Simmons v. Bohanna (In re Bohanna)

• Decision Date: 15 November 2019
• Docket Number: Case No. 18-40847,Adversary No. 18-4065
• Parties: IN RE: DARRYLE D. BOHANNA, JR. xxx-xx-8665 Debtor ALYSON SIMMONS Plaintiff v. DARRYLE D. BOHANNA, JR. Defendant
• Court: U.S. Bankruptcy Court — Eastern District of Texas

IN RE: DARRYLE D. BOHANNA, JR. xxx-xx-8665Debtor

ALYSON SIMMONSPlaintiff v. DARRYLE D. BOHANNA, JR.Defendant

Case No. 18-40847

Adversary No. 18-4065

UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

November 15, 2019

Chapter 7

FINDINGS OF FACT AND CONCLUSIONS OF LAW¹

Upon trial of the amended complaint filed by the Plaintiff, Alyson Simmons("Plaintiff"), seeking to deny the entry of a Chapter 7 discharge in favor of the Debtor-Defendant, Darryle D. Bohanna, Jr.("Defendant" or "Debtor"), pursuant to 11 U.S.C § 727(a)(4)(A) or, alternatively, seeking a determination of whether an alleged debt owed to her by the Debtor-Defendant should be excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(A), the Court issues the following findings of fact and conclusions of law.This memorandum disposes of all issues pending before the Court.

FINDINGS OF FACT

1.The Plaintiff, Alyson Simmons, first became acquainted with the Debtor-Defendant, Darryle Bohanna, Jr., and his spouse in 2006 through their church affiliation.

2.Through their church connections, the Plaintiff developed close personal ties with the Defendant, his wife, and his children over the next eight years.

3.The Plaintiff served as godmother to the Defendant's children, presented gifts to the children on special occasions, and periodically would provide other types of financial assistance to the household.

4.The Plaintiff considered the Defendant to be a close confidant and they enjoyed a social, business, and personal relationship for several years.

5.The close contact ceased at some point in time in 2014.

6.In December 2014, after a few months' absence, the Defendant contacted the Plaintiff regarding his need for financial assistance.

7.His financial assistance request was driven by his decision to separate from his wife² and was exacerbated by a loss of employment income.

8.The Defendant expressed his concern to the Plaintiff regarding his inability to provide financially for the needs of his children, and his estranged spouse with whom the children were still living, as the divorce process unfolded.

9.The Defendant promised to repay the Plaintiff for all sums advanced once the financial uncertainties caused by the divorce and job losses were resolved.

10.The Plaintiff was likely influenced by the fact that she had advanced moneys in the past to the Defendant and his wife in excess of $3,000.00 and all of those borrowed funds had been timely repaid.

11.Because of her close relationship to the Defendant's family and arising from a concern for their welfare, the Plaintiff agreed in December 2014 to authorize the Defendant to use certain of her personal credit cards to guarantee that he wouldhave access to needed financial resources as needs might arise during the divorce proceedings.

12.Thus, as subsequently determined in litigation, the series of credit advances were procured by the Defendant and authorized by the Plaintiff for the express and specific purpose of supporting Defendant and Defendant's wife and children during their divorce proceedings.

13.The Plaintiff did not require the execution of a written promissory note or any other document by the Defendant which would memorialize and govern the lending transaction.

14.The Defendant was given unfettered access to the selected credit accounts of the Plaintiff.

15.However, other than the general purpose of the transaction, there was no protocol nor any specific guidelines established by the Plaintiff to govern the amount or purpose of any charge by the Defendant, nor was any aggregate limit placed upon the amounts which the Defendant could access.

16.Though the Plaintiff received monthly statements on these credit accounts and though she may have possessed expectations as to the nature of the anticipated charges, such as for mortgage payments on the Defendant's family home, the evidence fails to suggest that the Plaintiff made any effort to keep apprised of the nature or amounts of the Defendant's charges on a monthly basis as they accrued.

17.Thus, the lone caveat to the Debtor's use and access of the Plaintiff's credit accounts was the requirement that such expenditures fall within the scope of the parties' verbal agreement.

18.For a period of fourteen months, from December 2014 to February 2016(the "Lending Period"), the Defendant borrowed funds from the credit accounts of the Plaintiff for various expenditures.

19.The monthly expenditures often included gasoline, fast food, wireless phone bills, auto parts, insurance payments for unspecified assets, and undesignated cash advances.

20.There were no mortgage obligations directly charged to the accounts during the Lending Period.

21.There were no charges incurred against the accounts during the Lending Period that clearly promoted the children's general welfare.

22.In February 2016, the Plaintiff terminated the lending relationship, claiming that the Defendant had violated the terms of the oral agreement.

23.It is difficult under the evidence presented to corroborate the actual precipitating cause of the termination of the lending relationship, although the Plaintiff apparently first learned in this time period that the Defendant had been involved in a romantic relationship with another person since 2013.

24.The Plaintiff further claims to have first learned in early 2016 that the Defendant had failed within the Lending Period to fulfill the contractual obligations regarding his family's home and that the property was in foreclosure proceedings.

25.The Plaintiff contends that she became suspicious about the Defendant's actions (or inactions) only at the conclusion of the Lending Period, even though the Plaintiff had possessed continuous access to the monthly statements and any examination of them at any point within the Lending Period would have revealed the nature of all of the Defendant's charges, including the fact that the credit accounts were not being utilized to make mortgage payments or other obligations directly tied to the children's welfare.

26.On or about March 2016, Plaintiff demanded complete and immediate repayment of the loans from the Defendant.

27.Despite the Defendant's repeated assurances that he would repay the borrowed amounts once his financial situation had stabilized and even after the Plaintiff forwarded a formal Demand for Payment Notice to him in July 2016, the Defendant failed to repay the debt in whole or in part.

The Iowa Litigation

28.On or about June 26, 2017, the Plaintiff filed a petition in Iowa state district court against the Defendant to collect the indebtedness (the "Iowa Litigation").³

29.The petition in the Iowa Litigation sought a judgment against the Defendant,treating each monetary advance as a separate loan, under the asserted theories of breach of oral contract, detrimental reliance, fraudulent misrepresentation, and unjust enrichment.

30.The Defendant subsequently filed a general denial to the petition.⁴

31.On or about this same time period, the Defendant relocated from Iowa to Texas.

32.Pending a trial in the Iowa Litigation, Plaintiff subsequently filed a motion for partial summary judgment based solely upon breach of the asserted oral contracts, detrimental reliance, and unjust enrichment.⁵

33.The Defendant appeared by telephonic means at the summary judgment hearing conducted on January 4, 2018 in the Iowa Litigation, but filed no "resistance" to the summary judgment motion, no statement of disputed facts, no affidavit, nor any other written response.⁶

34.In its consideration of the motion for partial summary judgment and the summary judgment record established thereby, the Iowa District Court declared that the following facts were established as undisputed:⁷

(a) Over the course of 2014, 2015 and early 2016, Defendant made numerous, frequent and persistent complaints to Plaintiff about Defendant's dire financial condition.

(b)Defendant made numerous, frequent and persistent entreaties for money to Plaintiff during same period of time.

(c)Defendant's entreaties requested a series of loans from Plaintiff for the express and specific purpose of supporting Defendant and Defendant's wife and children during their divorce proceedings.

(d) As a result of said entreaties Plaintiff made a series of loans to Defendant,beginning on December 14, 2014 and concluding on February 8, 2016.

(e) The previously mentioned loans totaled $19,324.71, which total is principal and does not include interest.

(f)Defendant agreed to repay the loans upon request or demand for payment from Plaintiff.

(g)Plaintiff demanded repayment of the loans from Defendant prior to commencing the instant action in District Court.

(h)Defendant refused to repay the loans to Plaintiff upon Plaintiff's demand for payment.

(i)Plaintiff and Defendant made a final oral contract on each occasion on which Plaintiff loaned money to Defendant.

(j) The terms of the contract required Defendant to repay each loan or all of the loans together when Plaintiff requested repayment.

(k)Defendant breached each oral contract by failing and refusing to repay the loans upon demand for payment.

(l)Plaintiff fully performed each oral contract.

(m)Defendant's breach of the oral contracts for repayment has caused Plaintiff damage in the liquidated amount of $19,324.71.

(n)Plaintiff relied on Defendant's representation of his willingness and intention to repay all or any of the loans upon request or demand from Plaintiff.

(o)Defendant did not provide any good or service to Plaintiff in consideration of the loans other than his willingness and intention to repay the loans upon request or demand for payment from Plaintiff.

(p)Defendant has acknowledged he owes Plaintiff approximately $20,000 in at least one phone conversation with Plaintiff.

35.Based upon the record of such undisputed material facts, the Iowa District Court entered an order on January 9, 2018, granting the partial summary judgment in favor of the Plaintiff against the...