Robertson v. Torres - Motion Denied in Part, Granted in Part

Jump To

Top Caption Trial Court Document The text of this document was obtained by analyzing a scanned document and may have typos.

Support FLP

CourtListener is a project of Free
Law Project, a federally-recognized 501(c)(3) non-profit. Members help support our work and get special access to features.

Please become a member today.

Join Free.law Now

April 17, 2026 Get Citation Alerts Download PDF Add Note

Angela Ann Robertson v. Dennis Eduardo Torres and Danielle Lyn Torres

United States Bankruptcy Court, D. Idaho

• Citations: None known
• Docket Number: 25-06060

• Precedential Status: Unknown Status

• Opinion

• Authorities (22)

• Cited By (0)

• Summaries (0)

• Similar Cases (7.2K)

• PDF

Trial Court Document

UNITED STATES BANKRUPTCY COURT
DISTRICT OF IDAHO

In re:

Case No. 25-00770-BRW
DENNIS EDUARDO TORRES and

DANIELLE LYN TORRES,
Chapter 7

Debtors.

ANGELA ANN ROBERTSON,

Plaintiff,

vs. Adv. No. 25-06060-BRW

DENNIS EDUARDO TORRES and
DANIELLE LYN TORRES,

Defendants.

MEMORANDUM DECISION

Appearances:
Angela Robertson, Nampa, Idaho, Plaintiff pro se.

Matthew W. Grimshaw, Grimshaw Law Group, Boise, Idaho, counsel for
Defendants.

Defendants in this adversary proceeding and chapter 7 debtors in the underlying
bankruptcy, Dennis Eduardo Torres and Danielle Lyn Torres (collectively, “Defendants” and
individually as “Mr. Torres” or “Mrs. Torres”), filed their Motion to Dismiss Amended
Complaint (Doc. No. 17) (the “Motion”). The Motion seeks dismissal of the Amended
Complaint (Doc. No. 15) (the “Amended Complaint”), filed pro se by the Plaintiff Angela Ann
Robertson (“Plaintiff”), pursuant to Federal Rule of Civil Procedure12(b)(6), incorporated to this
adversary proceeding by Federal Rule of Bankruptcy Procedure 7012(b).1
On March 26, 2026, the Court held a hearing on the Motion. Plaintiff failed to file a
response to the Motion but appeared at the hearing and opposed the relief sought in the Motion
through her arguments to the Court. At the conclusion of the hearing, the Court took the matter
under advisement.

After considering the Amended Complaint, the applicable law, and arguments of the
parties, the following constitutes the Court’s decision on the Motion. Rule 7052. Based on the
following analysis, the Motion is denied in part and granted in part.
I. JURISDICTION, AUTHORITY, AND VENUE
The Court has subject matter jurisdiction over this adversary proceeding as referred to it
by the district court pursuant to 28 U.S.C. §§ 157 (a) and 1334(b). This adversary proceeding is a
“core” proceeding and is within this Court’s constitutional authority to adjudicate via final
judgment or order. 28 U.S.C. § 157 (b)(2)(I); see also Dietz v. Ford (In re Deitz), 760 F.3d 1038,
1039 (9th Cir. 2014) (concluding bankruptcy courts have the constitutional authority to finally

determine exception to discharge actions). Finally, venue is appropriate in this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
II. RELEVANT FACTS
A. Procedural Background
Defendants filed the underlying chapter 7 bankruptcy case on September 26, 2025. On
November 24, 2025, Plaintiff filed an adversary proceeding, seeking to except from discharge a
debt owed to her by Defendants. The initial complaint (the “Complaint”) consisted of the

1 Unless otherwise indicated, all statutory citations are to the Bankruptcy Code, 11 U.S.C.
§§ 101–1532, and all citations to a “Rule” are to the Federal Rules of Bankruptcy Procedure.
Additionally, all citations to “Civil Rule” are to the Federal Rules of Civil Procedure.
adversary coversheet, an attached exhibit containing a judgment, and a second exhibit containing
a deposition. See Doc. No. 1 (listing the attachments). The Complaint did not otherwise provide
an explanation of Plaintiff’s claims. On the adversary coversheet, under “Cause of Action,”
Plaintiff indicated this was an adversary complaint under 11 U.S.C. § 727 and 541 based on a
default judgment stating fraud and alter ego claims. Doc. No. 1-1. However, Plaintiff only

checked the box for “Dischargeability” under § 523(a)(2) for false pretenses, false
representation, and actual fraud. Id. On December 23, 2025, Defendants filed a Motion to
Dismiss and Memorandum in Support (Doc. Nos. 9 and 10) pursuant to Civil Rule 12(b)(6),
pointing out that no facts were alleged in the Complaint.
A telephonic hearing on this motion to dismiss was held on January 29, 2026, with
appearances by counsel for Defendants and Plaintiff appearing pro se. At the January hearing,
the Court noted that the Complaint did not satisfy pleading standards and granted the motion to
dismiss without prejudice. See Doc. No. 12 (minutes stating the Court’s oral ruling). However,
the Court provided Plaintiff with 21 days to file an amended complaint. Id.

On February 18, 2026, Plaintiff timely filed her Amended Complaint, which seeks to
except from discharge a debt owed to Plaintiff by Defendants pursuant to § 523(a)(2)(A), and
cites § 727 as well. In response, Defendants filed the Motion and accompanying documents
seeking dismissal without leave to amend because Plaintiff has already had the opportunity to
cure the deficiencies, and yet, those deficiencies persist in the Amended Complaint. Defendants
further point out in the Motion that there are no allegations in the Amended Complaint
specifically against Mrs. Torres2 and no allegations with respect to Plaintiff’s apparent § 727

2 Although the Amended Complaint lists Mr. Torres and Mrs. Torres as Defendants in the
caption, the body of the Amended Complaint only contains allegations against Mr. Torres and his entity,
Rawson Construction Group, LLC. Mrs. Torres is otherwise not mentioned. At the hearing held on the
(Continued)
claims.3
B. Factual Allegations as Stated in the Amended Complaint
The following are the allegations of the Amended Complaint, which the Court accepts as
true for the purposes of the Motion in determining whether Plaintiff sufficiently stated a claim
upon which relief may be granted.

Prior to this bankruptcy, on February 28, 2022, Plaintiff entered into an agreement with
Mr. Torres and his entity, Rawson Construction Group LLC, (“Rawson”) to build a barn for
between $50,200 and $55,200 (the “Agreement”). Doc. No. 15 at ¶ 2, Ex. A at ¶¶ 4, 13. At the
time of the Agreement, Mr. Torres did not have an active contractor’s license in the State of
Idaho and knowingly entered into the Agreement without having a license. Doc. No. 15 at ¶ 2.
Mr. Torres also created a website that listed several completed projects with photos; however,
the projects detailed on the website were not his completed work. Doc. No. 15 ¶ 2. Plaintiff
justifiably relied on Mr. Torres’s representations and omissions and was damaged thereby when
Mr. Torres failed to build the barn and Plaintiff was required to hire another contractor to do the

work at a higher cost. Doc. No. 15 at ¶ 2.

Motion on March 26, 2026, Plaintiff stated on the record that she was not pursuing a claim against Mrs.
Torres. Based on the lack of allegations against Mrs. Torres in the Amended Complaint combined with
Plaintiff’s statements on the record, the Motion will be granted and the claims against Mrs. Torres will be
dismissed with prejudice.

3 The Amended Complaint cites §§ 523 and 727 as a basis for the relief sought by Plaintiff.
However, on the Adversary Cover Sheet, Plaintiff checked the box indicating this is a proceeding under
§ 523(a)(2) and the Amended Complaint quotes § 523(a)(2)(A). As to Plaintiff’s claim under § 727, at
the hearing on the Motion, Plaintiff confirmed and clarified that she is only seeking an exception to
discharge under § 523(a)(2) for her claim rather than an objection to discharge under § 727 as to one or
both Defendants. Based on the lack of allegations under § 727 in the Amended Complaint and Plaintiff’s
statements on the record, the Motion will be granted, and the § 727 claims against Defendants are
dismissed with prejudice. Given this conclusion, the Court will not address the legal basis for a § 727
claim below.
Pursuant to the Agreement, Plaintiff deposited $28,900 with Mr. Torres and Rawson to
secure their performance. Doc. No. 15 at ¶ 2, Ex. A at ¶ 11. At some point, the Agreement was
terminated by Mr. Torres. Doc. No. 15 at ¶ 2, Ex. A at ¶ 12. After the Agreement was
terminated, Mr. Torres wrongfully withheld the unearned deposit of $18,515.08 from Plaintiff.
Doc. No. 15 at ¶ 2, Ex. A at ¶ 11. Mr. Torres had no intention of returning the funds after

terminating the agreement. Doc. No. 15 at ¶ 2. After the Agreement was terminated, Plaintiff
hired and paid a different contractor to build the same barn. Doc. No. 15 at ¶ 2, Ex. A at ¶ 13.
The price of the bargained-for barn, as contemplated under the Agreement, was between $50,200
and $55,200 but ultimately cost $95,833 to construct. Id. Plaintiff was unaware and naïve to the
impossibility of building the barn at the bargained-for price provided by Mr. Torres and incurred
damages in paying the additional amount. Id.
As a result of the misrepresentations and termination of the Agreement, Plaintiff initiated
suit against Mr. Torres and Rawson and filed an Amended Verified Complaint in Idaho state
court in May 2023. Doc. No. 15 at ¶ 2, Ex. A at ¶ 4. The lawsuit claimed Mr. Torres engaged in

“fraud and fraud in the inducement” against Plaintiff in order to “get her to enter the parties’
February 28, 2022 agreement.” Doc. No. 15 at ¶ 2, Ex. A at 2 (¶ 4 of the Declaration of
Counsel); see also id. at 3 (¶ 13 of the Declaration of Counsel) (“Because of [Mr. Torres’s]
fraudulent inducement, Plaintiff entered into the Agreement.”).
On August 8, 2023, Defendants filed a Notice of Non-Opposition to Motion for Entry Of
Default. Doc. No. 15 at ¶ 2, Ex. A at ¶ 7. Thus, on August 30, 2023, Plaintiff obtained a default
judgment (the “Judgment”) against Mr. Torres and Rawson, in the District Court of the Fourth
Judicial District of the State of Idaho, in and for the County of Ada, Case No. CV01-22-08143,
in the amount of $111,211.72 plus interest. Doc. No. 15 at ¶ 2; Doc. No. 15 at ¶ 2, Ex. A at 6-7.
Plaintiff suffered damages in the amount of the Judgment, including actual damages from
Mr. Torres’s fraudulent withholding of her unearned deposit after the agreement was terminated,
the difference between the bargained-for barn and the actual cost built by a different contractor,
costs incurred as a result of Mr. Torres’s false and misleading statements, attorney fees, and
interest. Doc. No. 15 at ¶ 2, Ex. A at ¶¶ 11, 13, 14, 16. Mr. Torres is personally liable for the

Judgment, including the entity’s obligations, because Rawson was operated as Mr. Torres’s alter
ego because it was undercapitalized, did not observe corporate formalities, and commingled
funds. Doc. No. 15 at ¶ 2.
III. APPLICABLE LAW
A. Pleading Standards
Civil Rule 8(a), applicable to this adversary proceeding by Rule 7008, requires that
pleadings provide a short and plain statement of a claim entitled to relief. Similarly, Rule
7012(b) incorporates Civil Rule 12(b)(6), which Civil Rule allows courts to dismiss claims if the
complaint fails to state a claim upon which relief may be granted.

Under Civil Rule 12(b)(6), a complaint must provide sufficient facts that, when accepted
as true, support a claim as plausible on its face, or it may be subject to dismissal. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); Boquist v. Courtney, 32 F.4th 764, 773 (9th Cir. 2022).
A claim is facially plausible where “the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678; Boquist, 32 F.4th at 773. This is “a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679;
Boquist, 32 F.4th at 773. In doing so, all reasonable inferences must be drawn in favor of the
claimant, and all factual allegations must be accepted as true. Boquist, 32 F.4th at 773 (quoting
Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir.
2014)); Doe I v. Cisco Systems, Inc., 73 F.4th 700, 713 (9th Cir. 2023), cert. granted, (Jan. 9,
2026) (No. 25-579).
However, “threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice” and such legal conclusions are not entitled to the
presumption of truth. Iqbal, 556 U.S. at 678; Cisco Systems, Inc., 73 F.4th at 713. The factual
allegations must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S. Ct. 1955. “[W]here the well-pleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’— ‘that the
pleader is entitled to relief’” and is therefore insufficient under Civil Rule 8(a). Iqbal, 556 U.S.
at 679. Ultimately, the claim presented must provide a cognizable legal theory and sufficient
facts to support that theory. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001) (citing
Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)); In re Tracht Gut, LLC, 836 F.3d 1146, 1151 (9th Cir. 2016). When considering the plaintiff’s complaint under this
standard, the court may consider exhibits attached to and documents incorporated by reference in
the complaint. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1030 (9th Cir.
2008); Gugino v. Wells Fargo Bank Northwest N.A. (In re Lifestyle Home Furnishings, LLC), 2009 WL 1270317, at *2 (Bankr. D. Idaho 2009).
Notably, where a plaintiff proceeds pro se, the court must construe the pleading liberally
and hold it “to less stringent standards than formal pleadings drafted by lawyers,” to “afford the
petitioner the benefit of any doubt.” Erickson v. Pardus, 551 U.S. 89, 94 (2007); Boquist, 32
F.4th at 774 (quoting Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010)). Nevertheless, a liberal
interpretation does not relieve a pro se plaintiff of the obligation to conform with pleading
requirements; a court will not supply essential elements of a claim that are otherwise absent from
the complaint. Boquist, 32 F.4th at 774.
Rule 7009, which incorporates Civil Rule 9(b), imposes a heightened pleading standard
requiring that allegations of fraud must be stated “with particularity.” When pleading fraud, the

plaintiff must include “the who, what, when, where, and how of the misconduct charged” and
“set forth what is false or misleading abut a statement, and why it is false.” Ebeid ex. Rel. U.S. v.
Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and citations omitted).
The allegations must be “specific enough to give defendants notice of the particular misconduct
. . . so that they can defend against the charge.” Vess v. Ciba-Geigy Corp., 317 F.3d 1097, 1106
(9th Cir. 2003) (internal quotation marks and citations omitted).
Only the defendant’s alleged misrepresentations, fraudulent omissions, or other deceptive
conduct must be stated with particularity while intent and knowledge may be alleged generally.
Spring Creek Cap., LLC v. Hawkes (In re Hawkes), 2020 WL 1170708, at *3 (Bankr. D. Idaho

2020). In addition to pleading claims of fraud or mistake with particularity, plaintiffs must also
plead plausible allegations to conform with Civil Rule 8(a) and Iqbal. Cafasso, U.S. ex rel. v.
General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1055 (9th Cir. 2011).
B. Exception to Discharge under § 523(a)(2)(A)
The Amended Complaint seeks a determination that the debt owed to Plaintiff by
Defendants is excepted from discharge pursuant to § 523(a)(2)(A). Under that statute, an
individual debtor will not be discharged from any debt:
(2) for money, property, services, or an extension renewal, or
refinancing of credit, to the extent obtained by –
(A) false pretenses, a false representation, or actual fraud,
other than a statement respecting the debtor’s or an insider’s
financial condition[.]
§ 523(a)(2)(A).
To state a claim under § 523(a)(2)(A) of “false pretenses” or “false
representation,” the plaintiff must show by a preponderance of the evidence:
(1) Misrepresentation, fraudulent omission, or deceptive conduct by
the debtor; (2) knowledge of the falsity or deceptiveness of his
statement of conduct; (3) an intent to deceive; (4) justifiable reliance
by the creditor on the debtor’s statement or conduct; and (5) damage
to the creditor proximately caused by its reliance on the debtor’s
statement or conduct.
Idaho Dept. of Labor v. Tileh (In re Tileh), 665 B.R. 447, 457 (Bankr. D. Idaho 2024); see also
Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir. 2010). An express
misrepresentation is a “false representation” under § 523(a)(2)(A), while a false pretense is an
implied misrepresentation or conduct intended to manufacture a false impression. Reingold v.
Shaffer (In re Reingold), 2013 WL 1136546, at *3 n.4 (9th Cir. BAP Mar. 19, 2013) (citations
omitted).
Additionally, the Supreme Court of the United States has held that a misrepresentation is
not an element of “actual fraud” under § 523(a)(2)(A), which “encompasses forms of fraud . . .
that can be effected without a false representation.” Husky Int’l Elecs. v. Ritz, 578 U.S. 355, 359 (2016). “The word ‘actual’ has a simple meaning in the context of common-law fraud: It
denotes any fraud that ‘involv[es] moral turpitude or intentional wrong.’” Id. at 360 (quoting
§ 523(a)(2)(A); Neal v. Clark, 95 U.S. 704, 709 (1877)).
It is not only express misrepresentations that qualify under § 523(a)(2)(A), but omissions
may as well. “Omitting critical facts which a debtor has a duty to disclose may lead to a finding
of fraud[.]” Daniel v. Del Valle (In re Del Valle), 577 B.R. 789, 802 (Bankr. C.D. Cal. 2017)
(citations omitted). The determination of whether there is a duty to disclose requires the
bankruptcy court to look to the common law concept of fraud, found in the Restatement. Id. (citing Field v. Mans, 516 U.S. 591, 71 (1995); Apte v. Japara M.D., F.A.C.C., Inc. (In re Apte), 96 F.3d 1319, 1324 (9th Cir. 1996)). “[A] party to a business transaction has a duty to disclose
when the other party is ignorant of material facts which he does not have an opportunity to

discover.” In re Apte, 96 F.3d at 1324.
As this Court has recognized, there is a duty to disclose under the Restatement in the
following circumstances:
(1) One who fails to disclose to another a fact that he knows may
justifiably induce the other to act or refrain from acting in a business
transaction is subject to the same liability to the other as though he
had represented the nonexistence of the matter that he has failed to
disclose, if, but only if, he is under a duty to the other to exercise
reasonable care to disclose the matter in question.

(2) One party to a business transaction is under a duty to exercise
reasonable care to disclose to the other before the transaction is
consummated,

(a) matters known to him that the other is entitled to know
because of a fiduciary or other similar relation of trust and
confidence between them; and

(b) matters known to him that he knows to be necessary to
prevent his partial or ambiguous statement of the facts from
being misleading; and

(c) subsequently acquired information that he knows will
make untrue or misleading a previous representation that
when made was true or believed to be so; and

(d) the falsity of a representation not made with the
expectation that it would be acted upon, if he subsequently
learns that the other is about to act in reliance upon it in a
transaction with him; and

(e) facts basic to the transaction, if he knows that the other is
about to enter into it under a mistake as to them, and that the
other, because of the relationship between them, the customs
of the trade or other objective circumstances, would
reasonably expect a disclosure of those facts.

Husky v. Tolman (In re Tolman), 491 B.R. 138, 152 (Bankr. D. Idaho 2013) (quoting
Restatement (Second) of Torts § 551).
While the federal law standard as to fraudulent omissions, as provided by the
Restatement, applies in the context of an exception to discharge action, reference to the “state
law standard for nondisclosure . . . can be instructive.” In re Del Valle, 577 B.R. at 802.
Idaho law is consistent with the Restatement. See In re Tolman, 491 B.R. at 152 n.37
(noting that the Idaho supreme court has relied upon Restatement § 551) (citing Saint Alphonsus
Reg’l Med. Ctr. v. Krueger, 861 P.2d 71, 77-78 (Idaho Ct. App. 1992)). In the context of a
contractor, Idaho law states “it shall be unlawful for any person to engage in the business of, or
hold himself out as, a contractor within this state without being registered as required under this
chapter.” IDAHO CODE § 54-5204(1). A contractor under Idaho law is “[a]ny person who in any
capacity undertakes, offers to undertake, purports to have the capacity to undertake, or submits a
bid to, or does himself or by or through others, perform construction . . . .” IDAHO CODE § 54-
5203(4)(a). Further, a licensed contractor in the State “shall prominently display his contractor
registration number for public view in his place of business, on advertising, contracts, permits,
company or business letterheads, and purchase orders and subcontracts within sixty (60) days of
issue of registration.” IDAHO CODE § 54-5214. The Idaho supreme court has regarded a contract
entered into by a contractor required to be licensed in the State, but who was not so licensed at
the time of the contract, to be an “illegal contract.” See, e.g., AED, Inc. v. KDC Invests., LLC, 307 P.3d 176, 184 (Idaho 2013) (conducting the analysis of Idaho law and concluding that a
contract entered into by an unlicensed contractor is an unenforceable “illegal contract” regardless
of whether the contractor later obtained a license after the contract was signed).
Finally, exceptions to discharge, including claims under § 523(a)(2)(A), should be
liberally construed in favor of the debtor and construed strictly against the plaintiff. Klapp v.
Landsman (In re Klapp), 706 F.2d 998, 999 (9th Cir. 1983).

IV. APPLICATION OF LAW TO THE AMENDED COMPLAINT
The Amended Complaint may be legitimately criticized for being less than clear in some
of its allegations. In addition, the Amended Complaint lumps multiple allegations into single
paragraphs, a violation of Civil Rule 10(b), applicable in adversary proceedings by Rule 7010.
Nevertheless, given Plaintiff’s pro se status, and applying the principles of law stated above, the
Court finds that the Amended Complaint sufficiently states a claim under § 523(a)(2)(A) as
against Mr. Torres. As such, the Motion will be denied with respect to that claim.
More particularly, at this stage of the litigation, the Court finds the Amended Complaint
sufficiently states a claim of “false pretenses” or “false representation,” pursuant to the following

analysis.
A. Misrepresentation, fraudulent omission, or deceptive conduct
Plaintiff alleges that Mr. Torres “knowingly entered into the agreement without having an
active contractor license in the state of Idaho” and that he “misrepresented material facts
regarding his experience as a licensed contractor and business operations by falsely creating a
website that listed several completed projects that were fraudulent” because the website
“depicted several photos of completed projects that were simply copied from other websites [or]
photos that were never his projects.” Doc. No. 15, at ¶ 2. These allegations state either a
fraudulent omission by Mr. Torres regarding his licensure status or an express misrepresentation
to Plaintiff regarding his status before executing the Agreement. Either a fraudulent omission or
an express statement regarding the licensure status, if proven, may establish the first element of a
§ 523(a)(2)(A) claim of “false representation.”
Courts have held that omission of a debtor-contractor’s licensure status may be a
fraudulent omission under § 523(a)(2)(A). See, e.g., Miller v. Miller (In re Miller), 2025 WL

40884, at *13 (Bankr. C.D. Cal. Jan. 7, 2025) (holding debtor-contractor “misrepresented the
status of his license . . . by fraudulent omission[,]” because during the project, the debtor-
contractor “held himself out to Plaintiffs to be a licensed contractor despite his license being in
‘inactive’ status beginning July 2021”); but see In re Sabban, 600 F.3d at 1223 (holding that
while the contractor made a misrepresentation regarding the status of his license, the state court’s
determination that no damages were proximately caused by this misrepresentation resulted in a
state court judgment amount being held dischargeable as provided by California law).
In addition, the allegations regarding the representations by Mr. Torres on his website—
with projects shown that were not completed by him—if proven may establish a “false

representation” or “false pretenses” under § 523(a)(2)(A). It may be reasonably inferred from
this allegation in the Amended Complaint that Mr. Torres may have been attempting to give a
false impression that the work portrayed on his website is evidence of his ability to perform
similar work for other customers, including Plaintiff.
Misleading statements on a debtor’s website to induce customers to purchase services
may be a basis to establish the first element of § 523(a)(2)(A) with respect to a false
representation, if proven. See, e.g., United States v. MyLife.com Inc. (In re MyLife.com Inc.), 2023 WL 4875913, at *8 (Bankr. C.D. Cal. July 31, 2023) (giving preclusive effect to a
determination by the district court that the debtor “created a misleading website to induce
consumers to purchase its services” and finding such a determination was sufficient to establish
the first element of a § 523(a)(2)(A) claim); see also Boccella v. Purington (In re Purington), 2012 WL 1945510, at *10 (Bankr. D.N.J. May 30, 2012) (holding that representations by the
debtor-contractor in an advertisement “painted a picture of [the contractor’s] company as an
established enterprise that was qualified to accomplish the work being solicited . . . despite the

fact that [the contractor] had engaged in only one minor job . . . and had not registered her
company as a construction contractor in New Jersey” sufficient to form the basis for meeting the
first element of a § 523(a)(2)(A) claim).
For purposes of the Motion, the Court concludes that the Amended Complaint
sufficiently states this element of a § 523(a)(2)(A) claim against Mr. Torres.
B. Knowledge of the falsity or deceptiveness of the statement or conduct
Plaintiff states that “[Mr. Torres] knowingly entered into the agreement without having
an active contractor license in the state of Idaho.” Doc. No. 15 at ¶ 2. Plaintiff also asserts that
the photos on Mr. Torres’s website were false representations as they depicted work completed

by others. Doc. No. 15 at ¶ 2. These facts alleged by Plaintiff, when presumed as true for
purposes of the Motion, are sufficient to withstand a motion to dismiss on this element as well.
They sufficiently allege that Mr. Torres knew such representations or omissions were false
because he knew he did not have an active contractor’s license and he knew the photos were not
his projects, yet he portrayed on his website to Plaintiff that the projects were his own.
C. Intent to deceive
“Not only must there be a representation of material fact which is false, the representation
must be made with the intention and purpose to deceive.” Carnes v. Jones (In re Jones), 2024
WL 1608570, at *3 (Bankr. D. Idaho 2023) (quoting Welch v. Laraway (In re Laraway), 2010
WL 3703272, at *7 (Bankr. D. Idaho Sept. 13, 2010)). Direct evidence of a party’s intent to
deceive is rarely available; instead, it may be inferred from circumstantial evidence and the
totality of the circumstances. Brown v. Johnson (In re Johnson), 2021 WL 560093, at *6 (Bankr.
D. Idaho 2021). This intent may be satisfied where a debtor has shown a reckless disregard for
the truth. In re Jones, 2024 WL 1608570 at *3.

Here, assuming the facts as alleged and incorporated by the exhibit are true, Mr. Torres
was not licensed and implied on his website that the work of others was his own. Doc. No. 15
¶ 2; Doc. No. 15 ¶ 2, Ex. A at ¶ 13. Plaintiff alleges this fraudulently induced her to enter the
Agreement with an intent to deceive her. Doc. No. 15 at ¶ 2.
Taking the allegations in the Amended Complaint as true and in the totality of the
circumstances, Plaintiff has sufficiently asserted facts to suggest that Mr. Torres intended to
deceive Plaintiff.
D. Justifiable reliance
In addition to showing there was a knowing, intentional misrepresentation or fraudulent

omission, a plaintiff must also demonstrate that they justifiably relied on the misrepresentation or
omission. This is a subjective standard assessing the qualities and characteristics of a particular
plaintiff, knowledge and relationship of the parties, and the circumstances of the particular case,
rather than a common, uniform standard applied in all cases. In re Johnson, 2021 WL 560093, at
*6 (citing Field v. Mans, 516 U.S. at 71).
Reading the Amended Complaint liberally, Plaintiff relied on either Mr. Torres’s
fraudulent omission regarding his licensure status or an express false statement as to his licensure
status. Doc. No. 15 at ¶ 2. Further, in entering into the Agreement, Plaintiff relied on Mr.
Torres’s website, which showed pictures of projects that he had completed. Doc. No. 15 at ¶ 2.
In the Motion, Mr. Torres argues that the Amended Complaint is defective in this regard
because Plaintiff does not specifically state that she reviewed the website in making her decision
to hire Mr. Torres. See Doc. No. 18 at 6. However, while the Amended Complaint is not
express in this regard, the Court finds nevertheless that it may be reasonably inferred from
Plaintiff’s allegations in the Amended Complaint that she viewed the website prior to entering

into the Agreement with Mr. Torres. See Doc. No. 15 ¶ 2 (“[Mr. Torres’s] website depicted
several photos of completed projects that were simply copied from other websites, photos that
were never his projects, upon which Plaintiff justifiably relied . . . .”).
Accepting the allegations as true, Plaintiff has asserted sufficient facts to demonstrate a
justifiable reliance on the omissions or representations that Mr. Torres was a licensed contractor
and capable of constructing the barn in a manner consistent with the photos depicted on the
website, which were not Mr. Torres’s work.
E. Damages
Lastly, Plaintiff must show that she incurred damages as a proximate cause of Mr.

Torres’s fraudulent conduct, where the debt is traceable to the alleged fraud. In re Sabban, 600
F.3d at 1223; In re Johnson, 2021 WL 560093, at *7. The Amended Complaint and
accompanying exhibits sufficiently plead facts satisfying this element (see Doc. No. 15 at ¶ 2).
However, the Court notes that the proof at trial or on dispositive motion will need to address how
the damages incurred by Plaintiff in this case are traceable as the proximate cause of Mr.
Torres’s representations or omissions (or other proven fraud).
VI. CONCLUSION
Read liberally, the Amended Complaint asserts factual allegations sufficient to support
Plaintiff’s claim for relief under § 523(a)(2)(A) as to Mr. Torres. In so holding, the Court
cautions the Plaintiff that, to prevail at trial, she must provide proof for each of the required
elements of § 523(a)(2)(A) by a preponderance of the evidence. Mere allegations will not
suffice.
The Motion is denied with respect to the § 523(a)(2)(A) claim against Mr. Torres, and he
shall answer the Amended Complaint.
A separate order will be entered.

Tih DATED: April 17, 2026
oe 4 + xO)
Ne vy Brent R. Wilson
yy U.S. Bankruptcy Judge

MEMORANDUM DECISION - 17