## Facts

- Lamar, Archer & Cofrin, LLP (Lamar), a law firm, represented R. Scott Appling in business litigation.
- Appling fell behind on paying Lamar’s legal fees.
- To persuade Lamar to keep working and not withdraw, Appling told Lamar he expected a substantial tax refund and would use it to pay past-due and future legal bills.
- The statement about the expected refund was oral; Lamar did not obtain a writing memorializing that representation.
- Appling later received a tax refund that was substantially less than he had described and used the money for other expenses rather than paying Lamar.
- When Lamar later pressed for payment, Appling again orally stated he was still waiting on the refund, and Lamar completed additional work.
- Lamar sued Appling in state court and obtained a judgment for unpaid legal fees.
- Appling and his wife filed a Chapter 7 bankruptcy petition.
- Lamar filed an adversary proceeding seeking to have the judgment debt excepted from discharge under 11 U.S.C. § 523(a)(2)(A), alleging Appling obtained legal services by false pretenses, false representation, or actual fraud.
- Appling argued the alleged misrepresentations were “statement[s] respecting the debtor’s…financial condition,” which are addressed by § 523(a)(2)(B) and are actionable only if “in writing.”
- The bankruptcy court held Lamar’s debt nondischargeable under § 523(a)(2)(A), finding Appling made knowingly false oral statements and that Lamar justifiably relied on them; the district court affirmed.
- The Eleventh Circuit reversed, holding that a statement about a single asset can be a statement “respecting” financial condition and, because Appling’s statements were not in writing, the debt was dischargeable.
- The Supreme Court granted certiorari to resolve whether a statement about a single asset can qualify as a statement respecting a debtor’s financial condition under § 523(a)(2).

## Issues

1. Whether an oral statement about a single asset (an expected tax refund) can be a “statement respecting the debtor’s…financial condition” under 11 U.S.C. § 523(a)(2).
2. If so, whether a creditor may still obtain nondischargeability under § 523(a)(2)(A) when the statement was not in writing, despite § 523(a)(2)(B)’s writing requirement.

## Decision

- The Supreme Court affirmed the Eleventh Circuit.
- A statement about a single asset can be a “statement respecting the debtor’s…financial condition” under § 523(a)(2) when it has a direct relation to, or impact on, the debtor’s overall financial status.
- Appling’s oral statements about his expected tax refund were statements respecting his financial condition because they related to his ability to pay Lamar.
- Because the statements were not in writing, they could not satisfy § 523(a)(2)(B), and § 523(a)(2)(A) did not apply because it excludes statements respecting financial condition.
- The resulting debt was dischargeable.
- The Court’s opinion was authored by Justice Sotomayor; the judgment was unanimous, though Justices Thomas, Alito, and Gorsuch did not join one portion of the Court’s reasoning (Part III-B).

## Legal Principles

- “Respecting” in § 523(a)(2) is read broadly to mean “in relation to,” “with reference to,” or “regarding,” so the phrase reaches more than formal financial statements.
- A statement “respecting the debtor’s…financial condition” includes statements that bear directly on a debtor’s overall financial status; it is not limited to balance-sheet-type representations.
- A misrepresentation about a single asset may qualify as a financial-condition statement if it is used to show ability to pay a debt.
- Section 523(a)(2) creates a division:  
  - § 523(a)(2)(A) covers many forms of fraud, but not statements respecting financial condition;  
  - § 523(a)(2)(B) covers statements respecting financial condition only when they are in writing (and otherwise meet the statute’s elements).
- Reading “respecting” narrowly would drain meaning from the word and create arbitrary line-drawing over how complete a financial depiction must be.
- The writing requirement reflects Congress’s choice to limit nondischargeability claims based on alleged financial-condition statements that are informal and harder to verify when only oral.

## Conclusion

In *Lamar, Archer & Cofrin, LLP v. Appling*, the Supreme Court held that a debtor’s oral misrepresentation about a single asset—here, an expected tax refund offered as proof of ability to pay—counts as a “statement respecting the debtor’s…financial condition” under § 523(a)(2). Because such statements must be in writing to support nondischargeability under § 523(a)(2)(B), and are excluded from § 523(a)(2)(A), Lamar could not block discharge of its fee judgment based on Appling’s unwritten statements.


Lamar, Archer & Cofrin, LLP v. Appling, 584 U.S. 709 (2018)