In Re Amjad I. Eashai, Debtor. Citibank (South Dakota), N.A. v. Amjad I. Eashai

Amjad Eashai, a Chapter 7 debtor, appeals the Bankruptcy Appellate Panel’s decision 1 which affirmed the bankruptcy court’s judgment in favor of Citibank (South Dakota), N.A. The bankruptcy court found that Eashai’s $22,567.79 in credit card debt owed to Citibank was nondischargeable under 11 U.S.C. § 523 (a)(2)(A) because of fraud. On appeal, Eashai claims that the bankruptcy court erred by not requiring Citibank to establish “reliance” as an element of fraud in determining that the debt was non-disehargeable. 2 We have jurisdiction pursuant to 28 U.S.C. § 158 (d). We AFFIRM.

I. BACKGROUND

This is not a typical credit card fraud case. This is a case in which a debtor employed a fraudulent scheme of credit card kiting. Am-jad Eashai, the debtor, obtained many personal credit cards while he was employed as a car lease consultant for a bank. In that position, he earned approximately $24,000 a year. In April of 1990, he injured his back and became unemployed. He has not worked steadily since his injury. After the injury, his income was $1,200 per month from disability compensation. At that time his monthly expenses amounted to $3,300, which created a monthly deficit of…

specially concurring:

While I concur in the holding that the debt owed, in this case, is nondischargeable and that the bankruptcy court properly found fraud on the facts before it, I am somewhat troubled by the tone of the opinion which might be misinterpreted as ruling that any person that holds more than one credit card, and makes only minimum payments on each, risks committing fraud.

It is well known that credit card issuers compete for new users and a great deal of the marketing effort encourages customers to transfer credit card balances, usually at very low interest, to a new issuer. It is not *1093 at all unlikely for a person of average means to receive new credit cards unsolicited. Even where the invitation requires an application before issuance, the inducements may be too attractive to resist by people who should. Mr. Eashai, an unemployed holder of 26 credit cards, may not fit this profile; nevertheless, it would be wrong to conclude that a person who genuinely becomes overextended, perhaps because of the availability of too much free and easy credit, risks nondis-chargeability. In short, the credit card issuer is not entirely blameless in this equation. See In re…

87 F.3d 1082 65 USLW 2047 , 29 Bankr.Ct.Dec. 409 , Bankr. L. Rep. P 77,040, 96 Cal. Daily Op. Serv. 4948 , 96 Daily Journal D.A.R. 7976 In re Amjad I. EASHAI, Debtor. CITIBANK (SOUTH DAKOTA), N.A., Plaintiff-Appellee, v. Amjad I. EASHAI, Defendant-Appellant. No. 94-55749. United States Court of Appeals, Ninth Circuit. Argued and Submitted Dec. 14, 1995. Decided July 2, 1996. Darvy Mack Cohan, La Jolla, California, for appellee. Andrew E. Smyth, Smyth & Smyth, Los Angeles, California, for appellant. Appeal from the Ninth Circuit Bankruptcy Appellate Panel. Before: SCHROEDER, FERGUSON, and O'SCANNLAIN, Circuit Judges. FERGUSON, Circuit Judge: 1 Amjad Eashai, a Chapter 7 debtor, appeals the Bankruptcy Appellate Panel's decision 1 which affirmed the bankruptcy court's judgment in favor of Citibank (South Dakota), N.A. The bankruptcy court found that Eashai's $22,567.79 in credit card debt owed to Citibank was nondischargeable under 11 U.S.C. § 523 (a)(2)(A) because of fraud. On appeal, Eashai claims that the bankruptcy court erred by not requiring Citibank to establish "reliance" as an element of fraud in determining that the debt was nondischargeable. 2 We have jurisdiction…