Frank v. Hucke

UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re:
Mariann T. Hucke,
Debtor.
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Case No. 24-31436
Chapter 7
Judge Crist
Daniel Frank,
Plaintiff,
v.
Mariann T. Hucke,
Defendant.
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Adv. No. 24-3022
AMENDED MEMORANDUM OPINION AND ORDER DENYING MOTION FOR
DEFAULT JUDGMENT (DOC. 21), WITHOUT PREJUDICE, AND GRANTING
LEAVE TO FILE AN AMENDED COMPLAINT
I. 	Introduction
Fundamentally, this Memorandum Opinion and Order concerns whether this Court can
grant a default judgment on a claim asserted under 11 U.S.C. § 523(a)(2)(A) when there is not yet
an established underlying debt. There is no prepetition judgment for the debt, no prepetition state
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: July 27, 2026
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court lawsuit to seek a judgment, and Plaintiff has not alleged a claim in his Complaint (Doc. 1)1
(as defined below) in this adversary proceeding to seek a judgment. Nor has he even explained the
fraud claim under applicable non-bankruptcy law—state law—that he could and would pursue to
judgment in the event the amorphous “debt” were held non-dischargeable.2 In short, although it is
a close call because this is an unusual case in which the Debtor scheduled Plaintiff as holding a
non-contingent, liquidated, and undisputed nonpriority unsecured claim for the amount of $60,000,
as a business investor, in her no-asset chapter 7 case, and because Debtor ultimately withdrew her
answer to the Complaint, there simply is no way for this Court to know whether the claims that
Plaintiff might later assert would fit within the exception to discharge under § 523(a)(2)(A).
Because exceptions to discharge shall be construed narrowly in favor of the Debtor and because a
claim under § 523(a)(2)(A) must meet the heightened pleading standard under Federal Rule of
Civil Procedure 9(b), made applicable by Federal Rule of Bankruptcy Procedure 7009, the best
course of action is to deny the present request for judgment by default and require Plaintiff to plead
their fraud claim to hold the Debtor personally responsible for the funds that Plaintiff invested in
her failed business venture so that this Court can appropriately assess whether the “debt” qualifies
as non-dischargeable under § 523(a)(2)(A). Moreover, there is no basis alleged within the
Complaint to hold a debt non-dischargeable under either § 523(a)(2)(B) or (a)(4), such that
judgment by default cannot be granted on those bases.
But first, there were a number of other procedural issues with service in this adversary
proceeding that are worthy of discussion. As a result, there are two sets of background and analysis
within this Memorandum Opinion and Order, the first concerning service, the second concerning
the Plaintiff’s Motion for Default Judgment (Doc. 21) (the “Motion for Default Judgment”).
II. 	Jurisdiction
This Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. § 1334(b)
and Amended General Order 05-02 (Amended Standing Order of Reference) of the United States
District Court for the Southern District of Ohio entered pursuant to 28 U.S.C. § 157(a). This is a
core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I).
1 All citations to docket numbers are to the docket of this adversary proceeding, No. 24-3022, unless otherwise noted.
2 Simply obtaining a judgment determining a debt to be non-dischargeable does not result in a money judgment for
that debt which would be enforceable; rather, it only concerns whether the debt is discharged under 11 U.S.C. § 727.
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III. Background to Service
This adversary proceeding is before the Court on Plaintiff Daniel Frank’s (“Plaintiff” and
“Mr. Frank”) Motion for Default Judgment filed on July 31, 2025. Debtor and Defendant Mariann
T. Hucke (“Defendant” and “Ms. Hucke”) had originally filed an Answer of Defendant Mariann
T. Hucke (Doc. 5) (the “Answer”) on December 2, 2024,3 in response to Plaintiff’s Complaint to
Determine Non-Dischargeability of Debt Pursuant to 11 U.S.C. § 523(a)(2)(A) or (B), and 11
U.S.C. § 523(a)(4) (Doc. 1) (the “Complaint”), filed on November 4, 2024. The Complaint was
timely filed on the deadline to object to the dischargeability of debt pursuant to Federal Rule of
Bankruptcy Procedure (“Bankruptcy Rule”) 4007(c).4 Ms. Hucke, however, by and through
counsel, later withdrew her Answer on May 8, 2025 (Doc. 13).5 There was no explanation for the
withdrawal and her Counsel, Katharine R. Granger, who represented Ms. Hucke as both the Debtor
in her underlying chapter 7 case, No. 24-31436, and this adversary proceeding, did not state therein
that she was withdrawing as counsel. Thereafter, Plaintiff’s counsel filed a Status Report (Doc.
14) on May 9, 2025, stating that Plaintiff would “proceed forward with a dispositive motion.” But
nothing was filed for close to two months, so the Court 6 entered an Order Requiring Status Report,
and Notice of Possible Dismissal for Lack of Prosecution (Doc. 15) (the “Order”) on July 7, 2025.
In response to the above-referenced Order, Plaintiff’s counsel filed a Certificate of Service
(Doc. 17) on July 14, 2025, certifying that “service of this summons and a copy of the complaint
was made November 21, 2024, “pursuant to the laws of the State of Ohio – Certified mail” upon
Ms. Hucke at 8743 Meadowcreek Drive, Dayton, Ohio 45458. In conjunction, Plaintiff’s counsel
filed the Affidavit of Tami Hart Kirby (Doc. 18), which was docketed under the category of a
Request for Entry of Default and Affidavit. And on July 24, 2025, the Clerk of this Court filed an
3 The Answer was originally docketed as a “Response” (Doc. 3) and therefore was re-docketed by the Clerk as an
“Answer to Complaint” (Doc. 5) on December 3, 2024.
4 The Notice of Chapter 7 Bankruptcy Case – No Proof of Claim Deadline (Doc. 9) issued on July 31, 2024, notified
all parties that the deadline to “challenge whether certain debts are dischargeable” pursuant to 11 U.S.C. § 523(a)(2),
(4), or (6) was November 4, 2024.
5 See the Withdrawal of Answer of Defendant Mariann T. Hucke (Doc. 13) filed on May 8, 2025, by her counsel,
Katharine Granger.
6 This adversary proceeding was transferred from the Honorable Guy R. Humphrey to the above-signed Bankruptcy
Judge on June 3, 2025.
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Entry of Default (Doc. 19) pursuant to Federal Rule of Civil Procedure (“Civil Rule”) 55(a), made
applicable to this adversary proceeding by Bankruptcy Rule 7055. Plaintiff then filed his Motion
for 	Default 	Judgment 	on 	July 	31, 	2025, 	asking 	the 	Court 	to 	“find 	that 	the 	debt 	is
non-dischargeable.” Mot. for Default J. at 5, § IV.
IV. Analysis of Service
There were several procedural problems with the service of process in this adversary
proceeding. First, although Civil Rule 4(l)(3) states that “[f]ailure to prove service does not affect
the validity of service” and the Court “may permit proof of service to be amended[,]” Plaintiff’s
counsel did not file the Certificate of Service (Doc. 17) of the Summons and Complaint until July
14, 2025, over seven months after the only Summons in an Adversary Proceeding (Doc. 2) (the
“Summons”) was issued in this adversary proceeding on November 4, 2024. And the Certificate
of Service revealed that Plaintiff did not serve the Summons and Complaint by certified mail until
November 21, 2024, by which time the Summons was stale by nine (9) days and a new summons
had to be issued. See Fed. R. Bankr. P. 7004(e)(1).
Bankruptcy Rule 7004(e)(1) governs the “Time to Serve a Summons and Complaint” in an
adversary proceeding and provides as follows:
(e) 	Time to Serve a Summons and Complaint.
(1) In General. . . . . If served by mail, [the summons and complaint] must be
deposited in the mail within 7 days after the summons is issued. If a summons is
not timely delivered or mailed, a new summons must be issued.
Fed. R. Bankr. P. 7004(e)(1) (emphasis added). Accordingly, the Summons, issued on Monday,
November 4, 2024, had to be mailed by Tuesday, November 12, 2024.7 But the Certificate of
Service (Doc. 17) states the Summons and Complaint were mailed on November 21, 2024. This is
a problem because in an adversary proceeding in bankruptcy court the answer period runs from
the date of issuance of the summons, such that the longer it takes a plaintiff to serve the summons
and complaint, the less time the defendant has to answer, absent an extension of time, and after
seven days it is too late.
7 This is so because Monday, November 11, 2024 was Veteran’s Day, such that Bankruptcy Rule 9006(a)(1)(C) and
(a)(6) gave Plaintiff until the next day that was not a legal holiday.
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In addition to not timely serving the Summons and Complaint, Plaintiff did not file any of
the “necessary details of the certified mail service, as required by Ohio Civ. R. 4.1(A)(1)(a), (A)(2),
and Ohio Civ. R. 4.6(D), such as the return receipt requested number” such that “there is no way
to know or verify what happened with the alleged attempted certified mail service.” Hursey v.
Long (In re Long), 677 B.R. 77, 93 (Bankr. S.D. Ohio 2026).8 In short, Plaintiff mailed a stale
Summons to Ms. Hucke and the Court has no information before it, such as a return receipt number,
by which it can tell whether the certified mail service was accepted or rejected—was or was not
successful.
In addition to the foregoing deficiencies, the Certificate of Service (Doc. 17) does not
indicate that Plaintiff’s counsel served the Summons and Complaint on Ms. Hucke’s attorney, Ms.
Granger, as required by Bankruptcy Rule 7004(g), which must be done by a means other than the
Court’s ECF system because of Local Bankruptcy Rule (“LBR”) 7004-1(b), which provides that
“participants in the ECF System” do not “waive the right to service by personal service or first
class mail” or “agree to electronic service . . . with regard to service of process of a summons and
complaint in an adversary proceeding under Rule 7004[.]” In and of itself, this means that the
service was insufficient. See In re Long, 677 B.R. at 93-95.
Notwithstanding the foregoing procedural issues, Ms. Hucke did appear by and through
her attorney when she filed the Answer. So the first question is whether the Answer, which was
later withdrawn, waived the procedural deficiencies such that the Entry of Default was correctly
entered such that the Court should proceed to the next step of considering the Motion for Default
Judgment? This is resolved, in this case, by reviewing the Answer. See Gerber v. Riordan, 649
F.3d 514, 522 (6th Cir. 2011) (Moore, J., concurring) (stating that it is “easy in most cases” to
determine if any of the Civil Rule 12(b)(2)-(5) defenses have been waived by looking “at the
defendant’s answer or pre-answer motion; either personal jurisdiction is raised or it isn’t”), partly
abrogated by Friedman v. Estate of Presser, 929 F.2d 1151, 1157 n.7 (6th Cir. 1991), as noted in
King v. Taylor, 694 F.3d 650, 660 n.7 (6th Cir. 2012).
8 Although not expressly made applicable to adversary proceedings before this Court through the Local Bankruptcy
Rules, there are steps required for utilizing certified mail service in civil actions before the United States District Court
for the Southern District of Ohio, as set forth in Local Civil Rule 4.2(a)-(d), which are instructive. Plaintiff did not
follow the steps and did not file any evidence of what happened with the certified mail.
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A review of the Answer indicates that the only affirmative defense asserted was “that
Plaintiff has failed to state a claim upon which relief can be granted pursuant to Fe[d]. R. Bankr.
P[]. 2017(b)(6).” Answer at 3, ¶ 27. Thus, pursuant to Civil Rule 12(h)(1)(B)(ii), Defendant had
waived the defenses listed in Civil Rule 12(b)(2)-(5), which include “(2) lack of personal
jurisdiction; . . . (4) insufficient process; [and] (5) insufficient service of process[.]” And her
withdrawal of the Answer did not undue this waiver. In fact, there is no Civil Rule that expressly
permits a withdrawal and the only way to undue the waiver of defenses under Civil Rule
12(b)(2)-(5) would have been to obtain Plaintiff’s written consent or this Court’s leave to amend
the Answer under Civil Rule 15(a)(2), made applicable by Bankruptcy Rule 7015. Accordingly,
the Entry of Default by the Clerk was appropriate and the Court can move on to considering the
merits of the Motion for Default Judgment.
V. 	Background to Motion for Default Judgment
A. 	Scheduled Claim of Plaintiff
As briefly mentioned in the Introduction above, on July 30, 2024, Debtor scheduled the
Plaintiff as holding a non-contingent, liquidated, and undisputed nonpriority unsecured claim for
the amount of $60,000 (the “Scheduled Claim”). See Schedule E/F, Part 2, Claim 4.16 (Case No.
24-31436, Doc. 1 at 23). The Scheduled Claim was described as a “Business Investor” type of
nonpriority unsecured claim. Id. In conjunction, Debtor’s Schedule H lists Acu-Tru Systems LLC
(“Acu-Tru”) as Ms. Hucke’s codebtor on the Scheduled Claim. Schedule H, Codebtor 3.2 (Case
No. 24-31436, Doc. 1 at 38). Mr. Frank did not file a proof of claim, which is understandable given
that creditors were notified not to do so in Debtor’s no-asset chapter 7 case. See Notice of Chp. 7
Bankr. Case – No Proof of Claim Deadline, ¶ 10 (Case No. 24-31436, Doc. 9 at 2).
B. 	Complaint to Determine Non-Dischargeability of Debt
On November 4, 2024, Mr. Frank, by and through counsel, filed the Complaint against Ms.
Hucke. The Complaint, which was brief at about five pages, seeks to have the Court determine
“[t]hat 	the 	obligations, 	as 	generally 	represented 	by 	the 	transaction, 	be 	determined
non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) or (B), and . . . § 523(a)(4)[.]”9 Compl. at
9 Unless otherwise noted, in the remainder of this Memorandum Opinion and Order all references to sections are to
sections of title 11 of the United States Code (the “Bankruptcy Code”).
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5, ¶¶ 22, 25, 26, b. Apart from the cryptic reference to “the obligations, as generally represented
by the transaction,” the Complaint states that “Mr. Frank is a disclosed creditor in Debtor’s
bankruptcy proceedings, and is listed as being owed $60,000.00 by Debtor.” Compl. at 2, ¶ 4. This
is significant because the Complaint does not include a claim to liquidate any debt. In fact, the
only affirmative statement by Plaintiff in the Complaint is that “[p]ursuant to his investment, Mr.
Frank has been injured in the total amount of $60,000.00.” Compl at 4, ¶ 16. Otherwise, the
Complaint only contains the aforementioned very generalized statements, in several places, that
Plaintiff wants this Court to hold non-dischargeable “the obligations owed by Debtor to Mr. Frank,
as generally represented by the transaction . . . .” See, e.g., Compl. at 5, ¶¶ 22, 25, 26, b.
Plaintiff pleads two counts in the Complaint. Count One incorporates the previous
paragraphs of the Complaint and adds only two more. The first additional paragraph is simply a
recitation of § 523(a)(2)(A), stating that “Debtor engaged in false pretenses, a false representation,
and/or actual fraud, other than a statement respecting Debtor’s financial condition, in connection
with obtaining money from Mr. Frank.” Compl. at 4, ¶ 21. And the second paragraph simply
asserts that the “obligations owed by Debtor to Mr. Frank, as generally represented by the
transaction, are non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A).” Compl. at 4, ¶ 22. That
is the sum total of Count One.
Count Two also incorporates the prior paragraphs of the Complaint and adds three more.
The first paragraph is a recitation of the elements of § 523(a)(2)(B) and sub-parts (i) through (iv),
stating that “Debtor obtained money from Mr. Frank by the use of a statement in writing that was
materially false, respecting Debtor’s or an insider’s financial condition, upon which Mr. Frank
reasonably relied, and that Debtor caused to be made or published with intent to deceive.” Compl.
at 5, ¶ 24. But Plaintiff does not expressly identify the “statement in writing” in Count Two. The
second paragraph restates that Count Two is based on “a materially false statement in writing and
satisfaction of the remaining requirements of Bankruptcy Code Section 523(a)(2)(B)(i)-(iv)” and,
like Count One, seeks to have “the obligations owed by Debtor to Mr. Frank, as generally
represented by the transaction” held non-dischargeable pursuant to § 523(a)(2)(B). Compl. at 5,
¶ 25. The third and final paragraph of Count Two appears to attempt to add a third claim, although
still within Count Two, pursuant to § 523(a)(4) based on an allegation having no apparent basis
within the general allegations of the Complaint that “[b]ecause of the fraud or defalcation while
committing embezzlement and/or larceny by the Debtor, the obligations owed by Debtor to Mr.
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Frank as generally represented by the transaction are non-dischargeable[.]” Compl. at 5, ¶ 26.
Nowhere else in the Complaint, however, is there any mention of embezzlement or larceny, nor
any facts that would lead to the conclusion that Plaintiff is asserting that Debtor committed
embezzlement or larceny.
The prayer for relief in Plaintiff’s Complaint echoes Counts One and Two in asking this
Court to “find judgment in his favor . . . that the obligations, as generally represented by the
transaction, be determined non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) or (B), and 11
U.S.C. § 523(a)(4)[.]” Compl. at 5, ¶ b. Plaintiff also asks for “[c]ourt costs and reasonable
attorney’s fees to the extent permitted by law[,]” but does not state the basis upon which attorney’s
fees are sought. Compl. at 6, ¶ c. More broadly, the Complaint does not contain a count seeking a
judgment on the debt even though the alleged debt has not been, so far as this Court knows,
liquidated and reduced to judgment by any other court. Instead, as noted above, Plaintiff only states
several times that he is seeking to have held non-dischargeable the amorphous “obligations owed
by Debtor to Mr. Frank, as generally represented by the transaction . . . .” Compl. at 5, ¶¶ 22, 25,
26, b.
The referenced debt in this case appears to be based upon an equity investment made by
Plaintiff pursuant to an agreement that he had with Acu-Tru, not directly with Defendant, although
by scheduling the Claim as she did it does not appear that Debtor would dispute she might have
personal liability. She did, however, later file the Answer contesting the debt’s dischargeability.
The agreement, an “Equity Investment Contract” attached to the Complaint as Exhibit 1, reflects
that it was signed by the Plaintiff on June 21, 2023 and counter-signed by the Defendant in her
capacity as “President of [Acu-Tru].” Compl. at 2, ¶ 5 and Ex. 1. Additionally, the Equity
Investment Contract provides that Plaintiff’s monetary contribution to Acu-Tru was primarily “for
a 10% [e]quity stake in machine, equipment, supplies, & Acu-Tru licensing sales from Acu-Tru
Systems LLC.” See Equity Investment Contract, Ex. 1, at 1. Plaintiff, however, provides no other
insights as to how his claim for a debt is or is not based on or related to the Equity Investment
Contract, which would appear to govern the parties’ relationship. Instead, he asserts that “Debtor’s
material misrepresentations regarding the business operations of Acu-Tru, the promised return on
his investment, and the purported use of the investment proceeds caused Mr. Frank to make the
investment so that Acu-Tru could purchase the machinery and equipment.” Compl. at 3, ¶ 10. But
there is no elaboration as to what the promised return on investment was. There is an allegation
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that “[u]pon information and belief, Mr. Frank’s investment was not utilized to purchase the
machinery and equipment as previously represented by Debtor” and that “Debtor diverted the
funds for her personal use[,]” but, again, Plaintiff has not set up a claim to establish a debt based
on these facts, such that it is unclear if it would be based on contract or tort, and if a veil piercing
remedy would be pursued. And it remains to be seen if Plaintiff can adequately plead such a claim.
In summary, the Complaint asserts that Mr. Frank invested in Defendant’s business,
Acu-Tru, pursuant to an “Equity Investment Contract,” but that Ms. Hucke, “upon information and
belief, . . . diverted the funds for her personal use.” Compl. at 2, ¶ 5; 3, ¶ 13; Ex. 1. The investment
funds “were purportedly to be used to purchase certain machinery and equipment[.]” Compl. at 2,
¶ 7; Ex. 3. Defendant also provided a “Business Plan.” Compl., Ex. 2. Plaintiff further alleges that
he was not informed about liens against some of Acu-Tru’s assets, as well as “existing,
unsurmountable loans against the business.” Compl. at 2-3, ¶¶ 8, 9. Defendant allegedly
represented to Plaintiff that Acu-Tru “had been hindered by the COVID-19 pandemic, but that if
additional machinery and equipment was purchased for the company, the business was poised for
success.” Compl. at 3, ¶ 9. The rest of the allegations in the Complaint appear to concern events
that occurred after Plaintiff made his investment. Compl. at 3, ¶¶ 11-13. And ultimately, the
Defendant allegedly ceased Acu-Tru’s operations without informing the Plaintiff. Compl. at 3,
¶ 12.
C. 	Answer and Withdrawal of Answer
As noted above, Defendant initially filed an Answer on December 2, 2024 (Doc. 5), but
following the filing of the parties’ Joint Preliminary Pretrial Statement (Doc. 7) (the “Joint PPS”)
on January 6, 2025, and a subsequent Joint Status Report (Doc. 10) on March 7, 2025, which
indicated that “[t]he parties are still negotiating towards a resolution[,]” the Defendant, by and
through counsel, filed a Withdrawal of Answer of Defendant Mariann T. Hucke (Rel Doc #5) (Doc.
13) (the “Withdrawal”). The Withdrawal, however, did not say whether Debtor’s Counsel, Ms.
Granger, continued to represent Ms. Hucke.
D. 	Status Report and Request for Entry of Default
On May 9, 2025, counsel for the Plaintiff filed an individual Status Report (Doc. 14) in
accordance with this Court’s Order Requiring Further Joint Status Report on Adversary
Proceeding (Doc. 11). Defendant did not join in the filing of that Status Report. On July 14, 2025,
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pursuant to the Court’s Order Requiring Status Report, and Notice of Possible Dismissal for Lack
of Prosecution (Doc. 15), Plaintiff filed the Affidavit of Tami Hart Kirby (Doc. 18), accompanied
by a Status Report Pursuant to Servicemembers Civil Relief Act indicating that the Defendant was
not in military service and seeking an entry of default from the Clerk, pursuant to Federal Rule of
Civil Procedure (“Civil Rule”) 55(a), made applicable to this proceeding by Federal Rule of
Bankruptcy Procedure (“Bankruptcy Rule”) 7055. The Clerk filed the Entry of Default (Doc. 19)
on July 24, 2025.
E. 	Motion for Default Judgment
On July 31, 2025, seven days after the Clerk’s Entry of Default (Doc. 19) was issued,
Plaintiff filed the Motion for Default Judgment pursuant to Civil Rule 55(b) (Doc. 21) to ask the
Court to “find that the debt is non-dischargeable.” Mot. for Default J. at 5, § IV. Plaintiff submitted
a revised proposed Default Judgment Entry on October 31, 2025, which would have ordered, in
relevant parts, that “(i) Defendant Mariann T. Hucke’s obligations to Daniel Frank as set forth in
Plaintiff’s [Complaint] are non-dischargeable; and (ii) Plaintiff is entitled to recover court costs
and reasonable attorney’s fees to the extent permitted by law.” 10 And although Plaintiff recites the
factual background to the Complaint [within his Motion for Default Judgment], he does not explain
the type of claim he is pursuing against Ms. Hucke on the debt, which is not set up in the Complaint,
or whether he will even be pursuing a judgment on the debt for which his claim was scheduled.
The Defendant did not file a response to the Motion for Default Judgment.
Plaintiff’s last Status Report (Doc. 22), also filed on July 31, 2025—the same day the
Motion for Default Judgment was filed—essentially echoed the prior individual Status Report
(Doc. 14), stating that “[t]he parties were unable to reach a resolution, and Defendant has
withdrawn her answer in this matter.”
VI. Analysis of the Motion for Default Judgment
A. 	Overview
There are two categories of issues with respect to whether the Court can grant the pending
Motion for Default Judgment, one procedural and one more substantive. First, was it sufficient for
10 The original version of this Memorandum Opinion and Order incorrectly stated that Plaintiff had not submitted a
proposed judgment entry, which is hereby corrected. That, along with adding a clause to the following sentence for
clarity, are the only changes within this Amended Memorandum Opinion and Order.
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Plaintiff to serve the Motion for Default Judgment only on counsel for the Defendant, and not also
on the Defendant who is still a Debtor in a pending chapter 7 case? This requires analysis of Civil
Rule 55(b)(2), but ultimately the answer is yes, the service was sufficient. Second, can this Court
grant a judgment by default in favor of Plaintiff on any of the claims asserted under § 523(a) when
the Complaint did not state a claim for this Court to enter judgment on a claim by Mr. Frank against
the Debtor and there is no mention that any other court has previously done so? The answer in this
particular circumstance is no. Absent setting up a claim for the debt, the Court cannot move to step
two of the process for determining the dischargeability of a debt under applicable Sixth Circuit
law. See NHSS LLC v. Penn (In re Penn), No. 25-2060, 2026 Bankr. LEXIS 1816, at *31, ___
B.R. ___ (Bankr. S.D. Ohio July 22, 2026) (“A plaintiff must first establish that a valid debt exists
before he can seek a determination of dischargeability of that debt.” (citing Rich Triple Eight, LLC
v. Dawson (In re Dawson), No. 25-1047, 2026 Bankr. LEXIS 1415, at *7 (Bankr. S.D. Ohio June
8, 2026))). And this Court should not be required to go fishing in that proverbial “bucket of mud”
for Plaintiff’s claim for the debt. See The Clock Tower by West Element, Ltd. v. Scott (In re Scott),
No. 25-03037, 2026 Bankr. LEXIS 1590, at *3-4, ___ B.R. ___, 2026 WL 1824050 (Bankr. S.D.
Ohio June 23, 2026) (“ ‘judges and adverse parties need not try to fish a gold coin from a bucket
of mud.’ ” (quoting Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 943 (7th Cir. 2013)
(quoting United States ex rel. Garst v. Lockheed-Martin Corp., 328 F.3d 374, 378 (7th Cir. 2003)
and cited in Lee v. Ohio Educ. Ass’n, 951 F.3d 386, 392-93 (6th Cir. 2020) (holding that when “all
seven of [plaintiff’s] state-law causes of action are contained within a single sentence” it violates
Civil Rules 8(a)(2) and failure to “separate each of her causes of action or claims for relief into
separate counts” violates Civil Rule 10(b))).
B. 	Service of the Motion for Default Judgment
Regarding service of the Motion for Default Judgment, despite filing the Withdrawal of
the Answer, Ms. Granger did not seek this Court’s approval to withdraw as Ms. Hucke’s counsel,
such that under Local Bankruptcy Rule (“LBR”) 2091-1(c) Ms. Granger shall continue to act as
attorney for Ms. Hucke in this adversary proceeding. Because Ms. Hucke previously appeared in
this adversary proceeding, by and through Ms. Granger as Counsel (who has not withdrawn),
service of the Motion for Default Judgment upon her was sufficient.
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Civil Rule 55(b)(2) provides as follows:
(b) Entering a Default Judgment.
* 	* 	*
(2) By the Court. In all other cases, the party must apply to the court for a
default judgment. . . . If the party against whom a default judgment is sought has
appeared personally or by a representative, that party or its representative must be
served with written notice of the application at least 7 days before the hearing.
Fed. R. Civ. P. 55(b)(2) (emphasis added). Here, the Motion for Default Judgment was served
upon Ms. Hucke’s Attorney, Ms. Granger, through the Court’s ECF System. See Mot. for Default
J. at 5, Cert. of Serv.
For reasons similar to why service of the Summons and Complaint upon Ms. Hucke’s
Attorney by the Court’s ECF System was not sufficient, service of the Motion for Default
Judgment by the Court’s ECF System was sufficient. This is because LBR 7004-1(b) only excepts
the waiver of the right to service by first class mail (or personal service) for service of process of
“a summons and complaint in an adversary proceeding under Rule 7004 and the initiating motion
in a contested matter under Rule 9014.” Because the Motion for Default Judgment is a motion
filed in an adversary proceeding, not an initiating motion in a contested matter (in the main
bankruptcy case), Civil Rule 5, made applicable in an adversary proceeding by Bankruptcy Rule
7005, governs service. It provides that “[i]f a party is represented by an attorney, service . . . must
be made on the attorney unless the court orders service on the party” and that service may be
accomplished by “sending [a paper] to a registered user by filing it with the court’s electronic-filing
system . . . [in] which event[] service is complete upon filing . . . .” Fed. R. Civ. P. 5(b)(2)(E); see
also ECF Procedures 2(a) and 9(a)(1). Accordingly, we finally get to the substantive issue of
whether this Court can grant Plaintiff’s Motion for Default Judgment.
C. 	Motion for Default Judgment
Even though it appears Ms. Hucke might not dispute owing some kind of debt to the
Plaintiff, at least for purposes of notifying Mr. Frank of this bankruptcy, she did initially file the
Answer to dispute that the debt could be determined non-dischargeable. Thus, the failure of
Plaintiff to set up the legal basis for holding her personally responsible for a business investment
in Acu-Tru leaves the Court to guess at what type of claim Plaintiff might someday file against
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Ms. Hucke and whether that claim to reduce the debt to a judgment will satisfy the elements
required to show that a debt is non-dischargeable under any of the statutory provisions Plaintiff
cites; namely, § 523(a)(2)(A) or (B), or (a)(4).
As it concerns the “debt,” Plaintiff’s most specific allegations in both the Complaint and
the Motion for Default Judgment are that “Mr. Frank is a disclosed creditor in Debtor’s bankruptcy
proceedings, and is listed as being owed $60,000.00 by Debtor” and that “[p]ursuant to his
investment, Mr. Frank has been injured in the total amount of $60,000.00.” Compl. at 2, ¶ 4; 4,
¶ 16; Mot. for Default J. at 2-3, § I. But given that the main claims for non-dischargeability asserted
in the Complaint are alleged under § 523(a)(2), which requires Plaintiff to be able to obtain a
judgment on a fraud claim that fits the elements of § 523(a)(2)(A) or (B), the claim to hold the
debt non-dischargeable must be plead with particularity under Civil Rule 9(b), made applicable by
Bankruptcy Rule 7009, which includes setting up or at least alleging a specific fraud claim, not
just “obligations, as generally represented by the transaction” as alleged in the Complaint. This
requires that Plaintiff “ ‘(1) specify the time, place, and content of the alleged misrepresentation;
(2) identify the fraudulent scheme and the fraudulent intent of the defendant; and (3) describe the
injury resulting from the fraud.’ ” Stoner v. Keirns (In re Keirns), 628 B.R. 911, 918 (Bankr. S.D.
Ohio 2021) (quoting SFA Check, LLC v. First Bank of Del., 774 F.3d 351, 358 (6th Cir. 2014)).
Plaintiff does not explain within the Motion for Default Judgment how the facts alleged,
even if admitted through Ms. Hucke’s default, establish a debt under applicable non-bankruptcy
law of a type that would meet all the elements to be determined non-dischargeable under
§ 523(a)(2)(A) or (B), or (a)(4). Although because of the Scheduled Claim11 this case is somewhat
unique and potentially different from other recent cases in this District that have analyzed the
mechanics of pleading a complaint to determine that a debt is not dischargeable under § 523(a)(2),
(4), or (6), it is still the case that a dischargeability action under these provisions encompass “two
distinct claims: (1) whether the debtor owes a debt to the plaintiff[;] and (2) whether the debt owed
by the debtor to the plaintiff is nondischargeable.” See Scott, 2026 Bankr. LEXIS 1590, at *34-35,
2026 WL 1824050 (quoting Est. of Mingus v. Lombardo (In re Lombardo), No. 04-8060, 2005
11 Because Ms. Hucke filed her bankruptcy case under chapter 7, Bankruptcy Rule 3003(b) does not apply, such that
Mr. Frank would, if there were any assets, have to file a proof of claim under Bankruptcy Rule 3002(a) before the
Claim would be prima facie evidence of the validity and amount pursuant to Bankruptcy Rule 3001(f); however, even
then, the proof of claim might not tell us all the legal bases for the claim and whether it is the type of claim for which
this Court could find the resultant debt is non-dischargeable under § 523(a)(2)(A).
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Bankr. LEXIS 692, at *10 (B.A.P. 6th Cir. Apr. 28, 2005) (quoting Sill v. Sweeney (In re Sweeney),
276 B.R. 186, 195-96 (B.A.P. 6th Cir. 2002) (further citations omitted)). And so far all that Plaintiff
has specifically said is that “[p]ursuant to his investment,” he was “injured in the total amount of
$60,000.00.” Compl. at 4, ¶ 16. Again, because Plaintiff did not set up the debt—did not do step
one—he cannot ask this Court to do (to jump to) step two.
Another Court in this District recently “wrote that ‘if a plaintiff does not already have a
prepetition judgment, then the plaintiff must include non-bankruptcy law claim(s) in the adversary
complaint to establish a debtor’s liability and to quantify damages in order for this Court to
determine the debt’s dischargeability.’ ” Id. at 35 (quoting In re Dawson, 2026 Bankr. LEXIS
1415, at *7 (citing Lorentz, 2025 Bankr. LEXIS 1405, at *9-11). This is certainly the case when
the defendant is opposing the complaint and the establishment of a debt. However, here we have
a somewhat unusual situation in which the Debtor scheduled Plaintiff as holding a non-contingent,
undisputed, and liquidated debt, even though it appears no judgment has been entered; listed the
Claim as being owed both by her and her company, Acu-Tru, and she ultimately determined not
to defend the Complaint. Often times the defendant debtor has either not scheduled any claim for
the plaintiff seeking to hold a debt non-dischargeable or has scheduled the claim for an unknown
amount because it has not yet been liquidated by any court. In this situation, although it does not
appear that Debtor actually contests the amount of debt at issue, based on the Scheduled Claim,
both the Answer and the Joint Preliminary Pretrial Statement indicated that she did contest that
there was any fraud involved in procuring Mr. Frank’s investment. See Joint PPS at 3, § III. Def.
But does a lack of opposition by the Defendant automatically equate to Plaintiff having established
a prima facie case to hold a debt non-dischargeable, even without setting up a claim to obtain a
judgment on the debt, in the bankruptcy court or any other court? The answer, of course, is no.
This is because “[a]n entry of default does not automatically entitle the plaintiff to a default
judgment.” Cunningham v. Account Processing Grp. LLC, No. 2:21-cv-0120, 2022 U.S. Dist.
LEXIS 55709, at *3 (S.D. Ohio Mar. 28, 2022) (quoting Methe v. Amazon.com.dedc, LLC, 2019
U.S. Dist. LEXIS 116916, 2019 WL 3082329, at *1 (S.D. Ohio July 15, 2019)). And because “ ‘it
remains for the [] court to consider whether the unchallenged facts constitute a cause of action,
since a party in default does not admit mere conclusions of law.’ ” Id. (quoting F.C. Franchising
Sys., Inc. v. Schweizer, 2012 U.S. Dist. LEXIS 74991, 2012 WL 1945068 at *3 (S.D. Ohio May
30, 2012) (quoting Marshall v. Baggett, 616 F.3d 948, 852 (8th Cir. 2010)). Moreover, because
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Plaintiff did not allege a claim under applicable non-bankruptcy law for the “debt” he has not
established “ ‘the existence of a valid debt under non-bankruptcy law,’ ” such that “ ‘the analysis
ends without consideration of § 523(a)[.]’ ” Lucas v. Miller (In re Miller), No. 22-3009, 2024
Bankr. LEXIS 1521, at *16, 2024 WL 5711046 (Bankr. S.D. Ohio June 25, 2024) (quoting Kyle-
Wolf v. McClure (In re McClure), 625 B.R. 733, 738 (Bankr. C.D. Ill. 2021) (also stating that “[§]
523(a)(2) does not provide a creditor with a cause of action that ‘simultaneously creates a debt and
renders it non-dischargeable.’ ” (quoting In re Vanwinkle, 562 B.R. 671, 678 (Bankr. E.D. Ky.
2016))).
From a practical standpoint, denying entry of a default judgment will force the Plaintiff to
decide whether to amend his Complaint to add one or more counts to seek a judgment on the Claim.
In contrast to the well-established case law in this District holding that a dischargeability claim
has two components—establishing a debt and then showing the debt is of a type that meets the
criteria to be determined non-dischargeable—Plaintiff has neither obtained a judgment on the
Claim nor set up a claim in this Court to obtain a judgment. Thus, it is unknown whether any
applicable statute of limitations might bar Plaintiff from asserting a claim to obtain a judgment
against the Debtor12 and it is unknown whether there are any other issues. However, as of now,
there is neither a judgment nor a claim asserted on the alleged debt, such that the Court can only
guess at what the claim would be. And in the absence of Plaintiff pleading a valid claim for the
debt the Court cannot proceed to step two, to determine whether the debt is dischargeable. See,
e.g., Thornton v. Ludwikowski (In re Ludwikowski), 24-30668, 2025 Bankr. LEXIS 754, at *10
(Bankr. N.D. Ohio Mar. 28, 2025) (quoting Long v. Piercy (In re Piercy), 21 F.4th 909, 918 (6th
Cir. 2021) (“Whether a debt is nondischargeable under 11 U.S.C. § 523(a) is a matter separate
from the merits of the debt itself.”)).
For 	an 	overview 	of 	the 	possible 	approaches 	toward 	obtaining 	a 	judgment 	of
non-dischargeability that do not involve asserting a claim on the debt in bankruptcy court, the
Court finds helpful a fairly recent opinion; namely, De Los Rios v. Egeth (In re Egeth), 676 B.R.
69, 74-75 (Bankr. S.D.N.Y. 2026 (Glenn, C.J.), in which that Court noted, in the context of
granting a default judgment, that “[w]hile the text of section 523(a)(6) is silent on the issue, courts
12 Statutes of limitations, however, are affirmative defenses, such that Debtor could waive those as well, similar to
waiving her opportunity to contest the entry of a determination of non-dischargeability in this Court, at least on the
original Complaint.
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throughout the country have noted that Congress in drafting the Bankruptcy Code could not have
intended to allow a debt’s dischargeability to depend on whether an ongoing civil action has
concluded by the time of a bankruptcy filing.”) (quoted in Scott, 2026 Bankr. LEXIS 1590, at *36
n.27. In that case, however, the plaintiff in the adversary proceeding had asserted a claim in state
court prior to the bankruptcy case; thus, the plaintiff was “seeking a denial of discharge under
section 523(a)(6) on a theory that the elements of the causes of action in the Civil Action are
sufficient to show the Debtor engage in willful and malicious conduct.” Egeth. 676 B.R. at 75. In
contrast, even though it appears Defendant might not contest the amount of the alleged debt at
issue, Plaintiff, to the Court’s knowledge, has not filed an action in any court to obtain a judgment,
such that we do not know what claims Plaintiff will assert or the elements of such claims. The
Court could hazard a guess, but that is beyond the Court’s role. In short, without a pending claim
under applicable non-bankruptcy law the Court cannot, like the Court did in Egeth, determine
whether the resultant judgment would be of the type that is not dischargeable under § 523(a)(2)(A)
or (B), or (a)(4).
D. 	Count One—Claim Under § 523(a)(2)(A)
Although the Defendant did not respond to the Complaint or the Motion for Default
Judgment, the Court still needs to determine whether the Complaint has sufficient allegations, if
“taken as true” that are “sufficient to state a claim and support a judgment of liability.” General
Conf. Corp. v. McGill, 617 F.3d 402, 407 (6th Cir. 2010) (citing United States v. Conces, 507 F.3d
1028, 1038-39 (6th Cir. 2007)); see also In re Young, No. 12-14308, 2013 Bankr. LEXIS 3118,
*8-9 (Bankr. E.D. Tenn. Aug. 2, 2013) (quoting 10A Wright, Miller & Kane, Fed. Practice and
Procedure § 2688, p. 63 (3d [ed.] 1998) (discussing how the court must still determine if the
“unchallenged facts constitute a legitimate cause of action, since a party in default does not admit
mere conclusions of law.”); Merritt v. Layne (In re Layne), 517 B.R. 778, 781 (Bankr. E.D. Ky.
2014) (“Whether to enter a default judgment is in the Court’s discretion and the Court may review
the merits of the claim before entering judgment.”). Given that exceptions to discharge should be
“ ‘strictly construed against the creditor[,]’ ” the Court feels compelled to ensure that even an
unopposed complaint states a valid claim. Pazdzierz v. First Am. Title Ins. Co. (In re Pazdzierz),
718 F.3d 582, 586 (6th Cir. 2013) (quoting Rembert v. AT&T Universal Card Servs. (In re
Rembert), 141 F.3d 277, 281 (6th Cir. 1998) (citing Mfr.’s Hanover Tr. v. Ward (In re Ward), 857
F.2d 1082, 1083 (6th Cir. 1988))). Moreover, “[w]here the claim sounds in fraud, however, or
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where the allegations in the complaint are largely conclusory, the court must carefully ‘evaluate
the evidence presented to assure that the plaintiff has presented a prima facie case.’ ” Columbiana
Cnty. Sch. Emps. Credit Union, Inc. v. Cook (In re Cook), No. 05-8034, 2006 Bankr. LEXIS 446,
at *10 (B.A.P. 6th Cir. Apr. 3, 2006) (quoting Fleet Credit Card Servs., L.P. v. Macias (In re
Macias), 324 B.R. 181, 186 (Bankr. E.D.N.Y. 2004); citing MBNA Am. Bank, N.A. v. Hostetter
(In re Hostetter), 320 B.R. 674, 679 (Bankr. N.D. Ind. 2005); FCC Nat’l Bank v. Roberts (In re
Roberts), 193 B.R. 828 (Bankr. W.D. Mich. 1996) (denying creditor’s motion for default judgment
where creditor failed to present evidence to establish the debtor’s fraudulent intent)).
In addition to the foregoing legal standards, the practical reality is that many times debtors
who have recently filed chapter 7 bankruptcy do not have the means to pay counsel to continue to
represent them.
As this Court recently observed in Scott, “[t]he elements of a § 523(a)(2)(A) claim for false
representations, . . . are:
(1) the debtor obtained money, property, services or credit through a material
misrepresentation, either express or implied, that, at the time, the debtor knew was
false or made with gross recklessness as to its truth; (2) the debtor intended to
deceive the creditor; (3) the creditor justifiably relied on the false representation;
and (4) the creditor’s reliance was the proximate cause of loss.
Scott, 2026 Bankr. LEXIS 1590, at *56-57 (citing Sutton v. Berkley (In re Berkley), No. 24-01072,
2025 Bankr. LEXIS 227, at *13, 2025 WL 426476 (citing Rembert v. AT&T Universal Card Servs.
(In re Rembert), 141 F.3d 277, 280-81 (6th Cir. 1998))).
An examination of the allegations of the Complaint leaves doubt as to whether there were
material misrepresentations that Debtor knew were false and that Debtor intended to deceive Mr.
Frank. For example, Plaintiff asserts that “the funds invested by Mr. Frank were purportedly to be
used to purchase certain machinery and equipment as reflected on the equipment breakdown list
provided by Debtor,” which was attached to the Complaint as Exhibit 3. Compl. at 2, ¶ 7. This
allegation does not specifically state that Debtor made a material misrepresentation. Later, Plaintiff
does assert that “Debtor represented to Mr. Frank that the business had been hindered by the
COVID-19 pandemic, but that if additional machinery and equipment was purchased for the
company, the business was poised for success.” Compl. at 3, ¶ 9. That is the only allegation in the
Complaint of a specific representation by the Debtor, apart from the documents allegedly provided
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by Debtor to Mr. Frank. Otherwise, Plaintiff generally asserted, without specifying how or when
any misrepresentations were made, that “Debtors’ material misrepresentations regarding the
business operations of Acu-Tru, the promised return on his investment, and the purported use of
the investment proceeds caused Mr. Frank to make the investment so that Acu-Tru could purchase
the machinery and equipment.” Compl. at 3, ¶ 10. It appears that Mr. Frank does not know exactly
what happened after that, but he alleges “[u]pon information and belief” that his “investment was
not utilized to purchase the machinery and equipment” and that “Debtor diverted the funds for her
personal use.” Compl. at 3, ¶ 13.
In order to establish the non-dischargeability of a debt under § 523(a)(2), the Plaintiff must
first show there is a prepetition debt. See Leist v. Wiedle Corp. (In re Leist), 398 B.R. 595, 601
(Bankr. S.D. Ohio 2008) (“As elementary as it may seem, a creditor must establish that he is owed
a debt before it can be determined that the debt is nondischargeable under any § 523(a) exception
to discharge.”); Lawson v. Conley (In re Conley), 482 B.R. 191, 207 (Bankr. S.D. Ohio 2012)
(similar); Lorentz v. Dick (In re Dick), No. 24-3015, 2025 WL 1635507 (Bankr. S.D. Ohio Feb.
12, 2025) (similar). Although there is some case law suggesting that the scheduling of a claim
could be viewed as a judicial admission of a debt,13 the scheduling of the debt does not set forth
the legal bases for the debt and whether it is the type of debt that could be determined to be
non-dischargeable. Moreover, if there was a purpose, Debtor could presumably amend her
schedules,14 and either way, she did initially oppose the Complaint through her Answer, indicating
that she may not agree that any debt or portion thereof is the type that could be held
non-dischargeable. Thus, in a no-asset chapter 7 case such as the Debtor’s, in retrospect the main
purpose of scheduling this debt, apart from it being Debtor’s duty to do so, was to alert Mr. Frank
to the deadline to pursue any action under § 523(c), and to avoid a § 523(a)(3) issue later. But to
stretch the scheduling of the debt into an admission that it is a debt of the type that could be
determined to be non-dischargeable under § 523(a)(2)(A) or (B), or (a)(4) is a bridge too far.
13 See, e.g., Terry v. Owens (In re Owens), No. 09-06417, 2010 Bankr. LEXIS 3283, at *9 (Bankr. N.D. Ga. July 12,
2010) (stating that “Defendant’s failure to mark Plaintiff’s pending law suit as contingent, unliquidated, or disputed,
‘standing alone, constitutes a judicial admission that he does in fact owe a debt to the [Plaintiff].’ ”) (citing In re
Musgrove, 187 B.R. 808, 812 (Bankr. N.D. Ga. 1995)).
14 The United States Court of Appeals for the Sixth Circuit has previously held that “amending the schedule of debts
has no effect on the dischargeability of the debt and is, therefore, unnecessary.” Zirnhelt v. Madaj (In re Madaj), 149
F.3d 467, 470 (6th Cir. 1998).
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Plaintiff does not allege that he obtained a judgment or even filed suit to obtain a judgment
prior to bankruptcy. And Plaintiff did not include in the Complaint a count to request a judgment
on the “obligations.” Further, Plaintiff did not set forth the legal theory upon which Plaintiff might
later seek a monetary judgment of $60,000 against Ms. Hucke in any other court. Based on the
factual allegations of the Complaint, as discussed in the Motion for Default Judgment, it appears
that Plaintiff asserts Ms. Hucke defrauded him into investing in her company, Acu-Tru, misused
the proceeds of that business investment for her own personal use, and that Mr. Frank ultimately
received nothing while Ms. Hucke shut down Acu-Tru. But the investment was in Acu-Tru, Ms.
Hucke’s codebtor, such that Plaintiff might need to pursue a remedy of piercing the corporate veil,
which also is not discussed in the Complaint. And even if this Court could reach the question of
whether there is a $60,000 debt that is non-dischargeable, it is unclear how Plaintiff intends, if at
all, 	to 	obtain 	a 	judgment 	against 	the 	Defendant, 	without 	which 	any 	determination 	of
non-dischargeability would essentially be symbolic.
Concerning the establishment of a debt, the Complaint seems to have three hurdles: (1) any
debt would appear to be between Acu-Tru and the Defendant, not the Plaintiff and the Defendant,
and there is no legal argument or claim for piercing the corporate veil included in the Complaint;
(2) the Complaint does not articulate a legal basis for a debt (including whether it would be based
on contract law and/or a tort theory); and, related to the second concern, (3) the alleged debt in
question, as explained in the Complaint, appears to be an equity investment rather than a loan
establishing a contractual obligation to repay. The Court cannot speculate and read into the
Complaint what is not specifically stated. Simply put, the Complaint does not contain a specific
count or counts to establish a legal basis for a prepetition debt owed by the Defendant to the
Plaintiff. The Court needs such a count or counts in the Complaint in order to evaluate whether a
debt exists that can be held non-dischargeable, even within the context of considering whether to
enter a default judgment. Scott, 2026 Bankr. LEXIS 1590, at *51 (“Where there is no judgment
and no claims asserted in a complaint to support a state law debt, the Court cannot determine
whether a debt exists for purposes of a § 523(a) dischargeability determination and, relatedly,
whether there is a viable claim to hold a debt non-dischargeable and, if so, in what amount.”).
The Court cannot rely on the statement in the Complaint that “Mr. Frank is a disclosed
creditor in Debtor’s Bankruptcy proceeding, and is listed as being owed $60,000 by the Debtor.”
Compl. ¶ 4. Although, as noted earlier, Mr. Frank is listed as a creditor (along with Acu-Tru) as
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holding a non-priority unsecured claim as a “business investor,” the scheduling of a claim in Ms.
Hucke’s chapter 7 case is not prima facie evidence of the Claim’s validity and amount,15 and it
simply does not have the detail necessary to determine the basis for the claim and whether the
elements of such claim meet the criteria to hold the debt non-dischargeable. Thus, the Scheduled
Claim cannot be used to establish a prepetition debt for purposes of a dischargeability proceeding.
Even if the Scheduled Claim were prima facie evidence of the validity and amount, the scheduling
likely would not tell us enough to know whether the debt is of a type that can be determined to be
non-dischargeable. Moreover, Ms. Hucke initially filed the Answer to the Complaint, indicating
that even though she scheduled a debt to Mr. Frank, she did not agree that this debt was of a type
that would be non-dischargeable.
As indicated by the case law cited herein, it is permissible to seek default judgment in a
non-dischargeability action without a liquidated prepetition state court judgment. It is even
possible in certain circumstances that the debt might not need to be liquidated in a bankruptcy
court either, although this Court has jurisdiction and constitutional authority to do so in connection
with determining the dischargeability of a debt. Hart v. S. Heritage Bank (In re Hart), 564 Fed.
Appx. 773 (6th Cir. 2024). However, at a minimum, this Court would need to know the claims
under applicable non-bankruptcy law that Plaintiff will assert, whether here or elsewhere, in order
to assess whether the resultant debt is non-dischargeable. See Egeth, 676 B.R. at 75 (granting
default judgment on a willful and malicious injury under § 523(a)(6) if willful and malicious injury
“is required to recover on the state law cause of action.”). But in this case Plaintiff has not alleged
any non-bankruptcy (state law) cause of action; thus, this Court, even on a default basis, cannot
assess whether the facts admitted by the Defendant establish a non-dischargeable debt, there being
no predicate claim for the debt plead.
E. 	Count Two—Claims Under § 523(a)(2)(B) and (a)(4)
In addition to the issues with Plaintiff’s § 523(a)(2)(A) claim in Count One as discussed
above, there does not appear to be a basis for the claims in Count Two to hold any debt
non-dischargeable under either § 523(a)(2)(B) or (a)(4). There are no factual allegations in the
Complaint that Ms. Hucke obtained the alleged $60,000 investment through use of a statement in
15 In a chapter 7 case, unlike a chapter 11 case, the scheduling of a debt is not prima facie evidence of the validity and
the amount of a creditor’s claim[.]” Fed. R. Bankr. P. 3003(b)(1); Fed. R. Bankr. P. 3001(f).
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writing “respecting the debtor’s or an insider’s financial condition[.]” In fact, the only “statements
in writing” referenced in the Complaint are (1) the Equity Investment Contract, (2) the Business
Plan, and (3) the “equipment list breakdown list provided by Debtor.” None of these written
documents concern Acu-Tru’s “financial condition” as that term is construed in the case law,
“those that actually claim to state the debtor’s overall financial health, net worth or assets and
liabilities[.]” Lawrence Bank v. Brent (In re Brent), 539 B.R. 788, 796-97 (Bankr. S.D. Ohio 2015)
(citing Prim Capital Corp. v. May (In re May), No. 06-8044, 2007 Bankr. LEXIS 2335, at *17
(B.A.P. 6th Cir. 2007)) (quoted in Scott, 2026 Bankr. LEXIS 1590, at *72). Rather, the Equity
Investment Contract states the terms and conditions of Mr. Frank’s investment and the Business
Plan discusses Act-Tru’s business strategy and alleged need in the market for its service, promising
to “repair ‘unrepairable’ wheels.” Bus. Plan, Ex. 2. And Exhibit 3 appears to be a hand-written list
of equipment that would be purchased by Acu-Tru with Mr. Frank’s $60,000 investment.
Finally, it is puzzling why Plaintiff included an allegation in Count Two of the Complaint
that “the obligations owed by Debtor to Mr. Frank” are “non-dischargeable pursuant to 11 U.S.C.
§ 523(a)(4)” given there are no factual allegations anywhere in the Complaint alleging that Ms.
Hucke committed embezzlement or larceny. Again, because there are no claims for judgment on
the “debt,” we are left to guess at whether Plaintiff actually believes he can assert these types of
claims under applicable non-bankruptcy law. All we know right now is that he has not, so far, such
that a claim to hold a debt non-dischargeable under this subsection has no basis. And it does not
appear that Plaintiff would be able to do so, given the facts alleged.
Accordingly, the Court cannot enter a judgment by default on Count Two, based on either
§ 523(a)(2)(B) or (a)(4).
VII. 	Conclusion
Count One, based on § 523(a)(2)(A), could potentially be supported by the types of factual
allegations contained in the Complaint, subject to Plaintiff setting up claims to seek judgment on
the debt under applicable non-bankruptcy law and establishing claims based in fraud to hold
Debtor personally liable. In that event, the Court will then examine whether those specific claims
are well-plead and set up debts that can be determined to be non-dischargeable under the applicable
provision of § 523(a). See Sutton v. Berkley (In re Berkley), No. 24-1072, 2025 Bankr. LEXIS 227,
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at *13 (citing Rembert v. AT&T Universal Card Servs. (In re Rembert), 141 F.3d 277, 280-81 (6th
Cir. 1998)) (quoted in Scott, 2026 Bankr. LEXIS 1590, at *57).
For the foregoing reasons, the Motion for Default Judgment is hereby DENIED, without
prejudice. The Plaintiff is granted leave to file an amended complaint pursuant to Civil Rule
15(a)(2), made applicable by Bankruptcy Rule 7015.16 Any such amended complaint shall be filed
not later than twenty-one (21) days from the entry of this order.17 If the Plaintiff does not timely
amend the Complaint, the Court will determine how to proceed, which may include dismissal of
the Complaint after notice and an opportunity for Plaintiff to be heard as to why this adversary
proceeding should not be dismissed.
IT IS SO ORDERED.
Copies to:
Tami Hart Kirby
(Counsel for the Plaintiff)
Katherine R. Granger
(Counsel for the Defendant)
16 As analyzed in Scott, dismissing claims “without first granting Plaintiff leave to further amend its complaint would
contradict” the “ ‘fundamental tenor of the [Civil] Rules,’ which ‘is one of liberality rather than technicality.’ ” 2026
Bankr. LEXIS 1590, at *52 (quoting Fabian v. Goss (In re Goss), 605 B.R. 189, 196 (Bankr. S.D. Ohio 2019)
(quoting Hall v. Spencer Cnty., Ky., 583 F.3d 930, 934 (6th Cir. 2009) (quoting Miller v. Am. Heavy Lift Shipping,
231 F.3d 242, 248 (6th Cir. 2000))).
17 As noted above, pursuant to Bankruptcy Rule 4007(c), the deadline to file a dischargeability action in Ms. Hucke’s
chapter 7 case was November 4, 2024, which was 60 days from the first date set for the 341 meeting of creditors.
Notice of Chapter 7 Bankruptcy Case – No Proof of Claim Deadline (Doc. 9), ¶ 9. Generally speaking, an amended
complaint relates back to the date of the original complaint if “the new claims arise from the same ‘conduct[,]
transaction or occurrence.’ ” Durand v. Hanover Ins. Group, 806 F.3d 367, 374-75 (6th Cir. 2015).
Case 3:24-ap-03022 Doc 24 Filed 07/27/26 Entered 07/28/26 09:02:30 Desc Main
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