In Re Ronald Kirsh in Re Paula Kirsh, Debtors. Eugene Parks Law Corporation Defined Benefit Pension Plan v. Ronald Kirsh Paula Kirsh

Ronald and Paula Kirsh (the Kirshes) filed for bankruptcy, and the Eugene Parks Deferred Benefit Pension Plan (the Plan) asked that the Kirshes’ debt to it be found nondischargeable pursuant to 11 U.S.C. § 523 (a)(2)(A). The bankruptcy court denied that request because it found that the Plan had not relied on the Kirshes’ false representations. The district court affirmed the bankruptcy court. We affirm.

BACKGROUND

Eugene Parks (Parks) is an attorney who established the Plan to provide for his retirement. Parks had been practicing law for twenty years and the area of his practice was business law. That included handling real estate transactions in which he represented buyers, sellers or brokers. The Plan was intended to be the basis of Parks’ retirement security, so in his capacity as its administrator he was cautious *1456 about lending the Plan’s money. He did not use it for speculative purposes.

Ronald Kirsh (Kirsh) had been a client of Parks for ten years and their relationship was not simply that of attorney and client. They socialized together and, as Kirsh said, Parks “was everything to me. He was all my advice, he was all my legal advice, all my personal advice, all my…

concurring.

I agree with the bankruptcy court that Ronald Kirsh failed to reasonably rely upon the debtor’s representations. See Ronald Kirsh v. Eugene Parks Law Corporation Defined Benefit Pension Plan (In re Kirsh), Case No. 89-04738, Adv. No. *1462 89-1080 (C.D.Cal. Apr. 17, 1990). I therefore concur in the result.

concurring in part and dissenting in part:

I heartily agree with everything in the per curiam opinion except Part A(2), which applies reliance law to the facts of this case, and the ultimate conclusion.

In my opinion, the bankruptcy court erred because it believed that the standard was reasonable reliance, whereas the standard is really justifiable reliance. No doubt the court was led into that legal error because courts have often committed the linguistic error of using the phrase reasonable reliance when they actually meant justifiable reliance. Thus, my disagreement with the per curiam opinion is an exceedingly narrow one, although it could have a substantial effect upon the outcome of this case.

I recognize all that is said about Parks, and I must agree that it seems that he behaved in a very foolish manner. But Parks and Kirsh were friends, even extremely close ones. See Ophaug, 827 F.2d at 341; Phillips, 804 F.2d at 931. When Kirsh was in need of money, he lied to his friend in order to obtain it. Parks was a professional, but he was also capable of being taken in by friendship. Attorneys are no more exempt from that sentiment than other beings. Of course, Parks did know…

973 F.2d 1454 27 Collier Bankr.Cas.2d 942 , 23 Bankr.Ct.Dec. 727 , Bankr. L. Rep. P 74,911 In re Ronald KIRSH; In re Paula Kirsh, Debtors. EUGENE PARKS LAW CORPORATION DEFINED BENEFIT PENSION PLAN, Plaintiff-Appellant, v. Ronald KIRSH; Paula Kirsh, Defendants-Appellees. No. 91-55701. United States Court of Appeals, Ninth Circuit. Submitted * July 6, 1992. Decided Aug. 31, 1992. Gary Brown, Century City, Cal., for plaintiff-appellant. James M. Leonard, Leonard & Zeitsoff, Los Angeles, Cal., for defendants-appellees. Appeal from the United States District Court for the Central District of California. Before FARRIS, WIGGINS and FERNANDEZ, Circuit Judges. PER CURIAM: 1 Ronald and Paula Kirsh (the Kirshes) filed for bankruptcy, and the Eugene Parks Deferred Benefit Pension Plan (the Plan) asked that the Kirshes' debt to it be found nondischargeable pursuant to 11 U.S.C. § 523 (a)(2)(A). The bankruptcy court denied that request because it found that the Plan had not relied on the Kirshes' false representations. The district court affirmed the bankruptcy court. We affirm. BACKGROUND 2 Eugene Parks (Parks) is an attorney who established the Plan to provide for his retirement.…