In re Zamani-Zadeh

In re: RAMIN ZAMANI-ZADEH, Debtor.

TAEKI MARTIN, Plaintiff, v. RAMIN ZAMANI-ZADEH, Defendant.

No. 20-11939-t7

Adv. No. 20-1077-t

United States Bankruptcy Court, D. New Mexico

August 12, 2021

OPINION

HON DAVID T. THUMA, UNITED STATES BANKRUPTCY JUDGE.

Before the Court is Plaintiff's motion for summary judgment that her state court judgment against Defendant is nondischargeable. Because "fraud" is mentioned in the judgment, Plaintiff argues that the principles of claim and issue preclusion entitle her to summary judgment on her § 523(a)(2)(A) claim. Defendant disputes that he should be precluded from trying the proceeding on the merits. Considering the parties' submissions and the relevant law, the Court finds that Plaintiff's motion is not well taken and should be denied.

A. Facts.

There is no genuine dispute about the following facts:

On January 30, 2009, Plaintiff sued Defendant and four corporations or limited liability companies in the Circuit Court for the State of Oregon, County of Multnomah, Case No. 0901-01452 (the "State Court Action"). Plaintiff asserted a claim for financial abuse of a vulnerable person, in violation of Or. Rev. Stat. (ORS) §§ 124.100 and 124.110.^[1] Plaintiff sought "economic" damages of $1, 048, 862.60 alleged to have been suffered from the financial abuse.^[2] Debtor answered a "First Amended Complaint"^[3] on July 21, 2009 but failed to appear for trial.

The state court entered a General Judgment and Money Award on May 14, 2010 (as amended, the "Judgment").^[4] The caption on the Judgment differs from the caption on the original complaint and on Defendant's answer. The Judgment included the following findings of fact:

1. Plaintiff Martin is a vulnerable person within the meaning of ORS 124.100.

2. Defendants are liable for violations of the prohibitions on financial elder abuse as provided by ORS 124.100 by way of the Defendants and each of them having engaged in a scheme designed to deprive the Plaintiffs of money through artifice, false pretense, and fraud which were established clearly and convincingly. All named Defendants were conduits and vehicles for fraud and were alter egos of Defendant Ramin Zamani, aka Ramin Zamani-Zadeh. The total financial loss from such artifice and frauds to Plaintiffs, inclusive of statutory pre-judgment interest, is in the sum of $233, 955.17.

3. The Court makes a finding that Plaintiff Martin suffered non-economic damages by way of anxiety, emotional distress and loss of enjoyment of her life resulting from the stress attendant to the loss of monies described during a time when she has limited income. The Defendants and each of them are jointly and severally liable for $100, 000.00, which in accordance with ORS 124.100 is trebled to $300, 000.00.

4. Defendants Zamani and Ibiza, Inc. are jointly and severally liable for economic and non-economic damages in the amount of $476, 865.50.

5.Defendants Zamani, Ibiza, Inc., Zamani Entertainment, LLC (Oregon), 365 Z Production, Inc., and Elite Limousine, Inc. are jointly and severally liable for economic and non-economic damages in the amount of $525, 000.00.

6. The Court makes a specific finding that the lease documents executed in favor of Lease Corporation of America do not bear the genuine signature of Plaintiff Martin, but rather represent forgeries by Defendant Ramin Zamani, aka Ramin Zamani-Zadeh.

7. The Court makes a specific finding that Defendant Ramin Zamani 1) violated the Temporary Restraining Order signed by Judge Jean Kerr Maurer on January 30, 2009 by continuing to conduct business on behalf of Ibiza, Inc. by making bank withdrawals totaling $17, 238.00 from an account belonging to Defendant Ibiza, Inc., and 2) violated the Preliminary Injunction signed by Judge Leslie Roberts on March 12, 2009, by attempting to write $75, 192.39 in checks on Banner Bank account number 7806047611 in the name of Defendant Ibiza, Inc. The Court hereby grants Plaintiffs' Motion for Contempt.

The Judgment included a "Money Award" in favor of Plaintiff and Zamani Entertainment^[5] against Ramin Zamani and Ibiza, Inc. (jointly and severally) of $476, 865.50; and an "Additional" judgment against Ramin Zamani, Ibiza, Inc., Zamani Entertainment, LLC, ^[6] 365 Z Production, Inc., and Elite Limousine, Inc. (jointly and severally) of $525, 000.00. The total money judgment was $1, 001, 865.50, with interest accruing at 9% per annum.

Several aspects of the Judgment are confounding to this Court, including:

. The Judgment inserts a former defendant as a co-plaintiff, without explanation, and grants that entity a judgment against the other defendants;

. The complaint has no allegation regarding the "Lease Corporation of America" that is the subject of paragraph 6 of the Judgment;

. Paragraph 7 of the Judgment is based on events that occurred after the complaint was filed;

. Although non-economic damages were not sought in the complaint, they are awarded and trebled in the Judgment; and

. The money judgment does not square with the damages identified in the court's findings of fact and no explanation for the discrepancy is given.

Plaintiff filed this bankruptcy case on October 7, 2020. The chapter 7 trustee filed a report of no distribution on November 24, 2020. Plaintiff filed this adversary proceeding on December 30, 2020. The complaint asks that the state court judgment^[7] be declared non dischargeable under § 523(a)(2)(A).

The motion for summary judgment is comprised of the "Declaration of Ivan M. Karmel" (Plaintiffs counsel); copies of the state court complaint, answer, and Judgment^[8] and a supporting memorandum. Mr. Karmel's declaration avers that he was Plaintiffs counsel in the State Court Action and that copies of the state court documents are "true" copies.

The memorandum sets forth a "summary of facts," which the Court assumes is intended as a statement of the undisputed material facts upon which Plaintiff relies in support of her motion. The facts are the following:

On May 14, 2010, [Judge Reese] entered a judgment against [Debtor] and his codefendants, which the court found to be Defendant's alter ego. . . .

1. The relevant findings in that judgment were as follows: Plaintiff . . . is a vulnerable person within the meaning of ORS 124.100.

2. Defendants are liable for violations of the prohibition on financial elder abuse as provided by ORS 124.100 by way of Defendants . . . having engaged in a scheme designed to deprive [Plaintiff] of money through artifice, false pretense, and fraud, which were established clearly and convincingly. All named Defendants were conduits and vehicles for fraud and were alter egos of [Debtor], Ramin Zamani, aka Ramin Zamani-Zedeh. The total financial loss from such artifice and frauds to Plaintiff, inclusive of statutory prejudgment interest, is $233, 955.17.

3. Plaintiff . . . suffered non-economic damages by way of anxiety, emotional distress, and loss of enjoyment of her life resulting from the stress attendant to the loss of monies described during a time when she has limited income. The Defendants and each of them are jointly and severally liable for $100, 000, which in accordance with ORS 124.100 is trebled to $300, 000.

As a result of the latter finding the court found Debtor jointly liable along with the alter ego defendants for $100, 000 in non-economic damages, which were trebled in accordance with ORS 124.100 to $300, 000.

After making findings of fact against one of the Debtor's alter ego entities, 'Elite Limousine,' the court then went on to make specific findings of fact that Plaintiff's signature had been forged on lease documents by the Debtor. Further, the court found that the Debtor had violated a Temporary Restraining Order by continuing business on behalf of another alter ego corporation, 'Ibiza Inc,' and by making withdrawals totaling $17, 238.00 from an account in the name of that corporation, for which he was found in contempt of court. He was further found in contempt for attempting to write $75, 192.39 in checks in the name of that company, in violation of a preliminary injunction. With the trebling of damages, the Debtor was found to be liable to the Plaintiff for the sum of $1, 001, 865.51 exclusive of fees and costs.

Plaintiff argues that the Judgment is for "fraud," and should be given preclusive effect for purposes of her § 523(a)(2)(A) claim.

B. Summary Judgment Standards.

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Fed. R. Civ. P.^[9] 56(c); Fed. R. Bankr. P.^[10] 7056. "[T]he substantive law [governing the dispute] will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "A dispute is genuine when the evidence is such that a reasonable jury could return a verdict for the nonmoving party, and a fact is material when it might affect the outcome of the suit under the governing substantive law." Bird v. W.Valley City, 832 F.3d 1188, 1199 (10th Cir. 2016) (citing Anderson, 477 U.S. at 248). The "party seeking summary judgment always bears the initial responsibility of informing the . . . court of the basis for its motion, and identifying [the portions of the record that] demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. At 323.

C. Plaintiff Did Not Plead § 523(a)(4) or (6) Claims.

Although Plaintiff's complaint seeks relief only under § 523(a)(2)(A), ^[11] she argues in the motion that the debt also is nondischargeable under § 523(a)(4), and (6). The Court construes...