In re Deitz, Case No. 08-13589-B-7
| Decision Date | 02 August 2011 |
| Docket Number | Case No. 08-13589-B-7,Adv. No. 08-01217-B |
| Parties | In re: Shawn Deitz, Debtor. Wayne and Patricia Ford, Plaintiff, v. Shawn Deitz, Defendant. |
| Court | U.S. Bankruptcy Court — Eastern District of California |
1. Shawn Deitz, the Debtor and Defendant in the above-captioned case ("Defendant"), filed a Voluntary Petition for relief under Chapter 7 of the United States Bankruptcy Code on June 20, 2008.
2. The last day to file a complaint objecting to dischargeability of debts under 11 U.S.C. §§523(a)(2), (4) and (6)was September 22, 2008. This Adversary Proceeding was filed September 19, 2008.
3. Plaintiffs, Wayne and Patricia Ford ("Plaintiffs"), timely filed a complaint to determine dischargeability of debt on September 19, 2008. Plaintiffs' Adversary Complaint alleges causes of action under 11 U.S.C. §§523(a)(2)(A), (a)(4), and (a)(6)1.
4. Trial occurred on April 4, 5 and 11, 2011 before the undersigned. Thomas H. Armstrong, Esq. represented Plaintiffs. Defendant appeared in pro se. Prior to trial, the undersigned advised the parties that he is not related to or otherwise have any known connection to either Plaintiff despite having the same last name "Ford."
5. The Court has considered significant documentary evidence, testimony of five (5) witnesses including each of the parties, assessed each witnesses' credibility, considered the argument set forth in the Plaintiffs' Trial Brief, Defendant's initial representations immediately prior to trial that he never intended to defraud or willfully injure Plaintiffs, and the proposed Findings of Fact and Conclusions of Law submitted by each party.
6. After trial, and considering the above, the Court makes the following Findings of Fact and Conclusions of Law pursuant to Federal Rules of Civil Procedure Rule 52(a)(1) as
7. Jurisdiction exists under 28 U.S.C. §1334. Venue is proper under 28 U.S.C. §1409. The District Court forthe Eastern District of California has generally referred these matters to the Bankruptcy Court for hearing pursuant to 28 U.S.C. §157(a) and United States District Court, Eastern District of California General Orders 182 and 223. This is a core proceeding within the meaning of 28 U.S.C. §157(b)(2)(I). This is a complaint objecting to the dischargeability of debt under 11 U.S.C. §§523(a)(2)(A), (a)(4), & (a)(6). Plaintiffs are creditors of the estate and have standing to bring this Adversary Proceeding.
8. Defendant testified that he is currently employed by Heald College on a part-time basis. According to his testimony, he served in the U.S. Marines for a number of years and another branch of the armed forces. His total service time was 14 years. During his time in the military, he was engaged in construction projects. Following his tenure in the military, Defendant testified that he followed his passion for building and became a general building contractor. According to Defendant's Contractors State License Board ("CSLB") Certificate of Records (Plaintiffs' Exhibit "4"), Defendant's "B" General Building Contractor's License was issued on September 10, 2004. Defendant testified that he built a number of projects, including a small tract of smaller homes, and that he successfully completed some other larger custom homes in what was identified as the "Applegate Project." (Plaintiff's Ex. "17", Deitz E-Mail September 9, 2007.) The Applegate Project is relevant in that it is where Plaintiffs and Defendant first met.
9. Wayne Ford was born April 8, 1948 and is 63 yearsold. He is a disabled veteran. He testified that he served in the U.S. Army as a combat infantry soldier beginning in 1967. He served in Viet Nam. In June 1968, Mr. Ford was seriously injured when a vehicle in which he was a passenger ran over a land mine which detonated. He suffered significant, permanent, and obvious disabilities resulting from the land mine blast and must walk with the assistance of fore-arm Canadian Crutches on both arms. He will likely be confined to a wheelchair in the future. Mr. Ford has no college education and has not worked since being injured. He is permanently disabled.
10. Mrs. Ford is a registered nurse. She met her husband in a military hospital in Long Beach upon his return from Viet Nam. They eventually married and she has cared for him over the years.
11. In 2006, Plaintiffs had house plans drawn and submitted to the County of Fresno for approval. The plans were for a 4,170 square foot handicap accessible home to accommodate Mr. Ford's significant disabilities. It was designed to comply with the Americans With Disabilities Act ("ADA"), the Veterans Administration ("VA") requirements for handicap assisted housing, and of course, the County of Fresno building code requirements.
12. In late August or September 2006, Plaintiffs were driving around and by chance came upon the Applegate Project. Defendant was building three (3) custom homes at the Applegate Project. Mr. Ford testified that he asked permission to look around the three (3) custom homes that were in various states of construction as they were similar in size to what he and hiswife were planning to build. Defendant allowed Plaintiffs to look at these homes. Mr. Ford testified that each home had been rough framed, was weather tight, and still in need of drywall and finish carpentry. Two (2) of the Applegate Project houses had covered access porches, which is something Mr. Ford was required to have in order to comply with ADA requirements and to receive VA remuneration for handicap assisted housing.
13. After Plaintiffs viewed the Applegate Project, they spoke with Defendant regarding their plans to build a handicap assisted home. The undisputed testimony is that Defendant represented that he was familiar with ADA and VA requirements for handicap assisted housing and that he had, in fact, built to these guidelines before. Defendant represented that he could build to these standards for Plaintiffs.
14. The testimony by both Plaintiffs and Defendant was that Defendant met Plaintiffs at their property where the home was to be constructed on at least two (2) occasions. The unrefuted testimony adduced at trial was that during these meetings with Defendant, that Defendant also brought commonality between the parties relying on he and Mr. Ford's military experiences, the fact that Defendant worked as a pharmacy tech at the VA Hospital where Mr. Ford receives treatment, and that Defendant's mother was or is a nurse similar to Mrs. Ford. The Plaintiffs each testified that they asked Defendant if he was a licensed contractor in good standing and he replied that he was. Plaintiffs did testify that they were aware of a bonding issue that needed to be taken care of and that Defendant ultimately represented to them that he obtained a bond so that issue wasresolved. However, as the Court noted during trial, and as Defendant admitted on direct examination, his license remained suspended for other reasons at the time he contracted with Plaintiffs. The Court finds that Defendant's representations about the status of his contractor's license was a knowingly made material misrepresentation of fact and that Defendant's conduct was designed with the specific intent to deceive Plaintiffs, to fraudulently induce them to contract with him so he could obtain the job and substantial payments of money from Plaintiffs.
15. At some point, presumably prior to September 25, 2006, Defendant was provided a set of plans that both he and Mr. Ford initialed while the Plaintiffs' plans were in plan check with the County of Fresno so Defendant could prepare a bid. (Plaintiff's Exhibit "2".)
16. On September 25, 2006 Defendant provided a Custom Home Bid/Proposal to Plaintiffs. (Plaintiffs' Exhibit "1") The home's square footage was 4,170 square feet. The total price under the bid for the project was $444,105.00 or $106.50 per square foot (4,170 x $106.50 = $444,105.00). According to Defendant's bid, the project also included garage square footage of 965 square feet, breeze-way square footage of 309 square feet, porch and patio square footage of 1,136 square feet, and the courtyard square footage of 470 for a total square footage of 7,050 square feet for the project. The bid indicated that it included the cost to build and furnish the materials for the home according to the plans as approved by the County of Fresno. There was a caveat that extra flat-work, such as the drivewayand retaining wall, would be an additional charge, not included in the $444,105.00 contract price. In concluding the bid to Plaintiffs, Defendant signed the letter "Thanks" and "Semper fi". At trial, and on direct examination of Defendant, Defendant was provided a copy of the United States Marine Corps website home page. That home page was entered into evidence as Plaintiff's Exhibit "22". Plaintiffs' counsel had Defendant read the following into the record from the United States Marine Corps home page:
There is no such thing as an ex-Marine." The Court finds that the use of "Semper Fi" in the September 25, 2006 bid was in furtherance of Defendant's intent to induce Plaintiffs to contract with him for the construction of their home.
17. Following the initial bid of September 25, 2006, a Proposal and Contract ("Contract") was drawn by Defenda...
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