The debtor and the Nebraska Department of Health & Human Services had entered into a pre-petition agreement settling a lawsuit under the False Medicaid Claims Act, and the debtor had paid a portion of the settlement amount. In the debtor’s bankruptcy, the Department filed a complaint to determine the dischargeability of the balance of the settlement amount under 11 U.S.C. § 523(a)(2)(A).
In cross-motions for summary judgment, the debtor conceded the non-dischargeability of the balance owed. The dispute was whether the Department was entitled to treble damages under its complaint in the state court litigation.
The bankruptcy court determined the settlement agreement was clear as to the parties’ rights and remedies upon a payment default – entry of a judgment for the balance due under the agreement. The evidence did not support the Department’s claim for additional damages under the complaint, particularly since the Department had agreed to dismiss the state court complaint with prejudice as part of the settlement.