Vidov v. Marshak (In re Vidov)

Summarized by Bryan Robinson , Law Offices of Bryan Robinson
11 years 7 months ago

Citation:

Vidov v. Marshak (In re Vidov), 9th Cir. B.A.P., CC-13-1421-KuB1Pa, CC-13-1466-KuB1Pa, (2014) [Not for Publication]

Tag(s):

Ruling:

In an unpublished opinion, the bankruptcy appellate panel affirmed the bankruptcy court’s summary judgment ruling. The bankruptcy court ruled that most of the alleged misrepresentations, concealment and other misconduct Appellant complains of concern claims that Appellant as a matter of law released in the settlement agreement. As the claims had been waived pursuant to the release in the settlement agreement, the bankruptcy court concluded that Appellant would not be able to establish at trial all of the elements for an exception to discharge under either § 523(a)(2 (A) or § 523(a)(6).

Procedural context:

In early 2011, Marshak (Appellant) sued the Vidovs (Debtors/Appellees) and their businesses in the Los Angeles County Superior Court (Case No. BC462013) alleging breach of the settlement agreement and misappropriation of trade secrets. Shortly thereafter, the Vidovs (Debtors/Appellees) commenced their chapter 11 bankruptcy case, and Marshak (Appellant) filed her nondischargeability complaint against them in January 2012. Without holding a hearing, the bankruptcy court granted the Vidovs’ (Debtors/Appellees) summary judgment motion by order entered August 14, 2013. Marshak filed two notices of appeal from the bankruptcy court’s summary judgment ruling.

Facts:

Marshak (Appellant), the Vidovs (Debtors/Appellees) and others jointly owned several businesses and a parcel of residential real property on which some of those businesses were operated. The main business was a drug abuse rehabilitation clinic. A brush fire caused significant damage to the real property, but the parties had fire insurance coverage, so they made claims against the insurance policy based on their fire-related losses. Subsequently, a number of disagreements arose regarding the management and finances of the businesses. In February 2009, the parties entered into a settlement agreement, which the parties intended to resolve all of their differences regarding the companies, their finances, their operations, their assets and their liabilities. Marshak (Appellant) conveyed all of their interests in the businesses to the Vidovs (Debtors/Appellees), in exchange for cash payments in the aggregate amount of $250,000. These conveyances included the assignment of their membership interests in Holdings. In a written assignment document, which is attached to the settlement agreement, Marshak (Appellant) conveyed all of her interest in Holdings and all of her interest in the “income, profits, distributions, rights, capital, and assets” of Holdings. The principal asset of Holdings was the real property. To the extent Marshak (Appellant) might have retained any direct interest in the real property after her execution and the recording of the 2007 grant deed, she conveyed that interest to Holdings by quitclaim deed at the time of the settlement. The settlement agreement also contained general release provisions. Of particular importance, Marshak (Appellant) released the Vidovs (Debtors/Appellees), and their businesses “from any and all claims, demands, actions, causes of action . . . damages, obligations and liabilities of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected,” that Marshak (Appellant) “can, shall or may have” against the Vidovs (Debtors/Appellees) and their businesses “arising out of . . . any matter . . . or thing whatsoever from the beginning of time to the date of this agreement.” In spite of the settlement agreement attempting to resolve all of their differences, it was not long before trouble arose once again which led tot he lawsuit filed in state court in 2011.

Judge(s):

KURTZ, BLUMENSTIEL and PAPPAS, Bankruptcy Judges

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