Stewart v. Kauanui (In re Cynthia Lee Kauanui Dba Jet Set Mgmt. Grp.)

• Decision Date: 26 June 2015
• Docket Number: Case No.: 14-00077,Adv. Proc. No.: 14-90018
• Parties: In re Cynthia Lee Kauanui dba Jet Set Management Group, Debtor. Lindsay Stewart, Plaintiff-Creditor, v. Cynthia Lee Kauanui, Defendant-Debtor.
• Court: U.S. Bankruptcy Court — District of Hawaii

In re Cynthia Lee Kauanui dba Jet Set Management Group, Debtor.

Lindsay Stewart, Plaintiff-Creditor, v. Cynthia Lee Kauanui, Defendant-Debtor.

Case No.: 14-00077

Adv. Proc. No.: 14-90018

United States Bankruptcy Court District Of Hawaii

Filed: July 8, 2015

June 26, 2015

Joshua Piovia-Scott, Esq. [Cal. S.B. #222364]

Acrivi Coromelas, Esq. [Cal. S.B. #298305]

HADSELL STORMER & RENICK LLP

128 North Fair Oaks Avenue

Pasadena, California 91103-3645

Telephone: (626) 585-9600

Facsimile: (626) 577-7079

Email: jps@hadsellstormer.com

acoromelas@hadsellstormer.com

Jennifer Cynn, Esq. [S.B. #008558]

UNITE HERE! Local 5

516 South King Street

Honolulu, HI 96826

Telephone: (808) 941-2141

Facsimile: (808) 941-2166

Email: jcynn@unitehere5.org

Attorneys for Plaintiff-Creditor

LINDSAY STEWART

[Assigned to the Honorable Robert J. Faris]

PLAINTIFF-CREDITOR'S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW; DECLARATION OF ACRIVI COROMELAS AND EXHIBITS IN SUPPORT THEREOF

TRIAL: June 1, 2015

TIME: 9:30 a.m.

PLACE: U.S.B.C. Courtroom 1132 Bishop St., Ste. 250 Honolulu, HI 96813

Bankruptcy filed: January 24, 2014

Adversary filed: April 21, 2014

TABLE OF CONTENTS

Page(s)

TABLE OF AUTHORITIES ............................................... iv

I. INTRODUCTION ................................................... 1

II. PROPOSED FINDINGS OF FACT ..................................... 1

A. Background and procedural history ..................................... 1

1. Parties ....................................................... 1

2. The underlying San Diego Superior Court action ..................... 2

3. The instant bankruptcy proceeding ................................ 3

B. Despite Stewart being a dedicated and high-performing employee, Kauanui forced Stewart to quit after discovering Stewart was a lesbian and before she ostensibly suspected Stewart of any wrongdoing ........................... 3

1. Kauanui gave Stewart permission to work from Los Angeles ............ 3

2. Kauanui abandons Jet Set when she moves to Hawaii .................. 5

3. Kauanui discovered Stewart is a lesbian and forced her to quit .......... 6

C. Kauanui began a campaign of defamation, accusing Stewart of embezzlement

and of being under investigation for embezzlement ......................... 9

1. After Stewart left Jet Set, Kauanui began a campaign of defamation against Stewart ................................................ 9

2. Kauanui emailed and called numerous parents of former Jet Set child clients and, without justification, told them Stewart embezzled and

was under investigation for embezzlement .......................... 9

a. Kauanui told Amy Bryant that Stewart was under investigation

for embezzlement ......................................... 9

b. Kauanui told Grace Antipala that Stewart stole hundreds of thousands of dollars from Jet Set ............................ 10

c. Kauanui told Angie Lundgren that Stewart scammed Jet Set ...... 10

d. Kauanui told Jeannette Morales that Stewart took money ........ 11

e. Kauanui told Andrea Stowasser that Stewart was under investigation for stealing money ............................ 11

f. Kauanui emailed Barbara Froelich that Stewart was under investigation for embezzlement ............................. 11

g. Kauanui emailed Stephanie Harvey to take a job from Zuri ........ 12h. Kauanui sent letters to parents after they withdrew from Jet Set ................................................. 12

i. In her amended complaint and in her responses for requests for admissions, Kauanui admitted that she defamed Stewart ...... 12

3. Kauanui made false allegations about Stewart to people in the modeling and acting industry in order to harm Stewart's business ....... 13

a. Kauanui made accusations to casting directors ................. 13

b. Kauanui made accusations about Stewart's character to SAG ..... 14

c. Kauanui accused Stewart of embezzlement to a photographer ..... 14

d. Kauanui told Jet Set employees that Stewart embezzled money .... 15

D. Kauanui began her campaign of defamation in order to injure Stewart ......... 15

1. At no point in time before Stewart left Jet Set did Kauanuiever suspect Stewart of any wrongdoing ............................... 15

2. Kauanui knew her allegations against Stewart were false .............. 16

3. When communicating with persons outside the modeling industry in 2008 and 2009, Kauanui never stated that she suspected Stewart of any wrongdoing, instead only contending that Bennett was the perpetrator ................................................... 18

4. Kauanui admitted the purpose of her statements was to prevent Jet Set clients from leaving and to lure away Stewart's clients .......... 19

E. Kauanui's testimony during the instant bankruptcy trial was not credible and was repeatedly impeached ........................................ 20

1. Kauanui provided no evidence that she suffered from PTSD in 2008 or 2009 ............................................... 20

2. Kauanui's trial testimony contradicted her prior deposition testimony .... 21

3. There are inconsistencies between Kauanui's testimony and documented evidence .......................................... 22

III. PROPOSED CONCLUSIONS OF LAW ................................ 24

A. Kauanui's testimony was repeatedly impeached and she lacks credibility ...... 24

B. Legal standards .................................................... 26

1. Legal standards for finding a judgment is nondischargeable ............ 26

2. Legal standards for a defamation per se claim ....................... 27

3. Legal standards for an IIPEA claim ............................... 28

C. Kauanui's defamatory statements were willful and malicious injuries ......... 29

1. Kauanui's statements were defamatory per se ...................... 29

2. Kauanui's defamatory per se statements were willful and malicious ..... 32

a. Defamation per se is, as a matter of law, willful and malicious .... 32

b. Kauanui was aware that injury was substantially certain when she intentionally tried to lure away Stewart's clients through her defamatory statements ................................. 33

c. Kauanui's defamatory per se statements, which were made without just cause or excuse, were malicious .................. 36

D. Kauanui's liability for IIPEA is nondischargeable because her conduct was willful and malicious ................................................ 38

1. Because Kaunaui's defamatory statements were willful and malicious, her IIPEA conduct was inherently willful and malicious .............. 38

2. Kauanui willfully and maliciously interfered with Stewart's prospective economic advantage ................................. 39

E. The punitive damages award is nondischargeable ......................... 41

IV. PROPOSED ULTIMATE FINDINGS ................................. 41

TABLE OF AUTHORITIES FEDERAL CASES

Page(s)

Bane v. Hajime Sorayama (In re Bane) No. CC-09-1108-MoPaH, 2010 Bankr. LEXIS 3067 (B.A.P. 9th Cir. Jan. 15, 2010) ..................................... 40, 41

Bio Prime Enterprises v. Walker (In re Walker) No. 00-10958-B7, 2006 Bankr. LEXIS 4688 (Bankr. S.D. Cal. 2006) .............................................. 41

Burden v. Elias Brothers Big Boy Rests. 613 N.W.2d 378 (Mich. Ct. App. 2000) ................................. 32

Burks v. Bailev (In re Bailey) 499 B.R. 873 (Bankr. D. Idaho 2013) ................................ 33, 35

Carrillo v. Su (In re Su) 290 F.3d 1140 (9th Cir. 2002) ........................................ 27

Choice Hotels International, Inc. v. Wright (In re Wright) 355 B.R. 192 (Bankr. D.C. Cal. 2006) .................................. 36

Conte v. Jakks Pac., Inc. No. 12-CV-00006-LGO-GSA, 2012 U.S.Dist. LEXIS 174716 (E.D. Cal. Dec. 10, 2012) ......................................... 38, 39

Dorn v. Burlington N. Santa Fe R.R. Co. 397 F.3d 1183 (9th Cir. 2005) ..................................... 25, 26

Gateway One Lending & Finance LLC v. Raziyan (In re Raziyan) 501 B.R. 387 (Bankr. C.D. Cal. 2013) ................................. 36

Hernandez v. Powers & Effler Insurance Brokers (In re Hernandez) No. EC-10-1025-JuMkZi, 2011 Bankr. LEXIS 887 (B.A.P. 9th Cir. 2011) ........................................... passim

In re Houtman 568 F.2d 651 (9th Cir. 1978) ......................................... 26

Jett y. Sicroff (In re Sicroff) 401 F.3d 1101 (9th Cir. 2005) ..................................... 36, 37

Kennedy v. Mustaine (In re Kennedy) 249 F.3d 576 (6th Cir. 2001) ......................................... 32

Khaligh v. Hadaegh (In re Khaligh) 338 B.R. 817 (B.A.P. 9th Cir. 2005) .............................. 37, 38, 41

Murray v. Bammer (In re Bammer) 131 F.3d 788 (9th Cir. 1997) ...................................... 27, 37

Muse v. Day (In re Day) 409 B.R. 337 (Bankr. D. Md. 2009) .................................... 32

National Sign & Signal v. Livingston 422 B.R. 645 (W.D. Mich. 2009) ...................................... 32

Ormsby v. First America Title Co. (In re Ormsby) 591 F.3d 1199 (9th Cir. 2010) ............................ 27, 33

Peck v. Maaskant (In re Peck) 295 B.R. 353 (B.A.P. 9th Cir. 2003) ................................ passim

Petralia v. Jercich (In re Jercich) 238 F.3d 1202 (9th Cir. 2001) ..................................... 27, 33

Research Data Grp., Inc. v. Snegosky (In re Snegosky) No. 08-01709, 2010 Bankr. LEXIS 2088 (Bankr. D. Haw. 2010) ........................................... 36, 38

Serrao v. Picanco (In re Picanco) No. 03-00129, 2003 Bankr. LEXIS 2153 (Bankr. D. Haw. 2003) .............................................. 35

Sidense Corp. v. Kilopass Tech. Inc. No. C 11-04112 SI, 2012 U.S.Dist. LEXIS 115904 (N.D. Cal. Aug. 16, 2012) ............................................ 39

Solano v. Playgirl, Inc. 292 F.3d 1078 (9th Cir. 2002) ........................................ 27

Star's Edge, Inc. v. Braun (In re Braun) 327B.R. 447 (Bankr. N.D. Cal. 2005) .................................. 32

Turtle Rock Meadows Homeowners Association v. Slyman (In re Slyman) 234 F.3d 1081 (9th...