IN RE KORN

THOMAS TUCKER, Bankruptcy Judge

This adversary proceeding is before the Court on "Plaintiffs' Motion for Reconsideration of Motion for Summary Judgment," filed February 21, 2009 (Docket # 27, the "Reconsideration Motion"). After reviewing the Reconsideration Motion and related papers, the Court ordered Plaintiffs to supplement their motion, which Plaintiffs did on March 13, 2009. See Order, filed March 6, 2009 (Docket # 34); Plaintiffs' Supplement to Motion for Reconsideration, filed March 13, 2009 (Docket # 40). After reviewing Plaintiff's supplement, the Court concluded that it should require a written response from Defendants to the Reconsideration Motion. Defendants filed their written response, and Plaintiffs filed a reply brief. (Docket ## 43, 44)

The Court has considered all of the items filed in connection with the Reconsideration Motion, and concludes that a hearing on the motion is not necessary. The Court further concludes, for the following reasons, that the motion must be denied.

The Court finds and concludes that the Reconsideration Motion fails to demonstrate a palpable defect by which the Court and the parties have been misled, and that a different disposition of the case must result from a correction thereof. See Local Rule 9024-1(a)(3).

The Court further finds and concludes that even if Plaintiffs are correct in arguing that reasonable reliance is a necessary element of fraud under Michigan common law, it is clear from the jury instructions now in the record that the jury in the state court case was not instructed that it must find reasonable reliance (or for that matter, the less demanding requirement of "justifiable reliance") in order to find for Plaintiffs on their claims of fraud or silent fraud. Rather, only actual reliance was required by the jury instructions. Non-dischargeability under Bankruptcy Code § 523(a)(2)(A), on the other hand, requires not only actual reliance, but also that such actual reliance be "justifiable." See, e.g., Rembert v. AT T Universal Card Services, Inc. ( In re Rembert), 141 F.3d 277, 280-81 (6th Cir. 1998). Given the jury instructions, the issue of whether Plaintiffs' actual reliance on Defendants' misrepresentations or non-disclosures was justifiable (or reasonable) was not actually litigated and necessarily determined in the state court case. See, e.g., Keever v. Gallager (In re Gallagher), 2007 WL 782183 (W.D. N.C. 2007); KYMN, Inc. v. Langeslag (In re Langeslag), 366 B.R. 51, 62-63 (Bankr. D. Minn. 2007). Collateral estoppel therefore does not apply, and the Court's decision to deny Plaintiffs' motion for summary judgment was correct.

Accordingly,

IT IS ORDERED that the Reconsideration Motion (Docket # 27) is denied.