In re Giquinto

• Decision Date: 13 June 2008
• Docket Number: Adversary No. 06-0466.,Bankruptcy No. 06-10953ELF.
• Citation: 388 B.R. 152
• Parties: In re Richard GIQUINTO d/b/a Bear Builders, Debtor. Elan Strominger, Plaintiff, v. Richard Giquinto, Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of Pennsylvania

388 B.R. 152

In re Richard GIQUINTO d/b/a Bear Builders, Debtor Elan Strominger, Plaintiff, v. Richard Giquinto, Defendant.

Bankruptcy No. 06-10953ELF.

Adversary No. 06-0466.

United States Bankruptcy Court, E.D. Pennsylvania.

June 13, 2008.

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James E. Huggett, Wilmington, DE, for Plaintiff.

Joseph G. Washko, Southampton, PA, for Debtor.

MEMORANDUM OPINION

ERIC L. FRANK, Bankruptcy Judge.

I. INTRODUCTION

On March 8, 2006, Debtor Richard Giquinto ("the Debtor"), a home improvement contractor, filed a chapter 7 bankruptcy petition. Prior to the commencement of the bankruptcy case, Plaintiff Elan Strominger ("the Plaintiff) obtained a money judgment against the Debtor in the amount of $80,549.00. The judgment arises from a home improvement contract between the parties.

In this adversary proceeding, the Plaintiff requests that the debt be excepted from discharge under § 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A). The Plaintiff contends that the Debtor fraudulently induced him to enter into their home improvement contract. He accuses the Debtor of, among other things, misrepresenting his intentions, competence and ability to complete the work and of not disclosing the existence of disputes he had with other homeowners who had retained him in the past.

In addition, the Plaintiff requests that the Debtor's bankruptcy discharge be denied under 11 U.S.C. §§ 727(a)(4)(A) and (D). The Plaintiff contends that the Debtor was dilatory in his disclosure of the existence of certain unsecured creditors, that he failed to provide the Trustee with documentation of pending lawsuits and that this conduct justifies the denial of his discharge.

As elaborated below, I conclude that the Plaintiff has failed to meet his burden of proof on all of the issues. Accordingly, I will enter judgment for the Debtor and against the Plaintiff.

II. PROCEDURAL HISTORY

On October 2, 2006, the Plaintiff commenced this proceeding by filing an adversary Complaint. On May 7, 2007, the one-day trial of this matter was held and concluded.¹ At trial, the Plaintiff, his wife (Andrea Strominger), the Plaintiffs expert witness (Stephen Scherf)² and the Debtor testified. Four documents were admitted into evidence, all of them proffered by the Plaintiff.³ At the Plaintiffs request, and with no objection by the Debtor, I also took judicial notice of certain bankruptcy filings.⁴

Following the trial, I took this matter under advisement and entered orders on May 9, June 1 and June 27, 2007 to establish a post-trial briefing schedule. (See Adversary Docket Entry Nos. 29, 31 and 36). The last post-trial submission, Plaintiffs Reply Brief, was filed on September 7, 2007. (See Adversary Docket Entry No. 40). This matter is now ripe for disposition.

III. FINDINGS OF FACT

Upon consideration of the testimony and exhibits admitted into evidence, the arguments of counsel, the parties' joint statement of uncontested facts, the pleadings, the post-trial memoranda and the relevant law, I make the following findings of fact.

Prior to seeking bankruptcy relief, the Debtor was a professional construction contractor who regularly performed residential renovation work in customer's homes. (See Complaint 118; Answer ¶ 8). He started a construction business in 1989. (N.T. at 291; Exhibit P-5 at 73). For his first eight years in this business, the Debtor primarily worked as a roofer. Then, from 1997 to approximately 2001, he branched out, working mainly as a subcontractor framing houses. (Exhibit P-5 at 18-22). By 2002, the Debtor had acquired general contracting work on a wide range of projects that included home improvement work, additions, decks, basements, windows and doors. (Exhibit P-5 at 21-22; 8-9). Between 2002 and 2004, the Debtor worked on approximately 50 projects. (N.T. at 296-7).

The Debtor first met with the Plaintiff⁵ and his wife in December 2003. (N.T. at 27). At the time, the Stromingers were in the midst of purchasing their current home at 22 Clare Drive in Newtown, Pennsylvania ("22 Clare Drive"),⁶ and had decided that they wanted to have the basement of that home remodeled. (N.T. at 21). While it is unclear exactly how the Plaintiff came to learn about or decide to contact the Debtor about doing the basement remodeling work, he and the Debtor did meet several times before he hired the Debtor. (N.T. at 27).

During the course of pre-contract discussions, the Debtor advised the Plaintiff that "he had done ... similar projects finishing basements" and that his work "had generally been accepted as good quality." (N.T. at 28, 33). He also supplied the Plaintiff with the names of three customers for whom he had previously done work as references. (N.T. at 33, 69). The Plaintiff spoke with one of the three.⁷ That customer, whom the Plaintiff believed had also had basement refinishing work done, told the Plaintiff that he was satisfied with the Debtor's work. (N.T. at 69).

In this same time period, the Plaintiff told the Debtor that it was important to him to have the work in the basement finished by mid-April 2004, the date the Stromingers had targeted for moving into their new home. (N.T. at 25, 32).⁸ The Debtor told the Plaintiff he could have the work completed by that time. (N.T. at 35). The agreement the parties eventually signed did not contain a provision reflecting a time deadline for completion of the work. (See Exhibit P-1).

On January 7, 2004, the Plaintiff and the Debtor entered into a written agreement ("the Scope of Work Agreement") for Bear Builders, i.e., the trade name used by the Debtor in operating his sole proprietorship,⁹ to renovate the basement of 22 Clare Drive and for the Plaintiff to pay a total price of $49,650.00. (Statement of Uncontested Facts No. 6; Exhibit P-1). The Scope of Work Agreement memorializes the contemplated work and payment schedule. (Exhibit P-1). The agreement broke the work down into 14 subparts.¹⁰ It also required the Plaintiff to pay $2,650.00 at signing, $9,500.00 at the start, $9,500.00 after framing, $9,500.00 after rough plumbing and electric, $9,500.00 after drywall, and the balance upon completion. (See Exhibit P-1).

Work began promptly after execution of the Scope of Work Agreement. (N.T. at 24, 43). Two subcontractors who worked with Bear Builders, were employed at 22 Clare Drive. (See N.T. at 29, 43-46 (identifying "Mike" and "Mai" as two such workers)). The Debtor worked at the job site in mid-April. (N.T. at 43; see also Answer, ¶ 13).

Through April 15, 2004, the Plaintiff paid the Debtor a total of $40,650.00 for the work Bear Builders performed. (See Statement of Uncontested Facts No. 9). This sum includes all progress payments due under the Scope of Work Agreement except for the final "balance upon completion" payment, i.e., $9,000.00. (See Exhibit P-1; N.T. at 293-4).

In mid to late April 2004, Bear Builders ceased continuous work. (N.T. at 43). Seeking an explanation, the Plaintiff called the Debtor, who said that there had been a death in his family.¹¹ He requested a "couple weeks" to "get his affairs in order." (N.T. at 43). The Plaintiff agreed. (N.T. at 43). Meanwhile, the Stromingers moved into 22 Clare Drive in April notwithstanding the fact that the basement work had not been completed. (N.T. at 73).

In mid-May, some work resumed. A Bear Builders worker returned to the Strominger's home to do what Plaintiff described as "light work" and painting. (N.T. at 43-46). This worker was on site for "couple of weeks." (N.T. at 47). At the same time this work was being done, the Plaintiff and his wife were attempting, unsuccessfully, to reach the Debtor by phone and find out when the Debtor would personally return to the site. (N.T. at 44, 47).

In early June, the Debtor called the Plaintiff and advised him that the tiles required to complete the dropped ceiling in the basement were on back order. (N.T. at 44, 292-3). There was an "upgrade" associated with the tiles that apparently made them a special order item. (N.T. at 292). The Debtor said he would return to finish the work when the tiles arrived. (N.T. at 44, 293).

What eventually caused the parties' contractual relationship to terminate is sharply disputed.¹² The Debtor says he saved a voice message he received from the materials supplier advising him that there was a further delay to the arrival of the tiles and played it back for Mrs. Strominger. (N.T. at 293). He told her that the materials supplier subsequently promised him that the tiles would arrive on a particular Thursday. (N.T. at 293). He says that Mrs. Strominger told him that if the ceiling tiles did not arrive by that Thursday, he should not bother to return to the job. (N.T. at 293). Conversely, Mrs. Strominger testified that she never told the Debtor not to come back, and, to the contrary, called the Debtor several times to ask him to resume work but he never returned her calls. (N.T. at 75). In any event, when the ceiling tiles did not arrive by the Thursday the materials supplier had promised, the Debtor says that he assumed that he was fired. Either way, Bear Builders did not complete basement renovations at 22 Clare Drive. (N.T. at 26, 292-4).

When asked what items on the Scope of Work Agreement had not been completed by this time, the Plaintiff specified portions of six out of fourteen items,¹³ leaving the inference that eight items had been completed. While the Debtor agreed with the Plaintiff that the dropped ceiling tiles were not installed, he disagreed with the Plaintiffs characterization of items 4, 14 and 12. (N.T. at 291-295).¹⁴

On November 9, 2004, the Plaintiff filed suit against the Debtor in the Bucks County Court of Common Pleas on a breach of contract theory. (Statement of Uncontested Facts No. 11). On or about January 6, 2005, that court entered a default judgment for $80,549.00. (Statement...