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Bankruptcy Keyed to Howard 7th Ed.
Archer v. Warner
Citation:
538 U.S. 314, 123 S. Ct. 1462, 155 L. Ed. 2d 454 (2003)Facts
In late 1991, Leonard and Arlene Warner purchased Warner Manufacturing Company for $250,000 and sold it six months later to Elliott and Carol Archer for $610,000. The Archers subsequently sued the Warners in North Carolina state court alleging fraud connected with the sale. In May 1995, the parties settled the lawsuit, with the Warners agreeing to pay $300,000 as compensation for emotional distress. The settlement included broad releases of all claims arising from the litigation except obligations under the promissory note. The releases specifically stated that the parties did not admit any liability or wrongdoing. The Warners paid $200,000 and executed a promissory note for the remaining $100,000. When the Warners failed to make the first payment in November 1995, the Archers sued in state court. The Warners then filed for Chapter 7 bankruptcy, and the Archers sought to have the $100,000 debt declared nondischargeable as a debt obtained by fraud.
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