The 8th Circuit REVERSED the BAP’s ruling on the HUSBAND’S imputed liability, and the matter was remanded to the bankruptcy court on that issue. In other words, the Court of Appeals sent the issue regarding HUSBAND’s imputed liability back to the bankruptcy court and told the bankruptcy court to think about that issue some more. Therefore, the only issue was whether HE KNEW, SHOULD HAVE KNOWN, OR WAS RECKLESSLY INDIFFERENT to his wife’s fraud. I think at this point we know what is going to happen.

In Re Walker, (8th Cir.1984), the court said that a debtor” who abstains from all responsibility for his affairs cannot be held innocent for the fraud of his agent if, had he paid minimal attention, he would have been alerted to the fraud.” The court said that description applied to the debtor HUSBAND, who had access to the account holding money owed to Glenstone. Thus, the bankruptcy court on remand, ruled that the WIFE’S fraud should be imputed to HUSBAND.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626)284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.