BMW Financial Services NA, LLC v. Voong

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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re: ) Case No. 2:11-bk-53724-PC
)
EVA VOONG, ) Adversary No. 2:12-ap-01135-PC
)
)
)
Debtor. ) Chapter 7
)
)
BMW FINANCIAL SERVICES N.A., ) FINDINGS OF FACT AND
LLC, service provider for FINANCIAL ) CONCLUSIONS OF LAW
SERVICES VEHICLE TRUST, )
)
Plaintiff, )
)
v. ) Date: April 24, 2013
) Time: 9:00 a.m.
EVA VOONG, ) Place: United States Bankruptcy Court
) Courtroom # 1468
Defendant. ) 255 East Temple Street
) Los Angeles, CA 90012
At the above captioned date and time, this action came on for trial before the court.
Appearances were stated on the record. The evidentiary record having closed and the issues
having been duly tried, the court makes the following findings of fact and conclusions of law
pursuant to F.R.Civ.P. 52(a), as incorporated into FRBP 7052:
FILED & ENTERED
MAY 01 2013
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	egarcia
Case 2:12-ap-01135-PC Doc 44 Filed 05/01/13 Entered 05/01/13 14:07:01 Desc
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FINDINGS OF FACT
1. On or about November 14, 2008, an individual by the name of Chi Ho executed and
delivered to Chapman Scottsdale Autoplex, a Motor Vehicle Lease Agreement (hereinafter
“Lease Agreement”) for the lease of certain personal property described as a 2008 BMW X6
XDR50I motor vehicle, VIN#5UXFG83528LZ92128 (“the Vehicle”).
2. The Lease Agreement provides for monthly lease payments of $1,457.83 for a period
of 36 months beginning November 14, 2008 and thereafter on the 14th day of every month until
the lease matured on November 14, 2011.
3. Thereafter, the Lease Agreement was assigned to Plaintiff BMW Financial Services
NA, LLC, service provider for Financial Services Vehicle Trust by Chapman Scottsdale
Autoplex.
4. Under paragraph 21 of the Lease Agreement, Lessor agrees not to “allow an uninsured
person to operate the Vehicle at any time, or allow any third party, other than [the Lessor’s]
spouse, to operate the Vehicle without written permission from [the Lessee] . . . . “
5. Under paragraph 5 of the Lease Agreement, Lessor agrees “to immediately notify
[Lessee] if the Vehicle is damaged or destroyed in an accident, stolen, abandoned, or taken by a
police or governmental agency.”
6. On or about April 30, 2009, Chi Ho and Defendant executed and delivered to Plaintiff
a Lease Transfer Agreement (“Assumption Agreement”) transferring Chi Ho’s interest in the
Vehicle to Defendant. Per the Assumption Agreement, Plaintiff consented to the transfer of Chi
Ho’s interest in the Vehicle to Defendant on May 5, 2009.
7. Defendant never registered the Vehicle. Exhibit 2 is a copy of a duplicate Arizona
Certificate of Title to the Vehicle dated January 11, 2010, which refers to a previous certificate
of title to the Vehicle issued on December 2, 2008. Title to the Vehicle is in the name of Chi Ho,
as Lessor, and Financial Services Vehicle Trust, as Lessee.
8. Defendant did not receive a certificate of title from Plaintiff. There is no evidence that
title to the Vehicle was ever issued in the name of Defendant, as Lessor, after the date of the
Assumption Agreement.
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9. Plaintiff received monthly lease payments on the Vehicle from November 24, 2008 to
July 31, 2009, according to Exhibit 4. The last payment that Plaintiff received from Defendant
was on July 31, 2009.
10. Defendant asserts that the Vehicle was stolen in May of 2009.
11. Defendant never reported to Plaintiff that the Vehicle was stolen.
12. Defendant testified that she went to the police station in Walnut, California to file a
police report in May 2009, but ultimately a police report was not taken. According to
Defendant’s testimony, the officer did not consider the Vehicle stolen or lost at the time because
she had lent the Vehicle to someone. Defendant could not testify as to the date of the attempted
report nor the identity of the police officer or other individual to whom she spoke regarding the
report. Defendant could not provide any documentation to substantiate her testimony regarding
her attempt to file a police report.
13. Plaintiff has made efforts to locate and recover the Vehicle but has not been able to
find it.
14. Defendant testified that in February or March 2009, Ben Ly, a friend, introduced her
to Nguyen Thai Huy (“Nguyen”), who worked at New World Exchange Inc., d/b/a New World
Auto Trade, 1801 Katella Avenue, # 7, Anaheim, California. Nguyen introduced Defendant to
Chin Ho and assisted Defendant in securing an assumption of the Lease Agreement under which
Chin Ho was leasing the Vehicle.
15. Defendant testified that Nguyen asked to use the Vehicle in May 2009 after his car
“broke down,” and she loaned the Vehicle to him trusting that he would return it the next day.
16. Defendant testified that when Nguyen did not return the Vehicle, she “called him and
left messages but did not hear back.” According to the deposition attached to her declaration,
Defendant called Nguyen for “[a] few months,” but “after [she] couldn’t reach him, [she]
reported it to the police.” Deposition of Eva Voong, 29:12-13.
17. Defendant testified that she contacted Ben Ly for assistance, but that Ben Ly could
not locate Nguyen or the Vehicle after several attempts at Nguyen’s office and home addresses.
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18. Defendant did not report the Vehicle lost or stolen to State Farm Insurance, the
insurance company that issued the insurance policy on the Vehicle. Defendant cancelled her
insurance policy on the Vehicle on August 22, 2009.
19. Defendant testified that she did not renew her insurance on the Vehicle in August
2009 because she “thought [she] did not need the insurance because [she] did not have the
Vehicle anymore.”
20. On September 2, 2011, Defendant advised a repossession agent for Plaintiff that
Nguyen had borrowed the Vehicle and Defendant never saw Nguyen or the Vehicle again.
21. Defendant has a high school education. Defendant speaks little English. Cantonese
is Defendant’s primary language. Defendant worked as a waitress at the Walnut Tree restaurant
at the time of her deposition.
22. Defendant has no criminal history.
23. Defendant testified that she did not know she was required to report the Vehicle lost
or stolen under the Lease Agreement.
24. Defendant testified that when she stopped receiving statements from Plaintiff in
September 2009, she “thought [Plaintiff] might have found the car and everything was taken care
of.”
25. As of November 14, 2011, the maturity date of the Lease Agreement, Defendant
defaulted by failing to either pay off the Vehicle or return possession of the Vehicle to Plaintiff.
26. Plaintiff has been required to hire an attorney to collect and enforce the obligations
under the Lease Agreement and Assumption Agreement, and to commence and pursue this
proceeding. Plaintiff has incurred attorney’s fees, costs and expenses attempting to collect and
enforce the obligations under the Lease, including commencement and pursuit of this
proceeding.
27. Defendant currently owes Plaintiff a balance on the Lease Agreement of $67,184.12
plus interest, collection fees, attorney’s fees and costs.
28. The retail value of the Vehicle was $56,975 as of January 4, 2012.
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CONCLUSIONS OF LAW
1. This court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§
157(b) and 1334(b). This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (E), (H)
and (O). Venue is appropriate in this court. 28 U.S.C. § 1409(a). Plaintiff and Defendant have
consented to the entry of a final judgment by this court.
2. Section 523(a)(6) of the Code excepts from discharge debts resulting from “willful and
malicious injury by the debtor to another entity or to the property of another entity.” 11 U.S.C. §
523(a)(6).
3. A “deliberate or intentional injury” is required before § 523(a)(6) will render a debt
nondischargeable. See Kawaaukau v. Geiger, 523 U.S. 57, 61 (1998) (stating that
nondischargeability under § 523(a)(6) “takes a deliberate or intentional injury, not merely a
deliberate or intentional act that leads to injury”).
4. Section 523(a)(6) requires separate findings on the issues of “willful” and
“malicious.” Carrillo v. Su (In re Su), 290 F.3d 1140, 1146 (9th Cir. 2002).
5. The “willful” injury requirement of § 523(a)(6) is met “when it is shown either that
the debtor had a subjective motive to inflict injury or that the debtor believed that injury was
substantially certain to occur as a result of his conduct.” Id., at 1144 (quoting Petralia v. Jercich
(In re Jercich), 238 F.3d 1202, 1208 (9th Cir.), cert. denied, 533 U.S. 930 (2001)).
6. A “malicious injury” involves “(1) a wrongful act, (2) done intentionally, (3) which
necessarily causes injury, and (4) is done without just cause or excuse.” Id. at 1146-47 (quoting
Jercich, 238 F.3d at 1209).
7. Objections to the dischargeability of a debt are literally and strictly construed against
the objector and liberally construed in favor of the debtor. See Quarre v. Saylor (In re Saylor),
108 F.3d 219, 221 (9th Cir. 1997); In re Adeeb, 787 F.2d 1339, 1342 (9th Cir. 1986).
8. Debts that arise solely from recklessly inflicted injuries do not fall within the scope of
§ 523(a)(6). See Geiger, 523 U.S. at 64.
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9. A subjective standard is applied to “substantial certainty” under § 523(a)(6), not the
objective standard applied to “reckless disregard.” See Su, 290 F.3d. at 1145-46. See also Conte
v. Gautam, 33 F.3d 303, 307 (3d Cir. 1994) (holding that knowledge of a high probability of
harm, though amounting to “recklessness,” does not amount to a “substantial certainty” under §
523(a)(6)).
10. The Plaintiff has not established a “willful” injury.
11. Although Plaintiff has established a debt in the amount of $67,184.12 and injury as a
result of the Defendant’s transfer of possession of the Vehicle to Nguyen, Plaintiff has failed to
establish by a preponderance of the evidence that Defendant had a subjective motive to injure the
Plaintiff at the time she loaned the Vehicle to Nguyen or that Defendant believed with
substantially certainty that Plaintiff would be injured as a result of loaning the Vehicle to
Nguyen.
12. The Plaintiff has not established a “malicious injury.”
13. Defendant intended to loan the Vehicle to Nguyen, and Defendant’s loan of the
Vehicle to Nguyen may have been wrongful in that it violated paragraph 21 of the Lease
Agreement. However, Plaintiff has failed to establish by a preponderance of the evidence that
Defendant’s loan of the Vehicle to Nguyen would necessarily cause injury to Plaintiff.
14. Defendant presented some evidence of just cause or excuse. Nguyen was the person
who arranged the Assumption Agreement between Defendant, Chin Ho and Plaintiff. Defendant
loaned the Vehicle to Nguyen, at Nguyen’s request, believing that Nguyen’s car had “broke[n]
down” and that Nguyen would return the Vehicle the following day. Defendant continued to
make payments under the Assumption Agreement until July 31, 2009.
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15. Given the Ninth Circuit’s policy that objections to dischargeability of debt are strictly
construed against the objector and liberally construed in favor of the debtor, the Plaintiff has not
established by a preponderance of the evidence that the $67,184.12 debt owing by Defendant to
Plaintiff is nondischargeable under § 523(a)(6).
###
Date: May 1, 2013
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NOTICE OF ENTERED ORDER AND SERVICE LIST
Notice is given by the court that a judgment or order entitled (specify): Findings of Fact and
Conclusions of Law was entered on the date indicated as AEntered@ on the first page of this judgment
or order and will be served in the manner stated below:
1. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) B Pursuant to controlling
General Orders and LBRs, the foregoing document was served on the following persons by the court via
NEF and hyperlink to the judgment or order. As of (date) 05-1-2013 , the following persons are currently
on the Electronic Mail Notice List for this bankruptcy case or adversary proceeding to receive NEF
transmission at the email addresses stated below.
Michael Y Lo michaellolaw@yahoo.com, bklolaw@gmail.com
Tom Roddy Normandin tnormandin@pnbd.com, nwong@pnbd.com
United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov
Service information continued
on attached page
2. SERVED BY THE COURT VIA UNITED STATES MAIL: A copy of this notice and a true copy of this
judgment or order was sent by United States mail, first class, postage prepaid, to the following persons
and/or entities at the addresses indicated below:
Service information continued
on attached page
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