Marchitello v. Gutierrez (In re Gutierrez)

636 B.R. 624

IN RE: Julianne CM GUTIERREZ, Debtor.

David Marchitello, Plaintiff,

v.Julianne CM Gutierrez, Defendant.

Bankruptcy No. 21-20512-CMB

Adversary No. 21-2056-CMB

United States Bankruptcy Court, W.D. Pennsylvania.

Signed March 1, 2022

David Marchitello, Plaintiff, pro se.

Julianne CM Gutierrez, Defendant/Debtor, pro se.

MEMORANDUM OPINION

Carlota M. Böhm, Chief United States Bankruptcy Judge

The matter before this Court is the Complaint for Determination of Dischargeability and Objecting to Debtor's Discharge Pursuant to Sections 523 and 727 of the Bankruptcy Code ("Complaint," Doc. No. 1)¹ filed by David Marchitello, the former spouse of the Debtor, Julianne CM Gutierrez. Upon consideration of the credibility and demeanor of the witnesses, the plausibility of the testimony, the existence of corroborating evidence, and the entire record, for the reasons set forth herein, this Court finds that discharge must be denied.

Background and Procedural History

On March 10, 2021, Debtor filed a voluntary petition seeking relief under Chapter 7 of the Bankruptcy Code. The Meeting of Creditors, as required by 11 U.S.C. § 341, was held by the Chapter 7 Trustee, Robert Slone, Esq., on April 23, 2021. Later, in the course of determining whether there may be assets available for distribution in this case, the Trustee scheduled a continued meeting (hereinafter, "Continued Meeting of Creditors"). Mr. Marchitello, whose participation in this case began in June 2021, appeared to ask questions of the Debtor at that time.

On June 8, 2021, Mr. Marchitello filed the Complaint commencing this adversary proceeding. In the Complaint, Mr. Marchitello objects to Debtor's discharge pursuant to 11 U.S.C. § 727(a)(3) and (a)(4)(A) and seeks a determination of dischargeability of debt owed to him pursuant to 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6).² Within the Complaint, Mr. Marchitello identifies a number of alleged inaccuracies in Debtor's bankruptcy schedules. Debtor answered the Complaint by denying these allegations. See Doc. No. 42.³ Though Debtor is represented by counsel, Douglas Hipp, Esq., in the bankruptcy case, both she and Mr. Marchitello are unrepresented in the adversary proceeding.

Following an opportunity for discovery, trial was held on December 14, 2021. At trial, Mr. Marchitello was sworn in and offered his testimony in support of his Complaint. The testimony consisted primarily of the identification of his exhibits. The Court found his testimony to be credible. Mr. Marchitello did not call any witnesses. He did, however, identify Debtor's testimony at the Continued Meeting of Creditors as critical to a determination in this matter. The audio recording was admitted as an exhibit at trial and has been considered by the Court.

After Mr. Marchitello concluded his presentation to the Court, Debtor offered her own testimony, presented exhibits, and examined Mr. Marchitello as a witness. Upon observation of the Debtor's testimony at trial and review of the audio of the Continued Meeting of Creditors, Debtor's testimony was often purposefully evasive and convoluted. Debtor appears to employ various strategies to avoid providing a clear explanation regarding the allegations against her, including but not limited to, feigning confusion, changing the subject, and speaking over others. Ultimately, the Court found Debtor was not credible.

Although trial concluded on December 14, 2021, several days later, Mr. Marchitello filed correspondence with the Court identifying newly obtained evidence, a bank statement, which he provided along with an exhibit admitted at trial. See Doc. No. 90. As set forth in the Order dated December 23, 2021, Debtor was provided with an opportunity to respond and object to what appeared to be a request to reopen the record to admit the bank statement. Although Debtor filed a response, the Court does not construe the response as an objection to the consideration of the bank statement. See Doc. No. 95. Rather, Debtor seems to contend that the exhibit supports her position and fails to prove additional facts for the purpose of reopening the record. Accordingly, the Court considers the bank statement herein.

As both parties were unrepresented, the Court spent a significant amount of time sifting through irrelevant information and intensely reviewing the record to assess the array of evidence and testimony in light of applicable law. The audio recording of trial reveals the animosity that exists between these parties, resulting in the parties speaking over each other and, at times, the Undersigned. Having thoroughly considered the testimony and exhibits, the matter is now ripe for decision.

Findings of Fact

At the time of filing her bankruptcy petition, Debtor identified Mr. Marchitello as holding two claims: (1) a priority unsecured claim in the amount of $800.00 for child support arrears and (2) a nonpriority unsecured claim in the amount of $10,000.00 for a contempt fine. See Schedule E/F.⁴ Neither claim is identified as contingent, unliquidated, or disputed. See id. However, based on the record, it appears the $800.00 debt is no longer owed.⁵ With respect to the other debt listed, the $10,000.00 debt was identified by counsel at the Continued Meeting of Creditors as a typographical error that should have been in the amount of approximately $1,000.00. See Exhibit A at 29:05-43.⁶ Nonetheless, the schedule has not been amended though Debtor contends she requested correction of the typographical error. See Audio Recording at 12:03:45-12:04:30.

With respect to the debt owed to Mr. Marchitello relating to a contempt fine, an order was entered in the Court of Common Pleas of Westmoreland County on December 17, 2020, finding Debtor in contempt in the course of the parties’ child custody case. See Exhibit B. Specifically, the court granted two motions for contempt in favor of Mr. Marchitello and ordered Debtor to reimburse Mr. Marchitello attorney's fees in the total amount of $2,000.00.⁷ The Court understands this to be the debt alleged to be non-dischargeable.

In this proceeding, most of the allegations revolve around the Debtor's identification of her property in Schedule A/B and her testimony related to her assets. Within Schedule A/B, Debtor discloses no interest in household goods and furnishings (such as appliances, furniture, linens, china, kitchenware), electronics (such as televisions, computers, printers, cell phones, cameras), or jewelry. She identifies no cash, no deposits of money, no retirement or pension accounts, no interests in insurance policies. In fact, the only property disclosed in Schedule A/B is $600.00 in used women's clothing and shoes. Mr. Marchitello alleges that Debtor failed to disclose all of her property. With respect to jewelry, Waterford and Lenox items, fourteen sewing machines, and various other items, Mr. Marchitello claims he can attest to Debtor's ownership as he was the purchaser or otherwise aware of her possessions at the conclusion of their marriage. See Audio Recording at 10:23:29-10:24:12. Although the Court finds Mr. Marchitello to be credible, the parties separated in December 2012 and divorced in October 2014, long before the commencement of this bankruptcy case and the completion of Debtor's bankruptcy schedules in 2021. See Exhibit A at 3:10-28. Nonetheless, Mr. Marchitello alleged Debtor was not being forthright and sought information related to Debtor's assets.

With respect to jewelry owned by Debtor, Mr. Marchitello identifies and sought information from Debtor regarding the following: 1.8 carat ring, diamond necklaces, diamond earrings, and a Rolex watch. See Audio Recording at 10:23:33-44, 10:39:20-52; Exhibit K.⁸ The Court finds Mr. Marchitello's testimony credible that he gifted these items to Debtor prior to their separation. When Debtor was questioned by the Trustee at the Continued Meeting of Creditors, Debtor was evasive in her response regarding jewelry she received in the past and did not acknowledge the receipt of any specific item. See Exhibit A at 7:45-9:15, 10:30-12:55. At trial, Debtor argued that, without seeing receipts or more detailed descriptions, she is unable to recall these items. See Audio Recording at 11:51:55-11:52:30, 11:55:00-11:56:05. While some of the descriptions are general, Mr. Marchitello specifically identified a 1.8 carat ring, which he valued at $15,000.00,⁹ and a gold Rolex watch, for which Mr. Marchitello provided proof of purchase in the amount of $611.09. See Exhibit M. With respect to the watch, Debtor contends she simply cannot recall the method used to sell the item; curiously, she seems to recall that the sale occurred in 2013. See Audio Recording at 11:52:31-11:53:17.¹⁰ As to a ring of such an allegedly substantial value, it is simply not credible that Debtor was unable to unequivocally confirm or deny receipt of the item without viewing proof of Mr. Marchitello's purchase.¹¹ Seemingly inconsistent with Debtor's inability to recollect such a valuable item is her testimony that she has "an exceptionally excellent memory." See Audio Recording at 11:49:55-11:50:13.

Regardless of whether Debtor acknowledges receipt of specific items of jewelry, Debtor maintains that she had no jewelry remaining in her possession at the time of filing her bankruptcy case.¹² Initially, Debtor indicated she sold her jewelry through eBay and Craigslist. See Exhibit A at 7:40-9:15. However, when the Trustee specifically inquired about records of the sales, Debtor testified that she was unable to view sales from eBay dating back to 2012 through 2014 and further she maintained no records from sales of jewelry at garage sales, yard sales, estate sales, and the like from so long ago. See Exhibit A at 10:35-11:25. As observed by the Trustee, some of the jewelry allegedly owned by Debtor had substantial value; however, when asked if she could estimate how much she received from the sales, Debtor testified to receiving approximately a couple hundred...