent 	him 	filed 	a 	motion 	for 	a 	continuance 	to 	allow 	them 	to
finalize 	these 	arrangements. 	See 	Sampley 	v. 	Attorney 	General 	of
N.C., 	786 	F.2d 	610, 	615 	(4 th 	Cir. 	1986)(affirming 	the 	denial 	of 	a
continuance in part because the defendant knew the case was called
for trial in two weeks, the defendant had employed new counsel, and
neither defendant nor the new counsel make a motion for continuance
until 	the 	case 	was 	called). 	Debtor’s 	third 	argument 	is
unpersuasive because there is no reason for Debtor to believe that
filing a motion means that the motion will, in fact, be granted.
Debtor 	cites 	to 	Latham 	v. 	Crofters, 	492 	F.2d 	913 	(4 th 	Cir.
1974), in which the United States Court of Appeals for the Fourth
Circuit 	found 	that 	a 	district 	court’s 	denial 	of 	a 	motion 	to
continue on the day the trial was scheduled to start was an abuse
of discretion. 	In Latham, the defendant was unable to attend due
to 	a 	very 	serious 	heart 	attack; 	his 	motion 	to 	continue 	was
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4 Rule 3008, which deals with allowing or disallowing a claim
against an estate, is inapplicable.
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supported by a letter from the Defendant’s doctor. 	The Court of
Appeals 	found 	that 	the 	district 	court 	abused 	its 	discretion
because, “[l]ooking at the record as a whole, we think that there
was a sufficient showing of substantial danger to [the defendant’s]
life or health to mandate the grant of a continuance.” 	Id. at 915.
Debtor 	contends 	that 	the 	Court 	of 	Appeals 	found 	an 	abuse 	of
discretion because the defendant’s “testimony was critical to his
defense 	and 	the 	defense 	of 	other 	parties,” 	and 	therefore, 	the
defendant was unduly prejudiced by having the trial proceed without
him. 	(Paper 9, at 5). 	Debtor misstates the court’s holding. 	The
Court 	of 	Appeals 	repeatedly 	cited 	the 	defendant’s 	health 	as 	its
reason for finding an abuse of discretion.
Accordingly, the bankruptcy court did not abuse its discretion
by denying Debtor’s motion for a continuance.
B. Denial of Debtor’s Motion for a New Trial
Debtor 	next 	argues 	that, 	under 	the 	facts 	of 	this 	case, 	the
bankruptcy 	court 	should 	have 	granted 	his 	motion 	for 	a 	new 	trial.
Bankruptcy Rule 9023 states that “Rule 59 FR Civ P applies in cases
under the Code, except as provided in Rule 3008.” 4 	A new trial may
be 	granted 	under 	the 	following 	circumstances: 	(1) 	intervening
changes 	in 	the 	law; 	(2) 	new 	evidence 	not 	available 	at 	trial; 	and
(3) 	to 	correct 	a 	clear 	error 	of 	law 	or 	prevent 	a 	miscarriage 	of
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justice. See EEOC v. Lockheed Martin Corp., Aero & Naval Sys., 116
F.3d 110, 112 (4 th Cir. 1997). 	Debtor does not allege a change in
the 	law 	or 	new 	evidence. 	Although 	Debtor 	does 	not 	say 	so
explicitly, 	it 	appears 	that 	he 	seeks 	a 	new 	trial 	to 	prevent 	a
miscarriage of justice. 	In the affidavit in support of his motion,
Debtor stated that he had contacted Mr. Orenstein but he was unable
to get the money to Mr. Orenstein before the trial. 	Again, Debtor
offers 	no 	explanation 	as 	to 	why 	he 	had 	not 	made 	arrangements
sooner, in light of the fact that he was notified of his attorney’s
disbarment more than four months before the scheduled trial date.
Accordingly, Debtor has failed to show there was a miscarriage of
justice, and the bankruptcy court did not abuse its discretion by
denying Debtor’s motion for a new trial.
C. 	Dischargeability of the Debt Owed to the Hasenbergs
Debtor argues that the bankruptcy court erred as a matter of
law in determining that a portion of the debt owed by Debtor to the
Hasenbergs 	was 	not 	dischargeable. 	In 	his 	argument, 	however, 	he
objects 	to 	the 	court’s 	ruling 	on 	the 	ground 	that 	there 	was 	“no
evidence” to support the bankruptcy court’s ruling. 	Thus, Debtor
has presented a question of fact, not law. 	See In re Giovanni, 324
B.R. 	586, 	593 	(E.D.Va. 	2005)(stating 	that 	a 	bankruptcy 	court’s
finding 	of 	justifiable 	reliance 	is 	a 	finding 	of 	fact 	subject 	to
review under a clearly erroneous standard).
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The bankruptcy court found that the debt was not dischargeable
pursuant to 11 U.S.C. § 523(a)(2), which provides:
(a) 	A 	discharge 	under 	section 	727, 	1141,
1228(a), 	1228(b), 	or 	1328(b) 	of 	this 	title
does 	not 	discharge 	an 	individual 	debtor 	from
any debt -
(2) 	for 	money, 	property, 	services, 	or
an extension, renewal, or refinancing of
credit, to the extent obtained by –
(A) 	false 	pretenses, 	a 	false
representation, 	or 	actual 	fraud,
other 	than 	a 	statement 	respecting
the 	debtor’s 	or 	an 	insider's
financial condition; . . .
To sustain an objection to the dischargeability of a debt under §
523(a)(2), the parties must prove the following elements:
(1) 	a 	fraudulent 	misrepresentation; 	(2) 	that
induces another to act or refrain from acting;
(3) causing harm to the plaintiff; and (4) the
plaintiff’s 	justifiable 	reliance 	on 	the
misrepresentation.
In re Biondo, 180 F.3d 126, 134 (4 th Cir. 1999).
The 	parties 	cite 	to 	Werth 	v. 	Tashoff, 	1986 	U.S.Dist. 	LEXIS
16745 (D.Md. 1986), an older, unpublished district court case, for
a different catalogue of elements. 	The Werth court stated that the
objecting party must prove:
(1) 	that 	the 	debtor 	made 	materially 	false
representations;
(2) 	that 	the 	debtor 	knew 	the 	representations
were false at the time he made them;
(3) that the debtor made false representations
with 	the 	intention 	and 	purpose 	of 	deceiving
the creditor;
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5 	Debtor 	also 	states 	in 	a 	footnote 	that 	he 	was 	prepared 	to
(continued...)
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(4) 	that 	the 	creditor 	reasonably 	relied 	upon
the debtor’s materially false representations;
and
(5) 	that 	the 	creditor 	sustained 	loss 	and
damages 	as 	a 	proximate 	result 	of 	the
materially 	false 	representations 	by 	the
debtor.
Id. 	at 	*17-18 	(citing 	In 	Re 	Hunt, 	30 	B.R. 	425, 	435 	(M.D.Tenn.
1983)). 	The 	fourth 	element 	in 	Werth 	requires 	“reasonable”
reliance. 	The proper standard, however, is “justifiable” reliance.
See 	Field 	v. 	Mans, 	516 	U.S. 	59, 	74-75 	(1995)(stating 	that 	Ҥ
523(a)(2)(A) requires justifiable, but not reasonable reliance”).
The Fourth Circuit explained the difference between justifiable and
reasonable reliance in an unpublished decision:
This 	standard 	of 	[justifiable] 	reliance
requires 	more 	than 	actual 	reliance 	but 	less
than reasonable reliance. 	In re Justice, No.
01-02156, 	2002 	Bankr.LEXIS 	1540, 	n. 	3
(Bankr.N.D.Ohio Dec. 27, 2002). 	“It is a more
subjective 	standard 	. 	. 	. 	that 	takes 	into
account 	the 	interactions 	between 	and
experiences of the two parties involved.” 	Id.
(quoting Jeffrey R. Priebe, Fields v. Mans and
In 	re 	Keim: 	Excepting 	Debts 	From 	Bankruptcy
Discharge 	and 	The 	Difference 	Between
Experienced 	Horsemen 	and 	Reasonable 	Men, 	54
Ark. L.Rev. 99, 109-110 (2001)).
In 	re 	White, 	128 	Fed.Appx. 	994, 	999 	(4 th 	Cir. 	2005)(unpublished).
Debtor 	argues 	that 	there 	is 	no 	evidence 	that 	the 	Hasenbergs
relied 	on 	Debtor’s 	“alleged 	representation 	that 	he 	was 	licensed”
and 	there 	was 	no 	evidence 	that 	this 	reliance 	was 	reasonable. 5
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5
(...continued)
testify 	that 	he 	told 	the 	Hasenbergs 	that 	he 	was 	not 	licensed 	and
that the lack of a license was not an issue for them, but because
he was not able to be present at trial, Debtor had no opportunity
to present that evidence to the trier of fact. 	This court cannot
consider 	this 	evidence 	because 	it 	was 	not 	presented 	to 	the
bankruptcy court, and therefore, is not part of the record.
14
(Paper 9, at 7). 	Debtor points to Mr. Hasenberg’s testimony that
he hired Debtor because Debtor was referred to him by a relative.
Debtor 	also 	argues 	that 	the 	transcript 	is 	devoid 	of 	a 	request 	to
see Debtor’s license, an attempt to contact any licensing agent to
determine 	whether 	a 	license 	was 	held, 	“or 	any 	other 	action 	that
would 	be 	reasonable 	in 	determining 	whether 	the 	Debtor 	held 	a
license.” 	Id. at 7.
Debtor’s 	arguments 	are 	without 	merit. 	The 	uncontroverted
record shows that the Hasenbergs were told by Debtor that he had a
license 	and 	that 	they 	relied 	on 	his 	assurance 	that 	he 	had 	the
proper licenses when they hired him to do the work. 	The fact that
the Hasenbergs were referred to Debtor is of no moment. 	There is
no 	evidence 	that 	the 	Hasenbergs 	relied 	on 	the 	referral 	– 	to 	the
exclusion of the purported existence of a license – in deciding to
hire 	Debtor. 	Moreover, 	to 	satisfy 	the 	standard 	of 	justifiable
reliance, the Hasenbergs need not show that they requested to see
Debtor’s license, made an attempt to contact a licensing agent to
determine 	whether 	he 	held 	a 	license 	or 	took 	other 	actions 	to
determine whether in fact Debtor had a license. 	See In re Biondo,
180 	F.3d 	at 	135 	(stating 	that 	justifiable 	reliance 	is 	a 	“minimal
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standard” 	and 	holding 	that 	the 	creditors 	were 	not 	required 	to
inspect 	the 	debtor’s 	financial 	statements 	and 	were 	justified 	in
relying 	on 	the 	debtor’s 	representations). 	Accordingly, 	the
bankruptcy court’s findings that the Hasenbergs relied on Debtor’s
representation 	that 	he 	was 	licensed 	and 	that 	their 	reliance 	was
justifiable 	were 	not 	clearly 	erroneous. 	In 	addition, 	the
bankruptcy court did not err when it found that the requirements of
§ 523(a)(2) were met.
IV. Conclusion
Based on the foregoing reasons, the bankruptcy court did not
abuse its discretion by denying Debtor’s motion for a continuance;
did not abuse its discretion by denying Debtor’s motion for a new
trial; 	and 	did 	not 	err 	when 	it 	found 	that 	the 	requirements 	of 	§
523(a)(2) were met. 	The court will affirm the bankruptcy court’s
orders. 	A separate Order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
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