In Re Philip Rubin, Debtor. Philip Rubin v. Hugh E. West Yasue West

Debtor Philip Rubin appeals from the determination, by a bankruptcy court and bankruptcy appellate panel (BAP), that Hugh and Yasue West’s $125,000 judgment against him is not dischargeable under 11 U.S.C. § 523 (a)(2)(A) (Supp. V 1987). Although the Wests obtained the judgment by settling an action for fraud against Rubin, Rubin now denies that he acted fraudulently. We affirm.

I.

FACTS AND PROCEEDINGS BELOW

This is a story of Debtor Rubin’s abuse of the Wests that we hold amounted to fraudulent conduct. It began in 1969 when the Wests purchased a house in San Diego with a Veterans Administration (VA) loan. By the start of 1976, the house had an appraised value of $38,000, but was encumbered by two deeds of trust. The deeds of trust secured $19,000 remaining on the Wests’ original loan and $5,900 remaining on a second loan. This left the Wests with about $13,000 in equity. Although Mr. West at the time was earning $924 per month at the National Steel Company and was receiving $474 per month in military retirement pay, the Wests had defaulted on the debt secured by the second deed of trust. As a consequence, they faced the possibility of losing the house in a foreclosure…