Date of Decision:
October 6, 2010
Whether a claim held by a state against the debtor for the overpayment of claims submitted under Medicaid was excepted from discharge under 11 U.S.C. § 523(a)(2)(A) or (a)(4) where the debtor had signed a Medicaid provider agreement with the state and where the state had obtained an administrative decision in its favor regarding the overpayment but where the state had not specifically alleged fraud by the debtor in that administrative proceeding?
The Bankruptcy Court concluded the debt was not excepted from discharge under § 523(a)(2)(A) because the state failed to prove the debtor knowingly made a false representation and was not excepted from discharge under § 523(a)(4) because the state failed to establish the debtor was a fiduciary for the state under an express trust; the agreement did not create that trust. The other nonbankruptcy laws cited by the state did not create any exceptions to discharge.
The decision was affirmed. South Dakota Department of Social Services v. Malde, 2011 WL 1743176 (D.S.D. May 5, 2011).
Full Bankruptcy Appellate Panel/District Court Appeal Opinion: