Name of Assigned Judge Amy J. St. Eve Sitting Judge if Other or Magistrate Judge than Assigned Judge
The Court affirms the bankruptcy court's rulings.
O[ For further details see text below.] Docketing to mail notices.
Before the Court is Plaintiff-Appellant Anthony Stelmokas's bankruptcy appeal. For the reasons below, the
Court affirms the bankruptcy court's ruling.
Plaintiff-Appellant Anthony Stelmokas is the owner-operator of a licensed tavern in Chicago, where he (on occasion) cashes checks for his customers, including Defendant-Appellee Vytautus Kodzius. On March 31, 2008, Kodzius asked Stelmokas if he could borrow $11,650 in the form of a loan, and Stelmokas obliged.*fn1 In the months that followed, Kodzius did not repay the loan. On December 14, 2008, Stelmokas agreed to provide a loan extension to Kodzius and drew up a promissory note for $14,000 plus interest, payable on June 14, 2009. Kodzius confirmed that he would repay the loan, and Kodzius and Stelmokas both signed the promissory note. Kodzius ultimately made no payments on the note, and on or about July 2009, Stelmokas received notice that Kodzius had filed a Chapter 7 Bankruptcy Petition in the United States Bankruptcy Court for the Northern District of Illinois, Case No. 09-27773, and was endeavoring to discharge the promissory note in that proceeding.
Stelmokas initiated an adversary proceeding against Kodzius in that court on November 5, 2009. See Stelmokas v. Kodzius, Case No. 09 A 1135. In the adversary proceeding, Stelmokas sought the bankruptcy court's determination that the loan he had made to Kodzius was a non-dischargeable debt under 11 U.S.C. § 523(a)(2)(A). Section 523(a)(2)(A) of the bankruptcy code sets forth exceptions by which "money . . . or an extension, renewal, or refinancing of credit, to the extent [it was] obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's . . . financial condition" may be deemed non-dischargeable debt in a bankruptcy proceeding. 11 U.S.C. § 523(a)(2)(A).
The bankruptcy court held a bench trial on February 3, 2011. At trial, Stelmokas testified that he made the loan to Kodzius on the basis of Kodzius's representations that he would repay the loan. (R. 14, 2/3/11 Trial Tr. at 14:17-19; 30:2-23.) Stelmokas further testified that he made the loan because Kodzius "led him to believe" that he was "making considerable money, and [was] able to pay . . . and that the monies would be paid as drafted." (Id. at 17:10-17.) Stelmokas held that belief, in part, because Kodzius would regularly cash sizable checks made out to his business, V&V Construction, at Stelmokas's tavern.*fn2 Stelmokas made the loan to Kodzius, however, not to Kodzius's business, and at trial, Stelmokas conceded that he did not know anything about Kodzius's personal finances and had made ...