Bankruptcy Case No. 397-35087-rld7, Adversary Proceeding No. 97-3479.United States Bankruptcy Court, D. Oregon.
June 9, 1998
RANDALL DUNN, Bankruptcy Judge
Following a trial on the complaint in this adversary proceeding, I issued a letter opinion finding that debtor Rodney Meneley’s debt to Advanta National Bank, USA (the “Bank”) was nondischargeable. Letter Opinion, dated April 28, 1998. Relying on American Express Travel Related Services Company Inc. v.Hashemi (In re Hashemi), 104 F.3d 1122, 1126-27 (9th Cir. 1997), I denied the Bank’s request for attorneys fees pursuant to its Cardholder
Agreement because I did not need to determine the enforceability of the Cardholder Agreement in order to determine dischargeability under 11 U.S.C. § 523(a)(2)(A). The Bank timely moved for reconsideration of the denial of its attorneys fees, asserting that Cohen v. De la Cruz, 118 S.Ct. 1212 (1998), decided by the United States Supreme Court on March 24, 1998, recognized a right to recover attorneys fees for the prosecution of a fraud action under § 523(a)(2)(A).
I have reviewed the memoranda of the parties filed in connection with the motion for reconsideration. I find theCohen decision distinguishable from the facts before me. InCohen, the creditor was entitled to recover treble damages and attorneys fees as a “debt” pursuant to the provisions of the New Jersey Consumer Fraud Act. The Supreme Court did not find any right to an award of attorneys fees under § 523(a)(2)(A) itself.
In the instant case, the Bank is relying on a contract provision, enforceable pursuant to ORS 20.096, authorizing an award of attorneys fees in connection with collecting amounts due under the Cardholder Agreement. Because Mr. Meneley did not contest the allegation that he had breached his Cardholder Agreement with the Bank, the issues that were tried before me were those relating solely to Mr. Meneley’s alleged fraud for purposes of § 523(a)(2)(A), rather than to any contract causes of action. In these circumstances, I am bound by the Ninth Circuit’s decision in Hashemi, which is not inconsistent with Cohen, to the effect that there is no statutory authorization to award attorneys fees to the
Bank as the prevailing party on its fraud cause of action under § 523(a)(2)(A). Accordingly, I must deny the Bank’s motion for reconsideration.
The foregoing constitutes my findings of fact and conclusions of law in accordance with F.R.Bankr.P. 7052. I will enter a separate order denying the Bank’s motion.