Vazquez v. AAA Blueprint & Digital Reprographics (In re Vazquez)
- Summarized by Joel Newell , Ballard Spahr, LLP
- 11 years 3 weeks ago
- Citation:
- Ninth Cir. BAP Case No. CC-13-1014-KuBaPa
- Tag(s):
-
- Ruling:
- In the unpublished decisions, the Ninth Circuit BAP agreed with the Bankruptcy Court. The BAP ruled that Debtor's subjective motive for transferring Alliance's assets meets Section 523(a)(6) willfulness requirement. Moreover, the prior State Court Judgment explicitly found that Debtor's pre-Petition actions were malicious.
- Procedural context:
- The Bankruptcy Court ruled in favor of AAA's Motion for Summary Judgment primarily relying on the State Court's second Judgment. The Bankruptcy Court's ruling essentially held that the issue preclusive effect of the State Court's actual fraudulent transfer finding establised the AAA's judgment against the Debtor arose from willful & malicious injury. The Debtor filed a Motion for Reconsideration, which the Bankruptcy Court denied. The Debtor timely filed a notice of appeal.
- Facts:
- Prior to filing bankruptcy, the Debtor owned and controlled a printing company named Alliance Reprographics ("Alliance"). Jimmy Ibarra ("Ibarra") was a former employee of AAA Blueprint & Digital Reprographics ("AAA"). Ibarra took a confidential customer list and used the list to solicit AAA's customers for Alliance's benefit. AAA sued Ibarra and Alliance on the basis of misappropriation on trade secrets. The State Court entered a Judgment in favor of AAA in the aggregate amount of approximately $$280,000. After the Judgment was entered the Debtor, on behalf of Alliance, conveyed to the principle of AAA that if AAA does not take the Debtor's $100,000 offer of compromise, the Debtor would close Alliance and open a new business across the street. The Debtor did exactly that and started All Blueprint, Inc. ("Blueprint"). AAA then sued Blueprint and the Debtor for actual and constructive fraud. The State Court entered a second Judgment in favor of AAA in July 2009. In August 2009, the Debtor filed for relief under the Bankruptcy Code. Shortly thereafter AAA commenced an adversary regarding the non-dischargeability of the second State Court Judgment ultimately pursuant to Section 523(a)(6).
- Judge(s):
- Honorable Kurtz, Ballinger (sitting by designation), and Pappas
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